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CBO microsimulation of demand for health insurance

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CBO microsimulation of demand for health insurance

Microsimulation of Demand for Health Insurance: A Method Based on Elasticities

By Jessica S. Banthin
AcademyHealth Annual Research Meeting, Congressional Budget Office, June 9, 2014

CBO’s Health Insurance Simulation Model (HISIM)

  • The first version was developed in 2002 to model various proposals for expanding coverage, including direct subsidies, changes to tax incentives, and insurance market reforms.
  • The model is updated regularly to incorporate new data, the most recent economic forecast, changes in law or regulations, and technical improvements.

Major Outcomes Modeled by CBO’s HISIM

  • Effects on the federal budget
  • Changes in coverage by source of coverage
    • Uninsured
    • Employment-based coverage
    • Medicaid
    • Exchange(Subsidized and unsubsidized)
    • Other(Including nongroup coverage outside of the exchanges, Medicare, and military health care)
  • Occasional analyses of premiums, individual out-of-pocket spending, and outcomes by relationship to the Federal Poverty Level

By simulating behavior for each individual and family unit, the estimates capture the distribution of responses rather than average response by cell or subgroup, as in a simpler spreadsheet-type approach.

By taking advantage of detailed information collected in household surveys such as the SIPP on individuals and families and the relationships between key variables such as income, health status, employment status, and coverage, the estimates better reflect outcomes under new policies.

Individual behavior is modeled using an elasticity approach, not an expected utility approach.

Estimated Effects of the Affordable Care Act on Health Insurance Coverage, 2024 (non-elderly people):

UNINSURED:

  • Without the ACA:  57 million
  • Under the ACA:  31 million

INSURED:

Without the ACA

  • 35 million – Medicaid and CHIP
  • 166 million – Employment-Based
  • 27 million – Nongroup and Other

Under the ACA

  • 25 million – Exchanges
  • 48 million – Medicaid and CHIP
  • 159 million – Employment-Based
  • 22 million – Nongroup and Other

Estimated Budgetary Effects of the Insurance Coverage Provisions of the Affordable Care Act, 2015 to 2024: ~ $1,400 billion

http://www.cbo.gov/sites/default/files/cbofiles/attachments/45427-AcademyHealth.pdf

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Comment:

By Don McCanne, MD

Imagine how complex it is trying to estimate who will be eligible for and how many will select each of the various sources of coverage, how many will end up uninsured, and what impact that will have on the federal budget. The few excerpts above from the CBO presentation, “Microsimulation of Demand for Health Insurance: A Method Based on Elasticities,” provide an inkling of the complexity of that task.

Now imagine how simple it would be to estimate coverage under a single payer system. To the total population, estimates of births and immigration would be added and estimates of deaths and emigration would be subtracted. The CBO microsimulation serves as a proxy for the profound unnecessary administrative complexity and waste in our system.

The CBO is tasked with making projections for our federal budget. They estimate that the increase in federal spending on health care over the next decade due solely to the insurance coverage provisions of the Affordable Care Act will be ~ $1.4 trillion! This does not include the fact that individuals will be paying more because of the decrease in actuarial value of plans within and outside of the exchange, including especially the declining actuarial value of the largest sector of all – employer-sponsored plans. Our total national health expenditures is a much more important number than is the portion in the federal budget.

As we’ve said repeatedly, the ACA model falls short on most of the goals and it is the most expensive of the comprehensive models of reform. In contrast, the single payer model meets essentially all goals and is the least expensive of comprehensive models.

Because of the great number of variables and interdependent complexity of our health care financing, the CBO has declared that in the future it can no longer give a reasonable estimate of the changes in the federal budget due to the implementation and perpetuation of the provisions of the Affordable Care Act. That should tell you something. It’s time for single payer.

How VA Outsourcing Hurts Veterans

By Phillip Longman
Washington Monthly, June 8, 2014

On Thursday, Sen. Bernie Sanders, chairman of the Senate Veterans Affairs Committee, announced that he had reached a compromise with John McCain and other Senate Republicans on how to fix whatever it is that needs fixing at the VA. The legislation contains some good ideas, like providing for the hiring of more doctors and nurses where they are needed. But the bill also contains one provision that is a significant concession to Republican enemies of government. If enacted, it would lower the quality of health care received by veterans while setting back the movement for health care delivery system reform generally.

This is the provision in the draft legislation that would, according to a Senate Veterans Committee press release, “allow veterans living more than 40 miles from a VA hospital or clinic to access more convenient private care.” Given all the headlines about excessive wait times and backlogs at the VA, that might sound smart at first hearing, but in practice it could well lead to a disaster.

To begin with, as most people in this debate don’t seem to know or care to remember, the VA already engages in extensive outsourcing of medical services. For example, under the Bush Administration, the VA began contracting with Humana to provide care to veterans in rural areas, a program that continues under the Access Received Closer to Home project. In 2009, the Senate Veterans Affairs committee determined that the VA was already outsourcing some $3 billion year to private providers.

By 2012, the Obama administration had continued the trend to the point that the public employee unions that represent VA employees were screaming. “Contract physicians and nurses lack the specialized skills and best practices of clinicians who dedicate their lives to serving the veteran population as VA employees,” complained Alma Lee, National VA Council President for the American Federation of Government Employees. “Excessive contracting out has put many medical centers in the red, without benefitting the patient.”

Now to be sure, some of this outsourcing makes sense. It’s not cost-effective to maintain VA hospitals or even clinics in many remote areas. Due to the declining population of veterans, the VA lacks a sufficient volume of patients even in some developed areas to be able to justify using its own specialists.

But even at its current scale, the outsourcing of VA care has already been fraught with problems. One comes from just the generic hazards of government contracting. In 2009, the VA Inspector General (pdf) found that 37 percent of the $3.2 billion the VA had paid out the year before to private health care providers was improperly paid. Not only does outsourcing create new administrative costs and burdens for procuring and managing contracts. It also opens up opportunities for crony deals and all the kinds fraudulent billing by private doctors that bedevils Medicare and Medicaid.

Far more potentially tragic, however, is what further privatization of the VA would do the quality of care received by veterans. It’s not just that it would threaten the closure of more VA hospitals, thereby making the highly specialized prosthetic and trauma care they offer to disabled veterans more difficult to obtain. Even routine care would suffer in quality as well.

To understand why, consider that health care quality experts are virtually unanimous in identifying fragmentation of care as the one of the largest, if not the largest failures of U.S. health care outside of the VA. Here, for example, is the diagnosis of the of the National Quality Forum, a non-profit organization dedicated to improving healthcare quality:

CARE COORDINATION IS A VITAL aspect of health and healthcare services. Many patients often see multiple physicians and care providers a year, which can lead to more harm, disease burden, and overuse of services than if care were coordinated. This is particularly evident for people with chronic conditions and those at high risk for co-morbidities, who often are expected to navigate a complex healthcare system. Despite efforts to reduce problems through various initiatives and programs—such as care/case management—poor communication, medication errors, and preventable hospital readmissions are still substantial.

Indeed, they are. And superior coordination of care is one main reason why the VA, despite it flaws, continues to outperform most other health care providers in most measures of health care quality.

Because the VA truly is a system, it can coordinate among all the different specialists and other health care providers who are necessarily involved in patient care these days. And because it operates as a system, the VA can also make sure that all these medical professionals are working from a common electronic medical record and adhering to established, evidence-based protocols of care—not inadvertently ordering up dangerous combinations of drugs, or performing unnecessary surgeries and tests just to make a buck.

In short, as I explain further in my book Best Care Anywhere, the VA can treat the whole patient as opposed to one body part at a time. And due to its near lifelong relationship with its patients, which often extends to long-term nursing home care at the end of life, the VA also has incentives for investing in prevention and patient wellness that are largely absent elsewhere in U.S. medicine.

The VA pioneered this model of an integrated, evidence-based, health care delivery system platform that is aligned with the interests of its patients. The last thing we should want to see is more veterans getting treatment in the comparatively more chaotic, fragmented, dangerous, profit-maximizing world of U.S. medicine outside the VA. Instead, the challenge before us is tostop excluding so many vets from VA care with absurd eligibility standards, while giving the VA the capacity it needs to bring its superior model of care to a larger population. Eventually, we need a VA that is open to not only all vets and their family members, but more public health care systems like it that anyone can join.

Phillip Longman is senior editor of the Washington Monthly. This appeared at the Washington Monthly’s “Political Animal” blog.

http://www.washingtonmonthly.com/political-animal-a/2014_06/how_va_outsourcing_hurts_veter050680.php

Blues play same games as for-profit insurers

By James Besante
Albuquerque Journal, Letters, June 10, 2014

Winthrop Quigley concisely summarizes the sale of Lovelace Health Plan’s Medicare Advantage and commercial businesses to Blue Cross Blue Shield of New Mexico in his article, “Blue Cross cleared to acquire Lovelace Health Plan on Sunday” (May 28).

The U.S. Department of Justice stalled approval of the purchase out of concern that it would significantly limit consumer choice for insurance products in the state.

BCBSNM now moves to take unprecedented market share of New Mexico’s insured population, even as news breaks of a class-action lawsuit against Health Care Service Corp., the parent company operating BCBSNM.

The suit claims the parent company breached its contract with members by accumulating excess profits of about $4.9 billion. And rather than disbursing that money to members through dividends, cheaper drugs or lower premiums, the company paid nearly $100 million in bonuses to its top 10 executives.

The nonprofit, mutually held insurer is neither acting like a nonprofit nor providing substantial mutual benefits to its members.

As a fourth-year medical student, every day I am confronted with the profit-maximizing schemes of private insurers. They avoid the sick, collect premiums, deny claims, and shift more and more costs onto my patients.

BCBSNM plays the same games as their for-profit counterparts and the endless pursuit of profits hurts all of us, but especially sick New Mexicans.

This picture is unjust and unacceptable. That’s why I and an increasing number of medical students are calling for replacing the private health insurance industry with a streamlined, publicly accountable health care system, such as “single payer,” also known as “improved Medicare for all.”

James Besante resides in Albuquerque.

http://www.abqjournal.com/413375/opinion/talk-of-the-town-131.html

Charity, but not for all

Shifts in Charity Health Care

By The Editorial Board
The New York Times, June 8, 2014

Health care reform was supposed to relieve the financial strain on hospitals that have provided a lot of free charity care to poor and uninsured patients. The reform law, known as the Affordable Care Act, was expected to insure most of those patients either through expanded state Medicaid programs for the poor or through subsidized private insurance for middle-income patients, thereby funneling new revenues to hospitals that had previously absorbed the costs of uncompensated care.

In return for the new income streams, hospitals that treat large numbers of the poor and get special subsidies to defray the cost would have those subsidies reduced on the theory that they would no longer need as much help.

But after the Supreme Court ruled that the reform law could not force states to expand their Medicaid programs, 20 or more states declined to do so. That failure has hurt some big urban hospitals, because their charity care burden remains essentially the same even as their federal aid has been cut. Even in California, which has expanded its Medicaid program, public hospitals that serve the poorest patients could face a big funding shortfall in future years, according to a study just published by researchers at the University of California at Los Angeles.

A recent report in The Times by Abby Goodnough found that some hospital systems have started tightening the requirements for charity care in efforts to push uninsured people into signing up for subsidized health plans on the insurance exchanges created by the reform law. In St. Louis, for example, Barnes-Jewish Hospital has started charging co-payments to uninsured patients no matter how poor they are. Those at or below the poverty level ($11,670 for an individual) are charged $100 for emergency care and $50 for an office visit.

But some medical centers have seen their charity care costs decline. A report late last month in Kaiser Health News and USA Today said that Seattle’s largest “safety net” hospital, run by the University of Washington, saw its proportion of uninsured patients drop from 12 percent last year to a surprisingly low 2 percent this spring, putting the hospital on track to increase its revenue by $20 million this year from annual revenues of about $800 million.

How all of this will shake out is still uncertain. Some vulnerable groups may find it even harder to get the care they need. Through a quirk in the reform law, residents below the poverty line in states that have failed to expand Medicaid are not eligible for either Medicaid or for subsidized coverage on the insurance exchanges. Undocumented immigrants are not eligible for Medicaid or the subsidized coverage. And some low-income people who have enrolled in subsidized health plans may have trouble paying their cost-sharing.

There are some ways to address these gaps. All states ought to expand their Medicaid programs since the federal government is offering very generous matching funds. Hospitals should move aggressively to help people enroll in Medicaid or in subsidized plans on the exchanges. And federal health officials need to review regularly whether health plan co-payments are actually affordable to those living on very modest incomes.

Reader Comments:

NYT Picks
paradocs2, San Diego

It has been little appreciated that one of the most important accomplishments of the Affordable Care Act was to create universal national health insurance for all poor legal residents of the United States who earned less than 138 percent of the federal poverty level. This magnificent and compassionate action of social innovation and national unity was frustrated by the insensitive, tragic and immoral decision of the Supreme Court. The consequences described in this editorial go beyond costs and inefficiencies to the persistence of the lack of medical services in many areas of our country with appallingly poor health statistics. The problem is more than “the financial strain on hospitals that have provided a lot of free charity care to poor and uninsured patients,” for it extends to the suffering of those millions of people excluded from ongoing medical care. In addition, the circumstances described in this editorial highlight the conundrum of our country’s health care system, based as it is on on a commercial market model and profit generating insurance companies. The best solution to these problems, both the economic inefficiencies and the human suffering, is the creation of a universal, national, single payer health system looking like Medicare expanded to cover all residents. It is profoundly upsetting that our individualistic contemporary culture and the politicians who represent it are blind to both the moral and economic consequences of their position.

Comment:

By Don McCanne, MD

PNHP’s Jeoffry Gordon, MD (paradocs2, above) stated it so well that no additional comment is being provided today.

VA Care: Still the Best Care Anywhere? Part II

By Phillip Longman
Washington Monthly, June 5, 2014

On Tuesday, I offered some background information that called into question the now almost universal assumption that there is a “systemic” problem at VA hospitals with excessive wait times. Yes, VA hospitals in some Sunbelt retirement meccas like Phoenix face serious capacity issues due to the large number of aging vets who have moved to such areas. But in most parts of the country a shrinking population of vets threatens to force the closure of many VA hospitals for lack of patients.

Now let’s consider another, more serious, and often conflated wait time issue surrounding the VA—one that also been bringing forth all kinds of claims and accusations that are in desperate need of being put into context. I’m talking about the huge backlog of vets caught in the often protracted process of just trying to establish their eligibility for VA care.

This issue is confusing to most people, including many in the military, because they assume that vets are legally entitled to VA care, just like most seniors are entitled to Medicare or Social Security. But VA care is not an entitlement. Rather, reflecting the public’s deeply conflicted and often changing views about veterans, access to VA care is limited to vets who can establish that are “deserving” according to convoluted, arcane, and often impossible-to-prove sets of ever evolving metrics and standards.

In general and on paper, combat vets returning from Afghanistan and Iraq have access at least some VA health care for five years, few questions asked. But after that, they join most vets in having to demonstrate their worthiness for treatment by the VA. In general, to get or keep access to VA care most vets must either meet a strict means test or prove that they suffer from specific disabilities directly resulting from their military service.

Now if you want a sense of how inane, insane and time consuming the process of adjudicating such rules can be, then check out this, very typical case, recently brought before the Board of Veterans’ Appeal. Here we have an aging vet who is seeking access to the VA health care by claiming that during his service as a marine in late 1950’s and early 1960s he was exposed to the sound of grenades and gunfire, and that this exposure has since resulted in his hearing becoming so bad that it is disabling.

Now think of what proving (or disproving) this claim involves. Just establishing that he was in the military may well be a problem, due a 1973 fire in St. Louis that destroyed many military service records going back decades before. Today, if one picks up the membership magazine of the Vietnam Veterans of America, one finds pages of fine-print notices in which vets with missing records are searching for witnesses who can testify they were indeed once in the service.

But let’s assume the man filing this case can prove he was in the military and honorably discharged. Then he has to come up with the hearing test he took upon joining the military in 1956. And then he needs to get his hands on the hearing test he took upon discharge in 1962. And then he needs paperwork from doctors showing the extent of his hearing loss now. And then (and here’s the really big one) he needs to prove that his initial hearing loss really did result from being to exposed to too much gun fire and explosions during military service, as opposed to too much rock and roll, and that the subsequent worsening of his condition is not just a function of aging or some other chronic problem.

In this case, the veteran was denied his claim, and maybe that is just and maybe it isn’t. But suppose this vet could have proved that his increasing deafness was a service-related disability. Then that would have set off a whole new adjudication process to determine just how much of a disability his hearing loss might be. Under the laws and regulations under which it operates, the VA must, for example, charge some vets for co-payments, and others not, depending on whether they are rated, say, 25 percent, 30 percent, or 50 or more percent disabled. And so we have lawyers, bureaucrats, judges, caseworkers, doctors and ordinary vets caught up in debating another set of metaphysical questions. Just how much louder do vets with 30 percent hearing disabilities have to turn up the TV compared with to vets with 25 percent hearing disabilities?

Now to be sure, there are things the VA could have done and is now doing to streamline the claims process, such as making greater use of digitalized records and coordinating better with the Department of Defense. Through such efforts, the VA reports that the backlog of disability claims that have been awaiting a decision for more than 125 days is now down 283,762, which believe it or not is a sharp reduction from a year before.

But let’s get real. The fundamental reason for the still huge backlog of cases does not lie with inefficiencies of the VA’s bureaucrats, most of whom are vets themselves. Nor does it come from an increase in the numbers of vets because, as explained in my last post, the number of veterans is actually shrinking dramatically. Rather, it fundamentally lies with the American people and their representatives in Congress, who despite all their fine talk about honoring those who have served their country, have tasked the VA with administering laws and regulations that presume most vets don’t deserve VA care unless they can prove otherwise.

It wasn’t always so. As I describe in my book, the Clinton Administration opened the doors to the VA in 1996 to anyone with an honorable discharge, and many folks who got in then remain grandfathered. But the Bush Administration slammed that door shut again in 2003, and while it has reopened a bit under Obama, we are still spending enormous resources enforcing policies designed to exclude most vets from VA care.

If you don’t think most vets deserve any better, then fine. You are hardly alone. But don’t imagine that the VA’s bureaucracy should be blamed for carrying out laws and policies that reflect your views.

Phillip Longman is senior editor of the Washington Monthly. This appeared at the Washinhgton Monthly’s “Political Animal” blog.

http://www.washingtonmonthly.com/political-animal-a/2014_06/va_care_still_the_best_care_an_1050629.php

Insurer executive rolls her eyes over hokey ACOs

Doctors, hospitals and insurers team up

By Bernard J. Wolfson
Orange County Register, May 1, 2014

In an office building across the street from St. Joseph Hospital in Orange, midlevel managers from Blue Shield of California gathered around a conference table last week with representatives of St. Joseph Heritage Healthcare. The setting was unremarkable, but the conversation that took place was part of an increasingly common collaboration between a larger insurer and one of its key medical providers.

Christy Mokrohisky perked up when Nancy England, a senior pharmacist at Blue Shield of California, proposed a pilot program in which pharmacists would be parachuted into the clinics and physician offices of St. Joseph Heritage Healthcare to manage the prescriptions of sick patients for doctors who are too busy to do it.

For Mokrohisky, who oversees St. Joseph’s performance improvement efforts, the idea spoke directly to one of her driving ambitions: to keep chronically ill patients out of the hospital and away from the emergency room.

“We all know that issues around medication are the number one or close to the number one reason for trips to the ER or admissions to the hospital,” said Mokrohisky, giving voice to the consensus around the table.

The weekly meeting is only one manifestation of the huge upgrade in communication and information sharing between the two groups that has resulted from a 2-year-old alliance known, in the techno-jargon of the industry, as an accountable care organization, or ACO.

The main goal of the ACO is to improve the quality of patient care and save money through closer attention to patients’ needs, monitoring of their compliance with doctors’ orders and avoidance of unnecessary treatments.

Early signs indicate the Blue Shield-St. Joseph ACO is paying dividends. In its first year, it produced a sharp reduction in patient admissions, length of hospital stays, emergency room visits, outpatient surgeries and readmissions, according to in-house data from the insurance company. The group saved a total of $11.5 million, some of which the parties divvied up.

The financial windfall aside, people in both organizations say this kind of ongoing collaboration between an insurance company and a large medical group – virtually unheard of a few years ago – has changed the way they do business with each other.

“It sounds kind of hokey, and sometimes when I say it out loud I have to roll my eyes at myself, but it has created something I have never seen,” says Kristen Miranda, who oversees Blue Shield’s 15 ACOs statewide. “It absolutely has changed the way we interact with these providers and the way they interact with each other. We all now see ourselves as coming together to look at this population as if we are on the same side instead of just battling it out at the negotiating table every year.”

Blue Shield views the kind of orchestrated care it is offering through its ACOs as a competitive wedge against Kaiser Permanente, a health care giant in California that has a built-in advantage because its doctors, hospitals and insurance are integrated.

Some industry observers say ACOs are little more than traditional HMOs in new clothing.

(Glenn Melnick, a health economist at USC) worries that the ability of ACOs to save health care dollars may be time-limited.

“At some point, you are going to reduce inpatient days and other measures as low as they can possibly go,” he says. “Then the question becomes whether these ACOs will be able to generate additional savings from other areas that might be more difficult.”

http://www.ocregister.com/articles/blue-612097-shield-care.html

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Comment:

By Don McCanne, MD

So now with ACOs, insurers and providers are “coming together to look at this population as if we are on the same side instead of just battling it out at the negotiating table every year.” They are sharing a “financial windfall” by having accomplished “a sharp reduction in patient admissions, length of hospital stays, emergency room visits, outpatient surgeries and readmissions, according to in-house data from the insurance company.” The insurers and providers have conspired to split the gains from not providing care. No wonder the person overseeing Blue Shield’s 15 ACOs has to “roll my eyes” since it seems so “hokey.”

No more hokey. Let’s have a financing system geared to patients, not to insurers – a single payer national health program.

Center for Public Integrity on the Medicare Advantage Money Grab

The Medicare Advantage Money Grab

The Center for Public Integrity, June 4, 2014

Why Medicare Advantage costs taxpayers billions more than it should

By Fred Schulte, David Donald and Erin Durkin

(Medicare Advantage) plans have sharply driven up costs in many parts of the United States — larding on tens of billions of dollars in overcharges and other suspect billings based in part on inflated assessments of how sick patients are, an investigation by the Center for Public Integrity has found.

Dominated by private insurers, Medicare Advantage now covers nearly 16 million Americans at a cost expected to top $150 billion this year. Many seniors choose the managed-care Medicare Advantage option instead of the traditional government-run Medicare program because it fills gaps in coverage, can cost less in out-of-pocket expenses and offers extra benefits, such as dental and eye care.

But billions of tax dollars are misspent every year through billing errors linked to a payment tool called a “risk score,” which is supposed to pay Medicare Advantage plans higher rates for sicker patients and less for those in good health.

Government officials have struggled for years to halt health plans from running up patient risk scores and, in many cases, wresting higher Medicare payments than they deserve, records show.

The Center’s findings are based on an analysis of Medicare Advantage enrollment data from 2007 through 2011, as well as thousands of pages of government audits, research papers and other documents.

Federal officials who run the Medicare program repeatedly refused to be interviewed or answer written questions.

Key findings:

  • Federal officials have made billions in “improper” payments to Medicare Advantage plans traced to risk score errors.
  • Medicare Advantage risk scores rose much faster than the national average in hundreds of counties nationwide between 2007 and 2011. That rise in risk scores cost taxpayers more than $36 billion; critics attribute that more to aggressive billing than sicker patients.
  • Though federal health officials have recently disclosed some Medicare billing data, key financial records of Medicare Advantage plans have been kept under wraps.
  • The failure to crack down on health plans that overbill doesn’t bode well for the Affordable Care Act, which relies on a similar risk scoring system.

Thomas Scully, who helped get the program running under President George W. Bush, said rates were generous in hopes of enticing insurers to expand their Medicare business and not shy away from people in poor health.

“We very intentionally tried to overpay them a little bit,” said Scully, now a Washington lobbyist with numerous health care industry clients.

http://www.publicintegrity.org/2014/06/04/14840/why-medicare-advantage-costs-taxpayers-billions-more-it-should

“The Medicare Advantage Money Grab”: http://www.publicintegrity.org/health/medicare/medicare-advantage-money-grab

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Comment:

By Don McCanne, MD

Medicare Advantage is a program in which our government has conspired with insurers to privatize Medicare, even though it costs far more when private insurers are inserted as intermediaries than it does when Medicare is administered as a public program. This report from The Center for Public Integrity is just the latest that has exposed this outrageous use of our tax funds.

The program was set up to deliberately overpay the plans so that they could offer additional benefits that would entice Medicare beneficiaries into the private plans (see Scully’s comment above). Recognizing these overpayments, Congress included in the Affordable Care Act gradual reductions. Not to be outdone, the insurance industry has conspired with the Obama administration and has enlisted individual members of Congress to fight these reductions. In response, the Obama administration has used dishonest budgetary manipulations to offset a portion of the reductions for 2013, 2014 and 2015.

Even more outrageous is that the private insurance industry has used “innovations” to selectively enroll healthier beneficiaries, yet used “touch of illness” serious diagnostic codes to game risk adjustment, which has rewarded the insurers handsomely for claiming that their beneficiaries were much sicker than they really were. According to this report, federal Medicare officials refused to answer questions about these perverse practices.

The insurance industry has been very successful in framing this as “cutting payments for Medicare,” while mobilizing citizens to demand that these cuts be prevented. The cuts are not in Medicare, but they are a reduction of overpayments to private insurers. Yes, those who sign up with the private plans often have lower out-of-pocket costs, but the rest of us are paying for that through higher taxes and through our Part B Medicare premiums that are partially transferred to the private insurers.

Since we are paying for it, we should be receiving in the traditional Medicare program the same benefits of reduced out-of-pocket expenses. Let the people enrolled in Medicare Advantage keep the same level of benefits, but increase the benefits in the traditional Medicare program to the same level, then fire the private insurers that have been responsible for most of the cost overruns in the Medicare Advantage program.

The politicians seem to agree that we should be spending these excess funds on Medicare, so let’s be fair and spend them equitably on an improved Medicare, but not on insurer profits and waste. While we’re at it, let’s make that an improved Medicare for all.

Lack of funding is the real VA scandal

By Suzanne Gordon
Beyond Chron (San Francisco), June 3, 2014

As the firestorm about wait times at VA facilities continues, political representatives from both parties insist that waits must be eliminated for veterans seeking care. Now that Republicans have succeeded in forcing the resignation of Secretary of the Department of Veterans Affairs, Eric Shinseki, who resigned last week – the new focus is on seeking partial privatization of the system by allowing veterans to get care from private sector doctors – care that would be paid for by the government program. None of the current calls to action, however – whether they include criminal prosecutions of those responsible for secret waiting lists, or channeling vets into the private sector – will fix the wait times at the VA that keep vets from getting needed care.

There are two primary reasons for the problem of wait times. One has to do with Congress’ consistent failure to provide adequate funding so that the VA could hire more staff to care for an increasing number of veterans who live longer with complex service and age related health problems. The other – which may be the biggest and hardest to solve problem of them all – has to do with the US healthcare system’s persistent refusal to provide the number of physicians who deliver primary care services in this country.

Let’s look at the issue of funding. Over the course of the past ten years or more, the VA has been taxed with a population of veterans who have very particular problems. Many of those who survived the Vietnam and first Iraq war are often poor, sometimes homeless, have serious mental health problems and more than the usual share of age related health problems.

Added to this group are veterans who made it through the recent wars in Iraq and Afghanistan. They have survived long enough to be VA patients but with serious and equally special health problems. A not atypical VA patient might have a traumatic brain injury (TBI), plus an amputation, on top of Post Traumatic Stress disorder, combined with the normal problems of people who live longer in advanced industrialized societies – heart disease, diabetes, obesity, cancer, or asthma.

In spite of this increasing load of combat and age related problems, Congress has refused to allocate more funding to the VA.

In February of 2014, Independent Senator Bernie Sanders of Vermont proposed a bill that would have allocated $21 billion that would have improved access to healthcare, education, and other services for US veterans. Republicans – the same ones railing against Shinseki in particular and the VA in general – blocked killed that bill. Here is one typical comment that illustrates the tenor of the debate about adequately funding veterans’ care. “I don’t think our veterans want their program to be enhanced if every penny of the money to enhance those programs is added to the debt of the United States of America,” said Senator Jeff Sessions, (R-Alabama). If you go to this website you’ll hear even more: http://www.sanders.senate.gov/newsroom/video-audio/flashback-republicans-block-va-health-care-funds

The same politicians who killed Sanders’ bill are trying to find out what and who is at the bottom of the VA wait list crisis. It is clearly in their interests to ignore any serious discussion of how precisely the VA supposed to care for all the veterans who depend on its services with the limited resources it has been allocated – resources which Republicans staunchly refuse to increase.

This, in turn, leads to the broader and far more stubborn problem of the persistent shortage of primary care providers in the US.

Consider the preliminary report just issued by the VA’s inspector general. It documents that many of the veterans on waiting lists – secret or otherwise – are those seeking a first appointment in the VA system. The VA has set an ambitious policy of seeing such patients within 14 days of receiving a call for a non-urgent appointment. It considers longer waits of 30 days or more unacceptable. But fulfilling this goal is a mission impossible in a country whose medical education and training system (over which the VA has no control) consistently fails to produce enough primary care providers to care for the needs of an aging population suffering from an increasing number of chronic conditions.

Unlike other healthcare systems in other industrialized countries, students graduating from US medical schools and choosing their area of practice overwhelmingly eschew primary care and are increasingly going into highly paid specialties like gastroenterology, radiology, or orthopedics. Only about 20% of current medical school graduates are entering primary care.(Nursing schools are trying to produce more Nurse Practitioners (NPs) to deal with the crisis in primary care, but have been consistently attacked by MDs who insist that NPs are not well enough educated to provide even routine primary care.)

Even if the VA received the funding it would need to hire more physicians and nurse practitioners, where would they find them? They are simply not there to be hired. Not now and not next year or the next. It takes an average of seven to 12 years to produce a Nurse Practitioner, or Primary Care Physician.

If the US healthcare system suddenly figured out that it needed to produce 30% more primary care physicians than it has (bringing the ratio of primary care physicians to specialists at 50/50, which is what most other industrialized nations achieve), the US healthcare system would have to adjust its skewed incentives and begin producing more primary care providers next year in order to produce enough to care for patients in 2021 or 2026. (This would involve a whole series of reforms that Congress is loath to consider – including making medical and other health professional education free so that people do not incur the kind of huge debts when leaving school that push them in the direction of lucrative specialization among many other things).

Since these kinds of reforms are not even on the radar, the system-wide shortage of primary care providers also makes another “fix” Republicans have proposed almost laughable. Republicans who have long wanted to privatize the VA see a way to begin that process by pushing for creeping privatization. They want the government to allow vets to see physicians in the private sector and pay the freight.

But patients who already have good private insurance have trouble scoring an appointment with a primary care physician. Which is why, as Philip Longman, who wrote a wonderful book about the VA called Best Care Anywhere,  points out in his great interview at Vox, wait times for an appointment in Los Angeles are on average up to 59 days and in Boston up to 63. Newspaper reports like that in the New York Times spotlight vets who have been able to get immediate appointments in the private sector. Well I congratulate them.

Most other people I know, even those with good health insurance have a pretty hard time finding a PCP whose practice is even open to new patients and have to wait a good long time for specialist care as well. How will the nation’s overtaxed primary care doctors suddenly be able to accommodate millions of vets when they can’t handle the patients they already have, plus the influx of patients who will now be insured thanks to the Affordable Care Act?

Critics of the VA are studiously avoiding dealing with the only system-fixes that will solve the problem of wait times at the VA and elsewhere. It’s time for them to stop ranting about accountability and to take some real action to encourage medical students to go into primary care and allow more nurse practitioners to deliver the care our population so desperately needs. And it’s overtime for them to fund the VA at the levels necessary to serve the needs of America’s vets.

http://www.beyondchron.org/news/index.php?itemid=12674#more

The VA: Another reason for single payer

The uproar over the manipulation of wait times at the Phoenix VA hospital and other VA sites has tended to overshadow the larger issue of whether U.S. veterans have sufficient, unimpeded access to care. The short answer is they don’t, due to the inherent limitations of the VA program and the fragmented nature of our current health system. Among other problems, many veterans don’t even qualify for VA care and are completely uninsured.

There are 22 million veterans in the U.S. today. They are mostly poor, and the Vietnam-era veterans are getting to an age where they need more health care.

Over the years there have been long waits for different kinds of care at the VA, even as the overall population of veterans is declining. As we now know, some VA administrators have gamed the scheduling system to make their wait times appear shorter, the result of a “pay for performance” scheme that financially rewarded managers if they kept waits to under two weeks – even if that goal was unattainable at their facilities due to doctor shortages, a rapid influx of veterans due to retirement nearby or eligibility changes, or other factors.

But the longest and most onerous waits are associated with the time it takes to determine if veterans are eligible to receive care at the VA, and at what level. This determination is done precisely because the VA is not a single-payer system. It doesn’t cover everyone; it’s not accessible to every veteran; it is just one payer among many in our fragmented system. Currently about 2.3 million veterans and their family members are completely uninsured.

In contrast, a single-payer national health program would cover everyone and allow them to choose any provider and source of care in the U.S.

The VA has pioneered quality initiatives, delivery system changes and an electronic medical record that is far ahead of the private sector. Veterans’ service organizations praise the VA, even as they complain about waits, precisely because of its high quality.

But any health care program that benefits low-income individuals and families (including the VA, because today the poor are more likely to join the military) is politically vulnerable to budget cuts or calls for privatization, and is likely to suffer from more problems than a health system that benefits everyone — rich and poor, young and old, soldiers and civilians, i.e. the entire population. Otherwise there will be pressure to underfund it.

Single-payer national health insurance, an improved Medicare for All, will offer a single tier of high-quality care to everyone. It would address wait times in an organized way, be transparent and accountable, and allocate medical resources based on need, not ability to pay.

For more resources on the ongoing issues at the VA:

Large variation in cost-sharing reductions in silver plans harms patients

Analysis of Benefit Design in Silver Plan Variations

By Kelly Brantly, Hillary Bray and Caroline Pearson
Avalere Health, June 2014

Both state-based and federally-facilitated exchanges offer financial assistance for low-income enrollees. The assistance takes two forms: advanced premium tax credits and cost-sharing reductions (CSRs). This report focuses on CSR plans, which are available to individuals and families earning between 100% of the federal poverty level (FPL) and 250% FPL.

CSR plans use federal subsidies to increase their actuarial value (AV) and lower cost-sharing for low-income exchange enrollees. Avalere Health conducted an analysis of the standard silver and CSR plans offered in the federally-facilitated exchange (FFE) that spans 34 states.

  • Cost-sharing reductions are more often applied across multiple types of benefits
  • in 94% and 87% AV plans compared to 73% AV plans. 
  • Many CSR plans have MOOP (maximum out-of-pocket) limits lower than the amount required by law. 
  • Almost all CSR plans feature lower deductibles than the standard silver plans, though wide variation remains.
  • Consistent with standard silver plans, copays for specialist visits are higher than those for primary care visits.
  • Low-income consumers may face very high coinsurance for drugs on tiers three and four, which is least likely to be reduced in CSR plans.

The large variation in co-payments, co-insurance, and deductibles required by CSR plans may not be clear to exchange enrollees with limited income.

Across all CSR plans, there is broad variation in how issuers reduce cost-sharing across benefit categories relative to the standard silver plans. Because issuers have a high level of flexibility in designing these CSR plans, cost-sharing amounts vary across services and in some cases mirror the cost-sharing in standard silver plans.

The large variation in how plans apply the cost-sharing reductions across covered benefits may not be clear to consumers while they are shopping and comparing plans.

Notably, consumers with the lowest income who qualify for the highest level of financial assistance (100% to 150% FPL) could encounter some 94% AV CSR plans with cost-sharing requirements for specific services that are identical to standard silver plans. Even for CSR plan cost-sharing that is reduced, out-of-pocket costs could still serve as a barrier to accessing care.

(This analysis was funded by PhRMA.)

At this link, click “Download PDF” for full report: http://avalerehealth.com/expertise/managed-care/insights/avalere-analysis-cost-sharing-reductions-unevenly-applied-across-services-i

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Comment:

By Don McCanne, MD

This report provides a highly technical explanation of the great variation in cost-sharing provisions for lower-income individuals insured by the various silver plans in the exchanges. This is just another example of the unnecessary increase in administrative complexity brought to us by the Affordable Care Act.

What is particularly egregious is the intolerably high cost-sharing required of low-income individuals who need higher-tier drugs. High cost drugs, such as those used to treat hepatitis C or those that meet the expanded recommendations for HIV prophylaxis, will be unaffordable for individuals with low incomes, in spite of the cost-sharing reductions.

By making these drugs unaffordable, the insurers accomplish two ends: 1) the cost sharing is so high that many lower-income individuals will not fill their prescriptions, saving the insurers those costs, and 2) those with chronic hepatitis C, those at high risk of HIV exposure, or the many others who have  disorders requiring expensive tier 4 drugs will likely select other insurers once they realize that the drugs that they need will be unaffordable (favorable selection). These are some of the newer innovations that the insurers are using since they are now prohibited from using medical underwriting to deny insurance to individuals with greater anticipated health care costs.

More administrative complexity. More insurer chicanery. More inequity in the provision of health care. And this is because our politicians selected the most expensive model of health care reform – one that places insurers and pharmaceutical firms above patients. Many studies have shown that the most efficient and equitable model of comprehensive health care coverage – single payer – is also the least expensive of the comprehensive models of reform. Amongst other important measures, it would put pharmaceutical firms in their place, and it would dismiss the intrusive and wasteful insurers from the scene.

We can still do that.

Retired doctor reflects on his 90 years in new book

By Ross Forman
Windy City Times (Chicago), June 3, 2014

Quentin Young offers his take on a variety of topics, including people, politics and policies, in his new book: “Everybody In, Nobody Out: Memoirs of a Rebel Without a Pause.”

Young certainly speaks from experience. He celebrated his 90th birthday last September.

Born and raised in Chicago, and still calling the Hyde Park area home, Young is now in California, opting out of the Chicago cold and snow.

“I’ve lived a long life, so there’s a lot to tell. I like the book; it really tells the story of [my] 90 years,” Young said.

The book was published in late 2013.

Written in collaboration with Steve Fiffer, Young’s memoir offers a rare glimpse inside the mind of a fearless advocate for a single-payer health system, following his path through the civil-rights movement on through his stint as the head of Cook County Hospital.

Young retired in 1985.

“We’re in deep trouble in terms of health care, at least that’s my point of view,” said Young, who spent about 18 months writing the book that travels his 90 years. “I think the book does a pretty decent job of tracing the fight for national health insurance. We’re a country of 50 states, and there’s a different story in every state.

“The thing I like the most about the book is, the success of the senior component, Medicare. It’s been a dramatic economic change [over the years].”

In fact, Young added, “We’ve had a century of progress, and I’ve seen so many changes,” in the medical world.

The medical world of 2014 is seemingly at a paradox, trying to figure out what’s the best plan, he said. “Every polls seems to show that American people want to be covered against health-care costs. No one wants to go bankrupt because of a major illness,” he said.

Young attended Northwestern University Medical School in the 1940s and interned at Cook County Hospital, where he also did his residency. He was a founder and served as national chairman of the Medical Committee for Human Rights, which was formed in 1964 to provide medical care for civil rights workers, community activists, and summer volunteers working in Mississippi.

He also was noted for providing emergency medical care to protesters at the 1968 Democratic National Convention in Chicago.

He retired from private practice in 2008.

Then, in 2009, Young was appointed by Illinois Governor Pat Quinn to Chair the Illinois Health Facilities Planning Board.

Young said he still remains active in medical world, particularly on the economics of health care.

So where do you see health care in the future?

“It’s a question of whether we will have a single-payer system, or we’ll have a chopped up system with all different kinds of various benefits, depending on where you work, or whether you work, and how old you are. People don’t like that uncertainty.

“I’m hopeful, before I leave this world, that I’ll see national health insurance.”

Young tagged it as a 50-50 odds that a national health insurance program will materialize.

“I think the next five years will tell the story,” he said.

When asked about the early days of the HIV era, of about 33 years ago, Young said, “That’s a very delicate subject; it was a very important time. In the … early 1980s, that was a time when so many people would get [diagnosed] and then die within three or four years, or sooner. It was a horrible death. Eventually, people were able to live with HIV, if they took the proper medication.”

Young treated HIV/AIDS patients, and prominently promoted prevention, most notably through safe sex.

http://www.windycitymediagroup.com/lgbt/Retired-doctor-reflects-on-his-90-years-in-new-book/47674.html

Privatization won’t fix the VA

By Suzanne Gordon
The Boston Globe, May 27, 2014

First it was Social Security, then Medicare and Medicaid, and then the public health care option under Obamacare. Now, in the wake of recent allegations that veterans hospitals put patients on secret wait lists, Republicans are calling for the privatization of the Veterans Health Administration, the nation’s largest public health care system which provides cost-effective and high quality care to 6.2 million veterans.

It is of course unacceptable if patients suffered as a result of any delays. But regardless of what went wrong at any VA facility, turning veterans over to private sector insurers and for-profit hospitals is not the solution.

With its salaried staff of nearly 280,000, the VA has long been a model for health care delivery. The VA’s 152 hospitals, 900 clinics, 300 mental health centers, and other facilities — many located in rural areas that the private sector ignores — care for more than 230,000 people a day. In a recent survey of veterans for the American Customer Satisfaction Index, patients rated the system’s services as equal to or better than private sector health care facilities.

One reason is the VA’s systematic efforts to improve quality care and patient safety. The VA computerized medical records long before private hospitals. The VA conducts widespread training on inter-professional communication and teamwork that decreases patient deaths and injuries due to the kind of medical mistakes and problems that kill over 400,000 patients a year. In 2007, the VA launched a successful initiative to dramatically reduce the dangers of one the deadliest hospital superbugs — methicillin-resistant Staphylococcus aureus.

The VA has singular expertise in the treatment of post-traumatic stress disorder. Many injured soldiers have returned from Iraq and Afghanistan with what is known as poly-trauma — PTSD plus traumatic brain injury and limb amputations. Few primary care physicians — or even specialists — have much experience treating such cases in the private sector. In fact, without the VA, vets would have trouble getting any primary care services given the serious shortage of primary care providers in this country.

Because the VA is a public entity, its facilities actually display greater accountability — and more transparency to patients and their families — than private health care systems. When veterans have a VA-related beef — or in-house whistle-blowers a tale to tell — they are quick to notify their elected representatives. Such complaints regularly trigger individual constituent service queries from members of Congress or, as is the case today, oversight hearings by House and Senate committees. (Good luck triggering a similar rapid response to patient or staff complaints in the private sector.)

The US Inspector General now has a task force probing the VA in Phoenix, which is accused of hiding long delays before veterans could see doctors. As Senator Bernie Sanders of Vermont, chairman of the Senate Veterans’ Affairs Committee, said, “It’s imperative that we uncover the problems that exist and address them boldly.” What’s already known is that the VA system in Phoenix cares for 80,000 vets, many of them older and with serious, chronic health conditions. If some waited too long to be seen, maybe it’s time for Congress and the White House to figure out how to free up funds to care for veterans who are living longer with more complex conditions.

Doing this would be far better for them and the nation than privatizing a system that is, in fact, a model for broader health care reform.

Suzanne Gordon’s latest book is “Beyond the Checklist: What Else Health Care Has to Learn from Aviation Teamwork and Safety.”

http://www.bostonglobe.com/opinion/2014/05/27/privatization-won-fix/OyQgH0er1VXFNfkQTy01tI/story.html