PNHP

Proposed rule for premium tax credits

Proposed rule for premium tax credits

Implementing Health Reform: Premium Tax Credits

By Timothy Jost
Health Affairs Blog, August 13, 2011

On August 12, the Departments of Health and Human Services and Treasury (Internal Revenue Service) issued three notices of proposed rulemaking (NPRM) as part of their continuing effort to implement the Affordable Care Act (ACA).

This post will describe the Treasury NPRM, the shortest of the NPRMs but also the one that deals with the most complex and unsettled issues.

The Basic Rules Regarding The Tax Credit

The consequences of underpayments and overpayments.

Although the tax credit is paid on a monthly basis, the actual amount of the credit will in fact be finally determined based on the household’s income as determined on the annual income tax return.  At that point “reconciliation” must occur.   If over the course of the year household income turns out to have been greater or less than projected, or if household composition or compliance with other eligibility requirements has changed, the final tax credit may turn out to be greater or less than the amount already paid. If the taxpayer turns out to have been eligible for more than had been paid, the taxpayer gets a refund.

If, however, the government has paid more than the taxpayer in fact turns out to be entitled to, the taxpayer must pay the money back. There are limits to this liability for taxpayers with household incomes up to 400 percent of the FPL (which have been amended twice since the ACA was adopted to increase liability), but the amount owed back can be substantial (up to $2500 for families at the upper ranges), and if final income exceeds 400 percent of poverty, even by one dollar, the entire premium tax credit must be paid back.

No help for those who owe money back because of overpayments.

A taxpayer must file a return to claim a tax credit, even though the taxpayer otherwise has no obligation to file a return.  As noted above, at the time the return is filed, the tax credit will be reconciled with actual reported household income and the taxpayer will have to pay the IRS if there was an overpayment in tax credits.  Overpayments in fact will be common, not only because income and household composition will change over the course of a year, but also because a person who loses or gains a well-paying job over the course of the year may end up with a high end-of-the year income even though, at the time the taxpayer applied, the credit was accurate for the taxpayer’s then-current income level. A taxpayer with income under 400 percent of poverty level could receive a credit through out the year based on anticipated income, but then receive an end-of-year bonus putting the taxpayer over the 400 percent limit and have to pay back the entire credit for the entire year.

Consumer advocates hoped that Treasury would use its statutory rule-making authority to meliorate these consequences, but Treasury does not believe it has the authority to do so and offers no mercy.

http://healthaffairs.org/blog/2011/08/13/implementing-health-reform-premium-tax-credits/

Department of the Treasury – Proposed regulations for the Health Insurance Premium Tax Credit:
http://www.ofr.gov/OFRUpload/OFRData/2011-20728_PI.pdf

Comment: 

By Don McCanne, MD

Throughout the reform process Professor Timothy Jost has been very helpful in clarifying the impact of the Affordable Care Act, especially on health care consumers. As one example, here he shows how an individual who appropriately receives monthly premium tax credits for purchase of a plan through an insurance exchange could be required to pay back the entire credit for the entire year merely because of a year-end bonus that lifted income over the 400 percent poverty level. For most individuals, this could create a severe financial hardship.

As another example, if the employee’s premium contribution for an employer sponsored plan is over 9.5 percent of income, then the employee is free to accept the tax credit and purchase a qualified plan through the insurance exchange. However, the employee’s contribution to the premium for the family does not count. Thus the employee, with an individual contribution under 9.5%, could have to pay much more than 9.5 percent of income to insure the entire family, and yet not be eligible for the option of accepting a tax subsidy for an exchange plan. Again, family coverage could create a significant financial hardship for the employee.

There is a profusion of complexities in the Affordable Care Act that adversely impact patient-consumers, many of which Professor Jost has described in this and other articles. Although, as an academic, he has limited his advocacy to supporting rules that benefit patients, we don’t have to limit our own advocacy so narrowly.

The Affordable Care Act is an abomination of inequitable and unjust administrative complexities and waste that can never achieve an equitable health system that serves everyone. Let’s continue to do our best to make sure that everyone understands this and understands that health care justice for all is achievable by the adoption of a single payer national health program.

In the meantime, the IRS does not believe that it has the authority to alter the provisions of the Affordable Care Act and thus offers no mercy. Mercy is left in the hands of us would-be reformers.

Can We Have Health Reform Without an Individual Mandate? Yes, It's Called 'Medicare for All'

By John Nichols
The Nation blogs, Aug. 13, 2011

The essential vote on the 11th Circuit Court of Appeals panel that ruled that the individual-coverage mandate in President Obama’s healthcare reform is unconstitutional did not come from a reactionary Republican appointed by Ronald Reagan or George W. Bush.

Rather, it came from respected jurist whose two appointments to the federal bench—first as a judge for the Northern District of Georgia in 1994 and then to the 11th Circuit in 1997—were made by then-President Bill Clinton. No, Judge Frank Mays Hull is not a raging lefty, but nor is she a right-wing judicial activist. A former law clerk for Judge Elbert Parr Tuttle, who as the chief justice of the US Court of Appeals for the Fifth Circuit from 1960 to 1967 led the court in issuing a series of epic decisions on behalf of civil rights, Judge Hull has a reputation as a moderate defender of the rule of law who has earned reasonable marks for her pragmatic and decidely mainstream interpretations of the Constitution.

So why did Hull join with another member of the appeals court panel (Chief Judge Joel Dubina, an appointee of George H.W. Bush) to form the 2-1 majority that rejected the individual mandate while affirming the rest of the law? Perhaps it was because one can favor sweeping healthcare reforms—including an expansion of Medicare—while still believing that it is wrong to require Americans to buy insurance from for-profit insurance companies.

Hull telegraphed her thinking with repeated questions during June oral arguments in Atlanta regarding the case. Noting that “the panel spent a significant amount of time discussing whether the mandate is ‘severable’ from the rest of the law,” Politico pointed out that: “Hull in particular asked the federal government three times where the line should be.”

Ultimately, Hull and Dubina came to the conclusion that the individual mandate could, and should, be removed from an otherwise constitutional plan.

Why? Because, as the judges wrote in their majority decision: “This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: the ability to compel Americans to purchase an expensive health insurance product they have elected not to buy, and to make them re-purchase that insurance product every month for their entire lives.”

Those of us who favor fundamental healthcare reform have always been uncomfortable with the individual mandate. So was candidate Barack Obama, who distinguished himself from Hillary Clinton (a mandate backer) by saying in a February 2008, interview: “Both of us want to provide health care to all Americans. There’s a slight difference, and her plan is a good one. But, she mandates that everybody buy health care. She’d have the government force every individual to buy insurance and I don’t have such a mandate because I don’t think the problem is that people don’t want health insurance, it’s that they can’t afford it. So, I focus more on lowering costs. This is a modest difference. But, it’s one that she’s tried to elevate, arguing that because I don’t force people to buy health care that I’m not insuring everybody. Well, if things were that easy, I could mandate everybody to buy a house, and that would solve the problem of homelessness. It doesn’t.”

Candidate Obama was right.

The individual mandate was always a bad idea. Instead of recognizing that healthcare is a right, the members of Congress and the Obama administration who cobbled together the healthcare reform plan created a mandate that maintains the abuses and the expenses of for-profit insurance companies—and actually rewards those insurance companies with a guarantee of federal money.

Those who think that the for-profit (or even not-for-profit) insurance industry has to control any healthcare reform initiative have every right to be upset with the 11th Circuit’s ruling—which almost certainly will send the case of the Obama healthcare plan to the US Supreme Court.

But those of us who have no desire to perpetuate the insurance industry can and should recognize that the proper—and entirely constitutional—reform is an expansion of Medicare to cover all Americans.

There is no question that Medicare is a sound and popular program. (Just ask House Budget Committee chair Paul Ryan, R-Wisconsin, who took an epic political beating when he proposed a scheme to replace the successful single-payer system with a voucher scheme designed to enrich insurance firms.)

While Medicare is exceptionally popular, polling shows that the individual mandate is not—according to recent surveys, roughly 60 percent of Americans oppose it.

It also passes constitutional muster.

As former Labor Secretary Robert Reich notes: [No] federal judge has struck down Social Security or Medicare as being an unconstitutional requirement that Americans buy something. Social Security and Medicare aren’t broccoli or asparagus. They’re as American as hot dogs and apple pie.”

“So if the individual mandate to buy private health insurance gets struck down by the Supreme Court or killed off by Congress, “ says Reich, “I’d recommend President Obama immediately propose what he should have proposed in the beginning — universal health care based on Medicare for all, financed by payroll taxes.”

The insurance companies would, of course, scream.

But let them complain.

Americans don’t need mandates. They need healthcare.

And they have every right to ask, as activists with Physicians for a National Health Program have,  that Medicare be expanded to cover all Americans —affordably, efficiently, capably and constitutionally.

http://www.thenation.com/blog/162765/can-we-have-health-reform-without-individual-mandate-yes-its-called-medicare-all

Proposed rule for premium tax credits

Implementing Health Reform: Premium Tax Credits

By Timothy Jost
Health Affairs Blog, August 13, 2011

On August 12, the Departments of Health and Human Services and Treasury (Internal Revenue Service) issued three notices of proposed rulemaking (NPRM) as part of their continuing effort to implement the Affordable Care Act (ACA).

This post will describe the Treasury NPRM, the shortest of the NPRMs but also the one that deals with the most complex and unsettled issues.

The Basic Rules Regarding The Tax Credit

The consequences of underpayments and overpayments.

Although the tax credit is paid on a monthly basis, the actual amount of the credit will in fact be finally determined based on the household’s income as determined on the annual income tax return.  At that point “reconciliation” must occur.   If over the course of the year household income turns out to have been greater or less than projected, or if household composition or compliance with other eligibility requirements has changed, the final tax credit may turn out to be greater or less than the amount already paid. If the taxpayer turns out to have been eligible for more than had been paid, the taxpayer gets a refund.

If, however, the government has paid more than the taxpayer in fact turns out to be entitled to, the taxpayer must pay the money back. There are limits to this liability for taxpayers with household incomes up to 400 percent of the FPL (which have been amended twice since the ACA was adopted to increase liability), but the amount owed back can be substantial (up to $2500 for families at the upper ranges), and if final income exceeds 400 percent of poverty, even by one dollar, the entire premium tax credit must be paid back.

No help for those who owe money back because of overpayments.

A taxpayer must file a return to claim a tax credit, even though the taxpayer otherwise has no obligation to file a return.  As noted above, at the time the return is filed, the tax credit will be reconciled with actual reported household income and the taxpayer will have to pay the IRS if there was an overpayment in tax credits.  Overpayments in fact will be common, not only because income and household composition will change over the course of a year, but also because a person who loses or gains a well-paying job over the course of the year may end up with a high end-of-the year income even though, at the time the taxpayer applied, the credit was accurate for the taxpayer’s then-current income level. A taxpayer with income under 400 percent of poverty level could receive a credit through out the year based on anticipated income, but then receive an end-of-year bonus putting the taxpayer over the 400 percent limit and have to pay back the entire credit for the entire year.

Consumer advocates hoped that Treasury would use its statutory rule-making authority to meliorate these consequences, but Treasury does not believe it has the authority to do so and offers no mercy.

http://healthaffairs.org/blog/2011/08/13/implementing-health-reform-premium-tax-credits/

Department of the Treasury – Proposed regulations for the Health Insurance Premium Tax Credit:
http://www.ofr.gov/OFRUpload/OFRData/2011-20728_PI.pdf

Throughout the reform process Professor Timothy Jost has been very helpful in clarifying the impact of the Affordable Care Act, especially on health care consumers. As one example, here he shows how an individual who appropriately receives monthly premium tax credits for purchase of a plan through an insurance exchange could be required to pay back the entire credit for the entire year merely because of a year-end bonus that lifted income over the 400 percent poverty level. For most individuals, this could create a severe financial hardship.

As another example, if the employee’s premium contribution for an employer sponsored plan is over 9.5 percent of income, then the employee is free to accept the tax credit and purchase a qualified plan through the insurance exchange. However, the employee’s contribution to the premium for the family does not count. Thus the employee, with an individual contribution under 9.5%, could have to pay much more than 9.5 percent of income to insure the entire family, and yet not be eligible for the option of accepting a tax subsidy for an exchange plan. Again, family coverage could create a significant financial hardship for the employee.

There is a profusion of complexities in the Affordable Care Act that adversely impact patient-consumers, many of which Professor Jost has described in this and other articles. Although, as an academic, he has limited his advocacy to supporting rules that benefit patients, we don’t have to limit our own advocacy so narrowly.

The Affordable Care Act is an abomination of inequitable and unjust administrative complexities and waste that can never achieve an equitable health system that serves everyone. Let’s continue to do our best to make sure that everyone understands this and understands that health care justice for all is achievable by the adoption of a single payer national health program.

In the meantime, the IRS does not believe that it has the authority to alter the provisions of the Affordable Care Act and thus offers no mercy. Mercy is left in the hands of us would-be reformers.

Professionalism, social justice, and the primacy of patient welfare

Medical Professionalism in the New Millennium: A Physician Charter

Annals of Internal Medicine
February 5, 2002

A project of the American Board of Internal Medicine Foundation, American College of Physicians–American Society of Internal Medicine Foundation, and European Federation of Internal Medicine

The practice of medicine in the modern era is beset with unprecedented challenges in virtually all cultures and societies. These challenges center on increasing disparities among the legitimate needs of patients, the available resources to meet those needs, the increasing dependence on market forces to transform health care systems, and the temptation for physicians to forsake their traditional commitment to the primacy of patients’ interests. To maintain the fidelity of medicine’s social contract during this turbulent time, we believe that physicians must reaffirm their active dedication to the principles of professionalism, which entails not only their personal commitment to the welfare of their patients but also collective efforts to improve the health care system for the welfare of society. This Charter on Medical Professionalism is intended to encourage such dedication and to promote an action agenda for the profession of medicine that is universal in scope and purpose.

http://www.annals.org/content/136/3/243.full?ijkey=49cf14ffb35a6afdba3a14871f01fb39ad23066f&keytype2=tf_ipsecsha

And…

Government Policies in Violation of Human Rights as a Barrier to Professionalism

By Farrah J. Mateen, MD; Leonard S. Rubenstein, JD, LLM
JAMA, August 3, 2011

In recent decades, a set of reciprocal obligations between physicians and society have been identified as central to the concept of professionalism. In return for the high degree of autonomy society grants physicians, including licensure and self-regulation, the profession is expected to serve patients’ interests. At the heart of professionalism lie 3 fundamental principles: primacy of patient welfare, founded on altruism, trust, competence, and patient interest; patient autonomy, including educating and empowering patients to make appropriate medical decisions; and social justice, which considers available resources and the needs of all patients while taking care of an individual patient. However, deeply embedded institutional and organizational impediments often beyond the control of the physician (eg, inequitable access to care and reimbursement systems that create disincentives to proper care) can undermine physicians’ ability to adhere to these professional obligations in clinical practice.

http://jama.ama-assn.org/content/306/5/541.full

Comment: 

By Don McCanne, MD

The Charter on Medical Professionalism was established almost a decade ago. It reaffirms physicians’ active dedication to the principles of professionalism, which entails not only their personal commitment to the welfare of their patients but also collective efforts to improve the health care system for the welfare of society. How are we doing?

Professionalism, social justice, and the primacy of patient welfare

Medical Professionalism in the New Millennium: A Physician Charter

Annals of Internal Medicine
February 5, 2002

A project of the American Board of Internal Medicine Foundation, American College of Physicians–American Society of Internal Medicine Foundation, and European Federation of Internal Medicine

The practice of medicine in the modern era is beset with unprecedented challenges in virtually all cultures and societies. These challenges center on increasing disparities among the legitimate needs of patients, the available resources to meet those needs, the increasing dependence on market forces to transform health care systems, and the temptation for physicians to forsake their traditional commitment to the primacy of patients’ interests. To maintain the fidelity of medicine’s social contract during this turbulent time, we believe that physicians must reaffirm their active dedication to the principles of professionalism, which entails not only their personal commitment to the welfare of their patients but also collective efforts to improve the health care system for the welfare of society. This Charter on Medical Professionalism is intended to encourage such dedication and to promote an action agenda for the profession of medicine that is universal in scope and purpose.

http://www.annals.org/content/136/3/243.full?ijkey=49cf14ffb35a6afdba3a14871f01fb39ad23066f&keytype2=tf_ipsecsha

And…

Government Policies in Violation of Human Rights as a Barrier to Professionalism

By Farrah J. Mateen, MD; Leonard S. Rubenstein, JD, LLM
JAMA, August 3, 2011

In recent decades, a set of reciprocal obligations between physicians and society have been identified as central to the concept of professionalism. In return for the high degree of autonomy society grants physicians, including licensure and self-regulation, the profession is expected to serve patients’ interests. At the heart of professionalism lie 3 fundamental principles: primacy of patient welfare, founded on altruism, trust, competence, and patient interest; patient autonomy, including educating and empowering patients to make appropriate medical decisions; and social justice, which considers available resources and the needs of all patients while taking care of an individual patient. However, deeply embedded institutional and organizational impediments often beyond the control of the physician (eg, inequitable access to care and reimbursement systems that create disincentives to proper care) can undermine physicians’ ability to adhere to these professional obligations in clinical practice.

http://jama.ama-assn.org/content/306/5/541.full

The Charter on Medical Professionalism was established almost a decade ago. It reaffirms physicians’ active dedication to the principles of professionalism, which entails not only their personal commitment to the welfare of their patients but also collective efforts to improve the health care system for the welfare of society. How are we doing?

Comparing USA and UK on efficiency and effectiveness

NHS among developed world's most efficient health systems, says study

By Randeep Ramesh
guardian.co.uk, August 7, 2011

The NHS is one of the most cost-effective health systems in the developed world, according to a study published in the Journal of the Royal Society of Medicine.

The “surprising” findings show the NHS saving more lives for each pound spent as a proportion of national wealth than any other country apart from Ireland over 25 years. Among the 17 countries considered, the United States healthcare system was among the least efficient and effective.

Researchers said that this contradicted assertions by the health secretary, Andrew Lansley, that the NHS needed competition and choice to become more efficient.

“The government proposals to change the NHS are largely based on the idea that the NHS is less efficient and effective than other countries, especially the US,” said Professor Colin Pritchard, of Bournemouth University, who analysed a quarter of a century’s data from 1980.

“The results question why we need a big set of health reform proposals … The system works well. Look at the US and you can see where choice and competition gets you. Pretty dismal results.”

The study will be a blow for Lansley, who argues that patients should choose between competing hospital services and GPs.

Pritchard points out that even Adam Smith, the Scottish economist and father of market-based ideology, thought the state was “probably better” at health and education.

http://www.guardian.co.uk/society/2011/aug/07/nhs-among-most-efficient-health-services#history-link-box

And…

Comparing the USA, UK and 17 Western countries’ efficiency and effectiveness in reducing mortality

By Colin Pritchard and Mark S Wallace
Journal of the Royal Society of Medicine Short Reports, July 1, 2011

Conclusions

In cost-effective terms, i.e. economic input versus clinical output, the USA healthcare system was one of the least cost-effective in reducing mortality rates whereas the UK was one of the most cost-effective over the period.

http://shortreports.rsmjournals.com/content/2/7/60.full

Comment: 

By Don McCanne, MD

We continue to be faced with the painful truth that the United States has the highest health care costs while our mortality rates compare unfavorably to many other countries. The authors of this study suggest that the U.S. model of “choice and competition” may be a major source of our dismal results.

The British are using our model to show their would-be reformers that their single, integrated National Health Service is more efficient and effective than our model based on private, marketplace competition. When will we learn the same lesson?

Address why, not how, of health costs

By Jonathan D. Walker, M.D.
The Journal Gazette (Fort Wayne, Ind.), July 31, 2011

Politicians and special interest groups are always trying to control the debate over health care. But there is one undeniable fact: we are paying more for health care than we ever have before.

People offer lots of explanations for this: malpractice, fraud, private insurance, obesity. All these problems contribute to the rising cost of health care. However, the primary reason is that there has been so much money sloshing around our health care system, and so many fragmented, for-profit entities getting that money, that prices keep climbing at a higher rate than almost anything else in the economy.

Unfortunately, politicians are reluctant to look closely at whether we are getting our money’s worth because special interests have tremendous control over the system. For instance, we hear about how expensive Medicare is, but did you know that although Medicare is spending our tax dollars, pharmaceutical lobbyists have made sure that it is forbidden to bargain over drug prices? Or if two treatments are equally effective, but one is expensive and the other is cheap, Medicare is required to pay for both without question?

To make matters worse, private insurance companies usually emulate Medicare, but they have to pay even more because otherwise health care providers won’t deal with them. There could be huge cost savings if we looked carefully at issues like these. But whenever someone tries to raise such questions, businesses that might lose money start complaining about “government takeover of health care” and the debate is shut down.

Since politicians don’t want to look at cost-effectiveness, the only way employers, insurance companies and the government can save money is to have us, the consumers, bear more of the cost. This is why co-pays and deductibles have increased so much over the past few years, and why employees have had fewer raises as employers spend more on insurance. It is also why some people want to change Medicare to a voucher program; doing so would further unload the cost onto patients. But none of this addresses why the costs are going up in the first place – it just gets us to pay more.

And there is another reason why this is happening. There are a lot of powerful people who think that the state of American health care will be better if we have more “skin in the game.” The feeling is that, as we pay more for medical treatments, we will become better shoppers for health care and that will bring costs down. Actually, there is a lot of data that suggest that putting more of our skin in the game doesn’t solve the problem. Instead, people end up putting off needed care and become sicker, or people who are really sick burn through their deductible so quickly that it doesn’t have any effect on costs at all. Plus, if huge corporations and the government can’t control the rising cost of health care, it is hard to imagine that individuals can. Unfortunately, it doesn’t make any difference that putting more of our skin in the game won’t solve the problem – the people with that viewpoint dominate the situation.

It is frustrating that our leaders are fighting over issues that are irrelevant when it comes to addressing the real problems. Things such as waivers or changing the eligibility age for Medicare do nothing to solve rising costs or improve the quality of care – they simply unload the costs onto us. We need to demand that politicians look at what we are paying for, rather than just how to pay for it. As we spend more every year on insurance, co-pays and deductibles, remember that it is our money and our health that are at stake. Unless we take the time to get involved, we may soon lose all of our skin to their game.

Dr. Jonathan D. Walker is a member of Hoosiers for a Commonsense Health Plan (hchp.info).

http://www.journalgazette.net/article/20110731/EDIT05/307319977/-1/EDIT01

For Medicaid Patients, Particularly Children, the Neurologist May Not Be In

By Gina Shaw
Neurology Today, July 21, 2011

If a child needs a pediatric neurologist in Chicago, he’d better hope that he isn’t on Medicaid. An alarming “secret shopper” style study published in the June 16 New England Journal of Medicine found that children with Medicaid were far more likely to be declined an appointment with a pediatric neurologist (as well as eight other types of specialists) than those with private insurance.

The researchers called 273 specialty practices in the Chicago area, posing as parents of children with urgent — but not emergency — medical problems. For the pediatric neurology practices, the child described was an eight-year-old with an initial onset of afebrile seizures, and a referral from both a primary care doctor and the emergency department.

The “patient” on Medicaid was nine times more likely to be denied an appointment with a pediatric neurologist than one with private insurance. The Medicaid callers who did get an appointment would have had to wait two weeks longer for their appointments than those with private insurance. (Pediatric neurologists actually did better than most other specialties in the study at accepting Medicaid patients — Medicaid callers seeking appointments with asthma specialists, otolaryngologists, dermatologists, and orthopedists were 34 to 44 times more likely to be denied a slot.)

“There’s never been a study this comprehensive or this rigorous that actually measured access to specialty care, let alone children’s access,” Karin V. Rhodes, MD, an author of the study and director of emergency care policy research in the department of emergency medicine at the University of Pennsylvania, told the New York Times in a June 15 report on the study.

“We’ve known this is the case for a long time, but I was really struck by this research and the incredible differences between Medicaid-insured children and privately insured children in their access to neurology specialty care,” said Rachel Nardin, MD, assistant professor of neurology at Harvard Medical School and a practicing neurologist at the Cambridge Health Alliance. “It’s one of the most dramatic things I’ve ever seen,” added Dr. Nardin, who was not involved with the study.

The barriers to neurology care for people on Medicaid aren’t limited to pediatric neurology. “These disparities aren’t just for children; they’re there for adults as well,” Dr. Nardin noted. In the April 13, 2010 issue of Neurology, she and colleagues reported that the uninsured and those with Medicaid receive substandard migraine care, at least in part because they receive more care in emergency departments and less in physicians’ offices.

But, Dr. Nardin pointed out, the New England Journal study pinpoints the problem precisely, by separating out insurance factors from factors having to do with the patients themselves — such as lack of access to transportation and low health literacy. “That’s why it’s so important,” said Dr. Nardin. “It controlled for all the other variables and showed that simply being on Medicaid was responsible for dramatically reduced access to care.”

That finding doesn’t surprise Robert Friedland, MD, the Mason C. and Mary D. Rudd Chair of Neurology at the University of Louisville. “Rates of Medicaid reimbursement are falling, while expenses are not. It’s basically impossible for a neurologist to make a living seeing only Medicaid patients. I’m not talking about making a good living, I’m talking about making any living at all.”

In Illinois, for example, Dr. Rhodes reported that Medicaid pays $99.86 for an office visit for a problem of “moderate severity,” while private insurers pay $160. “At an AAN practice management class, I learned that for one neurologist in private practice to break even, they need to generate over $240,000 of income in order to cover all expenses. You can’t do that if you see Medicaid patients,” Dr. Friedland said.

“Through my contacts through the Florida Society of Neurology, I have heard from many private neurologists who have had to either stop taking Medicaid entirely, or limit the percentage of patients that they take, simply because they lose money every time they see a Medicaid patient,” said Glenn Finney, MD, assistant professor of neurology at the University of Florida in Gainesville. “I would say that right now the only neurologists who can regularly take Medicaid patients are at large institutions that receive federal aid to offset the costs.”

Dr. Nardin said that she has encountered difficulty in referring Medicaid-insured patients to subspecialists. “I work at a safety net hospital, where around 40 percent of our patients have Medicaid. Since we’re a community hospital, we don’t have certain subspecialties and surgical specialists on the faculty, and it’s often very difficult to get a consult — even here in Boston, in a city with a lot of academic medical centers.”

For Medicaid patients who don’t live in a city that has a good-sized academic medical center, access to neurology care can be even more difficult. “Here in Florida, since we’re a geographically large state, if you’re not within close distance to a major academic institution with a neurology division, you may have to travel several hours to find a neurologist that will see you,” Dr. Finney said. “And a lot of our patients on Medicaid can’t travel easily. Either they can’t afford to, or they have neurologic conditions that prevent or curtail entirely their ability to drive themselves or go somewhere alone.”

WHERE PATIENTS END UP

So what do they do? “They end up seeing no neurologist at all for their problem, and rely on local generalists,” Dr. Finney said. “Although fewer and fewer primary care physicians are taking Medicaid as well. They may get their care through the emergency department. Or at best, they see a neurologist very occasionally, even if more frequent visits would provide better care and prevent complications from their illness.”

In some cases, even the academic medical centers are cutting back on Medicaid care.

“Our department still takes Medicaid patients, but several other branches of our institution do not,” Dr. Finney said. “I care for people with dementia, memory and cognitive disorders. Sometimes they need more in-depth cognitive testing done by a neuropsychologist, and we can’t find anyone to do it for Medicaid patients, even at our own institution. It’s not because of any desire not to see these patients. In fact, they’ve offered some limited programs at a reduced rate, for people with epilepsy, with neuropsychologists in training. But they literally can’t afford to care for Medicaid patients.”

Neurologists and their patients are particularly vulnerable to the vagaries of Medicaid. As a cognitive specialty, the heart of neurology is the physical examination and patient history, which reimburse — in any form of insurance, but particularly within Medicaid — at lower rates than procedure-based specialties.

People with certain neurologic conditions, especially those that can affect a younger population — such as migraine, epilepsy, and multiple sclerosis — are also more likely to end up on Medicaid because of their disease. “A lot of patients who have uncontrolled epilepsy and can’t drive find that it impairs their ability to work,” said Dr. Finney. “They’re younger and can’t get Medicare, so they will end up on the Medicaid rolls trying to get control of their seizures and return to a good quality of life.”

Dr. Friedland noted that people with multiple sclerosis face particular challenges if they’re on Medicaid. “Their care is chronic and recurring and it doesn’t generate enough income to cover the costs of the practice,” he said. “And the patients don’t need EEGs
and EMGs, which are relatively more remunerative for neurologists.”

The longer these patients go without treatment, the more complicated their conditions may become — and ultimately, the greater the cost to both them and to society. “There are many treatable neurologic conditions that, if left untreated, affect not only the person’s well-being but their productivity in society. Untreated or poorly treated epilepsy or migraine really debilitate patients,” Dr. Nardin said. “There’s a big social cost to leaving these patients without access to the care they need to be fully functioning members of society.”

What’s the answer? “A financial situation in which doctors and departments, and functional units in an institution, lose money through their daily work is untenable. Certainly everybody agrees that care costs are going up very fast, but you can’t deal with it by paying doctors less,” Dr. Friedland said. He suggests that, for a start, reimbursement rates need to be reconsidered. “One question is whether a dermatologist really should be paid more than one $100 to do a five-minute skin biopsy, while an hour’s consultation with a dementia patient provides payment of less than $100.”

More broadly, Dr. Nardin said that these findings point to the need to rethink health care reform. “The recently enacted Affordable Care Act will increase the number of people who are insured in part by expanding Medicaid,” she said. “Sixteen million people are projected to get publicly subsidized private insurance and 16 million to get Medicaid. But now, we have data that tells us that just having the Medicaid card doesn’t mean that you’re going to have access to care.”

There are two options to fix that, she suggests — either legislation requiring Medicaid to reimburse sufficiently to cover costs, or replacing the patchwork of health insurance coverage in the current system with true national health insurance, providing standard coverage and full benefits to everyone equally. “If we really want to reform our health care system, we have to keep our eye on the prize,” she said. “Our goal isn’t just a health insurance card, but people being able to see a doctor when they need to.”

REFERENCE:
Bisgaier J, Rhodes V. Auditing access to specialty care for children with public insurance. N Engl J Med 2011;364(24):2324–2333.

Meja NI, Nardin R. Dying young: eliminating racial disparities in neuromuscular disease outcomes. Neurology 2010;75(11):948–949.

Wilper A, Woohandler S, Nardin R, et al. Impact of insurance status on migraine care in the United States: a population-based study. Neurology 2010;74(15):1178–1183.

http://journals.lww.com/neurotodayonline/Fulltext/2011/07210/For_Medicaid_Patients,_Particularly_Children,_the.2.aspx

Comparing USA and UK on efficiency and effectiveness

NHS among developed world’s most efficient health systems, says study

By Randeep Ramesh
guardian.co.uk, August 7, 2011

The NHS is one of the most cost-effective health systems in the developed world, according to a study published in the Journal of the Royal Society of Medicine.

The “surprising” findings show the NHS saving more lives for each pound spent as a proportion of national wealth than any other country apart from Ireland over 25 years. Among the 17 countries considered, the United States healthcare system was among the least efficient and effective.

Researchers said that this contradicted assertions by the health secretary, Andrew Lansley, that the NHS needed competition and choice to become more efficient.

“The government proposals to change the NHS are largely based on the idea that the NHS is less efficient and effective than other countries, especially the US,” said Professor Colin Pritchard, of Bournemouth University, who analysed a quarter of a century’s data from 1980.

“The results question why we need a big set of health reform proposals … The system works well. Look at the US and you can see where choice and competition gets you. Pretty dismal results.”

The study will be a blow for Lansley, who argues that patients should choose between competing hospital services and GPs.

Pritchard points out that even Adam Smith, the Scottish economist and father of market-based ideology, thought the state was “probably better” at health and education.

http://www.guardian.co.uk/society/2011/aug/07/nhs-among-most-efficient-health-services#history-link-box

And…

Comparing the USA, UK and 17 Western countries’ efficiency and effectiveness in reducing mortality

By Colin Pritchard and Mark S Wallace
Journal of the Royal Society of Medicine Short Reports, July 1, 2011

Conclusions

In cost-effective terms, i.e. economic input versus clinical output, the USA healthcare system was one of the least cost-effective in reducing mortality rates whereas the UK was one of the most cost-effective over the period.

http://shortreports.rsmjournals.com/content/2/7/60.full

We continue to be faced with the painful truth that the United States has the highest health care costs while our mortality rates compare unfavorably to many other countries. The authors of this study suggest that the U.S. model of “choice and competition” may be a major source of our dismal results.

The British are using our model to show their would-be reformers that their single, integrated National Health Service is more efficient and effective than our model based on private, marketplace competition. When will we learn the same lesson?

Single payer in stormy times, Medicare facing new threats

Aug. 10, 2011

Dear PNHP colleagues,

These are challenging times for advocates of single-payer health reform, we think you’ll agree.

Even as PNHP members vigorously celebrated the 46th anniversary of Medicare in opinion pieces, letters to the editor, blogs and on radio stations across the nation, noting the program’s merits and utility as a model for a universal, cost-effective single-payer system, Congress and the White House set up a “deficit reduction” process that will likely result in serious cuts to the program – with the prospect of even deeper cuts down the road.

Announcing the Nick Skala Scholarship Fund

Help bring medical and other health professional students to PNHP’s Annual Meeting by generously donating to the Nicholas Skala Health Activist Scholarship Fund. The fund awards $250 travel stipends to the Annual Meeting for students who have shown courage, tenacity and passion in their advocacy for single payer. The award is named after Nick Skala, a young research associate for PNHP who died in 2009. Nick was one of our nation’s most gifted advocates for single-payer national health insurance. Donate to this special fund today! If you’re a student, you can apply for a scholarship by filling out this form.

The Budget Control Act, signed by President Obama last week, calls for an automatic 2 percent reduction in Medicare in the event that a newly created “supercommittee” of six Democrats and six Republicans can’t agree on a wider package amounting to at least $1.5 trillion in cuts in federal spending. This supercommittee can also recommend cuts to Medicaid and Social Security, among other programs.

Dr. Don McCanne, PNHP’s senior policy fellow, writes, “The probability of reaching a complex and controversial agreement that leaves Medicare totally unscathed is almost zero in this dysfunctional Congress.” He suggests the law will only accelerate efforts by Medicare’s opponents to undermine the program.

In the context of a troubled economy and deepening economic hardship, such cuts can only be expected to intensify the suffering of the U.S. population. Our New York Metro chapter issued a sharply critical statement on the legislation.

As indicated above, PNHP members have spoken out in defense of Medicare, even while acknowledging its limitations. See, for example, Dr. Ann Settgast’s recent op-ed in the Minneapolis Star Tribune, Dr. James Mitchiner’s op-ed at AnnArbor.com, or Dr. Hrayr Attarian’s letter in the Chicago Sun-Times. At least 15 similar articles by PNHPers appeared in newspapers nationwide over the past month.

Along the same lines, our sister organization Healthcare-Now helped organize at least 45 events in 21 states to celebrate Medicare’s anniversary and to call for the program’s improvement and expansion to cover everyone. Many PNHP members participated in these too, of course.

Polls, surveys and citizen juries have consistently shown our proposal – an improved Medicare for all – enjoys the support of about two-thirds of the public. And of course Medicare itself commands extremely high public approval ratings. For example, a July 18-20 CNN poll showed 87 percent oppose cutting Medicare to reduce the deficit. Yet pundits, lawmakers and the president seem remarkably cavalier about proposals that would undermine the program.

For further evidence of single payer’s robust support, please read this morning’s extraordinary endorsement of single payer by the editorial board of the St. Louis Post-Dispatch.

In view of these developments, we urge 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. We also urge you to make a tax-deductible donation to PNHP so we can continue to educate the profession and the public about these critical issues.

(Incidentally, if you missed the stimulating PNHP dialogue about Medicare and single payer with Bruce Vladeck, the former head of Medicare and Medicaid, last month, you can listen to an audio recording of that conference call here.)

Finally, we’d like to draw your attention to a new study in the Annals of Emergency Medicine showing access to outpatient psychiatric care in the greater Boston area is severely limited, even for people with reputedly excellent private health insurance. Private insurers’ restrictive networks and their inadequate reimbursements to psychiatrists are at the root of the problem, the authors say.

The research was led by PNHP members Drs. J. Wesley Boyd, Rachel Nardin, Andrew Linsenmeyer, Steffie Woolhandler and David Himmelstein. Read PNHP’s news release on the study and the Boston Globe’s article, “Mental care can be hard to find, even for insured.” The research was also covered by CBS News and Time magazine.

Cordially,

Garrett Adams, M.D., M.P.H.
President
 
P.S. Again: Don’t forget to register for PNHP’s Annual Meeting in Washington on Oct. 29 at the Gallaudet University Kellogg Conference Hotel. Guest speakers include Phillip Longman, author of “Best Care Anywhere”; Canada’s distinguished health economist Robert G. Evans; and the U.K.’s Dr. Jacqueline Davis, a leader of Keep our NHS Public. You’ll be able to exchange experiences with fellow physicians and single-payer advocates from all over the country. We will host a Leadership Training Institute for a limited number of participants on the afternoon of Friday, Oct. 28. You won’t want to miss this extraordinary gathering. Register today.

St. Louis Post-Dispatch editorial on single payer

Editorial: If U.S. is serious about debt, there's a single-payer solution.

By the Editorial Board
St. Louis Post-Dispatch, August 10, 2011

If America truly is serious about dealing with its deficit problems, there’s a fairly simple solution. But you’re probably not going to like it: Enact a single-payer health care plan.

See, we told you weren’t going to like it.

But the fact is that everyone who has studied the deficit problem has agreed that it’s actually a health care problem.

That being the case — and nobody argues that it isn’t — there are two broad ways for the government to address its spiraling health care costs. One, shift more of those costs to recipients, by trimming benefits and/or extending eligibility ages and indexing eligibility to personal income. This is politically unpalatable, particularly to most Democrats, President Barack Obama being a conspicuous exception.

The second way for government to address its health costs is not to shift them, but to reduce them. This is what a single-payer health care system would do, largely by taking the for-profit players (insurance companies for the most part) out of the loop.

The advocacy group Physicians for a National Health Program estimates that “private insurance bureaucracy and paperwork consume one-third (31 percent) of every health care dollar. Streamlining payment through a single nonprofit payer would save more than $400 billion per year, enough to provide comprehensive, high-quality coverage for all Americans.”

Once everyone is covered, the government would have the clout to bring discipline into the wild west of health care spending.

Eventually, the United States will have a single-payer plan. But we’ll waste a lot of money and time getting there.

http://www.stltoday.com/news/opinion/editorial/article_97afa329-42f8-5f12-adb0-97fa305c3e4b.html

Comment:

By Don McCanne, MD

The Editorial Board of the St. Louis Post-Dispatch is right. Eventually we will have a single payer program, but only after wasting much more money and time.

If U.S. is serious about debt, there's a single-payer solution

By the Editorial Board
St. Louis Post Dispatch, August 10, 2011

If America truly is serious about dealing with its deficit problems, there’s a fairly simple solution. But you’re probably not going to like it: Enact a single-payer health care plan.

See, we told you weren’t going to like it.

But the fact is that everyone who has studied the deficit problem has agreed that it’s actually a health care problem — more specifically, the cost of providing Medicare benefits to an aging and longer-living population. The bipartisan National Commission on Fiscal Responsibility and Reform reported last December: “The Congressional Budget Office (CBO) projects if we continue on our current course, deficits will remain high throughout the rest of this decade and beyond, and debt will spiral ever higher, reaching 90 percent of GDP in 2020.

“Over the long run, as the baby boomers retire and health care costs continue to grow, the situation will become far worse. By 2025 revenue will be able to finance only interest payments, Medicare, Medicaid, and Social Security. Every other federal government activity — from national defense and homeland security to transportation and energy — will have to be paid for with borrowed money.”

That being the case — and nobody argues that it isn’t — there are two broad ways for the government to address its spiraling health care costs. One, shift more of those costs to recipients, by trimming benefits and/or extending eligibility ages and indexing eligibility to personal income. This is politically unpalatable, particularly to most Democrats, President Barack Obama being a conspicuous exception.

The second way for government to address its health costs is not to shift them, but to reduce them. This is what a single-payer health care system would do, largely by taking the for-profit players (insurance companies for the most part) out of the loop.

The advocacy group Physicians for a National Health Program estimates that “private insurance bureaucracy and paperwork consume one-third (31 percent) of every health care dollar. Streamlining payment through a single nonprofit payer would save more than $400 billion per year, enough to provide comprehensive, high-quality coverage for all Americans.”

Once everyone is covered, the government would have the clout to bring discipline into the wild west of health care spending. It could insist that providers be paid for quality of service, not quantity. Health facilities and equipment could be managed by regional boards. Medical services could be “bundled” — rather than paying hospitals and doctors and laboratories separately, there would be fixed prices for treatments. And so on.

The Patient Protection and Affordable Care Act passed in 2009 contains many pilot programs designed to test cost-reduction strategies. Most of them won’t kick in for another six to eight years, by which time health care costs will be approaching 20 percent of U.S. gross domestic product. The combined state and federal share of that will be 49 percent, up from 45 percent today.

Indeed, a study published this month in the journal Health Affairs estimates that while the Affordable Care Act will pay for itself by 2020, it won’t actually “bend the cost curve,” as the Obama administration had hoped. But the study, done by the Actuary Centers for Medicare and Medicaid Services, says the ACA will significantly slow the rise of health care costs to state and local governments.

But consider those two findings: In effect, they say that if reducing overall health care costs is the goal, then the ACA didn’t go far enough. Thirty million more people will be insured and government costs will grow more slowly. But overall health care costs will continue to explode.

Sooner or later, a nation serious about controlling spending must take broad control of the health care system.

It surely won’t be sooner. Compared to the political fight that would erupt over a single-payer plan, the congressional battle over the Affordable Care Act would seem as tame as resolution praising mom, the flag and apple pie.

The ACA was a compromise. Mr. Obama brought everyone to the table — doctors, insurance companies, drug companies, hospitals — and came away with a “best we can get” kind of bill. Many of those at the table turned around and lobbied against it or sought special favors once the bill came before Congress.

It passed by narrow margins, and Congress is decidedly more conservative now. Indeed, the new House majority has voted to repeal the ACA and challenges to its constitutionality continue to work their way toward the Supreme Court.

But now, like a baby discovering its toes, Congress has discovered the deficit. And the plain fact is that unless you want to commit political suicide and cut Medicare to the bone — as Rep. Paul Ryan’s, R-Wis., budget plan would do — the best way to seriously address long-term deficits is to get control of health care costs through a single-payer plan.

In 2008, when health care costs amounted to “only” 16 percent of U.S. gross domestic product, Great Britain was spending 8.7 percent of its GDP on health care, and Canada was spending 10.4 percent. Both nations have single-payer plans. Quality of care scores in both nations are at least comparable, and in most cases, better.

Eventually, the United States will have a single-payer plan. But we’ll waste a lot of money and time getting there.

http://www.stltoday.com/news/opinion/editorial/article_97afa329-42f8-5f12-adb0-97fa305c3e4b.html#ixzz1UdVj1faS