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The great health care sinkhole

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The great health care sinkhole

By Robert S. Kiefner, M.D.
Concord Monitor (N.H.), April 3, 2013

The bizarre and tragic loss of a Florida man a few weeks ago, slipping to his death from his bedroom into a sinkhole, offers up a fitting metaphor for the great abyss between cost and value in health care and how it has the potential to swallow us up without warning.

The periphery of that huge health care sinkhole is occupied by guys in suits – insurance companies, Big Pharma, and overpaid hospital executives and their legions of lawyers and lobbyists. In Steven Brill’s recent Time magazine expose, “Bitter Pill,” he shows how the elite of a separate health care economy are all doing quite well, while middle-class folks with serious illness are going bankrupt as a consequence of being under insured or just plain priced out of the market.

Equipped with shovels on the edge of the great sinkhole, health care executives contend that they are filling up the hole. In reality they are digging it deeper to everyone’s peril.

In the world of for-profit medicine, doctors also need to be held accountable, particularly among sub-specialties, as the gap between the pay of primary-care physicians and specialists continues to grow.

The five minutes during which an orthopedic surgeon applies a cast to a broken wrist, a dermatologist freezes a couple of barnacles on someone’s face, or a radiologist interprets an MRI are still reimbursed vastly more than a family physician might charge for an hour of managing a patient with multisystem disease, sorting through the pharmacy the patient has brought into the office in a brown paper bag, and making referrals where necessary, all while being trying to enact evidence-based medicine and maintaining an awareness of cost/benefit ratios.

The much-reported deficiencies relating to the care of the mentally ill would certainly be better addressed if we applied a fraction of the reimbursement for a broken foot to the care of a broken mind.

While the Affordable Care Act attempts to improve the lot of primary-care physicians by marginally enhancing reimbursement and recognition of the effort going into a “Patient Centered Medical Home,” the attendant costs, regulations and overall bureaucracy effectively erode the gains. Indeed, the sheer number and complexity of rules and regulations generated by the Affordable Care Act and Accountable Care Organizations have made it well nigh impossible for solo physicians, lacking in resources, to venture into private practice.

And so we witness the ascent of great and powerful hospital executives, modern-day health overlords charged with developing local networks of care, financed by the now famous “Chargemaster” system described by Brill. Two-dollar Tylenols, $70 gauze pads – it’s enough to make you cry into your $50 “mucus recovery system,” aka Kleenex. But it all adds up to million-dollar CEO salaries, even in community hospitals. No doubt that these are bright, clever and caring people, but no hospital CEO deserves to make a multiple of the salary of the president of the United States.

The perversity is ratcheted up another notch when one contemplates the multimillion-dollar salaries of CEOs of health insurance companies. But instead of making money on gauze pads and Tylenol, they prey upon individuals and businesses. A family of four may expect to pay over $25,000 for a year of coverage, complete with an $8,000 deductible in some markets, given the lack of major cost controls in the ACA.

While Obamacare may have expanded the safety net by encouraging the expansion of Medicaid, coverage of kids up to the age of 26, enhanced coverage of preventive services, coverage in the presence of pre-existing conditions, and lack of lifetime limits, plenty of folks are still going to fall through the net and into bankruptcy or worse.

There will be those in the great medical-industrial complex who would dispute the notion that U.S. health care is in desperate shape, who would offer their own numerical analysis to support the status quo. These are the people who use statistics the way a drunk uses a lamppost, for support rather than illumination.

While acknowledging and promoting the gains of the ACA, we need to resume the journey toward a single payer, where everyone enjoys the security and dignity of being covered by insurance. We’re not talking “free” care, just quality care at a truly affordable price. Where there are excessive profits, there cannot be compassionate and accessible care for all. Let’s fill in this enormous sinkhole, so that everyone gets a good and safe night’s sleep.

Dr. Robert S. Kiefner is a family physician in Concord.

http://www.concordmonitor.com/home/5359278-95/my-turn-the-great-health-care-sinkhole

Other nations' lessons on cost containment

Health Care Cost Containment Strategies Used In Four Other High-Income Countries Hold Lessons For The United States

By Mark Stabile, Sarah Thomson, Sara Allin, Seán Boyle, Reinhard Busse, Karine Chevreul, Greg Marchildon and Elias Mossialos
Health Affairs, April 2013

The past decade has been one of relative affluence for the countries we reviewed (Canada, England, France, and Germany), particularly when compared to the budget scenarios they face over the next few years. It may not be surprising, therefore, that health care costs grew relatively quickly during 2000–10 and that there is limited evidence of the success of recent cost containment strategies.

That said, the four countries discussed here continue to make use of public budgeting and price-setting mechanisms to contain costs in the health care sector, as they have in previous decades. The greater use of public budgeting and price-setting mechanisms, along with the much higher public shares of health care financing in these countries, remain the greatest contrasts between them and the United States.

Our review also revealed that in 2000–10 the four European countries moved away from strategies that simply shifted costs to households through across-the-board budget cuts, rationing of services, and increases in user charges. We found a growing focus on the cost-benefit ratio through the greater use of health technology assessment, activity-based funding with centrally set prices, and value-based approaches to paying for drugs. Although these policies may not drive down costs, they are likely to produce more efficient use of health care resources in the future.

Our review suggests that the four countries have had some success in using a variety of public policy tools and that the United States may wish to emulate their policies to reduce the growth rate in drug spending. The policies include relatively simple levers such as large-scale negotiations with pharmaceutical manufacturers and sellers as well as budget caps. Our review also suggests that the United States may wish to use more challenging tools, such as cost-effectiveness analysis that sets prices for new technologies based on the technologies’ relative value and value-based user charges.

It seems unlikely, however, that the US system will move toward the types of volume and price controls used in the countries examined here. Thus, although the United States is also moving toward policies aimed at changing the cost-benefit ratio and promoting economic efficiency, it is likely that the large gap in health care spending between the four countries in our study and the United States will remain.

http://content.healthaffairs.org/content/32/4/643.abstract?etoc

Comment:

By Don McCanne, M.D.

Cost containment strategies in the four nations studied – Canada, England, France, and Germany – depend largely on the government, especially through public budgeting and price setting. The authors point out that it is unlikely that the United States will move toward such policies, thus the large gap between our health care spending and that of these four countries will remain.

Also of note is the fact that other more recent cost containment innovations in these four countries have shown only limited evidence of success. It is still the government engagement that perpetuates their success.

Of great significance for the United States is the fact that these nations have moved away from strategies that simply shifted costs to households. Our emphasis on consumer-directed approaches that increase cost sharing through high deductibles, coinsurance, more restrictive provider networks, and our government efforts to reduce “entitlement” spending, are all moving in the wrong direction. Costs can be controlled without impairing access by erecting financial barriers.

The lesson is simple. We need beneficial public policies, designed to serve patients, to displace private sector policies (enabled by government complicity) that currently prioritize the interests of business stakeholders over those of patients.

For-profit insurers again flex lobbying muscle

By Sandra Fox
Pittsburgh Post-Gazette, April 7, 2013

Thanks to Steve Twedt and the Post-Gazette for the front-page coverage of the Medicare Advantage reversal by the Centers for Medicare and Medicaid Services (“Medicare Payment Cut Reversed,” April 3).

It is a story of the influence of the private for-profit insurance industry and its well-paid lobbyists in Washington who were able to reverse the government’s decision to reduce subsidies of private so-called “Medicare Advantage” plans. Now, instead of a planned 2.2 percent reduction, subsidies will increase by 3.3 percent. The U.S. government has been spending an average of 13 percent more per patient for Medicare recipients who chose one of the private Medicare Advantage options, as compared to those who opt for traditional Medicare. Now, the difference will be 16.3 percent more. So, how is this cutting waste out of Medicare?

If the government decides to make smart decisions on removing waste from Medicare, we can stop subsidizing the insurance industry altogether. Not only would we save billions of dollars a year, but we also would eliminate the restrictions on choice of doctors and hospitals imposed by health insurers.

Another way we can remove waste from Medicare is to negotiate lower drug prices with the pharmaceutical companies, as Medicaid and the VA already do.

Finally, we can pass “Expanded and Improved Medicare for All,” HR 676, which would implement these reforms, and use the savings to improve coverage, eliminate co-pays and deductibles, and cover all of us — cradle to grave.

Sandra Fox is co-chair, Western PA Coalition for Single-Payer Healthcare (www.WPaSinglePayer.org). She resides in Squirrel Hill, Pa.

http://www.post-gazette.com/stories/opinion/letters/for-profit-insurers-again-flex-lobbying-muscle-682393/

Obama administration intervenes to give $71.5 billion to overpaid, for-profit Medicare Advantage plans

Physicians group decries ‘backroom Medicare giveaway’

FOR IMMEDIATE RELEASE, April 9, 2013

Contact: Mark Almberg, (312) 782-6006, mark@pnhp.org

Medicare’s costs will jump by $7.43 billion next year – the equivalent of $149 for each of the nearly 50 million beneficiaries in the program – due to an unprecedented intervention last week by the Obama administration in the way privately run, for-profit Medicare Advantage (MA) plans, which are also known as Medicare HMOs, are paid by the government, a national physicians group reported today.

The total cost to U.S. taxpayers will be $71.5 billion to $104.5 billion over the next decade, depending on the number of Medicare beneficiaries who enroll in the private plans, researchers at Physicians for a National Health Program said. That’s money that could keep traditional Medicare’s hospital trust fund safely in the black over the same period, eliminating any need for greater cost-sharing by beneficiaries, they said.

Enrollment in MA plans, currently at 13.1 million beneficiaries, was expected to dip sharply over the next few years in the wake of a reduction in government overpayments to the plans under the Affordable Care Act (ACA), but the researchers said enrollment may not decrease, due to this windfall and last year’s “quality bonus” payments: hence the variation in the estimated cost.

“Medicare Advantage plans have been overpaid by the federal government for years, wasting tens of billions of taxpayer dollars,” said Dr. David Himmelstein, professor at the City University of New York School of Public Health and co-founder of the physicians group. “Studies by the Government Accountability Office, MedPAC and many private groups have drawn attention to this overpayment. The Obama administration’s ACA acknowledged the overpayments by calling for cuts to these payments starting in 2014.

“But last week’s extraordinary rate-setting directive from Health and Human Services Secretary Kathleen Sebelius to the Centers for Medicare and Medicaid Services, in which she spurned historical practice and the advice of the CMS Office of the Actuary, will result in an obscene windfall to the private, for-profit insurers,” he said. “Simultaneously, this backroom Medicare giveaway is a heavy blow to taxpayers and the traditional, public Medicare program.”

In response to the CMS announcement, which was leaked shortly before 4 p.m. last Monday, stock prices for the nation’s five largest for-profit health insurers surged last week, yielding a $13.2 billion bonanza for investors. Stock prices increased from open of trading Monday, April 1, to close of trading Friday, April 5, by the following amounts: Cigna, $15.93; Humana, $8.93; UnitedHealth Group, $4.94; Aetna, $4.62; and WellPoint, $1.70. Aetna’s Coventry share prices jumped by $1.19.

UnitedHealth and Humana reaped the largest windfalls. (See Table 1.) Based on its share of the MA market (20 percent, including its purchase of XL Health Corp.), UnitedHealth will receive an extra $1.49 billion from Medicare for its Medicare Advantage plans in 2014, and $14.3 billion to $20.9 billion over the next decade, triggering a $5.04 billion surge in the value of UnitedHealth’s stock last week.

Humana (17 percent market share) will receive an extra $1.26 billion from Medicare for its Medicare Advantage plans in 2014, and $12.2 billion to $17.8 billion over the next decade. Humana’s stock surged $1.41 billion last week.

Other insurers will also reap huge rewards. WellPoint (4 percent market share) will receive an extra $297 million in payments from Medicare for its Medicare Advantage plans in 2014, and between $2.86 billion and $4.18 billion over the next decade. Former CEO Angela Braly received compensation and stock options of $20.6 million in 2012.

Aetna will receive at least an extra $223 million from Medicare for its Medicare Advantage plans in 2014 (excluding its 75 newly acquired Coventry plans), and $2.14 billion to $3.14 billion over the next decade. Coventry will receive extra payments of $149 million in 2014 and between $1.43 billion and $2.09 billion between 2014 and 2022.

Finally, Cigna, which almost entirely exited the MA market in 2010, re-entered the market with the purchase of HealthSpring’s 40-plus plans in 2011. Cigna will garner an additional $223 million in federal payments in 2014 and between $2.14 billion and $3.14 billion over the next decade as a result of the Obama administration’s action.

Dr. Ida Hellander, director of policy and programs at PNHP, said that in 2012 alone, privately run Medicare Advantage plans were overpaid $34.1 billion, or $2,526 per enrollee. She and Himmelstein were among the authors of a study last year showing that having Medicare Advantage plans compete with traditional Medicare does not save money, but costs taxpayers billions of dollars more each year.

For the present analysis, Hellander and Himmelstein used publicly available data from the New York Stock Exchange and Medicare’s Board of Trustees to calculate the impact of a 5.5 percent hike in Medicare Advantage payments on insurers’ stock valuation and future government spending.

Hellander said, “Medicare Advantage plans are siphoning off valuable health care dollars into private, for-profit hands and producing no better outcomes to show for it. It is time to stop putting profits over patient care and adopt an improved Medicare for All, a national single-payer system. Single payer would save enough on wasteful private insurance-related bureaucracy and profits to provide high-quality care for everyone.”

Dr. Andrew Coates, president of PNHP and an internist in upstate New York, commented on the findings. “Instead of making a cut to the overpayments, the administration has bent over backwards to take good care of the private Medicare Advantage insurers,” he said. “This behind-the-scenes maneuvering will not only swell the already unconscionable profits of the insurance companies, but will further impair the traditional, public Medicare program.”

Table 1.


Sources

Kaiser Family Foundation Medicare Advantage Enrollment Update 2013; Google Finance April 1 to April 5, 2013; Medicare Trustees Report 2012; Washington Post, April 2, 2013; 10-year total based on 2013-2022 total Medicare spending of $1.3 to $1.9 trillion on MA plans.

Notes

1. As a result of HHS Secretary Sebelius’ unprecedented intervention, and over the objection of the Actuary, MA spending in 2014 will increase 5.5 percent. Instead of a 2.2 percent reduction in payments as announced in February 2013, there will now be a 3.3 percent increase. MA spending for 2014 after the passage of the ACA but before the intervention was an estimated $135.2 billion; $67.1 billion on Part A and $68.1 billion on Part B. A 5.5 percent increase amounts to $7.43 billion in 2014.

2. As a result of $156 billion in MA cuts included in the ACA, the Medicare Trustees’ latest report (2012, Table IV, c1) projected an MA enrollment decline from 26.7 percent of beneficiaries in 2012 to a low of 16.2 percent of beneficiaries in 2018, resulting in MA spending of about $1.3 trillion between 2013 and 2022. But enrollment may not fall that much, and could increase, especially if the Obama administration keeps backpedaling on its commitment to stop the overpayments to Medicare Advantage plans (e.g. with over $8 billion in offsetting “quality” bonuses and now an unprecedented intervention into payment rate
-setting).  As a result, MA payments over the next decade could rise one-third or more, topping $1.9 trillion. A 5.5 percent increase on estimated MA spending of $1.3 trillion to $1.9 trillion equals $71.5 billion to $104.5 billion.

3. The estimate of $156 billion in MA cuts in the ACA is from the Congressional Budget Office’s letter of July 24, 2012, Table 2. www.cbo.gov/publication/43471

4. Historical stock prices and number of shares are from Google Finance accessed April 7, 2013.

5.  Market-share data is from the Kaiser Family Foundation’s Medicare Advantage Data Spotlight: Enrollment Update (2013), www.kff.org/medicare/upload/8323.pdf. Market share for Aetna’s Coventry, UnitedHealth’s XL Health Corp., and Cigna’s HealthSpring is based on enrollment at the time of acquisition.

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Physicians for a National Health Program (www.pnhp.org) is a research and education organization of more than 18,000 doctors who advocate for single-payer national health insurance. To speak with a physician/spokesperson in your area, visit www.pnhp.org/stateactions or call (312) 622-0996.

Dependent verification programs. What a crime!

Fraud in the Workplace? Evidence from a Dependent Verification Program

By Michael Geruso, Harvey S. Rosen
The National Bureau of Economic Research (NBER), April 2013

Many employers have implemented dependent verification (DV) programs, which aim to reduce employee benefits costs by ensuring that ineligible persons are not enrolled in their health plan as dependents. We evaluate a DV program using a panel of health plan enrollment data from a large, single-site employer. We find that dependents were 2.7 percentage points less likely to be reenrolled in the year that DV was introduced, indicating that this fraction of dependents was ineligibly enrolled prior to the program’s introduction. We show that these dependents were actually ineligible, rather than merely discouraged from re-enrollment by compliance costs.

http://papers.nber.org/papers/w18947?utm_campaign=ntw&utm_medium=email&utm_source=ntw

And…

Help Prevent Health Plan Enrollment Fraud

Blue Cross Blue Shield of Hawaii
Hawaii Medical Service Association

Health plan enrollment fraud occurs when a person or company intentionally misrepresents facts to improperly receive health care products and services. This includes adding a person who is not eligible for health plan coverage as a dependent on a health plan.

It is a criminal offense under state and federal laws to fraudulently enroll someone onto a health plan. Enrolling ineligible dependents can lead to increased health care costs for employers. Penalties include fines, immediate loss of health plan coverage, or imprisonment.

http://www.hmsa.com/community/awareness/fraud/employers.aspx

And…

Dependent Eligibility Verification Project

CalPERS

The initial phase of the DEV project includes an amnesty period that runs from now through June 30, 2013. If you have one or more dependents on your health plan, you will receive a letter with further details on the DEV project, including dependent eligibility criteria and an Amnesty Disenrollment Document. During the amnesty period, we encourage you to carefully review the definition on an eligible dependent and identify on the Amnesty Disenrollment Document all ineligible dependents who should be removed from your health plan.

http://www.calpers.ca.gov/index.jsp?bc=/member/health/dev.xml&pst=ACT&pca=ST

Comment:

By Don McCanne, M.D.

There are many circumstances in which a de facto dependent is not technically a dependent when it comes to enrollment in a health plan. Enrolling such individuals is considered a criminal offense. Many employers have instituted dependent verification programs in order to ferret out this fraud. Is this really what we want to be doing?

It seems ironic that at a time in our history when theoretically we are attempting to enroll as many individuals as possible in health insurance programs, we are pushing a program designed to disenroll individuals currently covered as dependents when they are not technically entitled to such coverage.

We are expanding yet more administrative excesses which are resulting in the opposite of our policy goals. That is, we are increasing the numbers of uninsured through application of these dependent verification programs.

Wouldn’t it be far simpler to have a system that automatically covers everyone, regardless of dependency status or any other criteria? Instead of advancing policies that make health care coverage a crime, shouldn’t we make health care a right for all?

'Bitter Pill' misses the target on solutions to the U.S. medical crisis

Brill glosses over the real solution to the cost of medical bills: a single-payer system which forces hospitals to be more efficient

By Jack Bernard
Time magazine, Letters, Feb. 23, 2013

As someone who has worked on all sides of the health care field (regulator, non-profit, for-profit) for 30 years, I was intrigued by the Steven Brill piece, “Bitter Pill: Why Medical Bills Are Killing Us.” On the analysis of the problem, Brill was mainly on target, but he missed the mark on most of his proposed solutions.

For example, hospital competition is not the answer to getting lower prices and never has been. For instance, coordination of services among hospitals within a region is a far more cost-effective way to minimize duplicative purchases of expensive technology. Furthermore, group purchases of supplies, pharmaceuticals and capital equipment by large hospital systems has been shown to drive down vendor prices by up to 20 percent versus pricing given to small independent hospitals.

Brill glosses over the real solution to the cost of medical bills: a single-payer system which forces hospitals to be more efficient. Medicare For All, incorporating quality measures, would eliminate all the “chargemaster” game-playing. The inefficient providers would be paid the same as the effective ones. With higher costs, they would be driven out. Likewise for the ones with poor quality. Plus, the 20+ percent administrative marketing costs currently charged by private insurance companies — versus just 3 percent with Medicare — could be put back into direct care where it belongs.

Jack Bernard resides in Monticello, Ga.

http://ideas.time.com/letters/bitter-pill-misses-the-target-on-solutions-to-the-u-s-medical-crisis/#ixzz2PqAs58zY

Consumer-directed enrollees do not shop prices

Price Shopping in Consumer-Directed Health Plans

By Neeraj Sood, Zachary Wagner, Peter Huckfeldt, Amelia M. Haviland
Forum for Health Economics and Policy, Published online March 20, 2013

Abstract

We use health insurance claims data from 63 large employers to estimate the extent of price shopping for nine common outpatient services in consumer-directed health plans (CDHPs) compared to traditional health plans. The main measures of price shopping include (1) the total price paid on the claim, (2) the share of claims from low- and high-cost providers, and (3) the savings from price shopping relative to choosing prices randomly. All analyses control for individual and zip code level demographics and plan characteristics. We also estimate differences in price shopping within CDHPs depending on expected health care costs and whether the service was bought before or after reaching the deductible. For eight out of nine services analyzed, prices paid by CDHP and traditional plan enrollees did not differ significantly; CDHP enrollees paid 2.3% less for office visits. Similarly, office visits was the only service where CDHP enrollment resulted in a significantly larger share of claims from low-cost providers and greater savings from price shopping relative to traditional plans. There was also no evidence that, within CDHP plans, consumers with lower expected medical expenses exhibited more price shopping or that consumers exhibited more price shopping before reaching the deductible.

The full article can be downloaded at this link (19 pages):
http://www.degruyter.com/view/j/fhep.ahead-of-print/fhep-2012-0028/fhep-2012-0028.xml

Comment:

By Don McCanne, M.D.

High-deductible consumer-directed health plans are designed to make health care consumers better price shoppers, especially when they are spending their own money below the deductible. Guess what. Health care consumers do not shop prices to any measurable extent.

We should quite wasting our time looking for magical solutions to controlling health care costs and move on with health care reform that has been proven to work – a single payer national health program, an improved Medicare for all.

Lessons from Vermont's Health Care Reform

By Laura K. Grubb, M.D.
The New England Journal of Medicine, April 4, 2013

In May 2011, Vermont Governor Peter Shumlin signed legislation to implement Green Mountain Care (GMC), a single-payer, publicly financed, universal health care system. Vermont’s reform law passed 15 months after the historic federal Affordable Care Act (ACA) became law. In passing reforms, Vermont took matters into its own hands and is well ahead of most other states in its efforts to implement federal and state health care reforms by 2014. The Supreme Court decision last June to uphold most of the ACA left many states scrambling, since they had postponed reforms pending the judgment. Although Vermont is a small state, its reform efforts provide valuable lessons for other states in implementing ACA reforms.

First, Vermont instigated change from within the state and engaged local stakeholders in the process. Vermont’s administration provided information to residents, promoted transparency, and actively engaged citizens on all levels. The administration established a health care reform website, hcr.vermont.gov, which provides regular reform updates, educational presentations, timelines, and links to legislation and other reform resources. Administrators host frequent public listening sessions throughout the state. In addition, Shumlin engaged health care providers in the reform process, in part through the GMC Health Care Professional Technical Advisory Group, which consists of 68 physicians, dentists, physical and occupational therapists, pharmacists, and naturopathic doctors, and the Mental Health and Substance Abuse Technical Advisory Group, consisting of 24 mental health professionals. The engagement of such stakeholders has helped to smooth the transition to large-scale reform.

Second, Vermont created the Green Mountain Care Board (GMCB), an independent board with responsibility for all the major factors influencing the cost of health care in the state. Whereas other states split responsibility for the oversight of different parts of the health system among different agencies, Vermont’s legislature created one board to consider all the variables. The GMCB has jurisdiction over payment reform, insurance exchanges, rate setting, hospital-budget authorization, resource and workforce allocation, state formulary establishment, regulation of insurance carriers, and maintenance of a statewide quality-assurance program. The board will establish and maintain a publicly financed health insurance program and a unified health budget. In addition, it is overseeing the development of two accountable care organizations: the Accountable Care Coalition of the Green Mountains, which includes 100 independent physicians statewide, and OneCare Vermont, whose network of 13 community hospitals, 2 federally qualified health clinics, 5 rural health centers, and 58 independent physician practices is responsible for the care of 42,000 Medicare recipients. The fact that many types of health care–related transactions must pass through the GMCB supports synchronization of reform efforts.

Third, Vermont is advanced in its development of a state insurance exchange that will offer essential benefits through at least three tiers of insurance packages while providing transparency and comparability.1 The ACA mandates that states establish their own exchanges or default to the federal exchange, and to date 23 states and the District of Columbia have declared their intent to establish their own exchange or a joint state–federal exchange (see tableStates That Have Declared Their Plans to Create State-Based or State–Federal Health Insurance Exchanges.).2 Although the development of a state exchange is a massive task, Vermont administrators believe that their exchange will serve as a foundation for a streamlined system for single-payer reform. “The infrastructure is useful because it would build the portal we would use for single payer, including eligibility screening, enrollment processing, premium collection, claims administration, and claims payment,” notes Robin Lunge, Vermont’s director of health care reform. “We have 65 small group plans in the state. With only two carriers in the state and on the exchange, the plans will be more uniform and there will be significantly less product. In terms of competition and cost control, Vermont has a rigorous rate-review process to look at insurance premiums to make sure they are reasonable given the factors established in state law.” Establishment of a state exchange will provide Vermont with several advantages, including federal funding, the development of an electronic portal for insurers, and the opportunity to align state reforms with federal ones as much as possible.

Finally, Vermont policymakers are maximizing federal financing and have projected cost savings. In January 2013, the state released a 156-page financing plan for its single-payer arrangement; the plan outlines federal financing sources and the anticipated generation of savings. Vermont has been awarded more than $250 million in federal funding for its state exchange — the fifth-highest amount among the states, although Vermont has the country’s second-smallest state population. “We feel strongly that the exchange is not the answer to all of Vermont’s health care problems,” Shumlin remarked, explaining that “the exchange is helpful to Vermont to bring us federal dollars to achieve our single-payer goal.”3 In fact, state exchange development will be 100% federally funded.4

Vermont will also gain substantial federal funding through its Medicaid expansion ($249 million) and attract federal financing through a 2017 innovation waiver ($267 million). While many states continue to debate expansion, Vermont has expanded its Medicaid program well beyond the ACA’s proposed income-eligibility threshold of 138% of the federal poverty level. With the expansion, Vermont will save 10.9% in state Medicaid funding. States that now have high eligibility levels will see decreases in spending, whereas those with low eligibility levels will have to increase their spending. Overall, experts predict that the national impact of Medicaid expansion will be a net increase of 0.3% in states’ total Medicaid expenditures but an overall decrease of 0.4% in spending, thanks to a 0.7% decrease in uncompensated care. Even though some states will see an eventual increase in spending on Medicaid if they expand their programs, they will still generate net savings in health care spending.5

Revenues from taxes (payroll, personal income, sales, cigarettes, tobacco, insurance, and more) will also finance GMC, but administrators believe that the eventual cost savings from the single-payer system will be greater than what will initially be needed from tax revenues. In 2017, claims costs are projected to be $87 million higher than they would have been without health care reform because additional health care services will be provided, but administrative costs will be $122 million lower, which will result in net savings of $35 million in the first year.

Policymakers and stakeholders in other states can learn some lessons from Vermont regarding ACA reform. First, engaging stakeholders while providing transparency at each stage of reform builds support for transition efforts. Second, the adage “work smarter, not harder” applies to the enormous task of implementing health care reforms: a central board can coordinate all implementation efforts, reduce redundancy and bureaucracy, and improve transparency. Third, the development of a health insurance exchange presents opportunities for state-specific health care innovation. And finally, instead of resisting the inevitable federal reforms in the name of federalism, states may capitalize on federal financing opportunities to build new state health programs and realize cost savings.

REFERENCES

1 Lunge R. The Vermont health benefit exchange (PowerPoint presentation). 2012 (http:/
/hcr.vermont.gov/sites/hcr/files/Exchange%20benefits%20report%20Feb%202012%20FINAL.pdf).

2 Henry J. Kaiser Family Foundation. Facts at-a-glance (http://www.statehealthfacts.org/healthreformsource.jsp).

3 Panebaker A. Shumlin bends on health benefits exchange. VTDigger.com. February 7, 2012 (http://vtdigger.org/2012/02/07/shumlin-bends-on-health-benefits-exchange/).

4 Lunge R, Larson M. Financing plans 2014-2017 (PowerPoint presentation). January 25, 2013 (http://hcr.vermont.gov/sites/hcr/files/2013/Financing%20Plans%20PPT%20w%202017%201-25%20Final.pdf).

5 Henry J. Kaiser Family Foundation. The cost and coverage implications of the ACA Medicaid expansion: national and state-by-state analysis. November 2012 (http://www.kff.org/medicaid/upload/8384.pdf).

Disclosure forms provided by the author are available with the full text of this article at NEJM.org.

This article was updated on April 4, 2013, at NEJM.org. Source Information:  From the Department of Pediatrics, University of Texas Health Science Center, Houston.

N Engl J Med 2013; 368:1276-1277April 4, 2013DOI: 10.1056/NEJMp1212974

Kudos for Vt. from New England Journal of Medicine

By Dave Gram, Associated Press
The Boston Globe, April 4, 2013

MONTPELIER, Vt. (AP) — An article in the prestigious New England Journal of Medicine is praising Vermont’s efforts to redesign its health care system, saying Vermont can serve as a model for other states.

‘‘Vermont is progressive,’’ said the article’s author, Dr. Laura Grubb, also a fellow in adolescent medicine at the University of Texas Medical School. ‘‘They didn’t wait until each step of the Affordable Care Act had to be implemented. They voted on their own state-based reform system.’’

Much of the energy behind Vermont’s efforts to implement the 2010 federal law actually has been directed at a more ambitious goal. Gov. Peter Shumlin and his fellow Democrats who control the Legislature have put Vermont on a path to move as close as it can to a Canadian-style, single-payer health care system by 2017.

The federal law calls for states to set up regulated health insurance marketplaces, called exchanges. Vermont has been eagerly setting up its exchange, in hopes of using it as a springboard for the single-payer system. State lawmakers passed legislation in 2011 to set itself on a two-stop journey to set up the exchange in 2014 and the single-payer system in 2017.

Shumlin, who has championed the changes to Vermont’s health care system, said the state should be ‘‘proud to be a leader’’ in implementing the federal law.

‘‘We are pleased to gain recognition of our path to single payer health care and our Vermont-style solutions in the New England Journal of Medicine,’’ he said.

Darcie Johnston, founder of the group Vermonters for Health Care Freedom, a group opposed to the state’s health care plans, said Grubb is a member of Physicians for a National Health Program, which supports single-payer health care nationwide.

In a phone interview, Grubb said she was an ‘‘inactive’’ member. ‘‘I haven’t paid dues in a couple of years.’’

Grubb, a medical doctor pursuing a master’s degree in public health policy, highlighted four areas in which states would do well to follow Vermont’s example. She noted:

—The creation of a centralized board — the Green Mountain Care Board — to coordinate efforts to retool the state’s health care system and set up what will be called the Green Mountain Care system by 2017.

—The inclusion of people, called stakeholders, who will be affected by health policy in its development.

—An aggressive approach to setting up the exchange, getting started even before last year’s Supreme Court decision upholding the law and before President Barack Obama’s re-election, which helped ensure the continuity of the federal effort.

—Attracting federal funds to help the state effort to implement the changes. The second-smallest state by population, Vermont ranks fifth in the country in attracting federal funds to support health care efforts.

The Green Mountain Care Board set up a 64-member advisory group of physicians, dentists, physical and occupational therapists and naturopathic doctors. It also set up a 24-member advisory group of mental health and substance abuse professionals to help guide its work.

‘‘The engagement of such stakeholders has facilitated a smoother transition to large-scale reform,’’ Grubb wrote.

http://www.boston.com/news/local/vermont/2013/04/04/kudos-for-from-new-england-journal-medicine/adqWIuOYe6A4WIaUxYT5WM/story.html

An adventure to make life worth living

By Andrew Coates, M.D.
WAMC Northeast Public Radio, April 5, 2013

Helen Keller famously wrote that “Life is either a daring adventure or nothing.”  She continued: “To keep our faces toward change and behave like free spirits in the presence of fate is strength undefeatable.”

No patient goes to a hospital in search of a daring adventure. Yet in the hospital, the presence of fate is inescapable. The Grim Reaper stalks the corridors. Tragedy strikes.

One day some years ago, soon after my residency in internal medicine, I visited a hospitalized patient early in the morning. I liked him and looked forward to hearing his views. In addition to his symptoms and the plans for his care, we discussed the headlines in The New York Times.

Later that morning he died a sudden, unexpected, death. After a tearful meeting with his family I arranged for an autopsy, as they requested. Later that day I attended his autopsy, in hopes of learning from the pathologist what had killed him. Later still, the pathologist, remarkably, met with this family himself, to explain what had happened, trying to help bring some peace of mind.

In this way, perhaps the hospital can be seen as a place for a daring adventure — for caregivers. But we need to prepare ourselves to meet the challenge.

My experiences as a hospital medicine physician led me to seek more training about the nature of suffering, about breaking bad news to patients and their loved ones, about helping with difficult decisions, resolving the goals of care and caring for dying patients. After all, a significant fraction of all deaths occur in a hospital. Of all patients with Medicare, about one quarter to one third will die in a hospital.

This week in the hospital I attended the deaths of three patients.

Each patient faced an inescapable diagnosis. Each patient refused life support measures they viewed as futile and even harmful. And each one had a triumphal death scene, with family embracing one another at the bedside, reminiscing, loving one another.

But the most compelling aspect of this work is how it reveals human courage. Our society and culture does so little to prepare us for death. And yet when death comes, the human solidarity that emerges is amazing. Family feuds melt away, people embrace religious faith — or sometimes reject it — they hold their convictions up to scrutiny in all kinds of ways. They confess and forgive and find laughter.

I suppose this is been true for any human crisis — for example how volunteers responded to help strangers after the storm Sandy. Yet the hospital death scene is particularly compelling as people face the loss of their loved ones, with eyes and ears and hearts wide open.

Sometimes in medicine when a terminal diagnosis or a grave prognosis is revealed, doctors will say “there’s nothing to do.” I have learned that although the patient may be dying — or even dead — in the hospital there is always something we can do. And that sometimes very small things can mean a great deal.

One of my patients who died this week told me that she knew she was dying. “It’s OK,” she said. I asked what I could do for her. “I want my family,” she said. For two days, as her entire extended family gathered, she rallied, at one point speaking via video call with grandchildren. Soon she lost consciousness and died.

It occurs to me that I had the great privilege to witness a woman behave like a free spirit in the presence of fate — as Helen Keller said, a portrait of strength undefeatable. An adventure to make life worth living.

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-adventure-make-life-worth-living

Advice for Stephen Colbert when interviewing President Clinton

By Arthur Yakov Krichevsky
Clayton-Richmond Heights Patch, April 5, 2013

I hope Stephen Colbert asks President Bill Clinton about health care on Saturday.

Colbert is a brilliantly satiric political comedian and host of Comedy Central’s “The Colbert Report.”

Last June, Clinton said that if we adopted a health system similar to Canada’s or those in Europe we’d have universal coverage and gain “a trillion dollars or more a year for pay raises, for investment in new technology, to create new jobs or whatever.”

Adopting a single-payer system — in the U.S., for example, improving Medicare and extending it to cover everyone — is how every other modern nation has done what we seem unable to do: provide high-quality health care to all citizens at roughly half what we pay. Plus, the residents of those nations live longer and healthier lives than we do.

Colbert will interview Clinton Saturday at Washington University in St. Louis during the closing session of the Clinton Global Initiative University being held here April 5-7. They really need to talk about health care.

President Clinton also stated that a single-payer system would dramatically reduce waste in administrative costs and overhead. The approximate annual savings are estimated at $570 billion, according to University of Massachusetts-Amherst professor of economics Gerald Friedman. These savings would come from reduced administrative costs and more favorable pricing of drugs and medical equipment.

Many of these price reductions would be possible due to one simple market reason: increased purchasing power. With Medicare as the single purchaser of health care services in the United States, its expanded market share would empower the kinds of stronger price negotiations done by all other modern countries.

Clinton also made the point that the United States spends over 17 percent of its GDP on health care costs, while Germany, France and Canada each spend just over 10 percent. This discrepancy is even more striking when we consider that our system leaves tens of millions of us without any insurance, while these more frugal countries provide affordable health care to every one of their citizens. That’s part of the reason why they live longer and healthier lives.

This is why I hope Colbert asks him about single-payer health care.

I hope he also asks Clinton about the hottest health care issue sweeping many states today: the transformation of Medicaid.

The Patient Protection and Affordable Care Act (ACA) encourages states to make Medicaid more available to 10 million working poor by paying 100 percent of the cost of their care for three years, gradually requiring states to pay no more than 10 percent by 2020. Unexpectedly, the Supreme Court decided last summer that states could chose to not do this.

Expanding Medicaid is the smart thing to do. In Missouri, for example, it will create 24,000 new jobs in our state in 2014, bring $8.2 billion into our state by 2020, and preserve millions of dollars every year for important services such as higher education.

Expanding Medicaid is also the right thing to do. It would start to provide health care access for around 260,000 poor Missourians today. Most of these folks work full-time at jobs that just don’t provide an affordable health care benefit. They are working, yet they risk bankruptcy with each illness or injury.

Medicaid isn’t the perfect solution, it needs some fundamental improvements, but it’s incredibly better than having no insurance at all. Many lives are at stake, not just in Missouri but across our nation.

For these reasons, I hope Colbert asks President Clinton about health care. The country is listening.

Arthur Yakov Krichevsky is a Pharm.D. candidate at the St. Louis College of Pharmacy and a board member of Physicians for a National Health Program – St. Louis.

http://clayton-richmondheights.patch.com/blog_posts/advice-for-stephen-colbert-when-interviewing-president-clinton-in-st-louis

TRICARE is coming up short for our military and their families

TRICARE Multiyear Surveys Indicate Problems with Access to Care for Nonenrolled Beneficiaries

Government Accountability Office (GAO), April 2013

In fiscal year 2012, the Department of Defense (DOD) offered health care services, including mental health care services, to about 9.7 million eligible beneficiaries in the United States and abroad through TRICARE, DOD’s regionally structured health care program.

The number and type of civilian providers available to serve TRICARE beneficiaries can vary depending on a beneficiary’s location and choice of coverage among TRICARE’s three basic plans—TRICARE Prime, TRICARE Standard, and TRICARE Extra. We use the term “nonenrolled beneficiaries” for beneficiaries who are not enrolled in TRICARE Prime and who use the TRICARE Standard or Extra options, or TRICARE Reserve Select (TRS).

Nearly one in three nonenrolled beneficiaries experienced problems accessing care, and they rated their satisfaction with care generally lower than Medicare fee-for-service beneficiaries.

Nearly one in three nonenrolled beneficiaries experienced problems finding civilian providers who would accept TRICARE. Those in PSAs (Prime Service Areas with TRICARE Provider networks) experience more problems finding primary and specialty care than those in non-PSAs.

Civilian providers’ acceptance of new TRICARE patients has decreased over time. Mental health providers report lower awareness and acceptance than other provider types.

http://www.gao.gov/assets/660/653487.pdf

Comment:

By Don McCanne, M.D.

TRICARE is a health care service program for active duty military, their dependents, and military retirees – a program that is particularly important for those who cannot use military health facilities nor the VA system. The results of this survey should make us ashamed of how we treat the military and their dependents.

Straight to the point, if we had a single, comprehensive health care system that served everyone and included all health care professionals and institutions, this report would not have been necessary. We really do need an improved Medicare that includes everyone.

Over 7,000 march to demand return of stolen UMWA health benefits

16 arrested sitting in for miners

By Kay Tillow
Firedoglake, April 4, 2013

CHARLESTON, W.Va. — They boarded buses and cars before dawn, some the night before, coming from the coalfields of Illinois, Pennsylvania, Kentucky, Virginia, Ohio, Indiana, and all across West Virginia. By Monday at 10 a.m. over 7,000 had packed into the giant Charleston Civic Center to voice their support for the 23,000 miners and their families who face the loss of their lifetime health benefits in a bankruptcy scam.

In a series of mergers and deals, Peabody Energy and Arch Coal transferred their contractual health benefit obligations to Patriot Coal. In St. Louis in March, Patriot Coal filed in bankruptcy court seeking to terminate the United Mine Workers (UMWA) contract and set up instead a Voluntary Employee Beneficiary Association (VEBA) for the retirees and families.

Patriot seeks to put only a pittance into the VEBA, vastly underfunding it. UMWA President Cecil E. Roberts has said this plan would “put thousands of retired coal miners, their dependents or their widows on the path to financial ruin, worsening health conditions or even death.”

The UMWA pioneered in health care benefits and pensions when they battled coal operators and the American Medical Association to establish the UMWA Health & Welfare Fund. John L. Lewis and the union defied accusations of socialized medicine to set up miners’ clinics and built the miners’ hospitals that serve today as the backbone of health care in Appalachia.

The UMWA won early retirement with family coverage for miners who retired before they were 65. These achievements of the miners’ struggles are under attack by Patriot, Peabody, and Arch. Most unions, following the lead of the UMWA, have negotiated early retirement with employers picking up the cost of health care until Medicare kicks in. The attack on UMWA retirees is a snapshot of what employers have in store for union negotiated early retirement plans.

The miners’ fight is winning political support. The West Virginia state Senate and House of Delegates have passed resolutions calling on Patriot Coal to meet its commitment to provide pension and health benefits to miners. Elected leaders are feeling some heat, judging by the number of the powerful who appeared at the Civic Center to express their support. West Virginia Governor Earl Ray Tomblin greeted the crowd. “I’m from Logan County the heart of coal mining. … I’m honored to stand shoulder to shoulder with you for the benefits of our retired miners.”

Dan Kane, UMWA secretary treasurer, spoke. “To cast aside those who earned benefits through decades of back breaking labor is like taking money – it’s theft.”

Kane called for a congressional investigation. “Who’s looking into this conspiracy? We will fight to protect our health care no matter what it takes. We will follow these robber barons and we will shine the light of truth on these evil deeds. We are on the right side of history.”

West Virginia Senator Jay Rockefeller appeared through a video. “We must hold Peabody, Arch and Patriot to the promises they have made.” He spoke of the introduction of the Coal Accountability and Retired Employee Act.

Representative Nick Rahall of West Virginia declared that “In 1912 Mother Jones said that the labor movement was a command from God Almighty.” He said that the promise to the miners must be kept. “No white flag … this is an uphill battle, but everyone here knows how to walk uphill.”

West Virginia Secretary of State Natalie Tennant described herself as a union member and said that this is an attack on all American workers. “It happened at Century Aluminum to steelworkers.” Tomorrow, she said it will happen to many more until we stop “these fraudulent transactions.”

“We can’t let this stand. This is an attempt to take away the health care that was won on your broken backs, on your black lungs and on the memories of your fellow miners who took their last breaths in the coal mines,” Tennant said. “What’s worrisome is that tomorrow it can be an attack on construction workers, nurses, secretaries, teachers; who knows where it stops?”

West Virginia’s junior senator, Joe Manchin, spoke against Patriot’s attempt to have retirement obligations dismissed in bankruptcy but also condemned Peabody and Arch for shifting their liabilities.

Manchin said he knows and talks to the owners of these companies. “I’ve told them, where I come from, you can’t make wrong right. You can’t, no matter how hard you try. You can’t shine crap, and by God, this is crap. You can’t make this stuff look good, you can’t make it smell good and you sure as hell can’t make it taste good.”

AFL-CIO President Richard Trumka brought support from 12.5 million members of the AFL-CIO. He said that when they dumped all the legacy costs onto one little company they knew it would fail. He said that we’ve been “living and working under the threat of vulture capitalism.” He addressed Patriot, Peabody, and Arch: “You can’t use the courts to steal because we won’t let you.”

UMWA President Cecil Roberts concluded the indoor rally. He said that 42 people have already been arrested in St. Louis where the bankruptcy court is convened. That includes all of the members of the International Executive Board of the UMWA. He spoke of the broadening of this movement with faith leaders from the United Church of Christ, the Episcopal Church, and the Catholic Church who would be joining today in nonviolent civil disobedience and arrest in protest against this moral outrage. He recognized the Teachers, CWA, USW, UAW, and the many unions that were in the hall.

Roberts said “We know who did this – they are wearing $10,000 suits and Gucci shoes. We know where they are. We are going to be like Jesus who threw the money changers out of the temple.”

At the conclusion of his speech people moved in orderly fashion to march to the headquarters of Patriot at Laidley Towers. When the front of the march arrived, the streets were still packed all the way back to the Civic Center. Many workers cheered from the steps of their office buildings.

Moms and dads sheltered the babies from the light rain and kept walking. The camouflage UMWA shirts read, “We are Everywhere” and “No Health Care, No Coal.”

A brief rally continued across from Patriot. Doris Crouse-Mays, president of the Virginia AFL-CIO, said that this will be the “first time that I’ve ever gone to jail in my life and I can’t think of a better reason.” She was joined in being arrested by Kentucky AFL-CIO President Bill Londrigan and West Virginia AFL-CIO President Ken Perdue.

Three religious leaders were among the 16 arrested, Father John Rausch, director of the Catholic Committee on Appalachia, Rev. James Lewis, Episcopal priest, and Rev. Donald Prange, St. James United Church of Christ, Lovettsville, Va.

Before leading the group to sit down on the steps of the Laidley Towers, Cecil Roberts paid tribute to Rev. Dr. Martin Luther King who taught nonviolent resistance to unjust laws. Roberts said we must build a movement that is more powerful than all of their money. “We are over 7,000 today and we will be back with 20,000 and then 30,000. If we can’t get justice in the court house, we will take it to the Statehouse. If we don’t get justice there, we must take it to the streets.”

The powerful march and rally made the news not only in West Virginia but also in the Wall Street Journal, the St. Louis Post Dispatch, and across the country.

Throughout hours of speeches about health care, neither politicians nor labors leaders mentioned the Affordable Care Act (ACA), known as Obamacare, the health care reform that was passed in 2010. Clearly the ACA provides no remedy for the health c
are crises that workers and retirees face.

Only a national single-payer plan, H.R. 676, Expanded and Improved Medicare for All, can provide the needed care. By removing the private for-profit health insurance companies and hospitals through H.R. 676, the nation can save $400 billion a year yet expand care to all.

H.R. 676 makes the wealthy pay a larger share and stops nonunion employers from being able to underbid unionized companies. With H.R. 676 there will be no more profiting from the denial of care.

Until we can build the movement that can pass H.R. 676, everyone should join the battle to preserve the health care won through union contracts. So do something to help the miners. Ask your senators and congressperson to support the UMWA demands.

Sign the petition for the UMWA here: http://www.fairnessatpatriot.org/

Check out the UMWA on facebook. Watch for more demonstrations to come.

Distributed by: All Unions Committee for Single Payer Health Care–HR 676 c/o Nurses Professional Organization (NPO) 1169 Eastern Parkway, Suite 2218 Louisville, KY 40217 (502) 636 1551; Email: nursenpo@aol.com, website: http://unionsforsinglepayer.org

http://my.firedoglake.com/kaytillow/2013/04/04/over-7000-march-to-demand-return-of-stolen-health-benefits/