PNHP

Will financial incentives work?

Will financial incentives work?

Financial Incentives for Health Care Providers and Consumers

By Jill Bernstein, Deborah Chollet, and Stephanie Peterson
Mathematica Policy Research, Inc.
May 2010
Health reform will emphasize financial incentives for providers and consumers to promote the use of effective health services and discourage the use of marginally effective or inappropriate services. This brief looks at evidence on the impacts of financial incentives and draws lessons for policymakers.
Consumer Incentives Affect Their Choices
Most private and public insurance plans use financial incentives to constrain consumer demand for care. This strategy is premised on the idea that consumers will make better decisions about seeking care and using cost-effective services when they bear responsibility for a portion of the cost. So-called “consumer-directed” health plans attempt to extend this model, coupling high cost sharing with consumer information about treatment alternatives.
Indeed, research shows that cost sharing — including deductibles, coinsurance, and copayments — does affect health care use and expenditures. However, cost sharing can have important negative effects on health, and high cost sharing may ultimately have little impact on total costs.
When people respond to greater cost sharing by reducing their use of health services, they may forgo services that are necessary and effective as well as those that are more discretionary or ineffective. Forgoing care in response to higher cost sharing may not have significant health consequences for people with good overall health status and average income. But people with health problems and those with lower income and education enrolled in high-deductible health plans may suffer worse outcomes when they forgo or delay care. Vulnerable populations are especially likely to experience negative health outcomes related to cost sharing.
In addition, financial incentives may not significantly change the overall costs of care. Consumers with serious health problems account for most health care costs. Even if strong incentives induce these consumers to use care judiciously, most of their care is nondiscretionary, and costs that exceed their cap on out-of-pocket spending may account for most of the total cost of their care.
Value-Based Purchasing
A growing number of private and public payers (including Medicare) use financial incentives targeted to providers, consumers, or both, and linked to measures of health care quality and efficiency. These strategies have come to be known generally as value-based purchasing.
Value-based purchasing efforts that focus on providers typically use evidence-based measures of quality, effectiveness, and efficiency to classify or select providers, and to determine how much they are paid. These payment strategies, generally known as “pay for performance” (P4P), may also take into account measures of consumer experience or satisfaction. Most commercial P4P systems use hybrid approaches that combine fee-for-service payment with payment bonuses or withholds that reflect provider performance on specific measures of quality or patient satisfaction.
Value-based systems have encountered various problems related to consumer education and continuity of care that have affected their ability to meet program goals. For example:
* Consumers sometimes associate higher prices with higher quality, leading them to select inefficient, lower-quality health plans with higher premiums.
* Adverse outcomes — and ultimately greater cost — may result when conversions to new evidence-based treatment protocols disrupt care. Disruptions may be especially problematic for patients with serious, chronic illnesses and close ties to their care providers. Although careful targeting of incentives can protect vulnerable patients by identifying those who would most benefit from specialized care, it may also entail additional costs for technical and clinical expertise and for educating and communicating with patients.
SOME LESSONS LEARNED
Evidence on the impacts of financial incentives in private and public insurance plans is limited, but we do know that:
* In general, financial incentives work best when carefully targeted to a specific population, set of services, or health condition. However, providing high quality, effective care can be expensive, even when it is targeted.
* Incentives that improve care and reduce cost present challenges. For plan administrators, designing and using effective incentives can be technically demanding and administratively expensive. For providers, performance reporting can be time consuming. For consumers, choosing among plan options, providers, and treatments can be difficult.
* If not carefully designed, financial incentives can have unintended adverse consequences, including poorer health outcomes and higher long-term costs.
http://www.mathematica-mpr.com/publications/PDFs/Health/reformhealthcare_IB5.pdf

Considerable attention has been paid to controlling health care costs through financial incentives to constrain consumer demand for care (e.g., consumer-directed health care, or CDHC) or to encourage value-based purchasing (e.g., pay for performance, or P4P). This is more than just a theoretical construct since the Patient Protection and Affordable Care Act (PPACA) “focuses on developing financial incentives to improve quality of care and constrain costs.”
A great many readers have told me that they often skip the excepts from the resource, and go straight to my comment. Today’s surprise is that I do request that you read the excerpts above so that you understand more clearly why CDHC and P4P are yet other diversions that will not save money and yet would risk adverse outcomes.
(I’ll omit the comment that a single payer financing system would bring all of us true consumer choice of health care, absent financial barriers, while providing us value-based purchasing though the power of our own public monopsony. Er… I guess I didn’t omit that after all.)

The Dartmouth Atlas and ACOs

Critics Question Study Cited in Health Debate

By Reed Abelson and Gardiner Harris
The New York Times
June 2, 2010

In selling the health care overhaul to Congress, the Obama administration cited a once obscure research group at Dartmouth College to claim that it could not only cut billions in wasteful health care spending but make people healthier by doing so.

But while the research compiled in the Dartmouth Atlas of Health Care has been widely interpreted as showing the country’s best and worst care, the Dartmouth researchers themselves acknowledged in interviews that in fact it mainly shows the varying costs of care in the government’s Medicare program. Measures of the quality of care are not part of the formula.

The mistaken belief that the Dartmouth research proves that cheaper care is better care is widespread — and has been fed in part by Dartmouth researchers themselves.

The debate about the Dartmouth work is important because a growing number of health policy researchers are finding that overhauling the nation’s health care system will be far harder and more painful than the Dartmouth work has long suggested. Cuts, if not made carefully, could cost lives.

http://www.nytimes.com/2010/06/03/business/03dartmouth.html?hp=&pagewanted=all

A graphic comparing “The Dartmouth Atlas of Health Care” with Medicare’s “Hospital Compare”:
http://www.nytimes.com/interactive/2010/06/03/business/Dartmouth-maps.html

And…

Monarch HealthCare, HealthCare Partners, and Anthem Blue Cross Chosen for Innovative National Healthcare Program

Marketwire
May 25, 2010

Two of Southern California’s leading physician-governed medical groups, along with Anthem Blue Cross, have been selected for participation in a new and innovative, nationally-recognized healthcare model that rewards providers for improving patient outcomes, while slowing cost growth.
 
Monarch HealthCare, an Irvine, California-based Medical Group and Independent Physician Association (IPA), and HealthCare Partners, a Torrance, California-based Medical Group and IPA, will collaborate with Anthem Blue Cross in an Accountable Care Organization (ACO) pilot project led by the Engelberg Center for Health Care Reform at Brookings and The Dartmouth Institute for Health Policy and Clinical Practice. The selection of the two California organizations furthers the nationwide demonstration project already underway in three other communities. The demonstration project expects to produce a successful model that will be replicable throughout the country.

Jay Cohen, M.D., president and chairman of the board at Monarch, believes “this is a very exciting development for anyone who supports innovative ideas designed to improve healthcare delivery in the communities we serve. Monarch has always been a leader in this regard and is delighted to have been selected as a pilot site for this project.”

http://www.marketwire.com/press-release/Monarch-HealthCare-HealthCare-Partners-Anthem-Blue-Cross-Chosen-Innovative-National-1265703.htm

Comment: 

By Don McCanne, MD

The Dartmouth Atlas of Health Care has been an important contribution to the health policy literature because it demonstrates that regional variations in health care spending are very real. The reasons for these differences are complex and certainly not fully understood at this time.

In spite of the lack of adequate comprehension of the multiple factors involved, the Dartmouth researchers and the Washington politicians are pushing us into accountable care organizations (ACOs) that would arbitrarily reduce spending in high cost areas even though that spending might be medically appropriate and such reductions could impair health care outcomes.

Examples of other important factors that should be considered include the rates of poverty in the region, the population health status in the region, adequacy of health insurance and other financing programs, prices being charged for health care services, excess or deficient capacities in health care facilities especially for high-tech services, and whether or not the variations in frequency and intensity of services are medically appropriate. All potential factors should be well defined through further study, and then policy decisions should be made on the facts.

Unfortunately, moving forward with ACOs is not based on solid policy science. The prototype already initiated by the Dartmouth Institute and others, as mentioned in the Marketwire article above, is really not much different from the HMO concept.

Each year Jay Cohen, MD, MBA, the president and chairman of Monarch HealthCare, and I coach competing debate teams at the University of California at Irvine School of Medicine. The debate is on single payer versus managed care. I can assure you that the ACO under Monarch HealthCare will be structured based on markets and money, with “accountable” prioritized over “care.” Who in their right mind would ever believe that a new label for an old entity will somehow magically reduce our health care spending?

We do need to proceed with studies that could lead to promising efficiencies, but we should not allow the dubious ACO experiment to divert us from introducing proven efficiencies now. The most obvious would be to introduce a single payer national health program. That would provide us with much greater value in our health care purchasing while slowing the rate of cost growth throughout the future. And, oh yes, it would ensure that all of us would receive the care that we need – a mission not on the agendas of ACOs.

The Dartmouth Atlas and ACOs

Critics Question Study Cited in Health Debate

By Reed Abelson and Gardiner Harris
The New York Times
June 2, 2010
In selling the health care overhaul to Congress, the Obama administration cited a once obscure research group at Dartmouth College to claim that it could not only cut billions in wasteful health care spending but make people healthier by doing so.
But while the research compiled in the Dartmouth Atlas of Health Care has been widely interpreted as showing the country’s best and worst care, the Dartmouth researchers themselves acknowledged in interviews that in fact it mainly shows the varying costs of care in the government’s Medicare program. Measures of the quality of care are not part of the formula.
The mistaken belief that the Dartmouth research proves that cheaper care is better care is widespread — and has been fed in part by Dartmouth researchers themselves.
The debate about the Dartmouth work is important because a growing number of health policy researchers are finding that overhauling the nation’s health care system will be far harder and more painful than the Dartmouth work has long suggested. Cuts, if not made carefully, could cost lives.
http://www.nytimes.com/2010/06/03/business/03dartmouth.html?hp=&pagewanted=all
A graphic comparing “The Dartmouth Atlas of Health Care” with Medicare’s “Hospital Compare”:
http://www.nytimes.com/interactive/2010/06/03/business/Dartmouth-maps.html

And…

Monarch HealthCare, HealthCare Partners, and Anthem Blue Cross Chosen for Innovative National Healthcare Program

Marketwire
May 25, 2010
Two of Southern California’s leading physician-governed medical groups, along with Anthem Blue Cross, have been selected for participation in a new and innovative, nationally-recognized healthcare model that rewards providers for improving patient outcomes, while slowing cost growth.
Monarch HealthCare, an Irvine, California-based Medical Group and Independent Physician Association (IPA), and HealthCare Partners, a Torrance, California-based Medical Group and IPA, will collaborate with Anthem Blue Cross in an Accountable Care Organization (ACO) pilot project led by the Engelberg Center for Health Care Reform at Brookings and The Dartmouth Institute for Health Policy and Clinical Practice. The selection of the two California organizations furthers the nationwide demonstration project already underway in three other communities. The demonstration project expects to produce a successful model that will be replicable throughout the country.
Jay Cohen, M.D., president and chairman of the board at Monarch, believes “this is a very exciting development for anyone who supports innovative ideas designed to improve healthcare delivery in the communities we serve. Monarch has always been a leader in this regard and is delighted to have been selected as a pilot site for this project.”
http://www.marketwire.com/press-release/Monarch-HealthCare-HealthCare-Partners-Anthem-Blue-Cross-Chosen-Innovative-National-1265703.htm

The Dartmouth Atlas of Health Care has been an important contribution to the health policy literature because it demonstrates that regional variations in health care spending are very real. The reasons for these differences are complex and certainly not fully understood at this time.
In spite of the lack of adequate comprehension of the multiple factors involved, the Dartmouth researchers and the Washington politicians are pushing us into accountable care organizations (ACOs) that would arbitrarily reduce spending in high cost areas even though that spending might be medically appropriate and such reductions could impair health care outcomes.
Examples of other important factors that should be considered include the rates of poverty in the region, the population health status in the region, adequacy of health insurance and other financing programs, prices being charged for health care services, excess or deficient capacities in health care facilities especially for high-tech services, and whether or not the variations in frequency and intensity of services are medically appropriate. All potential factors should be well defined through further study, and then policy decisions should be made on the facts.
Unfortunately, moving forward with ACOs is not based on solid policy science. The prototype already initiated by the Dartmouth Institute and others, as mentioned in the Marketwire article above, is really not much different from the HMO concept.
Each year Jay Cohen, MD, MBA, the president and chairman of Monarch HealthCare, and I coach competing debate teams at the University of California at Irvine School of Medicine. The debate is on single payer versus managed care. I can assure you that the ACO under Monarch HealthCare will be structured based on markets and money, with “accountable” prioritized over “care.” Who in their right mind would ever believe that a new label for an old entity will somehow magically reduce our health care spending?
We do need to proceed with studies that could lead to promising efficiencies, but we should not allow the dubious ACO experiment to divert us from introducing proven efficiencies now. The most obvious would be to introduce a single payer national health program. That would provide us with much greater value in our health care purchasing while slowing the rate of cost growth throughout the future. And, oh yes, it would ensure that all of us would receive the care that we need – a mission not on the agendas of ACOs.

Critics Question Study Cited in Health Debate

By REED ABELSON and GARDINER HARRIS
The New York Times
June 2, 2010

In selling the health care overhaul to Congress, the Obama administration cited a once obscure research group at Dartmouth College to claim that it could not only cut billions in wasteful health care spending but make people healthier by doing so.

Wasteful spending — perhaps $700 billion a year — “does nothing to improve patient health but subjects you and me to tests and procedures that aren’t necessary and are potentially harmful,” the president’s budget director, Peter Orszag, wrote in a blog post characteristic of the administration’s argument.

Mr. Orszag even displayed maps produced by Dartmouth researchers that appeared to show where the waste in the system could be found. Beige meant hospitals and regions that offered good, efficient care; chocolate meant bad and inefficient.

The maps made reform seem relatively easy to many in Congress, some of whom demanded the administration simply trim the money Medicare pays to hospitals and doctors in the brown zones. The administration promised to seriously consider doing just that.

But while the research compiled in the Dartmouth Atlas of Health Care has been widely interpreted as showing the country’s best and worst care, the Dartmouth researchers themselves acknowledged in interviews that in fact it mainly shows the varying costs of care in the government’s Medicare program. Measures of the quality of care are not part of the formula.

For all anyone knows, patients could be dying in far greater numbers in hospitals in the beige regions than hospitals in the brown ones, and Dartmouth’s maps would not pick up that difference. As any shopper knows, cheaper does not always mean better.

Even Dartmouth’s claims about which hospitals and regions are cheapest may be suspect. The principal argument behind Dartmouth’s research is that doctors in the Upper Midwest offer consistently better and cheaper care than their counterparts in the South and in big cities, and if Southern and urban doctors would be less greedy and act more like ones in Minnesota, the country would be both healthier and wealthier.

But the real difference in costs between, say, Houston and Bismarck, N.D., may result less from how doctors work than from how patients live. Houstonians may simply be sicker and poorer than their Bismarck counterparts. Also, nurses in Houston tend to be paid more than those in North Dakota because the cost of living is higher in Houston. Neither patients’ health nor differences in prices are fully considered by the Dartmouth Atlas.

The mistaken belief that the Dartmouth research proves that cheaper care is better care is widespread — and has been fed in part by Dartmouth researchers themselves.

The debate about the Dartmouth work is important because a growing number of health policy researchers are finding that overhauling the nation’s health care system will be far harder and more painful than the Dartmouth work has long suggested. Cuts, if not made carefully, could cost lives.

Looking in detail at Dartmouth’s evidence helps show why.

Criticisms on Spending

A main focus of the Dartmouth Atlas is comparing spending among the nation’s hospitals. To do that, Dartmouth researchers use data on how much hospitals have billed Medicare for patients with a chronic illness who were in their last six months or two years of life.

“We show where the waste is in medicine,” said Dr. Elliott Fisher, a physician who is one of the principal authors of the Dartmouth work and was a frequent visitor to Washington during the long legislative debate. “If everyone could operate like Oregon, Seattle or the Upper Midwest, there’s huge savings.”

But the atlas’s hospital rankings do not take into account care that prolongs or improves lives. If one hospital spends a lot on five patients and manages to keep four of them alive, while another spends less on each but all five die, the hospital that saved patients could rank lower because Dartmouth compares only costs before death.

“It may be that some places that are spending more are actually getting better results,” said Dr. Harlan M. Krumholz, a professor of medicine and health policy expert at Yale.

Failing to receive credit for better care enrages some hospital administrators. But for the Dartmouth researchers, making these administrators uncomfortable is the point of the rankings.

“When you name names, people start paying more attention,” Dr. Fisher said. “We never asserted and never claimed that we judged the quality of care at a hospital — only the cost.”

In interviews, administration officials acknowledged that the Dartmouth Atlas was far from perfect. Mr. Orszag says he does not rely on the atlas alone to prove that huge savings are possible.

“What I have repeatedly said is that a wide variety of evidence suggests there is substantial opportunity for savings, and the challenge is in capturing that opportunity,” he said.

Still, the Dartmouth work remains influential in Washington.

Dr. Donald Berwick, nominated by President Obama to run Medicare, called it the most important research of its kind in the last quarter-century. In March, in response to the Congressional Democrats who would have otherwise withheld their support for the health legislation, the administration made a promise. It said it would ask the Institute of Medicine, a nongovernment advisory group, to consider ways of putting the Dartmouth findings into action by setting payment rates that would punish inefficient hospitals and reward efficient ones.

But if that system penalizes big city hospitals like those at the Ronald Reagan UCLA Medical Center and NYU Langone Medical Center — which look profligate by Dartmouth’s measure but may rank much higher by other quality indicators — a battle over the validity of the Dartmouth work is almost certain in Congress.

In fact, among health policy analysts, that battle has already begun. Critiques have been published in prominent medical journals, and more are on the way.

Differences in Patient Care

In interviews and extensive written comments, Dr. Fisher and Jonathan Skinner, a health economist at Dartmouth who works with him, vigorously defended their work. They berated what they described as “a cottage industry in new studies trying to debunk our findings.”

They say their critics fail to understand the issues and often make significant statistical errors. And they say even if they adjusted more fully to reflect differences in regional costs and patients’ health, the overall effect on the atlas’s findings would be relatively small.

The researchers also say they have made some of those adjustments in some of their other published work. Many other health researchers say Dartmouth should be praised for highlighting the tremendous differences in how patients are treated and for emphasizing that patients often fail to benefit from additional care.

“Dartmouth opened our eyes to something that I believe is real and important,” said Dr. Robert M. Wachter, a professor in hospital medicine at the University of California, San Francisco.

But even those who defend Dartmouth say that failing to make basic data adjustments undermines the geographic variations the atlas purports to show. David Cutler, a professor of economics at Harvard, likens it to failing to account for inflation when looking at gross domestic product. “Nobody in their right mind would talk about G.D.P. growth without adjusting for prices,” he said.

In addition to their hospital rankings, the Dartmouth researchers have also done separate studies of how Medicare spending affects patient care regionally. A 2003 study found tha
t patients who lived in places most expensive for the Medicare program received no better care than those who lived in cheaper areas.

Because some regions spent nearly a third more than other regions without any apparent benefit, the Dartmouth team concluded that at least one dollar in three was wasted by Medicare. When applied generally to the nation’s health care system, that meant about $700 billion could be saved.

But as it began publicly discussing its research, the Dartmouth team often extrapolated beyond this basic finding. Not only do high-spending regions fail to provide better care, the Dartmouth team began to argue, but those regions actually offer worse care.

In just one example of this extrapolation, Dr. Fisher, in testimony before Congress last year, summarized his and others’ work by asking, “Why are access and quality worse in high-spending regions?”

And on Dartmouth’s Web site, a question-and-answer section suggests that this interpretation is appropriate:

“The evidence is that higher utilization does not extend life expectancy, and might be correlated with shorter life expectancy, compared with lower utilization. Therefore, sending people with chronic diseases to higher-efficiency, lower-utilization hospitals for their care could result in both lower spending and increased quality and length of life.”

While a few studies by other researchers have shown that more spending leads to worse health, some others have suggested the opposite — that more expensive hospitals might offer better care. But many have shown no link, either way, between spending and quality.

In other words, there is little evidence to support the widely held view, shaped by the Dartmouth researchers, that the nation’s best hospitals tend to be among the least expensive.

In interviews, Dr. Fisher and Mr. Skinner acknowledged that there was no proven link between greater spending and worse health outcomes. And Dr. Fisher acknowledged the apparent inconsistency between his statements in interviews with The New York Times and those made elsewhere, saying that he was sometimes less careful in discussing his team’s research than he should be.

In any case, the more-is-worse message has resonated with insurers, whose foundations now help to finance the Dartmouth Atlas. Dartmouth researchers also created a company, Health Dialog, to consult for insurers and others on Dartmouth’s findings. Valued at nearly $800 million, the company was sold to a British insurer in 2007 and still helps to finance the Dartmouth work.

Rankings in Wisconsin

Last June, as Mr. Obama campaigned for his health care overhaul, he visited Green Bay, Wis., praising the city for getting “more quality out of fewer health care dollars than many other communities.”

Two of Green Bay’s hospitals, Bellin and St. Mary’s Hospital Medical Center, rank fourth and 11th within Wisconsin on the Dartmouth list.

But again, Dartmouth ranks hospitals only by costs and number of treatments and procedures. A different picture emerges from work done by the Wisconsin Collaborative for Healthcare Quality, a voluntary group of health care organizations that uses both price and quality of care measures. In an analysis of heart attack care, for example, it ranks Bellin second, and St. Mary’s 15th, among the 22 hospitals in the state.

And a Medicare ranking based on its own data that shows how many people die after treatment for certain conditions — statistics that exclude costs entirely — puts Bellin fifth, but drops St. Mary’s to second-to-last: 67th of the 68 hospitals statewide that were measured by both Dartmouth and Medicare.

Do the Green Bay hospitals favored by Dartmouth really offer better care? Maybe not.

Similar problems arise with Dartmouth’s regional data. In Dartmouth’s rankings, for instance, New Jersey comes in dead last because its costs per Medicare beneficiary are the nation’s highest. And yet, for the quality of care offered in New Jersey, independent of cost, federal health officials rank New Jersey second only to Vermont.

Researchers who have examined the Dartmouth Atlas numbers have found other flaws that can distort hospital rankings. Doctors at Cedars-Sinai in Los Angeles, for instance, found that Dartmouth had failed to distinguish two different types of intensive care units the hospital runs. Dartmouth also might have overcounted the number of specialists examining each patient.

The errors, Cedars-Sinai said, meant the hospital probably fared worse in the Dartmouth rankings than it should have. Cedars-Sinai’s chief medical officer, Dr. Michael Langberg, said he had tried to discuss these problems with Dartmouth researchers but had thought they were unresponsive.

Dr. Fisher said he had tried to address Cedars-Sinai’s concerns. But he also argued that while the Dartmouth Atlas was not perfect, it provided useful insights into differences in the way various hospitals treat patients.

“For the past 20 years, my colleagues and I and now many others have been working hard to clarify the causes and consequences of regional variations in practice and spending,” Dr. Fisher said. “The work is challenging and more work needs to be done, but we have learned enough to help guide health reform.”

Discussion in Portsmouth June 10 on national heath program

By Roni Reino
Fosters Daily Democrat
Saturday, May 29, 2010

PORTSMOUTH — The Portsmouth Primary Care Associates will host a discussion with Oliver Fein, president of the Physicians for a National Health Program on June 10.

The PNHP is an advocacy organization of some 17,000 American physicians, medical students and health care professionals who support a single-payer system of national health insurance.

The organization will hold a public forum on health care reform and suggest a solution with single-payer health care that will work for the small business person and the individual.

Single-payer health care is the financing of the costs to deliver universal health care for an entire population. It uses a single insurance pool of insured persons, employers and others.

It is a system in which a single or quasi-public agency organizes health financing, but the delivery of care remains largely private.

According to the PNHP, all Americans would be covered for all medical necessary services including doctor, hospital, preventive, long-term care, mental health, reproductive health care, dental, vision, prescription drug and medical supplies.

Under their plan, patients would retain free choice of doctor and hospital.

Australia, Canada and the United Kingdom all have examples of a single-payer universal health care system.

A survey conducted by the PNHP found that 81 percent of responding New Hampshire physicians agreed health care should be “available to all citizens as part of the social contract, a right similar to basic education, police and fire protection.”

Dr. Thomas Clairmont of the PNHP advocates for the single-payer system and suggests Americans have the choice of another health care option.

“We need alternative solutions now rather than waiting,” Clairmont said.

He also emphasized health care costs will rise unless the U.S. government does something about it soon, making it more difficult for people to pay for insurance.

“It should be that everyone gets covered,” Clairmont said.

The discussion will be held Thursday, June, 10 from 3 p.m. to 4:30 p.m. at the Frank Jones Center on the Route 1 Bypass in Portsmouth. The forum is open to the public with no registration required and attendance is free.

http://www.fosters.com/apps/pbcs.dll/article?AID=2010705299914

AHIP mischaracterizes NICE alcohol screening recommendations

British Doctors Must Now Ask: Tell Us How Much You Drink

America’s Health Insurance Plans (AHIP)
(Source – Rebecca Smith, The Daily Telegraph)
June 2, 2010

Under new guidelines set by the National Institute for Health and Clinical Excellence (NICE), British healthcare providers are required to inquire about their patients’ drinking habits as a means to curb the nation’s problem with drinking. NICE recommends that doctors and pharmacists alike gauge patient-consumption tendencies through a series of “alcohol screening” questions – the line of interrogation including no less than 10 questions.

http://www.ahiphiwire.org/International/News/Default.aspx?doc_id=589183&utm_source=6/2/2010

And…

PH24 Alcohol use disorders: preventing harmful drinking: guidance

National Institute for Health and Clinical Excellence (NICE)

Recommendation 9: screening adults

Where screening everyone is not feasible or practicable, NHS professionals should focus on groups that may be at an increased risk of harm from alcohol and those with an alcohol-related condition. This includes people:

− with relevant physical conditions (such as hypertension and gastrointestinal or liver disorders)
− with relevant mental health problems (such as anxiety, depression or other mood disorders)
− who have been assaulted
− at risk of self-harm
− who regularly experience accidents or minor traumas
− who regularly attend GUM clinics or repeatedly seek emergency contraception.

Full report (100 pages):
http://www.nice.org.uk/nicemedia/live/13001/48984/48984.pdf

The 10 questions used for screening (page 16 of 35 pages):
http://www.nice.org.uk/nicemedia/live/13001/49023/49023.pdf

About NICE: “NICE produces guidance on public health, health technologies and clinical practice.”
http://www.nice.org.uk/aboutnice/whatwedo/what_we_do.jsp

Comment: 

By Don McCanne, MD

Great Britain’s National Institute for Health and Clinical Excellence (NICE) produces guidance on public health, health technologies and clinical practice. Their efforts are directed at improving value in health care, especially reducing spending for ineffective or inappropriate services and products.

America’s Health Insurance Plans (AHIP) has repeatedly called for government policies that would help control spending. You would think that AHIP would be supportive of the NICE concept, but by distributing today’s release that falsely states, in essence, that British physicians are being required to invade the privacy of every one of their patients by submitting them to a questionnaire on alcohol use, it seems that AHIP is joining forces with the conservatives who have been condemning NICE as a program of socialistic government rationing. Nowhere in the 100 page NICE report does it state that universal alcohol screening is an absolute requirement. Also for a physician to discuss alcohol problems with a patient is no more an invasion of privacy than discussing any other factors that might influence the patient’s health.

The good news is that the United States has taken a step forward by expanding the role of comparative effectiveness research (CER). Although it is unclear as to whether CER would have much impact on total health care spending, there is no question but that it will provide greater value in our health care.

If we really do care about attaining greater value then we need to expand NICE-like policies while eliminating the profound waste of the superfluous insurance industry represented by AHIP.

AHIP mischaracterizes NICE alcohol screening recommendations

British Doctors Must Now Ask: Tell Us How Much You Drink

America’s Health Insurance Plans (AHIP)
(Source – Rebecca Smith, The Daily Telegraph)
June 2, 2010
Under new guidelines set by the National Institute for Health and Clinical Excellence (NICE), British healthcare providers are required to inquire about their patients’ drinking habits as a means to curb the nation’s problem with drinking. NICE recommends that doctors and pharmacists alike gauge patient-consumption tendencies through a series of “alcohol screening” questions – the line of interrogation including no less than 10 questions.
http://www.ahiphiwire.org/International/News/Default.aspx?doc_id=589183&utm_source=6/2/2010

And…

PH24 Alcohol use disorders: preventing harmful drinking: guidance

National Institute for Health and Clinical Excellence (NICE)
Recommendation 9: screening adults
Where screening everyone is not feasible or practicable, NHS professionals should focus on groups that may be at an increased risk of harm from alcohol and those with an alcohol-related condition. This includes people:
− with relevant physical conditions (such as hypertension and gastrointestinal or liver disorders)
− with relevant mental health problems (such as anxiety, depression or other mood disorders)
− who have been assaulted
− at risk of self-harm
− who regularly experience accidents or minor traumas
− who regularly attend GUM clinics or repeatedly seek emergency contraception.
Full report (100 pages):
http://www.nice.org.uk/nicemedia/live/13001/48984/48984.pdf
The 10 questions used for screening (page 16 of 35 pages):
http://www.nice.org.uk/nicemedia/live/13001/49023/49023.pdf
About NICE: “NICE produces guidance on public health, health technologies and clinical practice.”
http://www.nice.org.uk/aboutnice/whatwedo/what_we_do.jsp

Great Britain’s National Institute for Health and Clinical Excellence (NICE) produces guidance on public health, health technologies and clinical practice. Their efforts are directed at improving value in health care, especially reducing spending for ineffective or inappropriate services and products.
America’s Health Insurance Plans (AHIP) has repeatedly called for government policies that would help control spending. You would think that AHIP would be supportive of the NICE concept, but by distributing today’s release that falsely states, in essence, that British physicians are being required to invade the privacy of every one of their patients by submitting them to a questionnaire on alcohol use, it seems that AHIP is joining forces with the conservatives who have been condemning NICE as a program of socialistic government rationing. Nowhere in the 100 page NICE report does it state that universal alcohol screening is an absolute requirement. Also for a physician to discuss alcohol problems with a patient is no more an invasion of privacy than discussing any other factors that might influence the patient’s health.
The good news is that the United States has taken a step forward by expanding the role of comparative effectiveness research (CER). Although it is unclear as to whether CER would have much impact on total health care spending, there is no question but that it will provide greater value in our health care.
If we really do care about attaining greater value then we need to expand NICE-like policies while eliminating the profound waste of the superfluous insurance industry represented by AHIP.

Dilemma of insuring seasonal agricultural workers

Oregon agriculture industry sorts health care

By Harris Meyer
The Oregonian
May 29, 2010

Unlike many agricultural employers, Ken Bailey of Orchard View Farms in The Dalles offers his 85 full-time workers health insurance. The orchard and packinghouse operator pays 80 percent of the premium for workers and their dependents.

But like nearly all growers, Bailey’s company does not offer coverage to the 600 to 700 seasonal workers it hires for about eight weeks each year to pick cherries and pears on its 2,080 acres. It’s estimated that as few as 10 percent of farmworkers nationally have health insurance.

Now, Bailey and other farmers in Oregon and Washington are nervous about the federal health reform law passed in March. It requires employers with 50 or more full-time equivalent workers to provide health coverage starting in 2014 or pay a $2,000 penalty per employee. Bailey, who favored health reform, said he’s comfortable with that. Industry groups say most Pacific Northwest growers are too small to fall under that mandate.

But the new law also may require larger farmers and packers like Bailey who meet the 50-employee threshold to offer insurance to seasonal workers or pay the penalty, depending on how the government writes the rules, according to the American Farm Bureau Federation in Washington, D.C. That would be a major new cost for growers already struggling with the bad economy and lower prices for their products.

“It’s almost impossible for individual growers to cover seasonals,” Bailey said. “It depends on whether there is a reasonable program with a reasonable price.” Farmers might even end up paying for coverage of undocumented workers, he said, since they have no reliable way of verifying their workers’ legal status because so many documents — even Social Security cards — can be faked.

For agricultural employers, though, the biggest concern is whether they’ll be required to cover seasonal workers, whom Pacific Northwest growers depend on heavily for their labor-intensive fruit and vegetable crops. The law excludes seasonals — defined as working 120 days or fewer in a calendar year — from being counted toward the threshold of 50 full-time-equivalent employees that brings employers under the insurance mandate. But a new Congressional Research Service analysis says the law requires employers over that threshold to cover seasonals during the months they are working full-time or pay the penalty.

The seasonal worker issue is just one of many uncertainties facing agricultural employers and workers as the complex new health care law is rolled out.

http://www.oregonlive.com/business/index.ssf/2010/05/oregon_ag_industry_sorts_healt.html

Comment:  

By Don McCanne, MD

This is yet another of the endless examples of how the Patient Protection and Affordable Care Act (PPACA) is so flawed that it cannot ever result in accomplishing the primary reform goal of covering everyone. Seasonal agricultural workers do not fit into a neat slot in the dysfunctional, fragmented financing system that President Obama and Congress have selected for us.

The first question we might ask is should all seasonal agricultural workers in the United States have the health care that they need without having to suffer potentially severe financial consequences? If you support cultural narcissism and reject social solidarity, then go away. You really wouldn’t fit in with a group of people who believe that we should take care of each other, and our views are apt to only make you more angry.

Those who do believe that seasonal agricultural workers should have health care the year around, if they need it, understand how complex the rules will have to be to cover them with a system that includes an employer mandate, an individual mandate, and varying requirements based on previous, current and future employment, or unemployment, and based on the impact of vacillations in income as related to sliding-scale eligibility or ineligibility for various programs.

Just briefly touching on some of the policies inherent in PPACA: employers with over 50 full-time equivalent employees will have to purchase coverage for their seasonal employees or pay a $2000 penalty per employee, even though that may be a staggering bill because of a temporary ten-fold increase in the number of employees; since most seasonal employees are uninsured, moving in and out of coverage during the harvest season results in instability of coverage; many seasonal workers are undocumented and thus ineligible for purchase of plans in the exchanges, defeating the purpose of the individual mandate; seasonal workers might be able to obtain care through community health centers, though that depends on having clinics accessible and may mean that important specialized services may not be provided, and the mere existence of such clinics may not fulfill the mandate requirements anyway; though the workers and their families might be eligible for Medicaid on an income basis, that may conflict with the employer mandate; etc.

One of the structural problems is that this fragmented system attempts to assign an insurance product, whether employer-sponsored, privately purchased in the individual market, privately purchased in the exchange, provided by the government in the form of Medicaid, or provided as a safety-net function such as the community health centers, when the eligibility and ability to pay is highly variable between individuals and at different points in time. Fragmentation, disruptions, and voids in coverage are inevitable. We need to sever the individual link to a specific insurance product.

What would fix this would be a single payer national health program with automatic enrollment for everyone, financed separately though equitable tax policies. For purely ethical reasons, we can’t accept the new status quo of the highly dysfunctional PPACA. We need to dump it and move on with an improved Medicare for everyone.

For the cultural narcissists who read this far, we would hope to enact a system that would ensure that you will always be able to have the health care that you need, but we would also use the tax system to prohibit you from being a free rider, just as the tax system prevents us from not paying our share of the wars that we oppose.

Dilemma of insuring seasonal agricultural workers

Oregon agriculture industry sorts health care

By Harris Meyer
The Oregonian
May 29, 2010
Unlike many agricultural employers, Ken Bailey of Orchard View Farms in The Dalles offers his 85 full-time workers health insurance. The orchard and packinghouse operator pays 80 percent of the premium for workers and their dependents.
But like nearly all growers, Bailey’s company does not offer coverage to the 600 to 700 seasonal workers it hires for about eight weeks each year to pick cherries and pears on its 2,080 acres. It’s estimated that as few as 10 percent of farmworkers nationally have health insurance.
Now, Bailey and other farmers in Oregon and Washington are nervous about the federal health reform law passed in March. It requires employers with 50 or more full-time equivalent workers to provide health coverage starting in 2014 or pay a $2,000 penalty per employee. Bailey, who favored health reform, said he’s comfortable with that. Industry groups say most Pacific Northwest growers are too small to fall under that mandate.
But the new law also may require larger farmers and packers like Bailey who meet the 50-employee threshold to offer insurance to seasonal workers or pay the penalty, depending on how the government writes the rules, according to the American Farm Bureau Federation in Washington, D.C. That would be a major new cost for growers already struggling with the bad economy and lower prices for their products.
“It’s almost impossible for individual growers to cover seasonals,” Bailey said. “It depends on whether there is a reasonable program with a reasonable price.” Farmers might even end up paying for coverage of undocumented workers, he said, since they have no reliable way of verifying their workers’ legal status because so many documents — even Social Security cards — can be faked.
For agricultural employers, though, the biggest concern is whether they’ll be required to cover seasonal workers, whom Pacific Northwest growers depend on heavily for their labor-intensive fruit and vegetable crops. The law excludes seasonals — defined as working 120 days or fewer in a calendar year — from being counted toward the threshold of 50 full-time-equivalent employees that brings employers under the insurance mandate. But a new Congressional Research Service analysis says the law requires employers over that threshold to cover seasonals during the months they are working full-time or pay the penalty.
The seasonal worker issue is just one of many uncertainties facing agricultural employers and workers as the complex new health care law is rolled out.
http://www.oregonlive.com/business/index.ssf/2010/05/oregon_ag_industry_sorts_healt.html

This is yet another of the endless examples of how the Patient Protection and Affordable Care Act (PPACA) is so flawed that it cannot ever result in accomplishing the primary reform goal of covering everyone. Seasonal agricultural workers do not fit into a neat slot in the dysfunctional, fragmented financing system that President Obama and Congress have selected for us.
The first question we might ask is should all seasonal agricultural workers in the United States have the health care that they need without having to suffer potentially severe financial consequences? If you support cultural narcissism and reject social solidarity, then go away. You really wouldn’t fit in with a group of people who believe that we should take care of each other, and our views are apt to only make you more angry.
Those who do believe that seasonal agricultural workers should have health care the year around, if they need it, understand how complex the rules will have to be to cover them with a system that includes an employer mandate, an individual mandate, and varying requirements based on previous, current and future employment, or unemployment, and based on the impact of vacillations in income as related to sliding-scale eligibility or ineligibility for various programs.
Just briefly touching on some of the policies inherent in PPACA: employers with over 50 full-time equivalent employees will have to purchase coverage for their seasonal employees or pay a $2000 penalty per employee, even though that may be a staggering bill because of a temporary ten-fold increase in the number of employees; since most seasonal employees are uninsured, moving in and out of coverage during the harvest season results in instability of coverage; many seasonal workers are undocumented and thus ineligible for purchase of plans in the exchanges, defeating the purpose of the individual mandate; seasonal workers might be able to obtain care through community health centers, though that depends on having clinics accessible and may mean that important specialized services may not be provided, and the mere existence of such clinics may not fulfill the mandate requirements anyway; though the workers and their families might be eligible for Medicaid on an income basis, that may conflict with the employer mandate; etc.
One of the structural problems is that this fragmented system attempts to assign an insurance product, whether employer-sponsored, privately purchased in the individual market, privately purchased in the exchange, provided by the government in the form of Medicaid, or provided as a safety-net function such as the community health centers, when the eligibility and ability to pay is highly variable between individuals and at different points in time. Fragmentation, disruptions, and voids in coverage are inevitable. We need to sever the individual link to a specific insurance product.
What would fix this would be a single payer national health program with automatic enrollment for everyone, financed separately though equitable tax policies. For purely ethical reasons, we can’t accept the new status quo of the highly dysfunctional PPACA. We need to dump it and move on with an improved Medicare for everyone.
For the cultural narcissists who read this far, we would hope to enact a system that would ensure that you will always be able to have the health care that you need, but we would also use the tax system to prohibit you from being a free rider, just as the tax system prevents us from not paying our share of the wars that we oppose.

Anthem Blue Cross has racked up 479 enforcement actions

Anthem Big Outlier In DMHC Actions

Payers and Providers
May 27, 2010

Since the California Department of Managed Health Care (DMHC) began its regulatory mission a decade ago, it has levied nearly 1,200 enforcement actions against health plans, providers and other entities for violating state laws and regulations. The DMHC typically issues penalties for not responding to member grievances or failing to pay claims in a timely fashion.

Among the 170 organizations that have been penalized by the DMHC, Anthem Blue Cross of California stands alone.

The Indianapolis-based Anthem has racked up a remarkable 479 enforcement actions, or more than 40% of the statewide total, according to DMHC records. Some 275 of those actions have been levied against Anthem since early 2009 – including a $2.5 million fine the agency issued last November but has yet to publicize.

Anthem’s overall number is more than quadruple the 102 enforcement actions levied against San Francisco-based Blue Shield of California, the second-largest total.

Anthem Blue Cross equated the number of enforcement actions to its size: “As the state’s largest health benefits company serving more than 8 million people in California each year, it is not surprising that we might have the largest number of inquiries from the DMHC,” the insurer said in a prepared statement. Yet the only insurer of similar size to Anthem in California, Oakland-based Kaiser Foundation Health Plan, has received just 84 enforcement actions from the DMHC. It has 6.7 million enrollees statewide.

“The failure to timely respond to member grievances appears to be due to the lack of administrative capacity,” stated (DMHC spokeswoman Lynne Randolph).

http://www.payersandproviders.com/publications/pp527.pdf

Comment: 

By Don McCanne, MD

A unique characteristic of the U.S. health care system is the profound administrative waste, in a large part due to the administrative excesses of the private insurers and the administrative burden that they place on the providers of health care. The administrative component of just the private insurers alone is so large that Congress has codified the policy that 15 to 20 percent of health insurance premiums will be allocated for the insurers to use for their own intrinsic administrative services.

Currently outrage is being expressed over the very high insurance premium increases which the insurers attribute to increased health care costs. But the insurers are retaining the same high percentages of these ever higher premiums even though their marginal costs for administrative services should not be increasing at the same rate as health care prices. The increased spending on health care has provided a windfall for the private insurers.

So what are we getting for the massive amount of dollars being retained by the private insurers? Administrative services, and in great excesses at that. Yet why has WellPoint’s Anthem Blue Cross had so many enforcement actions levied against it? As the Department of Managed Care’s spokeswoman states, “The failure to timely respond to member grievances appears to be due to the lack of administrative capacity.”

Lack of administrative capacity?! With what we’re paying them for their administrative services?! And President Obama and Congress want to keep this industry in charge?!

This is not the time to sit back and see how the reform plays out. PPACA cannot ever insure everyone, and it cannot control the intolerable increases in spending. Now, more than ever, is the time for activism! Let’s demand a health care program that we can believe in – an improved Medicare for all!

Anthem Blue Cross has racked up 479 enforcement actions

Anthem Big Outlier In DMHC Actions

Payers and Providers
May 27, 2010
Since the California Department of Managed Health Care (DMHC) began its regulatory mission a decade ago, it has levied nearly 1,200 enforcement actions against health plans, providers and other entities for violating state laws and regulations. The DMHC typically issues penalties for not responding to member grievances or failing to pay claims in a timely fashion.
Among the 170 organizations that have been penalized by the DMHC, Anthem Blue Cross of California stands alone.
The Indianapolis-based Anthem has racked up a remarkable 479 enforcement actions, or more than 40% of the statewide total, according to DMHC records. Some 275 of those actions have been levied against Anthem since early 2009 – including a $2.5 million fine the agency issued last November but has yet to publicize.
Anthem’s overall number is more than quadruple the 102 enforcement actions levied against San Francisco-based Blue Shield of California, the second-largest total.
Anthem Blue Cross equated the number of enforcement actions to its size: “As the state’s largest health benefits company serving more than 8 million people in California each year, it is not surprising that we might have the largest number of inquiries from the DMHC,” the insurer said in a prepared statement. Yet the only insurer of similar size to Anthem in California, Oakland-based Kaiser Foundation Health Plan, has received just 84 enforcement actions from the DMHC. It has 6.7 million enrollees statewide.
“The failure to timely respond to member grievances appears to be due to the lack of administrative capacity,” stated (DMHC spokeswoman Lynne Randolph).
http://www.payersandproviders.com/publications/pp527.pdf

A unique characteristic of the U.S. health care system is the profound administrative waste, in a large part due to the administrative excesses of the private insurers and the administrative burden that they place on the providers of health care. The administrative component of just the private insurers alone is so large that Congress has codified the policy that 15 to 20 percent of health insurance premiums will be allocated for the insurers to use for their own intrinsic administrative services.
Currently outrage is being expressed over the very high insurance premium increases which the insurers attribute to increased health care costs. But the insurers are retaining the same high percentages of these ever higher premiums even though their marginal costs for administrative services should not be increasing at the same rate as health care prices. The increased spending on health care has provided a windfall for the private insurers.
So what are we getting for the massive amount of dollars being retained by the private insurers? Administrative services, and in great excesses at that. Yet why has WellPoint’s Anthem Blue Cross had so many enforcement actions levied against it? As the Department of Managed Care’s spokeswoman states, “The failure to timely respond to member grievances appears to be due to the lack of administrative capacity.”
Lack of administrative capacity?! With what we’re paying them for their administrative services?! And President Obama and Congress want to keep this industry in charge?!
This is not the time to sit back and see how the reform plays out. PPACA cannot ever insure everyone, and it cannot control the intolerable increases in spending. Now, more than ever, is the time for activism! Let’s demand a health care program that we can believe in – an improved Medicare for all!

Will the temporary high-risk pool meet the needs for those who are uninsurable?

Health Coverage for the High-Risk Uninsured: Policy Options for Design of the Temporary High-Risk Pool

By Mark Merlis
National Institute for Health Care Reform
May 27, 2010

Among the first tasks required by the recently enacted health reform law is creation of a temporary national high-risk pool program to provide subsidized health coverage to people who are uninsured because of pre-existing medical conditions. While as many as 5.6-million to 7-million Americans may qualify for the program, the $5 billion allocated over four years will allow coverage of only a small fraction of those in need, potentially as few as 200,000 people a year. Policy makers will need to tailor eligibility rules, benefits and premiums to stretch the dollars as far as possible. Another consideration is how the new pool will fit with existing state high-risk pools or other state interventions in the private nongroup, or individual, health insurance market. Policy makers also will need to consider how to manage the transition of enrollees from high-risk pools to the new health insurance exchanges scheduled to be operational in 2014 to prevent adverse selection and encourage insurer participation.

http://www.nihcr.org/High-RiskPools.pdf

Comment: 

By Don McCanne, MD

The Patient Protection and Affordable Care Act (PPACA) allocates $5 billion over four years for a temporary high-risk pool to insure those individuals who have problems obtaining coverage because of preexisting conditions. Although about 7 million Americans fall into this category, this report indicates that only about 200,000 people will be covered by this program, thereby meeting only about 3 percent of the need.

You need to read the full 14 page report to understand the multitude of policy interactions that will result in the failure of this one program. It serves as a proxy for the multitude of other policies contained in PPACA. We haven’t seen anything yet.

This is what happens when members of Congress insist on building health care reform on our dysfunctional, inefficient, highly fragmented system of health care financing. By insisting that we give first priority to protecting and enhancing the role of private insurers, the policy compromises have resulted in a system that will cost more while leaving far too many with inadequate coverage or no coverage at all.

Again, it doesn’t have to be this way. We can still enact a single payer national health program, ensuring all essential health care for everyone.