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Replace volume with quality?

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Replace volume with quality?

Should Physician Pay Be Tied to Performance? No: The System Is Too Easy to Game—and Too Hard to Set Up

By Steffie Woolhandler
The Wall Street Journal, June 16, 2013

Paying doctors for better care—not just more of it—seems like a no-brainer. Yet rigorous studies of pay-for-performance bonuses have found no health benefits and some unintended harms.

An exhaustive analysis of pay-for-performance research by the Cochrane Collaborative, an international group that reviews medical evidence, unearthed “no evidence that financial incentives can improve patient outcomes.”

Consider these cases. In Britain’s massive pay-for-performance program, family doctors earned almost perfect scores (and big bonuses) for hypertension treatment, but population surveys found no decrease in blood pressure or its main complication, strokes. Meanwhile, aspects of quality that didn’t bring bonuses deteriorated.

The largest U.S. pay-for-performance experiment—Medicare’s Premier Demonstration—also flopped. The 200 hospitals that offered bonuses scored slightly worse on patient death rates than other hospitals.

Proponents argue that programs like these were flawed in one way or another, and that the next trial—or the one after—will certainly do better. They also claim successes with other programs. But none of these claims rest on rigorous science, and all those that have subsequently been subjected to rigorous tests have failed.

No Easy Measurement

Why do these programs consistently fall short? Measurement is distorted once you pay doctors based on the data they themselves create. High scores may reflect real excellence, but can just as easily reflect cherry-picking or gaming the measurement system.

One Boston-area hospital we observed improved its quality score 40% just by getting doctors to change the words they wrote in patients’ charts. Medicare gives hospitals more credit for saving patients with “acute respiratory decompensation” than those with “COPD exacerbations,” although these terms are synonyms. That kind of practice is neither illegal nor unusual.

Beyond that, it’s devilishly difficult to quantify doctors’ performance in the first place. Hospital death rates seem, at first glance, an ideal measure of medical quality. Yet, four widely used algorithms yield completely different mortality rankings; a hospital rated outstanding in one often looks downright dangerous in another.

Even if—as some proponents argue—we find performance measures that work for one group of doctors, it’s unlikely that they’ll work for all providers in all patient populations. Moreover, many providers interact in providing care, and influence each other and patients’ outcomes in complex ways. It’s hard to imagine that incentives could optimize this as a system.

Ignoring Psychology

There’s also psychology at work. Rewarding performance ignores the complexity of human drive, particularly the role of intrinsic motivation—the desire to perform an activity for its own inherent rewards. Offering your dinner-party host a $10 reward for cooking a wonderful meal isn’t likely to motivate future invitations.

Studies have found that financial incentives often crowd out intrinsic motivation. For instance, college students will spontaneously play with interesting puzzles, but once they’re paid to solve them, they lose interest in playing for nothing. When day-care centers in Israel imposed fines on parents for picking up children late, tardiness increased. Promptness transformed from a moral duty to a market transaction.

Pay for performance undermines the mindset required for good doctoring—the drive to do good work even when no one is looking. Moreover, it forces doctors to shift their attention from patients to computer screens—documenting trivial details useless for patient care but essential for compliance.

None can doubt medicine’s grave quality problems. As a remedy, pay for performance suggests manipulating greed. This can certainly change medicine, but not necessarily in the ways that we would plan, much less hope for.

(Dr. Woolhandler is a physician and professor at the City University of New York School of Public Health. David U. Himmelstein, also a physician and professor at the School of Public Health, and Dan Ariely, the James B. Duke professor of behavioral economics at Duke University’s Fuqua School of Business, contributed to this article.)

http://online.wsj.com/article/SB10001424127887323528404578454432476458370.html

Comment:

By Don McCanne, M.D.

We keep hearing over and over that we are going to have to quit paying physicians based on the volume of their services and pay on the quality of those services instead. There are two problems with this.

The first problem is that there is a certain volume of health care that needs to be delivered. If the physician is told that quality counts but volume doesn’t, then wouldn’t that physician be motivated to cut back on work done? Does anyone seriously suggest that sloth is fine – payment would be the same regardless of the volume of work? Of course not. Whether fee-for-service or salaried, the physician is going to have to produce.

The second problem is that the abstract concept that physician pay should be tied to quality does not translate into a practical model of measuring and rewarding quality. Physicians already attempt to provide the best quality they can under the given clinical circumstances. Typical measures selected are only a infinitesimal sampling of the entire work product of the physician. Today’s article explains the deficiencies of trying to come to any conclusion about quality based on this process.

The counter opinion to the article above was written by François de Brantes, executive director of the Health Care Incentives Improvement Institute, and is available at the same link above. Some of his comments are instructive: “show poor outcomes in some pay-for-performance trials,” “design flaws,” “doctors were rewarded for results that were actually poor,” “it has worked, if not always as well as it should,” and, “problems can be fixed by not letting providers set benchmarks.” If physicians, with their conflicts of interest, don’t define quality, then who does? The MBAs? Is that really better?

We definitely must address medicine’s many quality problems, ideally through beneficent public policies, but manipulating greed through pay for performance schemes is not the way to get there.

Should Physician Pay Be Tied to Performance?

No: The System Is Too Easy to Game — and Too Hard to Set Up

By Steffie Woolhandler, M.D.
The Wall Street Journal, June 16, 2013

Paying doctors for better care — not just more of it — seems like a no-brainer. Yet rigorous studies of pay-for-performance bonuses have found no health benefits and some unintended harms.

An exhaustive analysis of pay-for-performance research by the Cochrane Collaborative, an international group that reviews medical evidence, unearthed “no evidence that financial incentives can improve patient outcomes.”

Consider these cases. In Britain’s massive pay-for-performance program, family doctors earned almost perfect scores (and big bonuses) for hypertension treatment, but population surveys found no decrease in blood pressure or its main complication, strokes. Meanwhile, aspects of quality that didn’t bring bonuses deteriorated.

The largest U.S. pay-for-performance experiment — Medicare’s Premier Demonstration — also flopped. The 200 hospitals that offered bonuses scored slightly worse on patient death rates than other hospitals.

Proponents argue that programs like these were flawed in one way or another, and that the next trial — or the one after — will certainly do better. They also claim successes with other programs. But none of these claims rest on rigorous science, and all those that have subsequently been subjected to rigorous tests have failed.

No Easy Measurement

Why do these programs consistently fall short? Measurement is distorted once you pay doctors based on the data they themselves create. High scores may reflect real excellence, but can just as easily reflect cherry-picking or gaming the measurement system.

One Boston-area hospital we observed improved its quality score 40 percent just by getting doctors to change the words they wrote in patients’ charts. Medicare gives hospitals more credit for saving patients with “acute respiratory decompensation” than those with “COPD exacerbations,” although these terms are synonyms. That kind of practice is neither illegal nor unusual.

Beyond that, it’s devilishly difficult to quantify doctors’ performance in the first place. Hospital death rates seem, at first glance, an ideal measure of medical quality. Yet, four widely used algorithms yield completely different mortality rankings; a hospital rated outstanding in one often looks downright dangerous in another.

Even if — as some proponents argue — we find performance measures that work for one group of doctors, it’s unlikely that they’ll work for all providers in all patient populations. Moreover, many providers interact in providing care, and influence each other and patients’ outcomes in complex ways. It’s hard to imagine that incentives could optimize this as a system.

Ignoring Psychology

There’s also psychology at work. Rewarding performance ignores the complexity of human drive, particularly the role of intrinsic motivation — the desire to perform an activity for its own inherent rewards. Offering your dinner-party host a $10 reward for cooking a wonderful meal isn’t likely to motivate future invitations.

Studies have found that financial incentives often crowd out intrinsic motivation. For instance, college students will spontaneously play with interesting puzzles, but once they’re paid to solve them, they lose interest in playing for nothing. When day-care centers in Israel imposed fines on parents for picking up children late, tardiness increased. Promptness transformed from a moral duty to a market transaction.

Pay for performance undermines the mindset required for good doctoring — the drive to do good work even when no one is looking. Moreover, it forces doctors to shift their attention from patients to computer screens — documenting trivial details useless for patient care but essential for compliance.

None can doubt medicine’s grave quality problems. As a remedy, pay for performance suggests manipulating greed. This can certainly change medicine, but not necessarily in the ways that we would plan, much less hope for.

Dr. Woolhandler is a physician and professor at the City University of New York School of Public Health. David U. Himmelstein, also a physician and professor at the School of Public Health, and Dan Ariely, the James B. Duke professor of behavioral economics at Duke University’s Fuqua School of Business, contributed to this article. They can be reached at reports@wsj.com.

http://online.wsj.com/article/SB10001424127887323528404578454432476458370.html?mod=hp_jrmodule

Underinsured in the Age of Obamacare

The Affordable Care Act does not make health care a right

By A.W. Gaffney
In These Times, July 2013

During the second presidential debate of 2008, Tom Brokaw asked Barack Obama and John McCain: “Is health care in America a privilege, a right or a responsibility?”

Obama, unlike McCain, did not hesitate to respond plainly that health care “should be a right for every American.” He proceeded to make health care reform a major goal of his presidency.

Sadly, though, whatever its merits (and they are substantial), the Affordable Care Act (ACA) will not create a right to health care in America. Nor will it lead to a system of universal health care. Not because it will leave millions uninsured — though it will do that — for if uninsurance were the law’s only flaw, with some combination of an expansion of subsidies and of Medicaid, the ACA could be transformed into a truly universal system. The law has a more fundamental flaw: It fails to reverse a peculiarly American trend toward what is euphemistically called “underinsurance.” We may have health insurance, in other words, but we cannot afford to become ill.

The ACA may actually exacerbate a practice that many of us face, in a limited and innocuous way, in our encounters with the health care system — a practice known as “cost-sharing.”

Cost-sharing takes the form of co-pays, deductibles and other payments that are not covered by insurance and are often exacted at the point of service. In theory, cost-sharing decreases medical spending by giving us “skin in the game,” as commentators frequently (and oddly) put it. The theory is that by forcing us to pay something out-of-pocket every time we “consume” health care, we are disincentived to utilize in excess, hence medical spending is controlled.

Many would ask whether the average person really needs to be disincentived from an invasive procedure or an unnecessary afternoon in the doctor’s office. But in any event, it is clear that as cost-sharing eats up larger portions of our disposable income, we become “underinsured,” forced to go broke or ration our health care.

Evidence suggests that underinsurance has been on the rise for years. A study published in the journal Health Affairs in 2008 found that in 2007, about 20 percent of Americans with insurance age 19-64 — about 25 million individuals — could be classified as underinsured (defined as having an exposure to out-of-pocket expenses above a certain threshold). This represents a striking 60 percent increase since 2003. Along similar lines, according to a report from the Kaiser Family Foundation, the percentage of insured workers with a deductible of $1,000 or more increased from 10 percent in 2006 to 34 percent in 2012, while the percent with a deductible of $2,000 or more increased from 3 percent to 14 percent.

But more telling than these figures is what underinsurance means to those who must live with it day after day. In milder cases, it might simply mean another bill to be paid out of a paycheck stretched thinner and thinner. Or it might mean deciding to sacrifice certain medical services — deferring appointments, not filling prescriptions, or forgoing diagnostic tests. During my years of training in internal and pulmonary medicine, I have seen entirely reasonable patients of mine make exactly these sorts of decisions.

But underinsurance can also translate into financial ruin. One study from 2009 found that 62 percent of all bankruptcies filed in 2007 had a medical cause. Particularly alarming, however, is the fact that three-quarters of these “medical debtors” had health insurance at the time of the illness that led to their bankruptcy. If health insurance does not prevent us from going bankrupt when we get sick, can we really call it “insurance”?

The ACA will reform the insurance industry to some extent, for instance by expanding Medicaid, eliminating lifetime limits on coverage, and preventing insurers from excluding us for pre-existing conditions. But the base model, so-called bronze plans on the ACA exchange, will only cover 60 percent of an individual or a family’s health care expenses. Although there are out-of-pocket limits as well as subsidies for the poor, families will be susceptible to as much as an estimated $12,500 in annual out-of-pocket expenses — after their premiums have been paid. Similarly, the administration has moved to allow state officials to charge Medicaid patients higher co-payments for such necessities as doctor’s visits and prescriptions, though these individuals are less able than any to afford such fees. The ACA, in short, will clearly not reverse — and in some cases, will worsen — the trend toward low-value health insurance that is increasingly relied upon — both by individuals and employers — in an age of soaring premiums and now, the required purchase of insurance.

As we peer into the future of health care in America, let’s look at how the system on which the ACA was modeled — Mitt Romney’s Massachusetts health plan — has fared. A 2012 report by the state’s Division of Health Care Finance and Policy found that Massachusetts employers increasingly choose insurance plans with fewer benefits, higher cost-sharing and lesser value. Between the years 2008 and 2010, the percentage of small group enrollees in the most risky, highest cost-sharing and seemingly least attractive plans (the bronze plans) increased from 2 percent to 27 percent, while those in the most comprehensive plans with less cost-sharing declined from 34 percent to 11 percent.

It may appear to make perfect sense for a healthy individual — or an employer — to favor low-premium, high-deductible plans. Why throw away thousands of dollars of much needed money every year for insurance premiums when using very little health care? Of course this is a gamble, but for those with significant competing expenses, choices have to be made.

The unfortunate reality, meanwhile, is that we all get sick, often when we least expect it. Insurance designed for the healthy is laughably absurd. And so underinsured individuals and families struck by unexpected illness constantly face choices between health care and other necessities. In a poll conducted last year, 40 percent of sick Massachusetts adults reported problematic out-of-pocket medical costs, while 36 percent reported that the cost of medical care caused financial problems for their family, and 14 percent said there was a time during the previous year when they were unable to get needed care, usually for financial reasons. This is in spite of the fact that the Massachusetts health care system — like the ACA — requires insurance policies to offer certain minimum coverage. It is also supposed to be an example of universal health care.

It is bad enough to be sick; forcing the sick to be sick with worry over their medical bills is neither a rational nor humane approach toward health care in the 21st century. The idea that we need to force the sick — or the future sick, a category we all belong to — into categories of bronze, silver, gold and platinum benefits, as the ACA does, is simply unnecessary.

For the great irony of the situation is that what we in the United States call platinum care — health insurance in which 90 percent of our expenses are covered — is actually something more akin to bronze care in much of the developed world, where truly universal systems offer health care free (or nearly free) at the point of care. A single-payer system could accomplish the same here in the United States.

Let us turn back briefly to Brokaw’s question in 2008. Obama went further than to merely declare health care a right in the abstract. “In a country as wealthy as ours,” Obama argued, “for us to have people who are going bankrupt because they can’t pay their medical bills — for my mother to die of cancer at the age of 53 and have to spend the last mo
nths of her life in the hospital room arguing with insurance companies because they’re saying that this may be a pre-existing condition and they don’t have to pay her treatment — there’s something fundamentally wrong about that.”

There is, of course, something very wrong with that. But the “pre-existing condition” is only one barrier to care. We will not have a “right” to health care until the other hazardous injustices of our system — persistent uninsurance and inadequate insurance among them — are also safely behind us, with a truly universal and comprehensive system in their place.

A.W. Gaffney is a physician and a writer on issues of health care policy, politics and history.

http://inthesetimes.com/article/15091/underinsured_in_the_age_of_obamacare/

Support for a single-payer system

By Christopher Stack, M.D.
Orthopedics Today, Letters, June 2013

In his commentary in the April issue of Orthopedics Today, Dr. Jackson makes several valid points. He correctly cites the many confusing facets of the Affordable Care Act (ACA), certainly a wishful title given that there is little in the bill that will control costs. In the long run, the legislation will not be affordable for the nation, and the people will be the ultimate payers. No one I am aware of, who follows health care policy, is pleased with the ACA.

Dr. Jackson suggests the possibility that the ACA was a conspiracy to speed the way to a single-payer system. Given the increased role of private insurers with millions of new customers and federal subsidies, this seems highly unlikely. The probability of a single-payer system should be celebrated not feared. The enormous benefits that have been projected far outweigh the alleged deficiencies of a more “socialized” system.

“Financial chaos” has been with us for decades. What will bring order to that chaos is the adoption of a single-payer system, namely the expansion of Medicare to bring all citizens into the fold as beneficiaries and premium paying members. By enlarging the risk pool to 300,000,000, including large numbers of the young and healthy, the actuarial experience will be improved, administrative efficiency will be improved and enormous overhead savings will accrue, which can be used to deliver quality care privately through our current delivery system to all Americans.

Support for a single-payer system, both in the general public and in the health care professions, has been growing. A single-payer system remains this country’s best option for solving our long-term fiscal problems while providing the best care for our citizens. Single-payer systems, or their fiscal equivalents, have been proven to be successful in every other industrialized nation in the world.

Dr. Christopher Stack resides in Indianapolis.

Would Syria benefit from a single payer system?

Syria: An overview of MSF programmes in and around the country

MEDECINS SANS FRONTIERES, May 23, 2013

The conflict in Syria is extremely intense. Frontlines continue to shift. The medical system is reduced to tatters. An estimated 6.8 million people are in urgent need of humanitarian assistance inside Syria and in the neighbouring countries. And people in enclaves are cut off from assistance.

Despite the very real challenges of operating in the country, MSF is now running five hospitals inside Syria and is increasing mobile clinic activities around some of these hospitals. Simultaneously, MSF is actively seeking to open new projects where it is safe to do so.

MSF is using only private donations for its work in Syria in order to remain entirely independent of all political positioning around the crisis.

MSF is also working in the neighbouring countries: Iraq, Jordan, Lebanon and Turkey where some 1.5 million Syrians have fled. These countries have been overwhelmed by the influx of refugees and the humanitarian response has so far been unable to meet their needs.

http://www.msf.org/article/syria-overview-msf-programmes-and-around-country

And…

U.S. Is Said to Plan to Send Weapons to Syrian Rebels

By Mark Mazzetti, Michael R. Gordon and Mark Landler
The New York Times, June 13, 2013

The Obama administration, concluding that the troops of President Bashar al-Assad of Syria have used chemical weapons against rebel forces in his country’s civil war, has decided to begin supplying the rebels for the first time with small arms and ammunition, according to American officials.

Supplying weapons to the rebels has been a long-sought goal of advocates of a more aggressive American response to the Syrian civil war.

But even with the decision to supply lethal aid, the Obama administration remains deeply divided about whether to take more forceful action to try to quell the fighting, which has killed more than 90,000 people over more than two years.

http://www.nytimes.com/2013/06/14/world/middleeast/syria-chemical-weapons.html

New York Times Reader Comment:

Don McCanne
San Juan Capistrano, CA

They have a tragic conflagration over there and we’re helping by pouring more gasoline on it?

Is “Peace on Earth” only for Christmas cards?

http://www.nytimes.com/2013/06/14/world/middleeast/syria-chemical-weapons.html?comments#permid=425

Comment:

By Don McCanne, M.D.

Syria needs their Mahatma Gandhi – someone who will be an inspiration for non-violence and civil rights.

And single payer for Syria? We can’t even get single payer in the United States. Perhaps we need our own Mahatma Gandhi.

Celebrating our nurse colleagues

By Andrew D. Coates, M.D., F.A.C.P.
WAMC Northeast Public Radio, June 14, 2013

I practice hospital medicine.

Recently the nurses at our hospital voted to give me an award. They told me about it, discreetly, one by one, ahead of the official notice from the administration. These caregiving colleagues, upon whom our patients in the hospital depend every day, took the time to let me know that they also depend upon me. Wow. A true honor.

We doctors organize and order plans of care, diagnostic tests and specific therapies, adapted to individual needs and immediate circumstances. Physicians, in hospital medicine and in every specialty, have a very challenging role.

To do a good job it often seems that we have be more thorough than smart, for thoroughness combined with insight is what can best protect patients from unexpected events. Being thorough also means counting upon our colleagues in nursing and every allied caregiving discipline.

This intellectual dimension is central to a physician’s life, constantly learning and teaching, ever struggling to confront what it is we don’t know. When we say that physicians embrace lifelong learning we sometimes forget that true learning comes with facing our self-doubts.

Yet shouldering this responsibility is compensated with the privileges of professional autonomy and collaboration in an atmosphere of mutual respect from our colleagues. That is the life of doctors.

Nurses have a different life. Our patients who come to the hospital sick, depend upon nurses in the most crucial, personal ways.

We might paraphrase what the great American writer Zora Neale Hurston once said of woman’s relationship to the world. In comparison to doctors, nurses are “the mule” of the hospital.

Nurses shoulder the burden of caregiving physically, in the moment, when it comes to serious illness. In human life, in sickness like in health, things do not always go as planned. No matter how things go, nurses are there to respond, minute by minute, at the bedside.

In turn, participating in the multidisciplinary effort to help our patients brings its own reward. Our shared efforts, the human relationships among caregivers, adds meaning to our lives as well as those of our patients, for ultimately there is no mind-body duality, but our best human effort, combined. Patients and physicians, for different reasons, depend upon nurses in a profound way, at every step.

The hospital can be such an awful, frightening place, yet when we’re joined in common cause, helping another human being, we find ourselves compelled to be there, loving our role. Seeing hospital care this way helps explain why we need to protect the relationships and efforts of the caregivers in order to protect the patient’s health.

This is an important reason why we need a national health program that will provide for every patient. So many private interests, each with perverse financial incentives, presently invade, warp, thwart, and even poison our caregiving relationships.

But let’s save that for another day.

For today, let’s savor the mutual recognition of caregivers, doing the best we can, together, under the circumstances.

Dr. Andrew Coates practices internal medicine in upstate New York. He is president of Physicians for a National Health Program.

You can listen to Dr. Coates’ radio broadcast here: http://www.wamc.org/post/andrew-coates-celebrating-our-nurse-colleagues

Competition in Medicare programs: Boon or boondoggle?

By Carole Carson
The Union (Nevada City, Calif.), June 11, 2013

Does competition to provide insurance for Medicare recipients reduce costs? Or does competition simply increase the tab picked up by taxpayers?

Dr. Ida Hellander, policy director for Physicians for a National Health Program, a nonprofit research and advocacy group, thought taxpayers should know the answers to these questions.

In her research study published in the International Journal of Health Services, Hellander found that competing insurance programs, called Medicare Advantage plans, did not save money. In fact, since their introduction, the private (mostly for-profit) insurance programs have cost taxpayers an extra $282.6 billion.

Hellander adds, “In 2012 alone, private insurers are being overpaid $34.1 billion.” This money, Hellander believes, should have been used to reduce the federal deficit, shore up Medicare’s trust fund or improve patient care — not to enrich private insurance companies.

In 1985, Medicare contracted with private (mostly for-profit) insurance plans such as UnitedHealth and Humana for coverage of Medicare enrollees in a plan called Medicare Advantage. The idea was that Medicare Advantage plans would compete with the traditional fee-for-service Medicare insurance.

Ironically, part of the argument for introducing the Advantage plans was that the competition would lower Medicare costs. Indeed, since their inception, the Advantage plans have become increasingly popular because they offer enrollees additional benefits at reduced premiums. But because of the added benefits, the lower premiums and the need to make a profit, the Advantage programs cost Medicare about 25 percent more than the traditional Medicare program.

Medicare currently pays these privately run plans a set premium per enrollee (about $10,123). This amount is $2,526 more than the premium paid for enrollees covered under the standard Medicare plan.

About 27 percent of Medicare beneficiaries are currently covered under Medicare Advantage plans. Given how profitable the Advantage plans are for private insurers and how attractive the expanded benefits and lower premiums are for enrollees, this number is expected to grow at a fast clip.

Just how profitable are these programs for the private insurers?

UnitedHealth Group could afford to bump the annual compensation of its chief executive officer, Stephen J. Hemsley, to $13.9 million from $13.4 million in the prior year. The increase was based in part on his leadership in solidifying the company’s position as “the biggest provider of the privately run, subsidized versions of the government’s Medicare program for the elderly and disabled people.”

Guess who’s subsidizing Mr. Hemsley’s salary? Look around. It’s you, me and other taxpayers.

Dr. Steffie Woolhandler, coauthor of the study, concludes, “It’s clear that having Medicare Advantage programs compete with Medicare doesn’t save us money. In fact, the opposite is the case. The private plans only add waste, and the aggregate waste is staggering — enough to be a significant drag on the economy.”

Can taxpayers afford the extra cost to help private insurers make a profit from Medicare? Given the intent of Medicare to provide basic healthcare coverage to all enrollees, should all enrollees receive the same benefits? Or are some recipients entitled to expanded benefits at reduced premiums? If so, should taxpayers cover the cost of paying for these extra benefits and lowered premiums?

Or does a single-payer, not-for-profit model with universal benefits and premiums make more financial sense?

What do you think?

Carole Carson lives in Nevada City.

PNHP note: The study referred to above can be found here.

http://www.theunion.com/opinion/columns/6891332-113/medicare-advantage-plans-benefits

Why does Kaiser have the highest premiums in the California exchange?

Kaiser's Obamacare rates surprise analysts

By Chad Terhune
Los Angeles Times, June 12, 2013

In California’s new state-run health insurance market, Kaiser Permanente will cost you.

The healthcare giant has the highest rates in Southern California and some other areas of the state, surpassing rivals such as Anthem Blue Cross and other smaller competitors. The relatively high premiums from such a strong supporter of the federal healthcare law surprised industry analysts, and it has sparked considerable debate about the company’s motives.

Some experts say Kaiser intentionally bid high to avoid drawing too many customers next year who are sick or who have been uninsured for years and may be costlier to treat. Others suspect Kaiser was worried that lower premiums would bring an influx of newly insured patients that could overwhelm its in-house roster of doctors and hospitals.

“Kaiser is not as low cost as many people think,” said Glenn Melnick, a USC health policy professor. “They appear to be protecting themselves because the people signing up in the first year are likely to be the sickest ones.”

Overall, Kaiser is the state’s biggest health insurer with a 40% share of the market.

(Marian) Mulkey of the California HealthCare Foundation said Kaiser has regretted being the low-cost option at times in the past and being overrun by too many members at one time. Other insurers may have more flexibility to add doctors and hospitals to their network as enrollment builds.

Kaiser, on the other hand, could face the costly decision to contract with outside hospitals to absorb some of its overflow.

“We are focused on sustainable prices for the long haul,” (Bill Wehrle, Kaiser’s vice president of health insurance exchanges) said. “If you make a large mistake in this environment, it can be hard to recover.”

http://www.latimes.com/business/la-fi-kaiser-health-rates-20130613,0,7939146.story

Comment:

By Don McCanne, M.D.

Kaiser Permanente was the prototype health maintenance organization (HMO) that sparked the managed care revolution, seeking lower costs supposedly without compromising quality. So why should a low cost leader come in with the highest premiums for Covered California – California’s new exchange that is being established under the Affordable Care Act (ACA)?

The strategies and negotiations were secret, so we don’t really know. But there are a couple of possible explanations. Initial enrollment may include more people with health problems who need insurance, whereas healthier individuals may opt out since initial non-participation penalties are very small, and they can always join later. By Kaiser setting premiums higher, this initial influx of less healthy but more expensive patients would be diverted to competing plans because of the attraction of their lower premiums.

Another possible reason is that the current Kaiser patient population is relatively stable at about 40 percent of the California insurance market. When patients change their PPO or HMO plans that use provider networks, they do not have as much disruption as they do when they move into or out of Kaiser Permanente. Such a move always entails a complete change of their physicians and hospitals. Since Kaiser realizes that they have not only dominant market share but also a stable group of satisfied patients who do not want any disruption in their care, they know that they can charge a little bit more for their plans since patients are willing to pay the modest differences to avoid such disruptions.

There is another reason that is perhaps the most important of all. Kaiser Permanente is a truly integrated health care delivery system with its own hospitals, clinics, health care professionals and other components of the health care delivery system. They can provide virtually all services to every one of their plan members. Carefully planning and executing system capacity is absolutely essential in the Kaiser model.

Large, abrupt changes in enrollment can be catastrophic from a business perspective. If they lose too many patients all at once they are sitting there with expensive excess capacity that is not generating revenues. On the other hand, if they have a sudden large influx of patients, especially patients who would require greater amounts of health care, they would strain their capacity, with overloads in their primary care clinics, with patients destined for admission waiting in the hallways because the hospital’s beds are full, and with intolerably excessive queues for patients waiting for high-tech and specialized services. Obviously, they would have very unhappy patients.

Instead of making large, abrupt changes in their system capacity to match large fluctuations in patient enrollment, Kaiser controls their patient enrollment, keeping patients out if there are too many, or increasing aggressive marketing if there are too few. Under our fragmented, dysfunctional system of financing health care, it is only natural that Kaiser would adjust its patient enrollment to fit its business model rather than adjust its business model to better accommodate patients.

This issue of capacity is important. The United States needs to improve central planning since we have amongst the worse maldistribution of capacity. We have too many regions with excess capacity, which causes wasteful over-utilization, and other regions with deficient capacity, which impairs access to needed care. As a major player, allowing Kaiser to have autonomy in its planning takes good care of Kaiser but at a cost of fragmenting the systemic planning that we need.

Most proposed single payer models include integrated health systems such as Kaiser Permanente. Presumably Kaiser, like other players in the system, would negotiate global budgets, fees and capitation rates, and negotiate separate budgets for capital improvements.

But what about patient choice? The new accountable care organizations (ACOs) would still ensure patient choice, especially since, under the ACA rules, patients may not even know that they have been assigned to a particular ACO. Should Kaiser, which, in essence, is a transparent mega-ACO, be allowed to lock their patients into their own system when other ACOs cannot?

Suppose their patients had the freedom to come and go as they please. Would  the patient choices be that be much different from choosing another primary care entity that has well established referral patterns for high-tech and specialized services, and established practice relationships with other hospitals? Isn’t the goal of expanded information technology to provide a similar level of interconnectedness between all providers that Kaiser has within its own system?

Instead of being a closed system, shouldn’t Kaiser just be another choice for patients within the health care delivery system? Under a single payer system, that choice would not be based on price since single payer eliminates the need to shop prices. Rather choice would be based on perceived quality. Wouldn’t it be better if the various elements of the health care delivery system were knocking themselves out to be sure that they have very contented, healthier patients?

(Changing the Kaiser Permanente model is controversial. Today’s comment should not be considered a specific recommendation, but should be used to get people thinking about what type of structural reforms would best serve the interests of patients – all patients, not just Kaiser’s.)

Affordable Care Act's Achilles Heel? Blaming Patients, Not Profiteering

By Karen Higgins, R.N.
Common Dreams, June 12, 2013

With the one-year anniversary of the Supreme Court ruling upholding the Affordable Care Act near, it’s time to ask if the decision to put the burden of cutting costs on patients, not corporate healthcare profiteering, is the fatal flaw in the plan.

The law’s tepid cost control measures targeted at healthcare spending that is gobbling up an increasing percentage of the economy and pricing more people than ever out of access to care have been widely viewed as the ACA’s biggest pitfall.

But from the outset, the Obama administration dismissed the most effective means to reduce costs by:

  • refusing to consider a single payer alternative that combines genuine universal coverage not based on ability to pay with global budgeting
  • rejecting a proposal to authorize the federal government to negotiate bulk purchasing (a concession to the drug companies), and
  • failing to regulate price gouging by hospitals, drug companies, insurers and other healthcare corporations.

Those fateful decisions left only one option for significant reduction of overall health expenditures – saving money in the delivery of care by shifting costs to those who use health services and discouraging them from getting care even if they have insurance.

Perhaps that’s not surprising given the decision to craft the ACA in concert with pharmaceutical, insurance, hospital, and Chamber of Commerce lobbyists, and, as recently reported, top Wall Street investment firms and hedge fund executives.

Here are several ways the ACA shifts the hardship of cost cutting to those who need care, and promotes delivery models that result in limiting care, even among those with health insurance.

1. What they’re not telling us about the exchanges

The ACA health exchanges are marketplaces set up to enable the uninsured who the law requires to buy private insurance or pay a financial penalty to choose among competing private insurance and qualify for a federal subsidy to cover some of the costs.

But premiums, deductibles, co-pays and other fees can run to thousands of dollars. Even in the cheapest plans buyers are expected to pay 40 percent of the cost. Subsides may not make these plans “affordable.”

Many younger, healthier people are likely to select the cheapest plan, one outside the exchange with fewer covered services, or just go without coverage entirely and pay the fine.

Further, small businesses can buy coverage for employees through the exchanges, but the premium and co-pay subsidies will not cover family dependents, a huge hole that will leave many uncovered.

Insurers offering lower rates the first year in hopes of acquiring many new customers are likely to raise rates later, as has occurred in Massachusetts, the model for the ACA. A recent study in the journal Health Affairs found that 38 percent of families buying plans through the Massachusetts exchange reported a financial burden and 45 percent said costs were higher than they had expected.

2. The high cost of taxing health benefits

For the first time, the law will tax health benefits beginning in 2018 through the misnamed “Cadillac tax” a 40 percent excise tax on comprehensive health plans. The inevitable result will be fewer employers offering good health benefits, and far more people pushed into skeletal, high deductible plans with far less coverage and much higher out-of-pocket costs. The New York Times just reported that 17 percent of employers this year are stepping up cost shifting five years before the tax goes into effect.

3. An incentive to employers to cut coverage or full-time jobs

Under the ACA employers with 50 workers or more must offer coverage to full time employees or pay a fine, but not to part-timers. Nurses and other workers are increasingly in battles with employers who are demanding elimination of coverage for part time employees, citing the ACA as their pretext. Regal Entertainment, Papa John’s and other companies are reducing workers’ hours to under 30 per week.

4. The wellness scam

“Wellness” programs that enable businesses to transfer more healthcare costs to workers with “unhealthy” factors like smoking or high blood pressure or cholesterol levels are rapidly spreading, actively encouraged by the ACA which offers premium discounts to participating employees. However, health disorders are as likely to derive from chronic or genetic conditions as “life style choices” and economic factors which have a disproportionate impact on the poor.

The cost reductions also fall far short of the hype. The federal government apparently buried a report it mandated for the ACA from the Rand Corporation on wellness programs which showed the overall savings are, at best, modest.

The programs make insurance unaffordable for some workers, and “keep the sickest workers from affording the care they need,” said Alan Balch, vice president of the Preventive Health Partnership, an alliance of the American Cancer Society, the American Diabetes Association, and the American Heart Association.

5. Self-rationing on the rise

With its weak controls on pricing practices by the insurers and hospitals, and encouraging cost shifting and high deductible plans, the ACA provides no relief for those who postpone needed care because of the high price tag.

A survey by the Centers for Disease Control and Prevention just released in early June found that 20 percent of Americans, or 54.2 million people in 2011 said their families had difficulty paying for health care services including physician visits, hospital procedures and medications within the prior 12 months.

Among the effects, people delay getting care include less containment for the spread of infectious diseases and more people ending up in emergency rooms. ER visits as the point of entry for patients to needed healthcare have been on a big upswing, a worrisome trend for the increased pain and suffering for patients and the overall health expenditures.

6. New barriers to care

If Massachusetts is the political model of the ACA, the industry model is Kaiser Permanente by combining the roles of insurance company and medical provider with its network of hospitals and clinics.

As ACA implementation nears, Kaiser has stepped up practices once associated with the worst abuses of HMOs. These include delaying medical appointments, restricting hospital admissions, and rapid discharge of patients from the hospital care to other settings.

These include sending people home where the care burden is placed entirely on family members, or to outpatient facilities or nursing homes that have fewer regulations and f
ewer, typically lesser skilled, lesser paid staff where the patients receive less care than in hospitals.

Other industry giants hope to follow this path, enrolling new members who are required to buy insurance, while they are more directly able to control their expenditures for care and can more easily slash spending. The ACA encourages care cutting practices through several mechanisms, including financial penalties for hospital re-admissions, an incentive to keep people out of the hospital, and rewarding providers who divert patients to outpatient clinics.

7. A tale of the 31 million

More than 48 million people are currently uninsured. A new study in Health Affairs estimates that even after full ACA implementation up to 31 million of those will still be without coverage.

That starts with the 14 states and counting who have rejected the expansion of Medicaid, the single most important provision in the ACA for expanding healthcare access, (with the help of the Supreme Court ruling gutting the federal sanction for opting out).  Others will lose their employer-sponsored coverage due to the ACA taxes on employers, the provision excluding dependent coverage for small businesses that enter the health exchanges, and all of those who will still find insurance far too costly to buy, especially in a recession that has never ended for millions of people.

Political posturing by those on the right opposed to any reform of our broken healthcare system and the bunker mentality of liberal allies of the Obama administration who for their own partisan reasons tend to gloss over serious flaws in the “legacy” law of the Obama years have obscured the reality that our healthcare crisis is far from over and in desperate need of more systemic overhaul.

Studies this year alone show the U.S. ranks last among 17 major industrial nations in life expectancy,  but is ahead of the others in first-day infant mortality rates. That will not end with the ACA.

Nurses will continue to make the case for joining the community of nations with a genuinely universal national or single payer healthcare system based on individual patient need, not corporate profits.

Karen Higgins is a registered nurse and co-president of National Nurses United.

Unraveling the Crisis in American Healthcare

By Joie Meissner, N.D.
Vital News (Seattle), Spring 2013

As N.D.s most of us are sole proprietors or in small group practices where we may feel cut off from the larger healthcare system. Yet what happens in the reform of our larger healthcare system will have an enormous impact not only on our practices and our patients, but also on our friends, families and on our own lives.

Ours is the most expensive healthcare system on earth. We spend billions more on healthcare than other industrialized nations yet we are the only industrialized country in the world that does not provide some type of universal health coverage to its people. No one dies due to lack of healthcare access in other industrialized countries, and yet a study done by Harvard Medical School and Cambridge Health Alliance found that nearly 45,000 deaths occur annually in our country due to lack of healthcare access. According to this study, there is a 40% increased risk of death in uninsured American adults.[1]

We spent $2.8 trillion in 2012 on healthcare. This is $750 billion or 27% more than the per capita costs of healthcare in other developed countries, yet WHO ranks our healthcare system’s performance 37th in the world.[2,3]

Despite its high cost, 50.7 million Americans do not have adequate access to healthcare.[4] Public outcry over the state of healthcare has already led to the attempt at nationwide healthcare reform known as Obamacare. The high cost of the multi-payer system is at the heart of our unsustainable healthcare costs, costs that can be predicted to lead to even more dramatic changes in the healthcare system in the years following full implementation of Obamacare.

The anticipated healthcare changes will affect all sectors, including naturopathic physicians, their patients and the treatments they often recommend. Understanding the shape that future reforms will likely take and our potential role in these reforms can help our profession and our patients have greater control over our destiny.

In order to understand the reforms necessary to solve our healthcare crisis, we first need to understand that unsustainable costs are occurring due to the lack of governmental and industry price controls and due to the expanded number of insurance plans and carriers, which respectively lead to skyrocketing hospital charges, and pharmaceutical prices as well as and excessive administrative costs in our current system.

Obscene Overpricing

Steven Brill, writing in Time magazine, uncovered the fact that hospitals set their fees for goods and services based on hugely inflated “chargemaster” pricing schemes that bear no relationship to costs, but which allow “non-profit” and for-profit hospitals to maintain plush surplus revenue and astronomical executive salaries.

Brill found that drug prices are so inflated under the current healthcare system that if pharmaceutical prices were controlled to the same degree that they are in other developed countries, we would save more than $90 billion annually and $25 billion/year in Medicare/tax payer savings.[5]

The Private Insurance System Jacks Up the Price of Healthcare

Between 25-30% of all US healthcare dollars go to pay for administration.[6] Because of the substantially higher administrative cost of the private insurance carriers as compared to non-privatized counterparts like Medicare or Medicaid and because of the logistical inefficiency inherent in having thousands of insurance plans and carriers, the private insurance system inevitably jacks up the price of healthcare.

According to healthcare economist Gerald Friedman, Ph.D., the inefficiencies in our healthcare system which lead to its unsustainable price tag are allowed to exist because the prevailing economic view sees the free-market as the remedy to healthcare overspending. He explains that the for-profit system economic framework that views healthcare spending as waste is why we have problems ensuring that all our citizens have access to healthcare.[8]

The For-Profit System; Cherry Picking and Lemon Dropping

Despite the fact that other economists like Paul Krugman, Ph.D., Nobel Prize-winning economist Kenneth Arrow, Ph.D., and Friedman himself would strongly disagree, Friedman asserts that the prevailing economic viewpoint holds that governmental health insurance promotes over-utilization of healthcare which, in turn, promotes wasted spending. He further asserts that this viewpoint leads the insurance carriers to engage in practices that results in lack of coverage for all Americans. He explains that profit in health insurance comes from a practice called ‘cherry picking’ and ‘lemon dropping’ in which insurance providers discourage the sickest patients, who incur 70% of healthcare costs, from being able to obtain insurance while providing membership incentives to the healthiest patients who incur only 10% of these costs.[9] The profit motive behind the mainstream practice of lemon dropping is the impetus for many of the rules and clauses in insurance policies such as the pre-existing condition clauses that denied many Americans medical insurance coverage.

Sixty-two percent of all American bankruptcies are due to unpaid medical bills; 78% of these were insured at the time.[10] Obamacare’s injunction against coverage caps was designed to prevent the growing number of medical bankruptcies. However, Obamacare does not prevent coverage caps from causing health insurance premiums to rise, thus allowing the high numbers of medical bankruptcies to continue.

Obamacare’s Exchange Benefit Plans Are Underinsurance Plans

Insurance policies sold on the exchanges created by Obamacare are only required to have actuarial values (AVs) of 60% (Bronze plan), 70% (Silver plan), 80% (Gold plan), and 90% (Platinum plan). This means that the actual health care expenses that a policy pays, on average, will be 60%, 70% and 80% respectively.[11] For example, the purchaser of a bronze level plan can expect to pay 40% of actual medical bills even after paying the premiums. Due to their lower cost, AVs of 60% and 70% are likely to be the predominant plans chosen and these plans are highly inadequate coverage for any serious illness such as cancer.

Not everyone who needs healthcare will qualify for healthcare subsidies under Obamacare. Although Obamacare enacts laws to address the problem of lack of healthcare access, the Congressional Budget Office and Joint Committee on Taxation estimate that at least through 2022, 30 million of the 50.7 million Americans who currently have no insurance will still have no insurance after Obamacare has been implemented. Sources project an increased number of Americans will have very inadequate insurance, leaving them bankrupt should they become seriously ill.[12,13]

Based on the need to maintain profits, the cost of insuring those who need it most will lead insurer’s to inflate overall premiums and cost sharing expenses. Even those who qualify for Obamacare’s expanded Medicaid coverage will still have some cost sharing expenses that for them may pose a financial hardship and the increased cost sharing expenses for those who do not qualify for subsidies especially for those with serious illnesses (the lemons) may lead to bankruptcies and/or avoidance of medical care they simply cannot afford.[14]

Sadly, these sorts of policies allowed under Obamacare will continue to result in extensive numbers of American medical bankruptcies and will not prevent insurers from shifting the costs of covering the sickest patients onto enrollees in the form of markedly increased premiums and cost sharing expenses (deductibles, coinsurance and co-pays).

Obamacare Isn’t Enough

The reasons why additional reforms beyond Obamacare are necessary is because Obamacare fails to ensure that
everyone is adequately covered, that those who are covered can actually afford to use healthcare services, and because Obamacare does not end the epidemic of medical bankruptcies or control the bloated costs that are bankrupting the American healthcare system.

To a large extent, Obamacare fails to control the unsustainable cost of American healthcare because it fails to use the government’s substantial purchasing power to bargain down prices for drugs and other medical goods and services and it fails to streamline excess administrative cost inherent in the private insurance system but instead it increases both the patient pool and the tax subsidies to the multi-payer system, the system that the prevailing economic paradigm lauds as the free-market solution.[15] This is because it does not address the basic precept held by prevailing healthcare economists and policy makers, namely the idea that the free-market can remedy all the nation’s healthcare woes.

Healthcare as Commodity or a Right?

Brill and others including healthcare economists like Kenneth Arrow, Paul Krugman and Gerald Friedman maintain that the very nature of healthcare being essential to life itself abrogates its ability to exist as a free-market commodity. They hold that because healthcare itself cannot obey the laws of supply and demand, it cannot be treated like a for-profit commodity. Common sense tells us that when we are having a heart attack, we are not going to be in any position to bargain over the cost of lab tests. Because of this, Brill insists that the healthcare market will always be a ‘seller’s’ market’ with the seller setting the price as far into orbit as our US promissory notes will stretch.[16]

The effects that the traditional “free”-market paradigm will continue to have on our ailing healthcare system are anticipated to lead to another public outcry for more healthcare reform. We are realizing that healthcare is too essential and too expensive to be treated like a commodity. The next outcry will be for something that goes beyond the for-profit-mindset: It will herald that healthcare is a human right, best supported by the implementation of a single-payer healthcare system.

We are the only industrialized country in the world that does not provide some type of universal health coverage to its people. A universal healthcare system such as single-payer is our long awaited reform that most other developed countries have already implemented.

Movement in the direction of a single-payer healthcare system has begun in our country. Vermont’s version of single-payer legislation was already passed by both houses, and that state is currently applying for a waiver allowable under Obamacare so that it can implement a state single-payer system. Most states have single-payer bills and there is a national bill called H.R. 676 that currently has 41 cosponsors.[17] The effects of the single-payer reform regarding how we practice medicine and how we are reimbursed will be substantial. As physicians we need to understand how we will be affected and also how we can be a part of the single-payer system that is in the future of American healthcare.

Special Thanks to Sherry Weinberg, MD, Don Bunger, Don Mitchell, MD, Jim Squire, MD, Marti Schmidt, JD, David McLanahan, MD, Kathleen Myers, DDS, Kathleen Randall, MA, and Helen Thorsen CDP.

Click here for references. This is the first of a three-part series.

Dr. Meissner is a member of the Washington Association of Naturopathic Physicians and a primary care physician in Seattle’s Capital Hill area. Currently on the board of directors Physicians for a National Healthcare Program of Western Washington, her personal interests include food safety, securing a universal healthcare system and clinical research on multiple sclerosis at Bastyr University.

http://www.wanpnews.com/2013/04/16/unraveling-the-crisis-in-american-healthcare-part-1-of-a-3-part-series/

Are physicians driven by profits or fear?

Appropriate Use of Myocardial Perfusion Imaging in a Veteran Population: Profit Motives and Professional Liability Concerns

By David E. Winchester, MD, MS; Ryan Meral, BA; Scott Ryals, MD; Rebecca J. Beyth, MD, MSc; Leslee J. Shaw, PhD
JAMA Internal Medicine, June 10, 2013

Myocardial perfusion imaging (MPI) is performed millions of times annually in the United States to assess patients for coronary ischemia. Some have expressed concern that MPI is being used inappropriately, possibly because of self-referral profit motives and professional liability fears. To inform clinicians about situations in which patients are likely to benefit from MPI testing, appropriate use criteria (AUCs) for MPI were developed, last revised in 2009. Prior investigations have applied AUCs to describe the magnitude and patterns of inappropriate testing. Rates of inappropriate testing have ranged from 7% to 24%. We hypothesized that the single-payer environment of the Veterans Affairs (VA) health system, which eliminates self-referral profit motive and limits liability concern, will result in less inappropriate use of MPI.

Results

For all but 4 patients (1%), an indication from the 2009 AUCs could be identified. Study indications were 78% (n = 259) appropriate, 13% (n = 42) inappropriate, and 8% (n = 27) uncertain. The most common inappropriate MPI indications included testing of patients with low pretest probability who could have undergone treadmill electrocardiogram testing (7 patients [16.7% of total inappropriate MPI]) and asymptomatic patients with low coronary heart disease risk (7 patients [16.7% of total inappropriate MPI]).

Discussion

In this retrospective cross-sectional investigation regarding the appropriate use of MPI in a VA health care setting, we observed that a substantial portion of MPI tests were ordered for inappropriate indications. The findings are in contrast to our initial hypothesis but are similar to those of another VA-based investigation, the results of which were published during our investigation.

Our hypothesis was based on unique characteristics of the VA patient care environment. First, no self-referral or profit motives exist. Second, whereas the Federal Tort Claims Act permits medical malpractice lawsuits against federally employed physicians, the substantial majority of claims are resolved through administrative processes.

We did not detect a significant reduction in inappropriate testing in the VA environment, which suggests a lesser role of defensive medicine and self-referral in the inappropriate use of MPI.

Reasons for the observed patterns of ordering MPI are unclear. Conceivably, commonalities in medical training, independent of postgraduate practice environment, could contribute to an exaggerated perception of benefit of MPI in asymptomatic patients and those at low risk of coronary heart disease.

http://archinte.jamanetwork.com/article.aspx?articleid=1696189

Comment:

By Don McCanne, M.D.

This study has two important lessons for health reform advocates – one obvious and the other not so obvious.

The obvious lesson is that “excessive” medical interventions occur even in the absence of greed or fear. In this study, since VA physicians receive no additional income with an increased volume of services – in this case the ordering of myocardial perfusion imaging – the tests that were inappropriate were not done to increase personal income. Also, since most VA malpractice claims are resolved administratively, there is a much lower fear factor that would cause physicians to order tests to reduce the risk of liability lawsuits.

This is good news in the respect that we can dismiss any nefarious motives on the part of most physicians who are recommending interventions that seem to be excessive. Policy corrections should be directed instead to the more important causes of excessive medical interventions.

This leads to the more subtle lesson of this study. What retrospectively is considered to be inappropriate medical management was done by physicians who, at the time, thought that they were doing the right thing for the patient. The policy recommendation that should follow is that we should continue to identify best practices and continue to educate our health professionals on just what those best practices are.

We are already doing this in the form of medical research and continuing medical education. The process can be enhanced by greater reliance on organizations such NICE, Cochrane, and several others. If we want to reduce unnecessary care, our resources should be directed to these efforts rather than being wasted on administrative excesses such as accountable care organizations that rely on feeble measurements that are used to distribute nominal rewards and punishments – not really much of a motivator but more of an insult for dedicated physicians.

Physicians appreciate receiving good information and will use that in their practices. Let’s make better use our public agencies, such as the NIH, that are dedicated to the health of patients, rather than private agencies that jerk our health care dollars around to conform to their business models.

Single payer really would shift the motive from “money first” to “patients and their health first.”

The Affordable Care Act and single payer

By Alec Pruchnicki, M.D.
WestView News (New York City), June 2013

Part 1: How Does the Affordable Care Act Affect Us?

The Affordable Care Act (ACA), sometimes referred to as Obamacare, will affect us. It is a complex area of law with many pieces. In 2010, it passed Congress with many compromises, and mostly survived a Supreme Court challenge. Here are a few of its major provisions.

From the start, insurers can no longer cancel coverage if you become sick; there will be no lifetime limits on total cost of coverage, and more preventive care will be covered. Young adults (up to 26 years of age) can usually stay on their parents plan, and denials for pre-existing conditions will start to decrease. Drug costs under Medicare will start to decrease in addition to reimbursements for Medicare Advantage plans (Medicare MOs). A significant new provision requires insurance companies to spend at least 85 percent of their budgets on medical care. If they do not, they must send a refund to their enrollees.

By 2014, all denials for pre-existing conditions are to be eliminated. Medicaid coverage will be expanded for millions of individuals and essential benefits will define minimal coverage for policies. Individuals will be required to have coverage which could be purchased through newly established health care exchanges, with subsidies for those with low income. Persons who do not purchase or have their own insurance will pay a penalty that will eventually rise to $695 for individuals and $2,085 for families, or 2.5 percent of income. Employers with 50 or more workers will be required to provide coverage, or face a tax penalty. Employers with less than 50 workers will not be required to provide coverage, but subsidies will exist to encourage them to do so.

Although the ACA establishes many reforms in the area of health care and is one of the major pieces of legislation in this field since the 1960s when Medicare and Medicaid were established, there are significant weaknesses. Progressive politicians tried to include a “public option” in the bill, or at least a possible buy-in to Medicare or Medicaid. However, these were never included and now much of the increased coverage will be channeled through private plans, both profit and non-profit, rather than any government program. This will expand, and sometimes subsidize, the private sector often with government enforcement or government funds.

The exchanges set up within the states are still being established and their goal of significantly decreasing costs and widening consumer options has yet to be determined. Furthermore, since the Medicaid reforms were not supported by the Supreme Court decision, many states have refused to implement them. Whether or not these refusals persist and states continue to reject substantial federal funds also remains to be seen.

Possibly the greatest problem with the ACA is that only half of those without medical insurance will be covered by the provisions of the act, even if more states agree to participate in Medicaid reform, and as many as 31 million people will still not have coverage. Supporters of the act point to Massachusetts where a similar plan led to more coverage than projected, while critics of the act also point to Massachusetts for failure to adequately control costs, either on a state-wide or individual basis, and the coverage that does exist is often insufficient and leads to under-insurance.

As this complex act is implemented, its strengths and weaknesses will become more apparent and the need for further health care reform may arise at some time in the future, possibly very soon.

http://westviewnews.org/2013/06/how-does-the-affordable-care-act-affect-us/

Part 2: What Is Single-Payer Health Care?

Single-payer national health insurance is a system in which one entity (usually a government agency) organizes the financing of health care, leaving the delivery of care mostly in private hands.

All residents would be automatically enrolled in the program at birth and be covered for life. Everyone would have equal access to comprehensive, high- quality health care, with no premiums, co-pays or deductibles.

Financed by a system of progressive taxation, the program would pay for all necessary medical expenses, including doctor, hospital, preventive, long-term care, mental health, reproductive health care, dental, vision, prescription drug, and medical supply costs. Patients would have free choice of doctor and hospital. People would no longer be afraid of unaffordable medical bills and would never be bankrupted by medical expenses.

In some single-payer systems, such as in Canada, hospitals receive lump-sum government payments rather than depend on piecemeal billing and negotiations with insurance companies. Had we such a system, it’s likely we would have prevented the closing of St. Vincent’s Hospital and many other hospitals around New York City.

There is a bill in Congress, the Expanded and Improved Medicare for All Act, H.R.676, that would establish such a program. Polls show that its principles have solid majority support, including among physicians and nurses. The bill has been endorsed by many unions, civic, and faith based organizations.

Why do we need it?

We already spend twice as much as other industrialized countries on health care but we receive mediocre results. Some Americans benefit from very good health care but millions do not. Fifty-four percent of Americans report delaying needed care in 2010, while 25 percent report having trouble paying medical bills. Many must choose between paying for medicine and paying for food or rent.

Approximately 45,000 deaths each year in the U.S. are associated with a lack of health insurance. Sixty-two percent of personal bankruptcies are a result of illness and medical bills.

We spend 17.7 percent of our GDP on health care and this is a terrible drain on our economy. Our reliance on private, for profit health insurance companies wastes billions of dollars every year on administrative costs. This money could be going towards providing health care if we eliminated this expensive middleman who adds cost but no value to the system.

How do we know it would work?

We already have a single-payer-like system in this country and it has been working well for nearly 50 years: Medicare. We also have publicly financed nonprofit health care for the military, veterans, and the poor. They all could be improved but they work and pay half of our country’s health care bill.

A single-payer system would bring health care justice to our country. It would be transparent, publicly accountable, fair, and efficient. It is time to end the immorality of our unequal, chaotic, inefficient health care “non-system” and join the rest of the industrialized world in providing equal access to high-quality health care for all our people.

Dr. Alec Pruchnicki practices internal and geriatric medicine and serves on the board of the N.Y. Metro chapter of Physicians for a National Health Program (pnhpnymetro.org). He resides in the West Village.

http://westviewnews.org/2013/06/what-is-single-payer-health-care/