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The second managed care revolution

HMO-Like Plans May Be Poised To Make Comeback In Online Insurance Markets

By Julie Appleby
Kaiser Health News, January 22, 2013

It’s back to the future for insurers, which plan to sharply limit the choice of doctors and hospitals in some policies marketed to consumers under the health law, starting next fall.

Such plans, similar to the HMOs of old, fell into disfavor with consumers in the 1980s and 1990s, when they rebelled against a lack of choice.

But limited network plans — which have begun a comeback among employers looking to slow rising premiums — are expected to play a prominent role in new online markets, called exchanges, where individuals and small businesses will shop for coverage starting Oct. 1. That trend worries consumer advocates, who fear skimpy networks could translate into inadequate care or big bills for those who develop complicated health problems.

Because such policies can offer lower premiums, insurers are betting they will appeal to some consumers, especially younger and healthier people who might see little need for more expensive policies.

Insurers, who are currently designing their plans for next fall, “will start with as tight a network control as they can,” says Ana Gupte, a managed care analyst with Sanford Bernstein.

Plans may also benefit from offering such policies because they are less attractive to those with medical problems, who can no longer be turned away beginning in January 2014.

Driven by consumer and employer demand for lower-cost plans, insurers are already rolling out narrow network policies that have shaved premiums 10 percent or more. A recent survey by benefit firm Mercer found that 23 percent of large employers offered such plans this year, usually among a choice of plans, up from 14 percent in 2011.

Many policies that currently offer a limited network of doctors and hospitals generally allow patients to go to out-of-network providers, with whom they do not have negotiated prices. But patients who seek such care face significant co-payments, which often start at 30 percent of the bill and can go as high as 50 percent.

It is often hard for consumers to figure out how much they might be charged if they go out of network, says Lynn Quincy, senior policy analyst at Consumers Union, publisher of Consumer Reports magazine. In addition to meeting separate annual deductibles for out-of-network care, patients can be “balance-billed” by doctors or hospitals for the difference between what the insurer pays them and their total charges.

That doesn’t change under the federal health law, so consumers could be left on the hook for tens of thousands of dollars.

http://www.kaiserhealthnews.org/Stories/2013/January/23/HMO-limited-networks-comeback-in-exchanges.aspx

Comment:

By Don McCanne, M.D.

So we didn’t get single payer, but at least we got a bill that brought us an end to insurance company abuses, so they say. But did we really?

Most people purchasing plans through the insurance exchanges will select plans with lower premiums which means the bronze and silver plans that have actuarial values of 60 or 70 percent. To achieve these low values, the plans will require large deductibles and other cost sharing – expenses that may not be affordable for many who actually need health care.

This article and others have reported on the strategy of insurers to rely more heavily on “narrow network” plans – plans that greatly limit your choice of health care professionals and institutions. Obtaining care outside of the network can result in greater cost sharing plus balance-billing for charges that normally would be disallowed. Current networks are already restrictive enough, but these new super skimpy networks will leave patients even more dissatisfied than they were at the peak of the managed care revolution. And we thought we got away from that.

Although insurers would be prohibited from deliberately excluding more costly, sicker patients, the very design of these plans motivates the healthy to buy them and the sick to shun them. Thus cherry picking and lemon dropping will still be with us, even if not overt.

Can you imagine the celebrations in the board rooms of the insurance and pharmaceutical firms? Officers and directors dancing around the table Don McNeill-style, singing, “Happy days are here again!”

Proposed Rule on Medicaid Premiums and Cost Sharing

A Proposed Rule by the Centers for Medicare & Medicaid Services

Federal Register, January 22, 2013

Medicaid, Children’s Health Insurance Programs, and Exchanges: Essential Health Benefits in Alternative Benefit Plans, Eligibility Notices, Fair Hearing and Appeal Processes for Medicaid and Exchange Eligibility Appeals and Other Provisions Related to Eligibility and Enrollment for Exchanges, Medicaid and CHIP, and Medicaid Premiums and Cost Sharing

This proposed rule would implement provisions of the Patient Protection and Affordable Care Act of 2010 and the Health Care and Education Reconciliation Act of 2010 (collectively referred to as the Affordable Care Act), and the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA).

IV. Medicaid Premiums and Cost Sharing

A. Background

Section 1916 of the Act describes long-standing requirements for cost sharing, which apply broadly to all individuals who are not specifically exempted. Such cost sharing is limited to “nominal” amounts. Section 1916 of the Act also establishes authority for states to impose premiums on specific groups of beneficiaries with family income above 150 percent of the federal poverty level (FPL). The Deficit Reduction Act of 2005 (DRA) established a new section 1916A of the Act, which gives states additional flexibility, allowing for alternative premiums and cost sharing, beyond what is allowed under section 1916 of the Act, for somewhat higher income beneficiaries. Such alternative cost sharing may be targeted to specific groups of beneficiaries and payment may be required as a condition of providing services. Alternative premiums and cost sharing imposed under section 1916A of the Act, cannot exceed five percent of family income.

B. Provisions of Proposed Rule

2. Update to Maximum Nominal Cost Sharing (§ 447.52)

Under the authority granted under sections 1916(a)(3) and (b)(3) of the Act for the Secretary to define nominal cost sharing, at § 447.52(b) we propose to revise the maximum amount of nominal cost sharing for outpatient services, which may be imposed on beneficiaries with incomes below 100 percent of the FPL.

To simplify the rules, we propose to remove the state payment as the basis for the cost sharing charge and replace it with a flat $4 maximum allowable charge for outpatient services.

Current rules permit cost sharing for institutional care, up to 50 percent of the cost for the first day of care, for individuals with incomes below 100 percent of the FPL. We are not proposing a change but are considering alternatives for the maximum allowable cost sharing related to an inpatient stay because this is a relatively high cost for very low income people and not a service that consumers have the ability to avoid or prevent. Options under consideration include the $4 maximum applied to outpatient services, $50, or $100, which would encompass the majority of hospital cost sharing currently in effect

3. Higher Cost Sharing Permitted for Individuals With Incomes Above 100 Percent of the FPL (§ 447.52)

Proposed § 447.52 consolidates the requirements for cost sharing established under sections 1916 and 1916A of the Act. Under the statute, states may impose cost sharing at higher than nominal levels for nonexempt individuals with incomes at or above 100 percent of the FPL. Section 1916A provides that states may establish cost sharing for nonexempt services, other than drugs and ED services, up to 10 percent of the cost paid by the state for such services, for individuals with incomes between 100 and 150 percent of the FPL.

4. Cost Sharing for Drugs (§ 447.53)

To provide additional flexibility to states, and to further encourage the use of preferred drugs, we are proposing to define nominal for this purpose so as to allow cost sharing of up to $8 for non-preferred drugs for individuals with income equal to or less than 150 percent of the FPL or who are otherwise exempt from cost sharing. States will have the flexibility to apply differential cost sharing for preferred and non-preferred drugs in whatever manner they consider most effective. For example, a state may charge $2 for preferred and $6 for non-preferred drugs or $0 for preferred and $8 for non-preferred drugs.

For individuals with family income above 150 percent of the FPL, per section 1916A(c) of the Act, cost sharing for non-preferred drugs may not exceed 20 percent of the cost the agency pays for the drug.

5. Cost Sharing for Emergency Department Services (§ 447.54)

In order to make it easier for states to utilize existing flexibilities to reduce non-emergency use of the ED, at § 447.54(a) we propose to allow cost sharing of up to $8 for non-emergency use of the ED no waiver will be required.

For individuals with family income above 150 percent of the FPL, per section 1916A(e) of the Act, there is no limit on the cost sharing that may be imposed for non-emergency use of the ED.

If an emergency condition does not exist, § 447.54(d) includes the requirements for hospital screening and referral currently codified at § 447.80(b)(2), to ensure that beneficiaries have appropriate access to other sources of care, before cost sharing is imposed. Hospitals must assess the individual clinically, identify an accessible and available alternative provider with lesser cost sharing, and establish a referral to coordinate scheduling. Examples of accessible alternative providers are those that are located within close proximity, accessible via public transportation, open extended hours, and able to serve individuals with LEP and disabilities.

5. Premiums (§ 447.55)

At proposed § 447.55, we consolidate and simplify the requirements for premiums established under sections 1916 and 1916A of the Act. Proposed § 447.56(a) describes the option to impose premiums on individuals with family income above 150 percent of the FPL, as established under section 1916A of the Act, while paragraphs (a)(1) through (a)(5) describe the options to impose premiums for specific populations as established under section 1916 of the Act. Except for the minor revisions described below, we are not seeking to change current policy related to premiums.

At § 447.55(a)(5), we propose to revise requirements related to premiums imposed on medically needy individuals whose income is under 150 percent of the FPL. We removed the current income-related scale currently at § 447.52(b) and instead would provide states with the flexibility to determine their own sliding scale for establishing premiums for the medically needy up to maximum of $20 instead of the $19 in current regulation.

VII. Regulatory Impact Analysis

C. Estimated Impact of the Medicaid Premiums and Cost Sharing Provisions

1. Overall Impact

Based on our policy analysis, we do not anticipate significant costs or savings from these proposed changes at the program level given the targeted nature of the cost sharing. We believe these proposed policies would encourage less costly care and decreased use of unnecessary services, which may reduce state and federal costs for the specified services.

2. Anticipated Effects

As states better understand their options for imposing premiums and cost sharing, more states may take advantage of existing flexibilities, such as cost sharing of up to 20 percent of the cost of the service, and the option of allowing providers to deny services for unpaid cost sharing, both of which are targeted to somewhat higher income beneficiaries. Research has shown that higher-than-nominal cost sharing on very low-income individuals can have an adverse impact on access to servi
ces by discouraging or preventing such individuals from seeking needed care. However, such impacts are not likely to result from the changes proposed here as they are largely focused on services where there are more appropriate and less costly alternatives. Increased cost sharing may have a negative impact on providers, as uncollected cost sharing reduces provider reimbursement, to the extent that the beneficiary cannot or does not pay the cost sharing and services are nonetheless provided. Under the DRA provisions and this proposed rule, however, states may minimize this impact by allowing providers to deny services for failure to pay the required cost sharing in certain circumstances.

https://www.federalregister.gov/articles/2013/01/22/2013-00659/medicaid-childrens-health-insurance-programs-and-exchanges-essential-health-benefits-in-alternative#h-186

Comment:

By Don McCanne, M.D.

Why do patients go on the Medicaid program? Because they’re dirt poor, that’s why. To even bring up a discussion of premiums and cost sharing on these down-and-out people represents the ultimate of bureaucratic insensitivity.

Admittedly, there was some effort to target the cost sharing to encourage more appropriate and less costly alternatives, but permitting states to require up to five percent of family income for out-of-pocket costs is truly unaffordable for most of these families.

This shows how much traction the make-them-shop-with-their-own-money crowd has gained – the moral hazard freaks who are hazardous to our health care morals. There are more effective and humane means of controlling health care costs, single payer being the most obvious. We do not need to erect financial barriers that can impair access to beneficial services, for the poor or for anyone else.

Perhaps the most disturbing statement in this Proposed Rule is the following: States may allow providers “to deny services for failure to pay the required cost sharing in certain circumstances.” Deny services for failure to pay “nominal” cost sharing?! What does that say about health care justice in America?

Baucus/Hatch taxpayer gift to Amgen

Fiscal Footnote: Big Senate Gift to Drug Maker

By Eric Lipton and Kevin Sack
The New York Times, January 19, 2013

Just two weeks after pleading guilty in a major federal fraud case, Amgen, the world’s largest biotechnology firm, scored a largely unnoticed coup on Capitol Hill: Lawmakers inserted a paragraph into the “fiscal cliff” bill that did not mention the company by name but strongly favored one of its drugs.

The language buried in Section 632 of the law delays a set of Medicare price restraints on a class of drugs that includes Sensipar, a lucrative Amgen pill used by kidney dialysis patients.

The provision gives Amgen an additional two years to sell Sensipar without government controls. The news was so welcome that the company’s chief executive quickly relayed it to investment analysts. But it is projected to cost Medicare up to $500 million over that period.

Supporters of the delay, primarily leaders of the Senate Finance Committee who have long benefited from Amgen’s political largess, said it was necessary to allow regulators to prepare properly for the pricing change.

But critics, including several Congressional aides who were stunned to find the measure in the final bill, pointed out that Amgen had already won a previous two-year delay, and they depicted a second one as an unnecessary giveaway.

Amgen has deep financial and political ties to lawmakers like Senate Minority Leader Mitch McConnell, Republican of Kentucky, and Senators Max Baucus, Democrat of Montana, and Orrin G. Hatch, Republican of Utah, who hold heavy sway over Medicare payment policy as the leaders of the Finance Committee.

Amgen’s success also shows that even a significant federal criminal investigation may pose little threat to a company’s influence on Capitol Hill. On Dec. 19, as Congressional negotiations over the fiscal bill reached a frenzy, Amgen pleaded guilty to marketing one of its anti-anemia drugs, Aranesp, illegally. It agreed to pay criminal and civil penalties totaling $762 million, a record settlement for a biotechnology company, according to the Justice Department.

Amgen, whose headquarters is near Los Angeles and which had $15.6 billion in revenue in 2011, has a deep bench of Washington lobbyists that includes Jeff Forbes, the former chief of staff to Mr. Baucus; Hunter Bates, the former chief of staff for Mr. McConnell; and Tony Podesta, whose fast-growing lobbying firm has unusually close ties to the White House.

In some cases, the company’s former employees have found important posts inside the Capitol. They include Dan Todd, one of Mr. Hatch’s top Finance Committee staff members on health and Medicare policy, who worked as a health policy analyst for Amgen’s government affairs office from 2005 to 2009. Mr. Todd, who joined Mr. Hatch’s staff in 2011, was directly involved in negotiating the dialysis components of the fiscal bill, and he met with “all the stakeholders,” Mr. Hatch’s spokeswoman said, not disputing when asked that this included Amgen lobbyists.

Aides to the senators said some heavy donors had won and others had lost in the Medicare negotiations — proof that the legislative outcome was based on the merits. “What is the best policy for Montanans and people across the country lies at the heart of every decision Chairman Baucus makes,” said Meaghan Smith, a spokeswoman for Mr. Baucus. “It’s as simple as that.”

http://www.nytimes.com/2013/01/20/us/medicare-pricing-delay-is-political-win-for-amgen-drug-maker.html

Comment:

By Don McCanne, MD

With appropriate anger, we can point our fingers toward Sen. Baucus and his colleagues for their involvement in this corrupt half billion dollar taxpayer gift to Amgen, a biotechnology company that has already paid over three-quarters of a billion dollars in penalties for prior criminal acts to which they pled guilty. Sen. Baucus especially deserves our ire since he led the process in bringing us the Affordable Care Act – an act that was designed specifically to serve the financial interests of the private insurance and pharmaceutical industries, at a consequential cost to patients and taxpayers.

Of course, Sen. Baucus is not alone in accepting payment in exchange for favorable legislation. All members of Congress have fundraising challenges. If you check OpenSecrets.org, you will find that most members of Congress are tainted, though they vary in their egregiousness.

Who is ultimately to blame? We elect these people. Health care justice doesn’t stand a chance when displaced by the power of greed and corruption, and we simply turn our backs on it.

Medicare pricing delay is political win for drug maker

By Eric Lipton and Kevin Sack
The New York Times, Jan. 19, 2013

WASHINGTON — Just two weeks after pleading guilty in a major federal fraud case, Amgen, the world’s largest biotechnology firm, scored a largely unnoticed coup on Capitol Hill: Lawmakers inserted a paragraph into the “fiscal cliff” bill that did not mention the company by name but strongly favored one of its drugs.

The language buried in Section 632 of the law delays a set of Medicare price restraints on a class of drugs that includes Sensipar, a lucrative Amgen pill used by kidney dialysis patients.

Amgen, which has a small army of 74 lobbyists in the capital, was the only company to argue aggressively for the delay, according to several Congressional aides of both parties.

“That is why we are in the trouble we are in,” said Dennis J. Cotter, a health policy researcher who studies the cost and efficacy of dialysis drugs. “Everybody is carving out their own turf and getting it protected, and we pass the bill on to the taxpayer.”

The provision’s inclusion in the legislation to avert the tax increases and spending cuts that made up the so-called fiscal cliff shows the enduring power of special interests in Washington, even as Congress faces a critical test of its ability to balance the budget.

It also has worked hard to build close ties with the Obama administration, with its lobbyists showing up more than a dozen times since 2009 on logs of visits to the White House, although a company official said Saturday that it had not appealed to the administration during the debate over the fiscal legislation.

Aides to Mr. Hatch and Mr. Baucus, and a spokeswoman for Amgen, said the delay would give the Medicare system and medical providers the time they needed to accommodate other complicated changes in how federal reimbursements for kidney care were determined.

“Sometimes when you try to do too much and too quickly, you screw up,” said Antonia Ferrier, a spokeswoman for Mr. Hatch. The goal, an Amgen spokeswoman said in a written statement, is “to ensure that quality of care is not compromised for dialysis patients.”

But the measure runs counter to a five-year effort in Washington to control the enormous expense of dialysis for the Medicare program by reversing incentives to overprescribe medication.

Amgen’s employees and political action committee have distributed nearly $5 million in contributions to political candidates and committees since 2007, including $67,750 to Mr. Baucus, the Finance Committee chairman, and $59,000 to Mr. Hatch, the committee’s ranking Republican. They gave an additional $73,000 to Mr. McConnell, some of it at a fund-raising event for him that it helped sponsor in December while the debate over the fiscal legislation was under way. More than $141,000 has also gone from Amgen employees to President Obama’s campaigns.

What distinguishes the company’s efforts in Washington is the diversity and intensity of its public policy campaigns. Amgen and its foundation have directed hundreds of thousands of dollars in charitable contributions to influential groups like the Congressional Black Caucus and to lesser-known groups like the Utah Families Foundation, which was founded by Mr. Hatch and brings the senator positive coverage in his state’s news media.

Amgen has sent large donations to Glacier PAC, sponsored by Mr. Baucus in Montana, and OrrinPAC, a political action committee controlled by Mr. Hatch in Utah.

And when Mr. Hatch faced a rare primary challenge last year, a nonprofit group calling itself Freedom Path sponsored advertisements in Utah that attacked his opponent, an effort that tax records released in November show was financed in large part by the Pharmaceutical Research and Manufacturers of America, a trade group that includes Amgen.

For years, Amgen used its clout in Washington to lobby for generous Medicare payments for its blockbuster drug, Epogen, which fends off anemia in dialysis patients.

The Medicare program covers most costs associated with treating severe renal disease, regardless of a patient’s age, and the dialysis market continues to grow steadily. In 2010, the government’s kidney program was spending $1.9 billion on injectable anti-anemia drugs like Epogen.

But nearly a decade ago, evidence started to surface that questioned the effectiveness and safety of Epogen at the levels being used.

Researchers found that Medicare’s practice of reimbursing providers with separate payments for the drugs and for dialysis treatments encouraged overprescription because the providers made healthy profits with each dose. They also found that high doses posed cardiovascular risks to patients.

Congress reversed the incentive in 2008 by requiring Medicare to pay a single, bundled rate for a dialysis treatment and related medications starting in 2011. With providers potentially profiting more by prescribing less Epogen, use of dialysis drugs dropped by nearly 25 percent.

But the blow was softened for Amgen and other kidney care companies with a few favors from Congress. Among them was a two-year delay in the inclusion of certain oral drugs, Sensipar among them, in the new bundled payment system. That meant demand for Sensipar would not decline and Amgen would maintain control over pricing.

With that two-year exclusion set to expire in 2014, Amgen’s lobbyists began making rounds again o
n Capitol Hill last fall. In private meetings with staff members of the House Ways and Means and Senate Finance Committees, they argued for another two-year delay, several Congressional aides said.

Committee staff members had been meeting regularly in Room S-124 of the Capitol to negotiate a package of Medicare cuts needed to prevent a large scheduled reduction in doctors’ fees. The kidney program was on the table because a new report by the Government Accountability Office had found that Medicare had overpaid for dialysis by up to $880 million in 2011.

The discussions about cutting dialysis reimbursement began late last fall with little focus on a delay for oral drugs, but it was eventually endorsed by leading staff members for Mr. Baucus and Mr. Hatch, Congressional aides said.

Aides to the senators said the delay made sense because the Government Accountability Office had warned in early 2011 that federal regulators should take care in setting compensation levels for the drugs.

But others on Capitol Hill saw no justification for further delay.

“It is disappointing,” said a Democratic Congressional aide who declined to be named because of the issue’s sensitivity, “since the status quo encourages prescribing of oral drugs based on financial incentives rather than on best clinical practices.”

Mr. Hatch’s spokeswoman, Ms. Ferrier, said the involvement of Mr. Todd, the former Amgen employee, had not been inappropriate and that dozens of staff members on Capitol Hill handled matters that might benefit former employers.

“They have to leave their previous lives behind,” Ms. Ferrier said. “And Dan has done just that.”

After the House was sidelined late in the fiscal negotiations, the Senate gained control of the final bill-writing process, and the provision requested by Amgen was inserted into the legislation by Senate staff members.

Aides to Mr. Baucus and Mr. Hatch emphasized that the White House and Senate leadership, including Mr. McConnell, had the final word on the bill.

A spokesman for Mr. McConnell praised the parts of the legislation related to Medicare, while a White House spokesman declined to comment, saying the matter was decided by players on Capitol Hill.

Many lobbyists and Congressional aides said they first learned of the language when the final bill was posted publicly, only hours before being approved. It called for cutting $4.9 billion over 10 years by lowering Medicare payments for dialysis, but left hundreds of millions on the table by extending the oral drug delay.

At this point, opponents had no way to challenge the provision, as there was a single vote on the entire fiscal package. Mr. Baucus and Mr. Hatch voted in favor.

http://www.nytimes.com/2013/01/20/us/medicare-pricing-delay-is-political-win-for-amgen-drug-maker.html

Create Medicare for all

By Harvey Fernbach, M.D.
The Washington Post, Letters, Jan. 21, 2013

Harold Meyerson [“America flunks its checkup,” op-ed, Jan. 16], citing the recent report of the Institute of Medicine, provides an excellent commentary on the failings of our health-care system — failings that will, in too many cases, persist under the Affordable Care Act. While Mr. Meyerson’s diagnosis of the problem hits a home run, however, his prescription for a remedy unfortunately stops at third base.

Until we establish an “improved Medicare for all” — a single-payer system that ends the flagrant waste, inefficiency and injustice associated with the private insurance industry — we won’t get to home plate. As the institute’s report makes plain, such systems are more equitable, economical and user-friendly for patients, practitioners and businesses than are our current arrangements, even as they deliver better medical outcomes.

In 2009, a majority of Americans told pollsters that they wanted the simplicity, portability, increased choice of doctors and peace of mind that an improved Medicare for all would bring. Why should we settle for less?

Harvey Fernbach, M.D., M.P.H., is co-director of the District of Columbia chapter of Physicians for a National Health Program. He resides in College Park, Md.

http://www.washingtonpost.com/opinions/create-medicare-for-all/2013/01/21/f1906f66-6185-11e2-8f16-7b37a1341b04_story.html

Second Inaugural of President Barack Obama

Second Inaugural Speech

President Barack H. Obama, January 21, 2013

We, the people, still believe that every citizen deserves a basic measure of security and dignity. We must make the hard choices to reduce the cost of health care and the size of our deficit. But we reject the belief that America must choose between caring for the generation that built this country and investing in the generation that will build its future. For we remember the lessons of our past, when twilight years were spent in poverty, and parents of a child with a disability had nowhere to turn. We do not believe that in this country, freedom is reserved for the lucky, or happiness for the few. We recognize that no matter how responsibly we live our lives, any one of us, at any time, may face a job loss, or a sudden illness, or a home swept away in a terrible storm. The commitments we make to each other – through Medicare, and Medicaid, and Social Security – these things do not sap our initiative; they strengthen us. They do not make us a nation of takers; they free us to take the risks that make this country great.

http://www.nytimes.com/2013/01/21/us/politics/obamas-second-inaugural-speech.html?_r=0&pagewanted=all

Single-payer system is only way to keep health costs down

By Bernie Fetterly
Ithaca Journal, Jan. 17, 2013

To “fix the debt,” we should focus on fixing the economy. Investment in jobs and growth will reduce the costs of high unemployment raise more revenue and reduce the debt burden.

Why should fairer taxes from the rich be allowed only if accompanied by less health care for the old or vulnerable?

Cuts to Medicare are aimed at the wrong target. We don’t have an “entitlements” problem; we have a broken health care system. If nothing is done to that system, the rising cost of health care will cause Medicare and other publicly funded health care programs to consume an even larger portion of the budget.

The real problem is runaway health care costs, driven by the entrenched corporate interests — the drug and insurance companies and the private hospital complexes — that have made our health care the most expensive in the world.

Since vouchers are out, conservatives have another strategy to weaken Medicare: raise the age of eligibility and eliminate benefits for 65- and 66-year-olds.

Denying Medicare to 65- and 66-year-olds will actually cost more money than it saves. The best estimate is that $5.7 billion in projected federal savings in Medicare will end up forcing individuals, states and employers to pay an additional $11.4 billion for health care. If the overall U.S. health care system controlled costs as well as most European countries, both Medicare and overall health care costs would be fully affordable.

To do that, you have to take on the drug companies, insurance companies and hospital complexes that drive up costs. Cutting benefits — or eliminating them for 65- and 66-year-olds — doesn’t control costs. It simply shifts the costs from the public budget to individual seniors or their families. Medicare is more cost-effective than private insurance because Medicare uses its leverage to keep doctor and hospital rates in check. “Improved Medicare for all” would be best because it would bargain for lower drug prices and “Medicare for All” would have a very large risk pool. So why would we want to push more people into the private health care system?

Hospitals under an “improved Medicare for all” system would be nonprofit and financed by global budgets. That alone would eliminate a huge problem of hospital complexes and greatly improve efficiency.

Today, more than 50 million older Americans and people with disabilities have access to health care thanks to Medicare. But Medicare can be improved if we apply it to cover every American. If conservatives succeed in raising the Medicare eligibility age, many 65- and 66-year-old retirees will find themselves uninsured. Others will try to stay at work, adding to their employers’ health care burden while limiting job opportunities for younger workers. Employer health insurance costs will rise as a result. Still others will seek coverage through the new health insurance exchanges — if they can afford it.

Two-thirds of people 65 and 66 (3.3 million people) would face an average of $2,200 more each year in premiums and cost-sharing. Medicare itself would be weakened, with fewer people in the program and less leverage to reduce health care costs. Such short-sighted conservative “reform” will result in chaos in the lives of people making the transition from work to retirement — and it would end up increasing the costs to our overall health care system.

To bring down Medicare costs, we need to make our health care system as cost effective as other nations that deliver more coverage and better care at lower cost. There is only one way to do that and that would be a system of “improved Medicare for all.”

If means-testing became law in Medicare, it would change Medicare from a universal program that serves all Americans into an underfunded health care program that serves only the elderly poor.

Medicare would be even more cost-effective if Congress — in the pocket of big drug companies and the rest of the medical industrial complex — hadn’t forbidden Medicare from negotiating with big drug companies or paying fair prices for a variety of health care goods.

If you consider private health care premiums as a tax, because under the Affordable Care Act you will be mandated to buy or have private insurance, you will be required to pay much higher taxes under the ACA than if you had “improved Medicare for all” — a single-payer system.

Do the math: We cannot afford the ACA or the hardship it will bring. What we need is a single-payer system. Insist on it — demand it. We will have several progressive organizations across the nation working together on this issue. Our local, state, and federal politicians need to support single-payer policy and not the ACA. What we do now is crucial.

Fetterly is the director of the Tompkins County Health Care Task Force.

http://www.theithacajournal.com/article/20130117/VIEWPOINTS02/301170099/Guest-Viewpoint-Single-payer-system-is-only-way-to-keep-health-costs-down?nclick_check=1

ACA administrative costs escalating

State's health insurance exchange gets $674-million federal grant

By Chad Terhune
Los Angeles Times, January 18, 2013

Federal officials awarded California’s new health insurance exchange a $674-million grant, providing money for a crucial marketing campaign aimed at millions of uninsured consumers.

The state-run insurance exchange, Covered California, is seeking to fundamentally reshape the health insurance market by negotiating with insurers for the best rates and helping consumers choose a plan.

In addition to “top down” advertising, Lee said, the exchange will be giving grants to religious groups and other community organizations for education at the grass-roots level.

The exchange also has the task of helping millions of Californians determine whether they qualify for an expansion of Medi-Cal, the state’s Medicaid program for the poor, or federally subsidized private coverage.

In addition to marketing, Covered California will use the federal grant money to help fund operations through January 2015, when the online marketplace will rely on fees assessed on health policies sold through the exchange.

Separately Thursday, the California Endowment said it would spend $225 million over the next four years to help implement the federal healthcare law in the state.

http://www.latimes.com/business/la-fi-health-insurance-grant-20130118,0,5154422.story

Comment:

By Don McCanne, M.D.

The administrative waste in our health care system far exceeds that of any other nation. During the political process of crafting the Affordable Care Act, we warned that this model would greatly add to this administrative waste. We are now beginning to see the extent of that expanded waste.

On just California’s insurance exchange alone, taxpayers are having to foot additional costs of two-thirds of a billion dollars just for administration and marketing of the exchange plans. In the future, these additional administrative costs will be downloaded to us through new fees assessed on the health policies sold through the exchange. Just think of all of the other administrative expenses for the multitude of other features of the Affordable Care Act, not just in California but throughout the nation. And not one cent of this additional administrative spending goes to health care. Sick!

Although taxpayers have already invested way too much in this wasteful program, we can still cut our losses and move on with an administratively efficient single payer system – an improved Medicare for all.

Doctor sees shift to single-payer care

By Mark Sommer
Buffalo News, Jan. 17, 2013

Single-payer health care remains the only way to meet public health needs, and demand for it will reignite as changes brought by the Affordable Care Act fail to make health care cheaper and continue to leave tens of millions uninsured, the head of a national physicians organization said Thursday.

Dr. Andy Coates, president of Physicians for a National Health Program, which represents more than 18,000 members, spoke to The Buffalo News Editorial Board. He later spoke at a forum sponsored by Partnership for the Public Good.

Coates, who practices in a community hospital in Albany and teaches in the departments of medicine and psychiatry at the University at Albany, said he constantly sees rising premiums and deductibles force low-income patients to choose between critical health needs and basic survival.

“I had a man [recently] who bled half of his blood volume, and he insisted on discharge because he had a day-by-day hospital co-pay of over $200, had no savings and hadn’t been able to pay his bills because it hadn’t snowed enough to plow snow like he usually does. He just absolutely insisted on going home when our advice was that he should be in a hospital making sure he didn’t continue to bleed,” Coates said.

“This kind of thing is unbelievably common.”

He predicted changes under way in health care will fall far short.

“The data we’ve seen most recently suggests that even in 2019, with the [Affordable Care Act] fully implemented, there would still be 36 million people without health insurance. It’s not fundamental reform, and the proven cost savings are none.”

Coates, who compared doctors to “lawyers for the poor,” said the country eventually will have to turn to single payer because “nothing else will work.”

He said studies and polls have shown a majority of the public and physicians would support single payer, but the idea remains outside mainstream acceptability among the political class.

He also promotes a more holistic approach to health care and was joined by Dr. Kathleen Grimm and Jessica Bauer Walker of the Community Health Worker Network of Buffalo.

Members of the 2-year-old network of health care and public health advocates operate as community educators and organizers who, through social networks, help people underserved by traditional health systems.

“Our way of working is based on trust, which is a very different framework for those who are providing and receiving services,” said Walker, the group’s executive director.

Grimm, co-chairwoman of the health network, noted the U.S. ranked 17th in a 2007 study by the Institute of Medicine and the National Research Council of life expectancy among high-income countries.

“The one distinguishing factor is that the United States does not have universal health coverage,” Grimm said, “and the other 16 do.”

Mark Sommer is a Buffalo News staff reporter.

http://www.buffalonews.com/apps/pbcs.dll/article?AID=/20130117/CITYANDREGION/130119215

Misdirected efforts aren’t making Americans any healthier

By Philip Caper, M.D.
Bangor Daily News, Jan. 18, 2013

We Americans seem to be obsessed with our health. You cannot watch TV, read a magazine or surf the Web without being inundated with articles and ads touting some new way get healthier. As one result, we spend about double what other countries do on health care for our people. But are many of those resources being misdirected?

A report released recently by the Institute of Medicine and the National Research Council suggests they are. Their report documents the fact that, despite our high health care spending, Americans persistently die younger and live in poorer health than residents of most other wealthy countries. The life expectancy of Americans is now near the bottom among all developed countries.

A report released last September — that I discussed in an earlier column — estimated that about 30 percent of what we as a nation spend on health care is spent on things that have little or no effect on curing illness or on improving our health — in other words, wasted. But even that which is spent effectively for medical care is directed mostly at fixing something that is already broken — a patient with a heart attack, for example — rather than preventing the illness in the first place. While we are able to cure infections, control hypertension or diabetes and treat or replace worn out joints, we are much less effective at preventing such illnesses.

It is becoming increasingly clear that many modern-day causes of disease, disability and mortality have their roots in what are known as “the social determinants of health.”

The IOM-NRC report pointed out that car accidents, gun violence and drug overdoses are major contributors to reduced life expectancy for Americans under age 50, as were high rates of heart attacks, lung disease and diabetes. Why, as a nation, are we so sick?

Some answers to that question can be found in a recent book, “The Spirit Level,” by British epidemiologists Kate Pickett and Richard Wilkinson. In it, they suggest an even more basic cause of our dismal national performance: extreme inequality of income, where the U.S. tops the list of wealthy countries. We are suffering from excessive accumulation of wealth at the top, growing poverty at the bottom, and a hollowing-out of the middle class.

Based on data from 23 rich countries and all 50 U.S. states, they compare the prevalence of nine types of physical and social pathology with the level of income inequality among each state in the U.S. and in each country. The U.S. is ranked at or near the top for income inequality among wealthy countries.

High levels of income inequality are associated with high rates of obesity, teenage pregnancy, violence, incarceration, mental health problems, drug abuse, school dropout rates, poor community life and social relations, poor physical health and low life expectancies. Among eight wealthy countries studied, the U.S. had the highest income inequality and lowest social mobility leading to the least opportunity for career and income advancement.

Wilkinson and Pickett have documented that in societies with high levels of inequality, many people suffer from low levels of self-esteem, high levels of insecurity and feelings of low status. These combine to produce high levels of chronic anxiety, which is thought to an important factor in causing cardiovascular disease (such as high blood pressure and heart attacks), and is known to stimulate the production of abnormally high levels of adrenal steroids which are a risk factor for diabetes with all of its consequences.

I’m all in favor of preventing illness as one way of lowering costs. These studies seem to indicate that a lot of factors other than medical care are important in doing so. Our high levels of social and physical pathology may be just the symptoms, not the underlying causes of our dismal performance.

There are a number of ways to reduce income inequality. Tax and social welfare policies are among them. In Maine and throughout the country we are now having a vigorous national debate about both.

American health care is far too wasteful and expensive. At almost 18 percent of our gross domestic product, it has to be a major contributor to our high and rising income inequality by shifting wealth from those who use health care products and services to those who provide them. Our health care system may be approaching the point where it is now doing more harm than good.

The bottom line of these findings seems to be that in nations with progressive taxes and a robust social safety net, that includes an efficient universal health care system, everybody is better off — including the very rich.

It seems to me that’s something worth thinking about as we continue our debate about national priorities.

Physician Philip Caper of Brooklin is a founding board member of Maine AllCare, a nonpartisan, nonprofit group committed to making health care in Maine universal, accessible and affordable for all. He can be reached at pcpcaper21@gmail.com.

http://bangordailynews.com/2013/01/18/health/misdirected-efforts-arent-making-americans-any-healthier/

Senator Kirk's recovery makes the case for single payer

By Philip Verhoef, M.D.
The State Register Journal (Springfield, Ill.), Jan. 17, 2013

U.S. Sen. Mark Kirk’s recovery from a devastating stroke is a testament to his strength and to many months of excellent rehabilitation care. As a concerned physician, I am heartened by his recent statement that he will be “much more focused on Medicaid and what (his) fellow citizens face,” noting that Medicaid patients only qualify for 11 rehab visits after a stroke.

However, his experience highlights some of the flaws in our current fragmented health care system, many of which are exacerbated by Obamacare.

While Kirk is covered by one of the high-level private insurance plans offered to federal employees, many Illinoisans are covered by less comprehensive health plans and do not have access to the type of care that our elected officials enjoy. By extension, there are a number of stroke patients who will not be able to return to the workforce the same way that Kirk will.

Obamacare props up our fragmented system by requiring insurers to offer support to working Illinoisans, with the most affordable plans covering only 60 percent of costs and containing high deductibles, and the most comprehensive plans being unaffordable. Thus, the costs of health care continue to fall on the people who can least bear it, as they choose the only affordable (sub-standard) insurance available.

Even though Kirk still incurred “major” out-of-pocket expenses, his story is still a happy one compared to those told by the poor — including the poor who have coverage.

More than a third of Illinois physicians refuse to see a single Medicaid patient, and those that do often limit the number of Medicaid patients seen. An important component of Obamacare is to actually expand Medicaid eligibility.

Kirk has already pointed out how inadequate the coverage is, coupled with the limited number of providers that accept Medicaid. Thus, the poor will have a vastly inferior insurance program, and they too will be forced to pay out-of-pocket for what should be the standard of care.

Finally, witness how the state of Illinois has cut Medicaid in the last year. Patients (including children) will only be allowed drug coverage for four of their prescriptions. In addition, Medicaid prescription benefits for senior citizens and the disabled have been eliminated. Medicaid will no longer cover most dental services, although it covers the cost of pulling rotted teeth. This is the flawed system that Kirk and Obamacare want to focus on? Medicaid is constantly underfunded, woefully inadequate, and accepted by far too few healthcare providers to meet the needs of Illinois citizens.

Why not create an expanded and improved Medicare system and extend it to everyone? Kirk could advocate for this system to provide coverage for stroke rehabilitation, primary care, mental health care (especially in light of the recent violent killings), and emergency care.

This coverage would be better than what Kirk currently has. He would have full choice of whatever doctor or hospital he would like to visit. And finally, it could be fully paid for by redirecting the money that we already pay for private health insurance, which costs tenfold more to administer than Medicare, while providing CEOs with multimillion-dollar salaries.

By supporting this single-payer system, he can assure that all Illinoisans receive the care that he did; isn’t that the least that we deserve?

Philip A. Verhoef is a physician in the adult and pediatric intensive care units at the University of Chicago and a member of Physicians for a National Health Program and the Illinois Single Payer Coalition.

http://www.sj-r.com/opinions/x1665863538/Philip-Verhoef-Senator-Kirks-recovery-makes-the-case-for-single-payer?zc_p=0

Business Roundtable attacks Medicare and Social Security

Social Security Reform and Medicare Modernization Proposals

Business Roundtable, January 2013

Business Roundtable (BRT) is an association of chief executive officers of leading U.S. companies with more than $7.3 trillion in annual revenues and nearly 16 million employees. BRT member companies comprise nearly a third of the total value of the U.S. stock market.

“Medicare and Social Security were not designed to cope with America’s new demographic realities. CEOs are calling for gradual changes that will modernize these programs and preserve the safety net for future generations of retirees.”
– Gary W. Loveman, Ph.D., Chairman, CEO & President, Caesars Entertainment Corporation, and Chair of BRT’s Health and Retirement Committee

Essential Elements of a Medicare Modernization Proposal

• Protect Medicare for Those Approaching Retirement: Medicare’s age of eligibility should be moved to age 70. However, this will not affect those age 55 or older today.

• Expand Competitive Models of Care: By 2015, Medicare should offer seniors the opportunity to choose among competing and comprehensive private plans and traditional Medicare. The private plans would offer a benefit similar to the existing Medicare program with the flexibility to innovate, sell across state lines, and create greater value strategies. Plans would be required to accept all applicants and would risk adjust the premium to take into account age and health status. The traditional fee-for-service program would compete for enrollment with private plans on cost, quality and a more innovative benefit structure. We believe that competition in the provision of health care to America’s seniors will bring substantial benefits, as it has to most all other categories of personal expenditure. The recent experience of competition in the Medicare Part D program serves as a persuasive indication of the potential savings and improvement in care available through the provision of choice to well-informed seniors.

• Reduce Taxpayer Costs for Upper-Income Beneficiaries: Today, the Part B premium (physician services) and the Part D premium are means-tested and other types of means testing should be explored. By 2015, additional means testing for Medicare services should be considered.

• Protect the Safety Net for Low-Income Americans: Low-income beneficiaries should retain the existing financial support received today. Improvements should be made in care-coordination and a focus on wellness and chronic care management.

(Social Security recommendations available at this link.)

http://businessroundtable.org/studies-and-reports/social-security-reform-and-medicare-modernization-proposals/

And…

Doctoring Health Care, I

By Barbara Dreyfuss
The American Prospect, December 17, 2006

In early 2006, Glen Barton, the retired CEO of Caterpillar and former head of the Business Roundtable’s health-care task force, said the solution to the health-care crisis is a single-payer system, citing Medicare as a model.

http://prospect.org/article/doctoring-health-care-i

Comment:

By Don McCanne, M.D.

Although the slick brochure from these wizards of industry at the Business Roundtable might make it look like these gentlemen are doing us a great favor by showing us how to save Medicare and Social Security from bankruptcy, their recommendations are, in fact, taking a supercilious approach to diminishing the effectiveness of America’s highly regarded social insurance programs.

This cavalier attitude is expressed in a comment by Caesars’ Gary Loveman, chairman of Business Roundtable’s Health and Retirement Committee that released this report. “Those of us who are in the BRT are paid to try to solve very difficult problems effectively. I would tell you that most of them are a lot harder than this, frankly” (Politico Pulse, Jan. 17).

What do they have in mind for Medicare? They would increase eligibility age to 70 – a disaster for future retirees. They would privatize the traditional Medicare program by throwing it into a market of private plans – a devious scheme to shift health care costs onto the backs of those with greater health care needs. They would also means-test benefits, losing the support of the wealthier individuals who have the strongest political voice, threatening to convert Medicare into a welfare program.

And Social Security? They would also increase Social Security retirement age to 70. And in a stroke of genius, they recommend that Americans simply save more for their retirement. Why didn’t we think of that before?

A word needs to be said about their recommendation to reduce future Social Security cost of living adjustments by converting to the chained-CPI. When individuals are forced into a frugal existence they learn to cut back and do without just so that they will have enough money for basic food and housing at the end of the month, if that. Under chained-CPI, the government assumes that this frugality represents the new, lower consumer price index for this sector, and so they adjust out the savings that the Social Security beneficiaries have accrued merely for the purpose of getting them all of the way through to the end of the month. Pretty cruel.

A decade ago, Glen Barton, Chairman and President of Caterpillar, led the BRT Health and Retirement Committee, currently headed by Gary Loveman. What a contrast. Glen Barton’s experience motivated him to become an advocate of “a single-payer system, citing Medicare as a model.” Lovemen? Well, you read it above. What a difference a decade made.

Class warfare? Ugly label, but…

pnhpf3a

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Doctoring Health Care, I

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