PNHP

Prescription drug plans are adding more tiers and switching from co-pays to coinsurance

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Prescription drug plans are adding more tiers and switching from co-pays to coinsurance

Avalere Analysis: Medicare Beneficiaries Will Pay Higher Out-Of-Pocket Costs As PDPs Increase Use Of Coinsurance In 2015

By Caroline F. Pearson, Vice President
Avalere, November 13, 2014

First Time in History of Part D, All PDPs Will Incorporate a Specialty Tier

A new analysis from Avalere Health finds that Medicare Part D prescription drug plans (PDPs) are poised to increase significantly the use of coinsurance in 2015. Avalere found that two-thirds of standalone Part D PDPs will apply coinsurance—i.e., consumers paying a percentage of the total cost of the drugs—to at least their top two formulary tiers, an increase of 83 percent from 2014.

“Adding coinsurance to a second plan tier means that more beneficiaries will be looking at the full cost of branded drugs at the pharmacy counter,” said Dan Mendelson, CEO at Avalere Health. “This strategy has proven central to plan operations as they try to keep premiums low to maintain stability in Part D.”

For First Time in History of Part D, All PDPs Will Incorporate a Specialty Tier in 2015

Since the introduction of Part D in 2006, the use of specialty tiers has been more common in Medicare Part D than in other markets, such as employer-sponsored insurance. From 2012 to 2015, the number of Part D PDPs using specialty tiers has increased, jumping nearly 15 percent in four years. As a result, all PDPs will use a specialty tier in 2015, the first time this has occurred in the history of Part D.

“The clear trend toward specialty tiers in exchanges and Part D is likely to have an impact on employer-sponsored benefit designs over time,” said Caroline Pearson, Vice President at Avalere Health. “Benefit managers and C-Suite executives are definitely taking notice of how active management of the pharmacy benefit may be able to reduce premiums.”

Two-Thirds of PDPs Will Use at Least Two Coinsurance Tiers

Perhaps more significant for beneficiaries and manufacturers is the major shift toward the use of at least two coinsurance tiers in 2015. Avalere’s analysis found that 66 percent of PDPs in 2015, representing 60 percent of covered Medicare Part D beneficiaries, will apply coinsurance to their top two tiers. In 2014, only 32 percent of PDPs (representing 35 percent Part D beneficiaries) did the same.  In total, enrollment in plans with at least two coinsurance tiers increased from 6.4 million to 11.1 million from 2014-2015.

In most cases, these plans include one specialty tier and apply coinsurance to the non-preferred brand tier. Unlike the specialty tier, there are no restrictions on what drugs can be placed on non-specialty coinsurance tiers, nor are there cost-sharing limitations. As a result, many of these tiers have cost-sharing rates ranging from 35 to 50 percent.

The shift toward more than one coinsurance tier has been accompanied by a shift toward formularies with five tiers. In 2015, 89 percent of plans will have five or more tiers, a 53 percent increase since 2012. Indeed, the dominance of five-tier plans can be accounted for in part by a surge in the number of such plans with two coinsurance tiers in 2015—while only three plans used this formulary structure in 2014, 335 plans will do so in 2015. Among these plans, coinsurance on tier four (typically used for non-preferred brand drugs) averages 44 percent.

“The inclusion of more coinsurance tiers on PDP formularies is designed to increase plans’ ability to obtain lower spending for high-cost – but non-specialty – drugs,” said Christine Harhaj, Senior Manager, Avalere Health. “Unlike most specialty drugs, however, these treatments are often prescribed to a broad patient population and applying coinsurance rates may have the effect of significantly increasing cost sharing for a large number of Part D beneficiaries.”

http://avalerehealth.net/expertise/life-sciences/insights/avalere-analysis-medicare-beneficiaries-will-pay-higher-out-of-pocket-costs

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Comment:

By Don McCanne, MD

There has been an explosion in the introduction of very high cost drugs. At the same time the generic drug market is being manipulated to enable exponential increases in the prices of generic drugs. So what innovations are the insurers introducing in response?

They are expanding the number of drug pricing tiers, and they are switching from modest co-payments (fixed dollar amount) to much higher coinsurance payments (a percentage of the actual costs), both of which shift much more of the costs to patients. Many patients will go without medications that they should have simply because the out-of-pocket costs will be truly unaffordable.

The insurance industry prides itself on offering innovative products to the public. But insurance innovations are designed to benefit the the insurers. In a public insurance program, problems such as the excessive prices of drugs are addressed through innovations that are designed to benefit
 wait for this
 the patient!

A well designed single payer system would not use unbearable cost sharing to try to address the high prices of drugs. Rather it would use its power as a monopsony (single purchaser in a market) to demand fair pricing of drug products based on legitimate costs and fair margins. Those prices would be paid by our shared single risk pool, funded through equitable taxes.

Really. If you didn’t read the excerpts above, read them now to see what a disaster these changes will be. And these are only changes introduced in one year for one program – Part D Medicare – though the intent is to extend these changes to employer-sponsored plans as well.

Just consider the changes that the private insurance industry makes in every program every year – some subtle, some not so – and add those up and you’ll understand why we have an exorbitantly priced but mediocre health care financing system. It’s time to turn it over to our own public administrators.

2014 Annual Meeting Materials

Highlights are available here.

Find below a selection of slideshows and handouts from PNHP’s 2014 Annual Meeting.
Photos from the Annual Meeting are available here.

2014 Annual Meeting Morning Presentation Annual Meeting Main Session
Slideshow: Grand Rounds By David Himmelstein, MD, and Steffie Woolhandler, MD, MPH

2014 Annual Meeting Morning Presentation (Alternate Visuals)
Annual Meeting Main Session
Slideshow: Grand Rounds By Ed Weisbart, MD

PNHP Proposal Annual Meeting Main Session
Slideshow: Beyond the ACA: A Physicians’ Proposal for Single Payer By Adam Gaffney, MD

High co-pays for speciality drugs undermine access Annual Meeting Main Session
Slideshow: How high co-pays for “specialty drugs” undermine access By Donald Light, PhD

Organizing for Single Payer in Minnesota Annual Meeting Main Session
Slideshow: Organizing for Single Payer in Minnesota By Inge De Becker, MD

Mental Health Care Workshop
Slideshow: Single payer and the crisis in mental health care By Steve Kemble, MD

Organizing in Red States Workshop
Slideshow: From Medicaid expansion to single payer: organizing in the red states By Ed Weisbart, MD, Rob Stone, MD, and Sam Dickman

International systems Workshop
Slideshow: Canada By Karen Palmer
Slideshow: Korea By Mira Lee, MD
Slideshow: New Zealand By Carol Paris, MD

State-based campaigns Workshop
Slideshow: Washington By David McLanahan, MD
Slideshow: California By Steve Tarzynski, MD, MPH

Talking about single payer in the wards Workshop
Slideshow: Speak up: talking about single payer in the wards By Anna Zelivianskaia and Desireé Conrad

Getting your message across in the media Workshop
Slideshow: Getting your message in print, radio, and TV By Mark Almberg, Sam Metz, MD, and Betsy Rosenthal, MD

Medicare and the VA Workshop
Slideshow: Medicare: a single-payer system in “crisis”? By Oli Fein, MD

Big Pharma’s growing threat to the health system Workshop
Slideshow: Pharmaceutical sector and single payer reform By Robert Kemp, PhD, and Donald Light, PhD

Mistreating health inequities Annual Meeting Dinner Session
Slideshow: Mistreating health inequities: The new biopolitics of race, health, and justice By Dorothy Roberts, JD

Interview: AMA Med Students Back State Laws to Achieve Universal Health Care

By Joan Brunwasser
OpEdNews, Nov. 18, 2014

My guest today is second-year medical student, Brad Zehr. Welcome to OpEdNews, Brad. Something very interesting happened at the AMA (American Medical Association) recently. What can you tell us about it?

BZ: The Medical Student Section of the AMA adopted a resolution at the Interim AMA meeting in Dallas expressing support for innovative state legislation to achieve universal health care, including but not limited to single-payer health insurance. The reason this policy item was particularly high-profile and groundbreaking was because it is the first instance of any section of the AMA adopting policy in support of single-payer health insurance. Although the Medical Student Section (MSS) is only one of ten sections of the AMA, and although this resolution pertains only to the MSS and not the full AMA, the resolution signals a generational shift in organized medicine’s approach to health care reform.

Historically, the AMA has explicitly opposed any forms of single-payer, including opposition to the creation of U.S. Medicare in 1965. The AMA House of Delegates (HOD), which is the highest policy-making body of the AMA and includes representation from all of the AMA sub-sections and from state medical societies and medical specialty societies, still has three policies stating express opposition to single-payer health insurance in the U.S. The MSS boldly voiced support for single-payer despite the HOD’s continued hypersensitivity to single-payer.

JB: How did this come about? I understand that you were one of the students responsible for writing the resolution. Was there a knock-down drag-out fight about this? What was the process like? Tell us more, please.

BZ: Several recent developments in U.S. health care contributed to our motivation to submit the single-payer resolution to the AMA-MSS at this particular time. First, the Affordable Care Act includes a lesser known component called “Sec. 1332: Waiver for State Innovation.” The section allows states to apply for an exemption from the federal ACA law beginning on January 1, 2017, to implement their own alternative, state-based health care law, given that their state law would cover at least as many people as the ACA would have, that the coverage would be as affordable to individuals and families as the ACA coverage would be, and that the state law would not increase the federal deficit.

Upon receiving approval from the U.S. Department of Health and Human Services and the U.S. Department of the Treasury, such innovative states would receive federal funds equivalent to what they would have received under the ACA in order to implement their alternative health care reform plan.

Vermont is the first, and so far only, state to commit to applying for a Section 1332 State Innovation Waiver. The state plans to establish a state-based single-payer health insurance system beginning in 2017. The program will be called Green Mountain Care and would be the first-ever example of a state-based single-payer system in the U.S. In addition to Vermont, at least half a dozen other states have active single-payer popular movements.

JB: Promising!

BZ: A second recent development that motivated our resolution was the Massachusetts gubernatorial candidacy of Dr. Don Berwick, an internationally recognized health policy scholar and former chief administrator of the U.S. Centers for Medicare and Medicaid Services. Berwick campaigned on a pledge to move Massachusetts toward a single-payer system. His campaign energized a vast progressive base in the state, and he earned endorsements from some of health care’s most celebrated thought-leaders, including Atul Gawande, Paul Farmer, and John McDonough. Berwick often noted on the campaign trail that Massachusetts has historically been a beacon of progress for the nation, including the passage of so-called “Romneycare” in 2006, which became the model upon which the ACA was based. Berwick’s inspiring vision was for Massachusetts to once again lead the nation in health policy reform. Although he lost the Democratic primary to Martha Coakley, he mobilized incredible stores of political energy in the state with his bold commitments.

Finally, we wrote the resolution because single-payer has been conspicuously absent from the health policy conversation at the AMA-MSS throughout this past 15 years of upheaval in U.S. health care. The last time medical students debated single-payer at the AMA was at the interim meeting in 1999. That resolution asked the AMA to study the advantages and disadvantages of a single-payer system, but the MSS did not adopt it.

We submitted a single-payer resolution to the Annual 2014 meeting this past June in Chicago. That resolution was strong: asking the AMA HOD to advocate for national single-payer health insurance. Sixty-one medical students from 18 medical schools co-authored that resolution. However, the MSS Reference Committee recommended the resolution not be adopted based on the argument that asking the AMA HOD to advocate for national single-payer in light of their continued opposition was politically futile and a waste of our limited MSS influence. Furthermore, many student delegates expressed support for single-payer, but said that it should be tried on a state-by-state basis, and that we should keep this policy within the MSS.

With the feedback of dozens of medical students from around the country, we crafted a compromised resolution for re-submission at the Interim meeting in November. This second version of the resolution was internal to the MSS, and asked for support for state-based single-payer. And rather than being co-authored by 61 individual students, it was co-authored by 4 delegations: Massachusetts, Wisconsin, University of Vermont College of Medicine, and SUNY-Downstate College of Medicine. During the MSS General Assembly, the Reference Committee recommended adoption after amending the resolution to be expanded to include other innovative state legislation to achieve universal health care, in order to garner broader support. The resolution was adopted by approximately a two-thirds majority, although only 51 percent was required for adoption. 

JB: This is definitely encouraging, but what does it all mean? Vermont’s Green Mountain Care won’t even kick off until 2017 and it’ll take a while to assess its effectiveness. I’m intrigued with the sea-change among you future physicians. You’re clearly out of step with the AMA as a whole. How do you explain the gap? What about your own motivation?

BZ: We’ve asked ourselves these questions often throughout this resolution-writing process. I often return to the words of the immediate past president of the AMA, Dr. Ardis Dee Hoven. In May of this year, she visited some medical students in Detroit. She said, “Students are the lifeblood. They are the future. Medical students are so much better and so much smarter than I was as a student. They’re learning early. They’re learning the democratic process and the tools they need to make a difference. … The status quo is unacceptable. We have to move medicine ahead and it is our job to move this forward. You will be the leaders.”

From the highest levels of organized medicine, medical students hear that U.S. health care is not working and that we need to advocate for the system we want during our careers. This is exactly what we are trying to do with this resolution. We know that single-payer is one of the best ways to guarantee universal health care while controlling costs. The evidence to support this assertion is extensive, some of which we included in the Whereas clauses of our resolution. We think it is time to treat the AMA’s hypersensitivity to single-payer in the U.S. and have an evidence-based debate about the merits of such a system, especially in light of the fact that one state has already committed to it.

JB: You’re passionate about this. Have you always been? What drew you to medicine in the first place and do practicing medicine and activism go together well or does one get in the way of the other? 

BZ: Single-payer health care reform was not on my radar going into medical school. Throughout college and grad school, I had followed the national health reform debate, from the 2008 presidential elections through the tumultuous rollout of healthcare.gov in October 2013. I learned about single-payer a year ago by attending the annual meeting of Physicians for a National Health Program, which happened to take place in Boston (10 minutes by bus from my medical school). David Himmelstein, MD, and Steffie Woolhandler, MD, the co-founders of PNHP, presented several hundred slides of data analyzing the poor performance of our current health care system — or “non-system” as they demonstrated. Medical students and physicians respond to evidence and data. The evidence presented at that meeting was so compelling that several classmates and I decided to start a PNHP chapter at our school and to study single-payer in between studying anatomy, physiology, biochemistry, and histology. What we discovered was an energized community of physicians whose priority is to create a health care system where everyone is in, nobody is out, and the profit motive is removed from health financing. I’ve made single-payer a major part of my medical education because I want to practice in a more sane, ethical, and sustainable system.

JB: What’s wrong with what we’ve got now? Aren’t we a lot better off with the Affordable Care Act? So many more people, millions more, are covered. Isn’t that what we’ve been aiming for?

BZ: The ACA will leave about 30 million uninsured and tens of million more underinsured. It is inadequate. Half the states are opting out of the Medicaid expansion. The most popular plans on the exchanges are silver and bronze, which are low cost up front but high cost out of pocket, exposing patients to extreme financial toxicity. Patient choice of doctor and hospital are limited by private insurance networks. The administrative overhead in the private health insurance system is 15 to 20 percent, whereas the overhead of single-payer Medicare is less than 2 percent. Our country spends twice as much per capita on health care as the other advanced nations yet we consistently achieve poorer health outcomes across the board and leave millions out. Physicians are tired of fighting with private health insurance plans to cover the care their patients need.

We need a modern, 21st-century health care system that includes every citizen automatically and simply. The ACA exacerbated the flaws of the pre-ACA system and further entrenched the private health insurance industry. It is a patchwork fix and will not suffice during my career. Millennials have a low tolerance for needless complexity and systemic inequality, and they demand simplicity and fairness. Millennial physicians will not tolerate a system that leaves out millions, outspends all other peer nations for poorer outcomes, and creates daily interferences with treating patients.

JB: Everything you say is true, Brad. I believe the U.S. is the only industrialized country without some form of universal health coverage. But, as you pointed out, the AMA opposed Medicare’s creation back in 1965. And the organization, your resolution notwithstanding, is still adamantly opposed to single payer. So, how realistic is it to think that a bunch of idealistic young’uns are going to turn things around any time soon? done

BZ: The AMA is struggling to maintain its position as the singular voice of American doctors. The percentage of U.S. physicians who are AMA members has declined for decades — from a peak of 75 percent in 1960, to 50 percent in 1973, to about 20 percent in 2008. These figures come directly from AMA CEO Dr. Michael Maves, who addressed the AMA House of Delegates at the 2008 Interim meeting in Orlando. He listed several reasons why the AMA struggles and said, “Perhaps most difficult of all, physicians don’t think that the AMA gets ‘it’ and gets ‘them’ and can act as an agent of positive change. ” When your colleagues back home no longer think of the AMA as ‘stuck in the past’ and see us as future-focused, you will know we are on the right track.”

Medical students participate in the AMA because we want to advocate for patients and for the future of the profession, not to subscribe to any particular political ideology. We study medical ethics in the first year of med school, and then steadily over the next years we observe in hospitals and clinics a fundamental disconnect between the Hippocratic Oath and the reality of American medicine. According to the Oath, the interests of patients trump the interests of physicians and all other interests, including those of profit-seeking health insurance companies. If taking the Hippocratic Oath seriously is perceived as foolish idealism by the system, then it is the system which requires correction.

When the AMA-MSS voiced support for innovative state legislation to achieve universal health care, including single-payer health insurance, it took one step toward treating the AMA’s historical hypersensitivity to single-payer. We invite the AMA to listen carefully to the voice of its youngest members and engage in an evidence-based discussion on single-payer. We hope the AMA takes this opportunity to evolve, keeping in mind its long-term membership goals.

JB: I couldn’t agree with you more. I’m buoyed by you passion for this topic and am consequently cautiously optimistic for the long run. Getting the insurance companies to surrender what has been a cash cow of gargantuan proportions will be another big fight. Any thoughts on that?

BZ: Polling shows a majority of Americans prefer national health insurance. Can you believe it? A 2009 CBS News / New York Times poll showed 59 percent of Americans favor government-run national health insurance.

JB: Great!

BZ: Ultimately, voters will need to force their representatives to write and pass legislation that creates a more equitable health care system. Things might have to get worse, sadly. Right now, our national political discourse is in disarray. Few are optimistic about major national reform in any area of policy, let alone one as sensitive as health care. We will likely need campaign finance reform to get to a place politically where the will of the majority of Americans is prioritized over the will of the wealthiest donors and private health insurance lobbyists.

In the meantime, there are a handful of states where there are popular movements advocating for the creation of state-based single-payer health insurance — Vermont, New York, Massachusetts, Washington, Illinois, Pennsylvania, among others. We want to support those states that will move toward single-payer in the coming decade.

JB: Maybe after people see how well Vermont and any other forward-thinking states are doing with single-payer, it will catch on like wildfire. Anything you’d like to add before we wrap this up?

BZ: For anyone on the fence or skeptical about single-payer, I invite them to listen to a physician debate on single-payer in March 2014 at Albany Medical College.

Last, I want to share a story I recently discovered. In 2004, the Canadian Broadcasting Corporation ran a TV series called “The Greatest Canadian.” The show conducted national polling in the spirit of “American Idol” to identify who is the greatest Canadian in history. The winner was Tommy Douglas, who started Canada’s first province-based single-payer health care system in 1962 Saskatchewan. The system was later adopted nationally. By popular vote in 2004, Canadians deemed the father of their single-payer system their greatest citizen, beating such Canadian luminaries as Wayne Gretzky, Celine Dion, Mike Myers, Alexander Graham Bell, Frederick Banting (co-discoverer of insulin), Neil Young, Jim Carrey, Michael J. Fox, Tecumseh, and John Candy. 

We will create a health care system for all Americans, eventually. Millennial medical students are moving us toward that goal with the adoption of the AMA-MSS resolution supporting state-based single-payer.

JB: This interview has been an eye-opener for me. I’m thrilled that our medical future will be guided by souls such as yourself so dedicated to the true spirit of the Hippocratic Oath. Thanks very much for talking with me, Brad. Good luck to you!

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PNHP website.

1) The PNHP press release on this resolution —

2) 2003 JAMA article, Proposal of the Physicians’ Working Group for Single-Payer National Health Insurance — the foundational paper describing what single-payer in the U.S. would and would not be (note, the group is set to publish an updated version of the proposal in 2015, but the basic tenets of the proposal will be unchanged).

3) March 2014 Albany Medical College debate on single-payer, audio from which is posted on WAMC Northeast Public Radio website.

Joan Brunwasser is a co-founder of Citizens for Election Reform has been Election Integrity Editor for OpEdNews since December 2005. Her articles also appear at Huffington Post, RepublicMedia.TV and Scoop.co.nz.

http://www.opednews.com/articles/1/AMA-Med-Students-Back-Stat-by-Joan-Brunwasser-Activism_Boston_Health-Care-Socialized-Nationalized_Health-Care-Establishment-141118-643.html

Deloitte report on digging deep – for out-of-pocket health care costs

Dig deep: Impacts and implications of rising out-of-pocket health care costs

Deloitte Center for Health Solutions, November 17, 2014

Executive summary

Even though more consumers are gaining health insurance coverage, they are by no means insulated from the burden of health care costs. Consumers are paying more of their health plan premium and experiencing higher out-of-pocket (OOP) cost-sharing for all types of health care services. These increases are expected to continue as employers shift to high-deductible offerings and individuals gain coverage through insurance marketplaces (also known as public health insurance exchanges). Moreover, government estimates of health care spending do not take into account discretionary consumer spending on a number of products and services; Deloitte’s Hidden Costs Analysis shows these purchases add considerably to the total.

Increases in consumer OOP spending impact hospitals, life sciences companies, and health plans as well as consumers. In response, hospitals should consider strategies to help patients anticipate and pay their bills. Pharmaceutical companies should consider identifying ways to minimize consumers’ cost-sharing for their products. Finally, health plans should consider developing tools to help consumers understand how to use their coverage and plan for care, including choosing high-value providers.

Implications for consumers

Consumers are finding it increasingly difficult to bear the burden of mounting OOP costs and many are searching for ways to manage the expenditure. For example, in Deloitte’s surveys of U.S. consumers, respondents have shown a willingness to skip care and/or use over-the-counter products to avoid the cost of doctors’ office and hospital visits. Some opt to not fill prescriptions, take less than the prescribed amount, or have trouble getting behavioral health care.

A growing number of individuals are buying health plans that have lower premiums (so are less expensive on a monthly basis) but have high deductibles, without understanding that these plans will not pay for a doctor visit or for prescription drugs before the consumers meet their annual deductible. These choices can result in thousands of dollars of OOP medical expenses each year. The challenges of insurance illiteracy are great: A study by Consumer Reports found that many consumers were not aware of basic insurance concepts. (HHS is running a campaign to help people understand how to use their insurance.) Among potential implications of insurance illiteracy, some consumers in future rounds of marketplace purchases may choose to “buy up” when they learn about their financial exposure under some of the less-expensive plans.

Ideally, consumers seeking to reduce OOP costs will take time to research options and use available tools to select low-cost, high-quality providers in their health plan’s network. OOP costs may even encourage some consumers to take extra steps to stay healthy. But even consumers who are fully committed to healthy living will at some time or another need health care and this may involve high prices. Finally, people facing high cost-sharing may be discouraged from using many of the health services they need, including help managing chronic health conditions, and may not see the value in paying premiums for future coverage.

https://www.deloitte.com/view/en_US/us/Insights/centers/center-for-health-solutions/c4ad4bf8d0679410VgnVCM2000003356f70aRCRD.htm

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Comment:

By Don McCanne, MD

This report is written for the health care industry. It provides advice on potential strategies to deal with an increasing problem in health care today: the impacts of rising out-of-pocket health care costs. Although Deloitte’s advice is directed more towards the medical/industrial complex that provides health care services, our concern is with what Deloitte calls consumers, though we know them as patients.

Shifting costs of health care to patients’ pockets is not in the interests of the patients. They would be better served by a system that prepays all essential health care services so that they can access care as needed without having to face financial barriers. Other nations do this while spending much less per capita on health care than we do. 

So is shifting costs to patients in the best interests of the medical/industrial complex? For the providers of health care services and products – physicians and other health care professionals, hospitals, pharmacists, laboratories, imaging centers, medical equipment suppliers, and others – instead of collecting charges from a single payer, these entities must also collect from individual patients the deductibles, co-payments, coinsurance, out-of-network charges, and uncovered health expenses that the insurers exclude from provider payments. This increases the administrative complexity for the providers and exposes them to losses for charges that prove to be uncollectible. Increases in administrative efforts and exposure to potential losses are not in the interests of the providers. They would be better off providing services within a prepaid system that eliminates patient cost sharing.

If this isn’t working for either the patients or the providers, then who is benefiting? The private insurers, of course. They benefit by selling us more of their primary product: administrative services. They benefit by paying less for health care services and products, since some of the costs are shifted to patients’ pockets. They benefit by increasing the administrative complexity of health care financing thereby making their intermediary role an essential service that insured patients and contracted providers require to negotiate the administrative maze of health care payment. So we need them because they created an administrative nightmare that is so complex that we can’t do without them?

As would be expected, Deloitte advises tinkering to address the problem of digging deep for out-of-pocket spending. Or, failing that, they suggest that patients “take extra steps to stay healthy.” But for patients and for the health care delivery system, the correct solution is obvious. Provide first dollar coverage and pay for care through an administratively efficient system: a single payer national health program.

America’s new healthcare bind: How to overcome the “family glitch”

Due to a quirk in the law, 3 million low-income kids could soon lose their insurance. Here’s the best, only way out

By Vijay Das
Salon, Nov.14, 2014

Starting tomorrow, November 15, millions of Americans will go online to obtain or re-enroll in health coverage through the Patient Protection and Affordable Care Act’s (ACA) insurance marketplaces. Working families once again will try to pick a health plan that works for them. Yet this year, the task will be particularly difficult.

A quirk in the ACA, coupled with the expiration of a national children’s health insurance program, will put family coverage out of reach for many. This means that up to 3 million low-income children may lose their insurance because family coverage is too expensive for low-income parents.

A solution exists. But first, let’s explore the ACA problem. Under the law, employers need to provide insurance only for workers – not workers’ families. This has created the so-called “family glitch.” Although premiums paid by workers are capped, there is no limit on the employee’s share of premiums for family members, and these often cost three times as much as an individual’s coverage.

So what are parents to do? What about the Children’s Health Insurance Program (CHIP)? It was expressly designed to help families in these circumstances. Since 1997, CHIP has provided insurance for children 18 and under in families slightly over the poverty level, and all kids in families that can’t afford private insurance.

CHIP is now up for congressional reauthorization. Congress is debating how long to extend the program given that the ACA helps provide private and Medicaid coverage for many children. The ACA’s “family glitch” adds new complications in health care. Politics permitting, Congress hopes to quickly renew the successful program by the end of the year.

But CHIP isn’t a panacea either. Many children eligible for CHIP still lack insurance and access to care. Why? CHIP is a federal block grant. States implement CHIP in their own way. Some create waiting lists when the coffers run empty.

CHIP also struggles to enroll and cover all eligible kids. Many eligible children have parents that are undocumented who are hesitant to get coverage. Application assistance, language access and geography determine the success of outreach of CHIP or any other health program’s enrollment.rtisement

What about Medicaid? Can that help parents? Not necessarily. Although it covers nearly 36 million children, and Medicaid and CHIP combined insure more than half of America’s children, many working parents make too much money to qualify or live in states that did not expand Medicaid.

The result? Two-thirds of all eligible low-income children are uncovered. That’s more than 7 million kids. African-American and Latino children are disproportionately uninsured. And two million children have fallen into poverty because of family medical bills, which cut into wages and can devastate families facing child illness.

The ACA hopes to close this gap through enrollment outreach, but millions of kids will still go uninsured. Health enrollment will be much tougher this year. Hard-to-reach populations will remain uncovered. And for kids that do get coverage, CHIP’s eventual convergence with the ACA means more working families will get their coverage through the insurance marketplaces. They’ll have to continue spending a larger share of their paychecks toward their child’s rising premiums, deductibles and co-pays.

This trend is bad for the country. We know that uncovered and under-insured kids cost much more than just medical bills. Healthy kids perform better in school and develop the required skills to successfully enter the workforce.

The problem, then, is that hurdles to basic health care for low-income kids linger because our health care system is fragmented and unnecessarily complex.

There is a better, simpler way. We could have a unified health care plan that covers everybody and is more fair and efficient than our current system. Medicare is a universal program for seniors and the disabled. Let’s expand it to cover everyone.

A single-payer national health program built from Medicare would guarantee universal coverage and permit children and adults to see any physician. Patients would not be blindsided with unexpected out-of-network costs. We would have no coverage gaps or enrollment hiccups. Moreover, we could eliminate the waste and inefficiencies contributing to our $2.8 trillion national health bill by curtailing the enormous overhead incurred by for-profit health plans.

Most industrialized nations offer universal health care. Vermont plans to deliver health care to every resident next year. Bills before Congress present a path forward for a single-payer system.

If we want to really cover all kids, boost outcomes and curb costs, we need to pursue a national health program that guarantees quality coverage for our next generation and beyond.

Vijay Das is a health care advocate for Public Citizen’s Congress Watch division. Follow him on Twitter @vijdas.

http://www.salon.com/2014/11/14/americas_new_healthcare_bind_how_to_overcome_the_family_glitch/

Hate was never a part of Obama’s supposed love/hate relationship with insurers

Health Law Turns Obama and Insurers Into Allies

By Robert Pear
The New York Times, November 17, 2014

With the health insurance marketplace now open for a second year, President Obama will be depending more than ever on the insurance companies that five years ago he accused of padding profits and canceling coverage for the sick.

Those same insurers have long viewed government as an unreliable business partner that imposed taxes, fees and countless regulations and had the power to cut payment rates and cap profit margins.

But since the Affordable Care Act was enacted in 2010, the relationship between the Obama administration and insurers has evolved into a powerful, mutually beneficial partnership that has been a boon to the nation’s largest private health plans and led to a profitable surge in their Medicaid enrollment.

“These companies all look at government programs as growth markets,” said Michael J. Tuffin, former executive vice president of America’s Health Insurance Plans, the main lobby for the industry. “There will be nearly $2 trillion of subsidized coverage through insurance exchanges and Medicaid over the next 10 years. These are pragmatic companies. They will follow the customer.”

“We are in this together,” Kevin J. Counihan, the chief executive of the federal insurance marketplace, told insurers at a recent conference in Washington. “You have been our partners,” and for that, he said, “we are very grateful.”

In another sign of the close relationship, the administration has recruited experts from the insurance industry to provide operational expertise. Eight months after the unit of UnitedHealth Group, called Optum, helped repair HealthCare.gov last fall, the administration hired a top Optum executive, Andrew M. Slavitt, as the No. 2 official at the Centers for Medicare and Medicaid Services. The administration waived conflict-of-interest rules so that Mr. Slavitt could participate in decisions affecting UnitedHealth and Optum.

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Comment:

By Don McCanne, MD

The Affordable Care Act (ACA) provided the private health insurance industry with the greatest stimulus to its industry that it could possibly have achieved, and it is reaping great rewards as a result.

Even the provision of ACA that was considered most unfavorable for the industry – the fact that they would have to start insuring individuals with preexisting conditions – was actually just what they needed because it then mandated the individual mandate. That is, they would have the entire population as their market, except for the government plans. Even there, Medicaid is being shifted en mass to private insurers, and more Medicare patients are moving into the private Medicare Advantage plans – all with the complicity of the Obama administration.

If you don’t understand why the takeover of health care financing by the private insurance industry is a problem, there are a few thousand Quote of the Day messages that can give you some insight – posted at https://www.pnhp.org/news/quote-of-the-day

Financial protection provided by insurance is deteriorating

Too High a Price: Out-of-Pocket Health Care Costs in the United States

By Sara R. Collins, Petra W. Rasmussen, Michelle M. Doty, and Sophie Beutel
The Commonwealth Fund, November 2014

Abstract 

Whether they have health insurance through an employer or buy it on their own, Americans are paying more out-of-pocket for health care now than they did in the past decade. A Commonwealth Fund survey fielded in the fall of 2014 asked consumers about these costs. More than one of five 19-to-64-year-old adults who were insured all year spent 5 percent or more of their income on out-of-pocket costs, not including premiums, and 13 percent spent 10 percent or more. Adults with low incomes had the highest rates of steep out-of-pocket costs. About three of five privately insured adults with low incomes and half of those with moderate incomes reported that their deductibles are difficult to afford. Two of five adults with private insurance who had high deductibles relative to their income said they had delayed needed care because of the deductible.

http://www.commonwealthfund.org/~/media/files/publications/issue-brief/2014/nov/1784_collins_too_high_a_price_out_of_pocket_tb_v2.pdf

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Comment:

By Don McCanne, MD

Health reform was supposed to make health care more affordable, yet underinsurance is increasing. The deductibles are more difficult for people to afford and a delay in needed care has been the result. Single payer would eliminate underinsurance. It’s time.

Health policy views of medical students in Ontario and in California

Attitudes and knowledge regarding health care policy and systems: a survey of medical students in Ontario and California

By Sherif Emil, MDCM, Justine M. Nagurney, MD, Elise Mok, PhD, Michael D. Prislin, MD
CMAJ OPEN, November 11, 2014

Abstract

Background

Canada and the United States have similar medical education systems, but different health care systems. We surveyed medical students in Ontario and California to assess their knowledge and views about health care policy and systems, with an emphasis on attitudes toward universal care.

Methods

A web-based survey was administered during the 2010–2011 academic year to students in 5 medical schools in Ontario and 4 in California. The survey collected demographic data and evaluated attitudes and knowledge regarding broad health care policy issues and health care systems. An index of support for universal health care was created, and logistic regression models were used to examine potential determinants of such support.

Results

Responses were received from 2241 students: 1354 from Ontario and 887 from California, representing 42.9% of eligible respondents. Support for universal health care coverage was higher in Ontario (86.8%) than in California (51.1%), p < 0.001. In California, females, self-described nonconservatives, students with the intent to be involved in health care policy as physicians and students with a primary care orientation were associated with support for universal coverage. In Ontario, self-described liberals and accurate knowledge of the Canadian system were associated with support. A single-payer system for practice was preferred by 35.6% and 67.4% of students in California and Ontario, respectively. The quantity of instruction on health care policy in the curriculum was judged too little by 73.1% and 57.5% of students in California and Ontario, respectively.

Interpretation

Medical students in Ontario are substantially more supportive of universal access to health care than their California counterparts. A majority of students in both regions identified substantial curricular deficiencies in health care policy instruction.

From the Interpretation

Whether the culture of many American medical schools promotes or discourages support for universal health care can be debated. However, most would agree that health policy education in North American medical schools is poor. In our study, only one-third of all respondents demonstrated accurate knowledge of the basics of their own health care system, and fewer than 1 in 10 respondents understood the basics of the neighbouring country’s health care system. For example, less than 60% of California respondents correctly answered the question regarding the Patient Protection and Affordable Care Act of 2010, despite a recent survey showing that 80% of students are supportive of the law. A large majority of respondents in both locations rated the quantity of instruction on health care policy as too little, and a minority rated the quality as good or excellent. The medical curriculum ranked low as a source of information. These deficits have been consistently reported in previous medical student surveys. If students graduate without adequate knowledge of health care policy or alternative health care systems, they are unlikely to acquire that knowledge as physicians. Studies have shown that American physicians, both primary practitioners and specialists, have inaccurate impressions of the Canadian system. On the other hand, there is evidence that integration of instruction on health care policy into resident and student curricula results in increased knowledge, participation and action.

Conclusion

The differences in health care systems between the US and Canada are deep-rooted and embedded in the history, politics and cultural traditions of both countries. These differences were reflected in our comparison of Ontario and California medical students. The differences in the level of physician support for universal access to health care between Ontario and California start in medical school. Many of these views, which are embedded early in a physician’s formative experience, are based on inadequate knowledge of health care systems. Like many, we believe that medical schools and academic medicine in general have a responsibility to train socially responsible physicians who will advocate for universal health care access of appropriate quality and cost. This can only be achieved if high-quality and sufficient quantity instruction on health care policy and health care systems is integrated into medical school curricula in the US and Canada, a challenge yet to be met.

http://www.cmajopen.ca/content/2/4/E288.full

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Comment:

By Don McCanne, MD

Two-thirds of medical students in Ontario and in California do not have accurate knowledge of the policy basics of their own health care systems and nine-tenths fail to understand the basics of the neighboring country’s health care systems.

However, Ontario students do show greater support for universal health care coverage than do California students (86.8% versus 51.1%). Also, support for a single payer health care system, which of course the Canadians have and we do not, was greater amongst Ontario students than it was amongst California students (67.4% versus 35.6%).

What might account for these differences? The authors state, “In California, females, self-described nonconservatives, students with the intent to be involved in health care policy as physicians and students with a primary care orientation were associated with support for universal coverage. In Ontario, self-described liberals and accurate knowledge of the Canadian system were associated with support.”

We can only speculate that if these students were better informed on health policy that their views of their own country’s system and especially of the neighboring country’s system might change. It may be that ideology is a greater driving force of opinion, especially when unencumbered with facts of which they are unaware. If so, it seems that Canadian medical students have more egalitarian views than those in the United States.

Can a better understanding of the facts change ideological stances? The Ontario students with more accurate knowledge of the Canadian system were more supportive of universal health care coverage. There is hope that PNHP’s mission of educating our colleagues and the public could help.

Why does the press attack Gruber and ignore Pauly?

Who is Jonathan Gruber?

By Jose A. DelReal
The Washington Post, November 11, 2014

Jonathan Gruber is probably having a hell of a day.

The MIT economics professor, best known until now for his key role advising the Obama administration on the Affordable Care Act, has come under attack after year-old video of a University of Pennsylvania panel surfaced that featured him referring to the “stupidity of the American voter” and a “lack of transparency” as crucial to the passage of the 2010 health reform law.

Those comments have struck a nerve on the right, with some of the law’s critics pointing to Gruber’s comments as evidence that the administration intentionally deceived the American public on the costs of the program.

http://www.washingtonpost.com/blogs/post-politics/wp/2014/11/11/who-is-jonathan-gruber/

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AHEC 2013 Conference

November 10, 2014

As part of the 24th Annual Health Economics Conference hosted by PennLDI, Mark Pauly and Jonathan Gruber were featured in the Plenary Panel discussing the role of economics in shaping (and possibly reshaping) the ACA.

Transcript from Video:

Jonathan Gruber (at 20:24):  Mark made a couple of comments that I do want to take issue with, one about transparency of financing and the other is about moving from community rating to risk-rated subsidies. It should
 You can’t do it, politically – you just literally cannot do it. Okay, transparent financing
 not just transparent financing
 all transparent spending. I mean, this bill was written in a tortured  way to make sure that CBO did not score the mandate as taxes. If CBO scores the mandate as taxes, the bill dies. Okay, so it’s written to do that. In terms of risk-rated subsidies, you get a law which said healthy people are going to pay in
 you make it explicit the healthy people pay in and the sick people get money, it would not have passed. Just like
 lack of transparency is a huge political advantage. And, basically, you know, call it the stupidity of the American voter, or whatever, but basically that was really critical to get the thing to pass, and, you know, it’s the second best argument. Look, I wish Mark was right, we could make it all transparent, but I’d rather have this law than not.

Mark Pauly (at 12:39):  My last comment is on most needed research, and here I’m going to ask you to cheer me up. So the premise, actually, for my thesis work, on why we ought to subsidize health insurance was this idea that we
 what I would now call benevolent moral hazard. We want to create moral hazard to get people who underuse medical care by community standards, to use it because it will improve their health, and, at least I was terribly depressed by the results of the Oregon study where impacts on health were minimal and moral hazard, though, came through like gangbusters – it’s still about a 33 percent increase. One study doesn’t prove anything, and it was not super powered, although it was powered to detect large impacts if they’d been there. But I think we either need to figure out a more sensitive way to detect health influences, or the alternative, which some people have talked about is, say, well it really wasn’t health care we wanted, it was financial stability, which I’m willing to give $1.98 for. I guess my concern is there are so many ways a person can go broke, why would we particularly concentrate on subsidizing health insurance to prevent them from going broke that way?

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Comment:

By Don McCanne, MD

Quite a furor has been caused by Jonathan Gruber’s controversial comments at a conference last year – comments on the importance of preventing transparency over the transfer of funds from the healthy to the sick. Yet the press has remained silent on Mark Pauly’s disconcerting comments at the same conference. So what does this mean, and what does it have to do with single payer?

It is common for voters to express their opposition to taxes by stating that they do not want money to be taken away from them by the government and given to someone else. There is particular resentment, for instance, of middle-income workers paying taxes to provide food stamps for low-income individuals, or, worse, the objection of high-income individuals being required to participate in a transfer from the rich to the poor. Yet everyone agrees that we should have arrangements wherein our very high medical bills are paid by others. That is the very essence of health insurance – a transfer from the healthy to the sick. But now that health care costs are so high, a transfer from the wealthy to low- and middle-income individuals and families is also essential.

Gruber’s comment referred to the fact that voters who are not particularly sophisticated (“call it the stupidity of the American voter”) should not have the financing of the Affordable Care Act framed as a “taxes.” So the lack of transparency was in the rhetoric – avoiding the use of the term “taxes” – but not in the policy. The financing was to be perceived as insurance premiums with subsidies if required, though the rhetoric did not include the fact that the subsidies are a transfer through the tax system. So there is not dishonesty here. It is totally about political rhetoric, compounded perhaps by Gruber’s inelegant choice of words.

But look at what Mark Pauly has to say. He is considered by many to be the father of the theory of moral hazard in health insurance – obtaining free care because you are insured – care that you would not have obtained if you had to pay for it. Yet he supports creating what he calls “benevolent moral hazard” – getting people to use medical care when it benefits their health. He would do this by subsidizing insurance based on individual risk rather than based on community rating. People with greater needs would receive insurance subsidies if they could not afford the higher premiums. (Why this is a terrible idea requires a discussion of risk pools, administrative efficiency, equity, and other financing concepts which we will not go into here.)

But then Pauly goes on to lament the moral hazard of Medicaid by using the Oregon study. He indicates that health care use increased 33 percent without any demonstrable benefits. The Oregon natural experiment has been discussed thoroughly elsewhere, but, just briefly, we’ll say that the study was not powered to detect major beneficial endpoints, but, further, there are many other benefits of physician visits that are never measured in these studies (e.g., reassurance that distressing symptoms are benign). People do not go to physicians as a social outing, but rather they go because they have health concerns.

The really outrageous comment that should offend even the media is Pauly’s glib questioning of why we would “particularly concentrate on subsidizing health insurance” when “there are so many ways a person can go broke.”

The reason that we should be especially concerned about this truly insensitive comment is that it represents the thinking of one of the nation’s health policy leaders who are sending us down the path of “skin in the game” consumer-directed health care that deliberately places financial barriers in the way of beneficial health care.

And this is what the Gruber furor has to do with single payer. If the media investigated and reported on the really important issues, they would expand on Pauly’s comments to show us how single payer would REMOVE financial barriers to care – ensuring that everyone would have the health care that they need. Reporting insignificant rhetorical gotchas while ignoring an expert’s dismissal of going broke due to personal health care expenses reflects poorly on today’s media – not all of them, but far too many. Google both Gruber’s and Pauly’s comments and you’ll see which one was covered and which one wasn’t.

Woman taken to ‘wrong’ hospital faces bankruptcy

By Adam Schrager
Channel3000.com (WISC-TV, Madison, WI), November 10, 2014

MADISON, Wis. – Megan Rothbauer would rather be discussing an impending engagement, her future marriage and eventually, children. However, the 30-year-old Madison resident is instead scouring the Internet looking for solutions to stave off bankruptcy.

A project manager for a manufacturing company, she is one year removed from a cardiac arrest and the subsequent physical recovery is being dwarfed by a near-impossible fiscal recovery. She was sent last Sept. 9 to the emergency room at St. Mary’s Hospital, which was out of her insurance network, instead of to Meriter Hospital, three blocks away, which was covered by her insurance. It’s the difference between a $1,500 maximum out-of-pocket expense and the now-$50,000-plus she’s facing in bills.

“I was unconscious when I was taken to the hospital,” she said. “Unfortunately, I was taken to the wrong hospital for my insurance.

“I was in a coma. I couldn’t very well wake up and say, ‘Hey, take me to the next hospital.’ It was the closet hospital to where I had my event, so naturally the ambulance took me there. No fault to them. It’s unfortunate that Meriter is in network and was only three blocks away from St. Mary’s,” Rothbauer said.

A News 3 investigation revealed Rothbauer’s situation — what’s called “balance billing,” where patients receive the balance between the hospital charge and what insurance companies will cover — is not unique. While the local insurance companies that represent roughly 80 percent of those who have insurance in our area will offer out-of-network patients in-network rates during emergency room visits, there remains no guarantee they won’t face hefty bills on the back end depending on the treatment they receive.

“My strong suspicion is this happens more frequently than you think,” said Meg Gaines, who runs the Center for Patient Partnerships, a consumer health care advocacy group at the University of Wisconsin-Madison Law School. “I mean every time someone goes down, they don’t have someone around who knows what their insurance is.”

In Rothbauer’s case, her insurer, Blue Cross Blue Shield, said it paid St. Mary’s 100 percent of its in-network rate or $156,000 to cover part of the original $254,000 bill that she incurred during 10 days in a medically-induced coma and another six days in the cardiac unit. St. Mary’s negotiated with Rothbauer to reduce the remainder of her $98,000 bill by 90 percent. This is separate from the bills she received from the doctors, the ambulance, the therapist and others.

Gaines said consumers have little chance to negotiate against the parties in the health care industry as they don’t have the necessary tools.

“I mean, I know this business. I’ve been doing this for a while, knocking on doors, trying to understand this data and I have no ability to do it. None,” Gaines said. “When they don’t even disclose the cost (of services), there’s the cost. There’s the price. There’s the charge. There’s the accepted payment. Lions, tigers and bears, oh my. How do you even know what’s what in this world?”

“It is totally random, and it is the problem with saying consumers have to go to the right hospital and you say, ‘What if you’re unconscious?'” Gaines said.

Rothbauer’s insurance company placed the blame for her situation on St. Mary’s Hospital and its cost for services.

“(Megan) received care by a hospital that is not in our Wisconsin network,” Scott Larrivee, public relations director for Anthem Blue Cross Blue Shield, wrote in an email to News 3. “Since we have no contract with this hospital, we have very little influence over what the hospital is charging in this situation.”

The hospital, meanwhile, said it empathizes with Rothbauer’s situation, but that it already wrote off tens of thousands of dollars in costs and that the conversation should also focus on the fact its doctors and nurses saved Rothbauer’s life.

“When you’re looking at saving a life, you’re not looking at whether or not you can save them money,” said Cyn Gunnelson, manager for Managed Care Contracting for the Wisconsin region of SSM Health Care. “I can only do so much. The hospital can only do so much. And I think the best outcome is the person walked away from the emergency room.”

Rothbauer credits the doctors and nurses at St. Mary’s for the work they did on her behalf. However, her feelings toward the hospital’s accounting department and her insurance company are much different. As she sits at her kitchen table with her eventual fiancĂ©, Ben Johnsen, the bills are spread out, covering much of the surface. Her frustration is matched solely by the fear that this could happen to any one of us.

She and Johnsen are holding off getting engaged until her economic situation has more clarity. She is waiting to hear back about her latest appeal to Blue Cross Blue Shield before she can negotiate further with Dean to see if the doctors’ bills will be reduced and whether she and Johnsen need to get second jobs, cash out retirement accounts, take a loan from the hospital or file for bankruptcy.

“My hardest issue is I had no control and I still have no control over what is my future,” she said. “I don’t want this to happen to anyone else. I don’t know if this can be fixed for me at this point, but I think it’s unfortunate that it can happen to anyone.”

The Affordable Care Act specifically addressed emergency room visits for out-of-network patients by requiring insurers to pay the greater amount between the in-network rate and what Medicare would cover. However, balance billing is expressly permitted and Gaines said its results, like what’s happened to Rothbauer, are far too common.

“It’s devastating for people who plan, who get insurance, get coverage, do everything they can and then, at 29, have a heart attack and get taken to the wrong hospital, and can’t get married, can’t do anything because they have to declare bankruptcy because they can’t afford to have gone to the hospital,” she said. “I mean, it’s not enough to worry about having a heart attack at 29, you end up with a secondary one or a stroke because of your medical bills. I mean, it’s just ridiculous. The level of frustration is astronomical.”

http://www.channel3000.com/news/woman-taken-to-wrong-hospital-faces-bankruptcy/29648000

How to End Health Insurance ‘Churn’

By Anne Scheetz, M.D.
Common Dreams, Nov. 11, 2014

With the Affordable Care Act’s new enrollment period starting on Nov. 15, and then, for many, the activation of new insurance coverage on Jan. 1, we’ll be witnessing an intense period of “churn.”

Churn is the term often used to describe people moving back and forth between health insurance plans, e.g., between eligibility for Medicaid and eligibility for federal subsidies for private insurance bought on the ACA’s exchanges.

Such eligibility hinges on your income, which can change from year to year. Also, the subsidies themselves can fluctuate if your income changes by as little as one dollar. Suddenly you’re in a new bracket.

There are other scenarios, too. People with employer-sponsored insurance may now be required to join a high-deductible plan. Still others may have their hours cut so that they lose eligibility for job-based coverage altogether, throwing them on to the individual market.

Yet others may decide to change plans in search of lower premiums, deductibles, or co-pays. Or perhaps they want to follow a doctor who has left their plan’s network.

How many people are we talking about? Writing in Health Affairs in 2011, researchers estimated 28 million adults are subject to health insurance churn annually.

But churn can also be used more broadly to describe any disruption in coverage, doctors, hospitals, or access, whether initiated by enrollees or forced on them by employers or insurers.

Churn is an expensive, intricate process. It requires the work of thousands of people, the creation of new branches of specialized knowledge and new software, and the expenditure of millions of dollars every year to track and make adjustments for such changes.

Churn is frustrating for nurses and doctors, and it adds to our health system’s outrageously high administrative costs. We’re told we’re entering a new era of coordination of care, yet churn makes coordination impossible.

Churn is harmful to patients, and it is most harmful to the sickest patients. Loss of continuity of any aspect of access or care means that appointments are canceled, test results are lost, critical procedures don’t get done, prescriptions don’t get filled, and difficult decisions have to be revisited. It can result in preventable complications and even premature death.

Our private-insurance-based system is extremely complex. A recent Kaiser Family Foundation report notes that in the first year of the ACA’s exchanges, “assister programs” employed more than 28,000 full-time-equivalent staff and volunteers to help people navigate the health insurance maze. Even people with extensive experience of the health care system are bewildered by the complex trade-offs they face.

The Kaiser report also makes clear that the need for assisters continues long-term. It recommends funding for “different models for specialized assister expertise,” in, for instance, tax, family, and immigration law. It proposes development of “norms of professional practice for Marketplace assisters,” a national assistance information center, and “prototype information management systems.”

Yet all of this added bureaucracy doesn’t necessarily give people access to affordable, high-quality care. It only gets some of them – for some will still fall through the cracks – some kind of health insurance that may well turn out to have high deductibles and co-pays that deter them from seeking care they truly need. And those who do seek care may find themselves in severe financial distress as a result.

Shouldn’t we be providing all necessary health care to everyone, with a minimum of time and money devoted to bureaucracy?

I believe the answer is clearly yes — and that we have an effective model in front of our noses.

By using the Medicare program as a foundation and improving upon its existing benefits, we could quickly cover everyone — of all ages — in the country.

Researchers have shown that by eliminating costly private-insurance-related overhead and redirecting those savings into clinical care, we could assure that everyone has coverage for all necessary care, free choice of doctor and hospital, and no more co-pays and deductibles — for no more than our nation is spending now. Ninety-five percent of households would end up spending less.

The “single-payer” program’s buying clout would also rein in health spending.

And there would be no more churn: Once you’re in the Medicare for All program (i.e. when you’re born), you’d be covered for life. End of story.

We know the path to providing high-quality care while enhancing everyone’s financial security. It’s called an improved Medicare for All.

Let’s get it done.

Anne Scheetz, M.D., is an internist in Chicago and a member of Physicians for a National Health Program.

This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License.

http://commondreams.org/views/2014/11/11/how-end-health-insurance-churn

AMA policy on narrow networks

New policy calls for adequate networks for patient access, choice

AMA Wire, November 10, 2014

The new AMA policy, which is part of a new report by the AMA Council on Medical Service, calls for health insurers to make changes to their provider networks before the open enrollment period gets underway each year. Implementing changes to provider networks at this time will help prevent patients from being stuck with plans that drop their physicians after they already have enrolled.

The policy also reiterates the need for health insurers to provide patients with an accurate, complete directory of participating physicians through multiple media outlets. These lists also should identify physicians who are not accepting new patients.

Other provisions of the new policy include:

  • Promoting state regulators as the primary enforcers of network adequacy requirements. These regulators can ensure compliance with state network adequacy laws and regulations that are intended to make sure patients have access to adequate provider networks throughout the plan year.
  • Calling for insurers to submit quarterly reports to state regulators. These reports should provide data on several measures of network adequacy, including the number and type of physicians who have joined or left the network, the provision of essential health benefits, and consumer complaints received.
  • Calling on insurers to treat patient visits to out-of-network physicians the same as in-network visits if the plan’s provider network is deemed inadequate.
  • Supporting regulation and legislation that require out-of-network expenses to count toward a patient’s annual deductibles and out-of-pocket maximums when a patient is enrolled in a plan with out-of-network benefits or is forced to go out of network as a result of network inadequacies.

http://www.ama-assn.org/ama/pub/ama-wire/ama-wire/post/new-policy-calls-adequate-networks-patient-access-choice?

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Comment:

By Don McCanne, MD

If any organization should be able to devise policies that would correct the deficiencies of narrow provider networks, it is the AMA. When you read their new recommendations, clearly they leave in place the fundamentally flawed policy of restricting patient choices of physicians. Tweaking a policy that needs to be eliminated is not an adequate response.

They speak of ensuring network adequacy, but networks are not adequate if they eliminate your primary care provider, if they require greater distances to travel in seeking care, if they limit access to specialists, if they exclude physicians at centers of excellence, or if they include any of the other restrictions that result from not having freedom to choose from all available physicians in the community and in referral centers.

Keeping provider lists current is almost impossible. Physicians often do not notify the insurers when they close their practices to new patients or when they move their offices. List changes of physician attrition (retirement, license revocation, death, etc.) or of new physicians entering the community can be difficult to keep current.

Requiring prior authorization for out-of-network services is a barrier to care, if it is even allowed at all.

One of the more important AMA recommendations is to allow the cost of out-of-network care to be applied to the deductibles and to the out-of-pocket maximums. But then there would be little reason for patients to stay in network unless they had catastrophic expenses that could expose them to large balance-billing costs. Regardless, the patient is still exposed at least to the high deductibles and high out-of-pocket maximums, creating financial hardships for many of the insured.

The AMA recently again rejected recommending single payer proposals. That’s too bad. Single payer would have taken care of not only the narrow network problem, but also the thousands of other deficiencies that are unique in our highly dysfunctional, market-oriented non-system of health care financing.