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Romney supports Medicare Advantage overpayments

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Romney supports Medicare Advantage overpayments

Patients Would Pay More if Romney Restores Medicare Savings, Analysts Say

By Jackie Calmes
The New York Times, August 21, 2012

Mr. Romney has been especially critical of the cuts for insurance companies that provide Medicare Advantage, a popular private-policy alternative to Medicare. “This is the president’s plan: $716 billion cut, four million people losing Medicare Advantage and 15 percent of hospitals and nursing homes not accepting Medicare patients,” he said in a recent campaign appearance.

But Medicare Advantage, which was created 15 years ago in the hope that private-market competition for beneficiaries would result in lower prices, has consistently cost more than standard Medicare — costs that Medicare beneficiaries must help subsidize through their premiums.

The reductions for Medicare Advantage providers are “a matter of basic fairness because they’ve been overpaid for years,” said (Marilyn Moon, vice president and director of the health program at the American Institutes for Research). As for beneficiaries, she added, “they’re guaranteed basic Medicare benefits. They may lose some extra benefits they may have been getting, but in effect you’re saying some of the windfall benefits may go away.”

“The bottom line,” said Representative Chris Van Hollen of Maryland, the senior Democrat on the House Budget Committee, which Mr. Ryan leads, “is that Romney is proposing to take more money from seniors in higher premiums and co-pays and hand it over to private insurance companies and other providers in the Medicare system.”

http://www.nytimes.com/2012/08/22/us/politics/costs-seen-in-romneys-medicare-savings-plan.html?pagewanted=all

Comment: 

By Don McCanne, MD

Why would Mitt Romney support overpayments to the Medicare Advantage program? The reason is that they want a vibrant market of private health plans in order to be able to put into place their plans for a premium support (voucher) program for Medicare, even though those plans cost more than does the traditional Medicare program.

The precursor to Medicare Advantage (Medicare + Choice) already demonstrated that private insurers cannot meet Medicare’s lower costs for comparable Medicare populations. They pulled out of patient markets with average or worse levels of health, keeping the healthier regions enrolled in their plans. In the Medicare Advantage program, they have gone even further. They are receiving unwarranted risk adjustment payments by submitting data indicating that their patients are sicker than they actually are.

(There has been some misleading publicity about Medicare Advantage bids this year being only 98 percent of traditional Medicare costs, but the complicated formulas still result in payments well in excess of Medicare costs.)

Once the premium support system is up and running, the intent is to cap the amount that the government contributes to the premiums for the private plans, shifting an ever-increasing portion of the costs to the Medicare patients – sort of a delayed gratification for anti-government ideologues.

(Although today’s message is about the nefarious plot to foist off on us the privatization of Medicare, some may wonder what the NYT headline means. The scheduled reduction in payments to Medicare come from two sources – reduction of overpayments to the Medicare Advantage plans, and reductions in payments to some health care providers, but not from a reduction of benefits in the traditional program. The savings are shared with Medicare beneficiaries in the form of lower premiums and lower coinsurance payments. When Romney restores the Medicare cuts, costs go up for both the taxpayers who finance the government and for Medicare beneficiaries through higher premiums and coinsurance payments.)

For patients or for profits?

By Helen Redmond
Socialist Worker, Aug. 22, 2012

Helen Redmond reports on a series of scandals hitting for-profit health care giant HCA–and looks at how the quality of care patients receive has suffered, with sometimes deadly results.

In the last 20 years, as the health care crisis has accelerated and the number of uninsured has soared to over 50 million, publicly funded, not-for-profit hospitals have been transformed into ruthless, investor-owned, profit-generating businesses. Corporations have bought up not only hospitals, but dialysis clinics, outpatient surgical centers, home care agencies and physician practices with the singular goal of making money.

Hospitals are the nexus of profit-making for medical equipment and supply companies, the pharmaceutical industry, medical device makers, doctors who charge exorbitant fees and, increasingly, private investors. The health care sector has grown exponentially and now comprises one-sixth of the national economy.

No single company has been more successful in the hijacking of health care resources to Wall Street than the Hospital Corporation of America (HCA), which is currently facing a series of scandals. The industry giant’s insatiable greed for profits has resulted in numerous, ongoing federal and state investigations and hefty fines.

Over the years, nurses and doctors at HCA facilities have consistently blown the whistle on unethical medical practices that have maimed and killed patients.

HCA’s tagline on its website says, “Bettering the Human Condition.” But HCA is better known for “bettering” the salaries and profits of shareholders and company executives. So far this year, HCA’s revenues have increased 11.9 percent to $8.112 billion. In 2010, Richard Bracken, the CEO of HCA took home a compensation package that totaled a whopping $38.2 million.

HCA is the largest for-profit hospital chain in the United States and owns 163 hospitals and 110 surgical centers in 21 states.

The hospital chain, formerly known as Columbia/HCA, has a long, corrupt and criminal record. In the 1990s, it was investigated for Medicare billing fraud and accused of ordering unnecessary tests to boost revenue, having unethical relationships with doctors, and of the practice of “patient dumping.”

In 1997, federal agents executed search warrants and seized documents related to billing practices at hospitals and clinics owned by Columbia/HCA. The company was fined $1.7 billion for Medicare fraud. At the time, Rep. Pete Stark (D-Calif.) commented, “Hopefully they’ll all be in jail soon for the crimes they have committed across the country.” No one went to jail.

Instead of being barred from participating in the Medicare program, the hospital chain was forced to sign a strict Corporate Integrity Agreement and their billing practices were monitored by an independent reviewer. That oversight ended in 2008.

History has a way of repeating itself. Soon after the oversight stopped, it was back to business as usual.

According to a recent New York Times investigation of HCA, “HCA changed the billing codes it assigned to sick and injured patients who came into the emergency rooms. Almost overnight, the numbers of patients who HCA said needed more care, which would be paid for at significantly higher levels by Medicare, surged.”

The MBAs at HCA have worked overtime to get the company back to making superprofits by using methods developed by the founders of the company–Dr. Thomas Frist Jr., the former Republican senator from Tennessee, and Rick Scott, the current Republican governor of Florida.

Scott’s business plan for health care delivery is based on how the fast-food industry delivers burgers and fries. He said, “The day has come when somebody has to do in the hospital business what McDonalds’s has done in the fast-food business and what Wal-Mart has done in the retailing business.”

An updated version of Scott’s argument that health care should be run like an assembly line business is an article by Dr. Atul Gawande in the New Yorker. He argues that the restaurant chain The Cheesecake Factory is the new model for fixing the dysfunctional American health care system. He wrote: “We’ve let health care systems provide us with the equivalent of greasy-spoon fare at four-star prices, and the results have been ruinous. The Cheesecake Factory model represents our best prospect for change.”

Gawande’s argument is absurd; as if the human art and science of medicine and treating complex diseases like cancer and diabetes should adopt the methods that a restaurant chain uses to bake and serve 50 kinds of cheesecake. Treating health care like a factory commodity, while denying that care to millions, is the reason that the U.S. lags behind 19 advanced countries in preventable deaths.

We spend more than $8,000 per person for health care annually, and yet the quality of health care is worse in the U.S. than in nations that spend far less and provide coverage to everyone. It is the rapacious and destabilizing pursuit of profit in the privatized health care market that is the root cause of the fragmented and high cost of health care.

HCA increases profit margins in a contradictory combination of ways that are dangerous to patients’ health. Recent scandals show that HCA medical providers have performed unnecessary medical procedures. In other instances, care is denied to the uninsured and rationed to the insured. Patients are discharged quickly and staff is cut to unsafe levels, particularly nurses.

A recent internal investigation by HCA–instigated after a nurse complained–found that HCA cardiologists have performed hundreds of unnecessary cardiac procedures, putting patients’ lives at risk.

As the Times explained, “Cardiology is a lucrative business for HCA, and the profits from testing and performing heart surgeries played a critical role in the company’s bottom line in recent years.” Medicare reimbursement rates are $10,000 for a cardiac stent and $3,000 for a diagnostic cardiac catheterization–a lucrative figure for the company.

To jettison the uninsured, and avoid providing care that won’t be reimbursed, HCA’s emergency rooms refuse to treat patients who have “non-urgent” health conditions. The patients are told to go somewhere else for care–unless they pay an insurance co-pay or $150 in cash if they’re uninsured, an impossibility for thousands of people.

Enormous pressure is put on medical staff to deny care and to dump uninsured patients to non-HCA hospitals. One uninsured patient went to an HCA emergency room in Nashville complaining of trouble breathing. The patient was discharged without care and was admitted to another hospital hours later with pneumonia. The New York Times reported that a Medicare investigation cited HCA for having “failed to ensure that an appropriate medical screening examination was conducted.”

An article in 1996 in The Nation magazine interviewed nurses that worked for Columbia/HCA. They had a litany of complaints that included insufficient staff to assist patients in walking after surgery, delays of up to 45 minutes in delivering medication and other treatments and the elimination of overnight environmental cleaning services.

Sixteen years later history is repeating itself. HCA hospitals have one of the highest rates of bed
sores, a preventable condition if there are enough nurses to turn patients over and check the skin. An HCA hospital in Florida was cited twice by regulators for having inadequate staffing levels to monitor bedsores. And, according to the New York Times, at least one patient has died due to untreated bedsores.

Research has shown that lower nurse-to-patient staffing ratios lead to improved health outcomes, increased hospital safety and decreased mortality. But what is good for patients is not always good for profits, and the Wall Street investors that own HCA hospitals have calculated that into the cost of doing business, putting patient’s lives at risk.

http://socialistworker.org/2012/08/22/for-patients-or-for-profits

Dr. Ann Settgast on travel medicine and health care policy

Minnesota Health Care News, August 2012

Dr. Ann Settgast, an assistant professor of internal medicine at the University of Minnesota, is a primary care physician at HealthPartners Center for International Health and practices travel medicine at HealthPartners Travel and Tropical Medicine Center.

You earned a diploma in tropical medicine and health (DTM&H). How did you become interested in that field and in international health in general? I’m fascinated by other countries and cultures, and love to travel. Most Western medical education doesn’t provide extensive coverage of diseases encountered in developing countries (malaria, leprosy, malnutrition, etc.). I obtained my DTM&H to be better prepared to work in parts of the world, and with populations, where these conditions are common.

Many of your patients are foreign-born. Is working with them different than with U.S.-born patients? It’s a privilege to work with people from entirely different backgrounds than my own. I’m fascinated by my patients’ histories and perspectives, and learn a great deal from them. For many, coming to the U.S. from, say, a refugee camp, preventive medicine and chronic disease management are foreign concepts. I enjoy the opportunity to improve health by building relationships that allow me to promote these concepts, working with patients to combine their non-Western approaches to health with our own in order to obtain the best outcomes.

Some travel requires advance medical planning, such as immunizations. How can a traveler find out what is needed?The best way is to visit a travel clinic. Many patients think the only thing we do at travel clinic is give shots, but there is much more. Significant time is spent reviewing malaria risk and prevention. Malaria is an illness that can be fatal quickly in patients who are not immune to it. Choice of prophylactic medication is individualized based on side-effect profile, patient medical history, and other factors. We discuss prevention and management of traveler’s diarrhea, which is very common, and review travel risks.

Some preexisting conditions require special planning for travel abroad. Please give us some examples. Changes in diet, activity, and time zone can all affect diabetes control and may require readjustment during travel. Risk of altitude illness can be affected by various cardiopulmonary conditions. Patients who are immunosuppressed, whether due to a disease like AIDS or to medication, require special management.

Have you found an effective way to handle jet lag? Starting a trip well rested helps. People are typically affected when crossing more than three time zones, and traveling west is easier than going east. For example, someone traveling west across six time zones can expect to feel well within two or three days. But the same distance going east can require double that time to feel synchronized with local time. In addition to circadian rhythm disturbance, sleep loss itself common during travel contributes to jet lag. I advise patients to use daylight, outdoor activity, and intense activities during the day of arrival when going east to help them stay awake at their destination until local bedtime. Some providers recommend melatonin or zolpidem to help with sleep the first few nights.

Recently, you had a short-term teaching appointment in Tanzania. Please tell us about that. I taught on the internal medicine service at Selian Hospital outside Arusha, Tanzania, which serves northern Tanzania’s rural Masaai. My students were training to be assistant medical officers, mid-level providers who lessen Tanzania’s profound physician shortage. They were among the most eager and motivated learners I have ever met; teaching and learning from them was fun and inspiring. They requested multiple topics for lectures, and would attend any time of day for as long as I would teach!

What can the United States learn about health care delivery from other countries? The U.S. has much to learn from other wealthy democracies, all of which have truly universal health care systems, most at less than half the cost of ours. There is a constant search in American medicine for the “holy grail” of cost control. We often try to do this via mechanisms to reduce care based on the misperception that our system is so expensive because we provide too much care. However, if one looks at discrepancies in spending between us and these countries, it’s not because the U.S. provides too much unnecessary care (although this problem certainly exists). Rather, our huge spending is on the administrative side due to our fragmented, multipayer, for-profit system.

Please tell us about Physicians for a National Health Program and this group’s reaction to the June 28 Supreme Court ruling on the Affordable Care Act (ACA). Physicians for a National Health Program (PNHP) is a national non-profit research and education organization dedicated to implementing a single-payer health care system in the U.S. Our Minnesota chapter, with nearly 1,000 provider and medical student members, works toward a single-payer solution at the state level. While the ACA will help some patients, it will not solve our crisis. More than 200,000 Minnesotans will remain uninsured while many more will be under-insured without proper access to health care. Single-payer still provides the only means to cover everyone at reduced cost. More information is at www.pnhpminnesota.org.

What are obstacles to implementing single-payer health insurance? The main obstacle is the private health insurance industry. Another obstacle is lack of education about what “single payer” really means. Some erroneously confuse it with socialized medicine or think it would lead to reduced care. However, the savings come not from reducing care but from streamlining the administrative side of the system. The Lewin fiscal analysis of a Minnesota single-payer system, published in March 2012, revealed that Minnesota could reduce health care spending by 9 percent and cover ALL Minnesotans with comprehensive coverage if single payer was enacted here.

PNHP-MN has introduced legislation for single-payer insurance. What can you tell us about this? PNHP-MN has worked closely with Sen. John Marty, chief author of Minnesota’s single-payer legislation. The bill made progress during the first few years after introduction, passing through several legislative committees. However, since the 2010 election and subsequent changes in House and Senate leadership, the bill has stalled. Single-payer is not a partisan issue. It is the most fiscally conservative approach to health care reform.

http://issuu.com/mppub/docs/mhcnaug12

Health plan competition improves quality, right? Right??? – ctd.

By Aaron Carroll, M.D.
The Incidental Economist, August 21, 2012

Yesterday, Austin highlighted a paper that said competition might not increase quality. Here’s another paper that goes even further. “Quality and Equity of Care in the Veterans Affairs Health-Care System and in Medicare Advantage Health Plans“:

Background: After an organizational transformation in the mid-1990s, the quality of care in the Veterans Affairs health-care system(VA) compared favorably with the quality of care in some private sector settings. Whether this performance advantage has persisted, and also its relation to geographic and socioeconomic variations in care, is unknown.

Objective: We compared the quality and equity of care for older adults in the VA with that delivered in Medicare Advantage (MA) health plans using the same performance measures.

Research Design: Cross-sectional comparison.

Subjects: A total of 293,554 observations from enrollees in 142 VA medical centers (VAMCs) and 5,768,573 observations from enrollees in 305 MA plans.

Measurements: Adherence to quality measures assessing diabetes, cardiovascular, and cancer screening care from 2000 to 2007.

Using the same HEDIS type measures Austin described yesterday, this study compared the quality of the VA health care system to that of private Medicare Advantage. Remember, the VA isn’t just a single-payer system, a la Canada or Medicare, it’s a completely government run health care system a la the UK. Can you guess where this is headed?

Results: The VA outperformed MA plans on 10 of 11 quality measures in the initial study year, and on all 12 measures in the final year. In 2006 and 2007, adjusted differences between the VA and MA ranged from 4.3 percentage points (95% CI, 3.2-5.4) for cholesterol testing in coronary heart disease to 30.8 percentage points (95% CI, 28.1-33.5) for colorectal cancer screening. For 9 of 12 measures, socioeconomic disparities (defined as the difference in performance rates between persons in the highest and lowest quartiles of area-level income and education) were lower in the VA than in MA. Across all measures, the mean interquartile range of performance was 6.7 percentage points for VAMCs and 14.5 percentage points for MA plans.

For people over the age of 65, the VA outperformed private insurance (Medicare Advantage) on nearly all the measures of quality. The care it delivered was also more consistent across geography and socioeconomic status.

I know a lot of you believe that private market and competition are the cures for what ails us. Unfortunately, there’s just not a lot of evidence that’s true.

http://theincidentaleconomist.com/wordpress/health-plan-competition-improves-quality-right-right-ctd/

How are health insurance investors betting on the election?

Investors in Health Care Seem to Bet on Incumbent

By Andrew Ross Sorkin
The New York Times, August 20, 2012

Who is going to win the presidential election?

You might want to ask Mark T. Bertolini. He just bet $5.7 billion on President Obama.

Mr. Bertolini is the chief executive of Aetna, which on Monday agreed to acquire Coventry Health Care, a huge provider of Medicare and Medicaid programs. His $5.7 billion bet makes a lot of sense if you believe that the Affordable Care Act — otherwise known as Obamacare — will not be repealed.

Mitt Romney has pledged to repeal the act “on my first day if elected,” so any gamble that Obamacare stays intact could be fairly described as a wager that President Obama will remain in office.

At a minimum, the stock market, which is an indicator of future earnings, seems to be in disagreement, at least somewhat, with the steady drumbeat of C.E.O.’s and investors who have said that President Obama’s administration, in the words of Daniel Loeb, the outspoken activist hedge fund investor, “is openly hostile to most businesses and unable to articulate or implement policies to spark growth and reduce unemployment.”

Mr. Loeb is a frustrated Obama voter who now backs Mr. Romney.

But take a look at some of his most recent investments in the health care field. In the last quarter, he reported in Securities and Exchange Commission filings, he picked up shares of Aetna, Cigna, Humana, UnitedHealth and WellPoint, among others. All of those companies stand to benefit while Obamacare remains in force; a repeal of the bill could send those shares reeling.

Aetna is not the only company to make a bet on the White House. WellPoint agreed to acquire Amerigroup for $5 billion in July, just a little over a week after the Supreme Court’s decision to uphold the Affordable Care Act. Before that, Cigna paid $3.8 billion for HealthSpring in another bet on the expansion of Medicaid and Medicare.

Companies like Aetna, WellPoint and Cigna have all gravitated to rivals with a foothold in government-sponsored programs because the prevailing view is that margins for private customers are going to steadily erode. According to Aetna on Monday, the acquisition of Coventry will “substantially increase Aetna’s Medicaid footprint, creating more opportunity to participate in the expansion of Medicaid and to pursue high acuity positions as they move into managed care.” Aetna’s revenue from the government will jump to 30 percent from 23 percent.

David Einhorn of Greenlight Capital recently made the contrarian case that companies like Cigna would actually do better if the law were to be repealed, ostensibly because of the margin compression that is likely as a result of the new law.

“While the stocks are already cheap, there is the additional unpriced upside in the possibility that the election changes the political landscape, resulting in a possible modification or repeal of Obamacare,” he wrote in a letter to investors last month.

Still Mr. Einhorn, through smarts or luck, made a big investment in Coventry in the last quarter. With the sale to Aetna, irrespective of his investment thesis, Mr. Einhorn’s firm just made about $72 million.

http://dealbook.nytimes.com/2012/08/20/investors-in-health-care-seem-to-bet-on-incumbent/

Comment: 

By Don McCanne, MD

Although this article suggests that presidential election politics may influence the future of the private health insurance industry, the message is really nonpartisan. No matter who is elected president, there will be a lot on money to be made by investing in private insurers. Regardless of the election outcome, this message is terrible news for the patients in our health care system.

HCA hasn't changed

A Giant Hospital Chain Is Blazing a Profit Trail

By Julie Creswell and Reed Abelson
The New York Times, August 14, 2012

During the Great Recession, when many hospitals across the country were nearly brought to their knees by growing numbers of uninsured patients, one hospital system not only survived — it thrived.

In fact, profits at the health care industry giant HCA, which controls 163 hospitals from New Hampshire to California, have soared, far outpacing those of most of its competitors.

The big winners have been three private equity firms — including Bain Capital, co-founded by Mitt Romney, the Republican presidential candidate — that bought HCA in late 2006.

The financial performance has been so impressive that HCA has become a model for the industry. Its success inspired 35 buyouts of hospitals or chains of facilities in the last two and a half years by private equity firms eager to repeat that windfall.

HCA’s emergence as a powerful leader in the hospital industry is all the more remarkable because only a decade ago the company was badly shaken by a wide-ranging Medicare fraud investigation that it eventually settled for more than $1.7 billion.

Among the secrets to HCA’s success: It figured out how to get more revenue from private insurance companies, patients and Medicare by billing much more aggressively for its services than ever before; it found ways to reduce emergency room overcrowding and expenses; and it experimented with new ways to reduce the cost of its medical staff, a move that sometimes led to conflicts with doctors and nurses over concerns about patient care.

In late 2008, for instance, HCA changed the billing codes it assigned to sick and injured patients who came into the emergency rooms. Almost overnight, the numbers of patients who HCA said needed more care, which would be paid for at significantly higher levels by Medicare, surged.

As HCA’s profits and influence grew, strains arose with doctors and nurses over whether the chain’s pursuit of profit may have, at times, come at the expense of patient care.

http://www.nytimes.com/2012/08/15/business/hca-giant-hospital-chain-creates-a-windfall-for-private-equity.html?_r=2&hp&pagewanted=all

Comment:

By Don McCanne, MD

Nobody expected the for-profit HCA hospital chain to change its fundamental practices. It hasn’t. It is an investor-owned corporation designed to make money, which it does very effectively. The PNHP model of single payer reform calls for an end to for-profit, investor-owned corporations in health care. You need only to read this fairly long article to understand why.

HCA hasn’t changed

A Giant Hospital Chain Is Blazing a Profit Trail

By Julie Creswell and Reed Abelson
The New York Times, August 14, 2012

During the Great Recession, when many hospitals across the country were nearly brought to their knees by growing numbers of uninsured patients, one hospital system not only survived — it thrived.

In fact, profits at the health care industry giant HCA, which controls 163 hospitals from New Hampshire to California, have soared, far outpacing those of most of its competitors.

The big winners have been three private equity firms — including Bain Capital, co-founded by Mitt Romney, the Republican presidential candidate — that bought HCA in late 2006.

The financial performance has been so impressive that HCA has become a model for the industry. Its success inspired 35 buyouts of hospitals or chains of facilities in the last two and a half years by private equity firms eager to repeat that windfall.

HCA’s emergence as a powerful leader in the hospital industry is all the more remarkable because only a decade ago the company was badly shaken by a wide-ranging Medicare fraud investigation that it eventually settled for more than $1.7 billion.

Among the secrets to HCA’s success: It figured out how to get more revenue from private insurance companies, patients and Medicare by billing much more aggressively for its services than ever before; it found ways to reduce emergency room overcrowding and expenses; and it experimented with new ways to reduce the cost of its medical staff, a move that sometimes led to conflicts with doctors and nurses over concerns about patient care.

In late 2008, for instance, HCA changed the billing codes it assigned to sick and injured patients who came into the emergency rooms. Almost overnight, the numbers of patients who HCA said needed more care, which would be paid for at significantly higher levels by Medicare, surged.

As HCA’s profits and influence grew, strains arose with doctors and nurses over whether the chain’s pursuit of profit may have, at times, come at the expense of patient care.

http://www.nytimes.com/2012/08/15/business/hca-giant-hospital-chain-creates-a-windfall-for-private-equity.html?_r=2&hp&pagewanted=all

Comment:

By Don McCanne, MD

Nobody expected the for-profit HCA hospital chain to change its fundamental practices. It hasn’t. It is an investor-owned corporation designed to make money, which it does very effectively. The PNHP model of single payer reform calls for an end to for-profit, investor-owned corporations in health care. You need only to read this fairly long article to understand why.

First, do no harm. Second, nationalize

By Teryl Zarnow, columnist
The Orange County Register, Aug. 17, 2012

It sounds like a golden age in medical care.

You went to the doctor and received medical care. You didn’t jump through hoops such as prior authorization, referrals, or network providers.

“Insurance didn’t interfere,” recalls Dr. Don McCanne, who practiced family medicine for 31 years in San Clemente before retiring in1997. “You just took care of the patient.”

Then in the 1990s came the “managed care revolution.”

Suddenly, he says, the private sector “intruded in the relationship between the physician and the patient.”

In his practice, McCanne worked evenings and weekends to treat the poor or undocumented without health insurance. Today he sees the same problems getting worse: Medical costs have soared, and many people still don’t have access to health care.

McCanne, now 74, volunteers as a policy fellow for Physicians for a National Health Program (PNHP) where he was a past president. His group favors a single-payer national health program often called “Improved Medicare for All.”

It’s not socialized medicine, just socialized insurance.

I can’t decide if the doctor is out of touch with reality or a prophet in blue jeans.

•••

The idea is to take health insurance down to the studs.

The Patient Protection and Affordable Health Care Act, which survived a judicial cliffhanger in the Supreme Court, only remodeled the existing structure.

McCanne believes the act corrects several issues, but doesn’t go far enough. His group’s position is that when the law is fully implemented in 2017, more people will be insured, but under plans that won’t provide adequate coverage. Many low-income families could be left out altogether, and medical costs will continue to rise.

“It didn’t fix the system,” he says.

McCanne describes an alternative that sounds stunning in its simplicity:

Everyone would be automatically enrolled in a national health plan at birth. There would be no deductible, no out-of-pocket, no coinsurance, and no networks. It’s similar to Canada’s national insurance.

“It returns choice to the patient and removes monetary barriers to care.”

Doctors and hospitals would deal with only one plan, cutting administrative costs and improving planning. Today, McCanne notes, 31 cents of every health care dollar is spent on administrative costs.

We would pay for this insurance through an employer payroll tax and income tax. Physicians for a National Health Program believes most taxpayers would spend less than they do now.

The passion of McCanne and others seems to be fueled by front-line exposure.

This summer a group of doctors and nurses caravanned across California to rally support for national insurance. Participants included PNHP, as well as Campaign for a Healthy California and the California Nurses Association.

Sharon Speck, a pediatric trauma nurse at UCI Medical Center, was on the tour. She doesn’t see herself as a radical, more as a compassionate advocate for her patients.

She remembers a 5-year-old who died from leukemia, without the bone marrow transplant that might have saved his life. His insurance didn’t cover it.

“It’s a social justice issue,” Speck says. “I think something’s got to change.”

•••

McCanne doesn’t seem like a doctor who could hustle you in and out of his office in seven minutes without making eye contact. He also doesn’t seem like a policy wonk.

The son of a doctor, he seems like a guy fundamentally offended by the way things work today. Too many uninsured patients came to him too late, ignoring a malady until it has reached a late stage.

“We are the only nation that rations health care based on ability to pay… As a doctor, if someone needs health care, I give them health care. That’s just the way it should be.”

McCanne’s group – a non-partisan think tank that seeks to educate the public about what works and what doesn’t work in health reform — believes we won’t control health care costs until we reform the way we pay for them. The group estimates a single, national insurance plan could save over $400 billion per year in administrative costs.

McCanne also argues we should stop allowing medical costs to drive families into bankruptcy.

“Half of all personal bankruptcies have medical debt as a contributor and of those … three-fourths were insured… so insurance is not providing the financial protection it’s supposed to.”

I see the logic, but isn’t it a little naive to think the insurance industry and lawmakers are going to fall into line behind a change simply because it makes sense?

“I’m a pragmatic idealist,” he responds. “I’m not for incrementalism, which doesn’t work at all. … Or for supporting legislation because it’s what we can get passed….

“We support policy that really works.”

A little perspective helps.

Hard to remember, for example, the American Medical Association was originally against Medicare. California’s Legislature has twice passed statewide single payer insurance bills, vetoed by the governor in 2006 and 2008.

The argument catches my eye now because it’s backstroking upstream. Vice presidential candidate Paul Ryan would introduce private insurance back into Medicare. At a time when we’re prioritizing shortages, these folks argue against settling.

McCanne sees obstacles in today’s more conservative political climate, for sure. Most people who are covered by an employee plan, he believes, don’t want to change what they already have for something that sounds uncertain.

Ultimately, though, he believes a single-payer plan will prevail. He thinks the day will come when people will view their health insurance, like Social Security, as another entitlement.

“I don’t hold high ideals. The nation holds low ideals on what our health care should be. We should just be doing it right.”

In McCanne’s upstairs office, underneath the Hippocratic Oath hanging on the wall, is a model of David and Goliath. Against the odds, David scored a knockout.

For information visit: www.pnhp.org.

http://www.ocregister.com/articles/health-368877-insurance-care.html

Journal editorial: Pay-for-performance a faulty policy in medicine

By Chelsea Conaboy
The Boston Globe, White Coat Notes, Aug. 15, 2012

Programs that reward doctors and hospitals for hitting certain quality targets are being rolled out in Massachusetts and across the country. A major focus of the health care law signed by Governor Deval Patrick last week is that doctors should be paid for keeping patients healthy, rather than for the volume of tests or treatments they order. Yet, several recent publications question whether pay-for-performance systems actually lead to better care for patients.

The programs are meant to push doctors to think about a patient’s overall care and to consistently do things that are thought to improve health outcomes, such as give appropriate counseling to people with heart conditions or timely antibiotic treatment to people with pneumonia.

A review of seven studies of primary care programs that paid doctors extra for meeting certain targets, published by the Cochrane Collaboration in September, was inconclusive about the effect on quality of care. “Implementation should proceed with caution,” the authors wrote.

A study published in March in the New England Journal of Medicine found that a large Medicare pilot program that paid providers more if they met certain process targets — and docked pay for those who did poorly — did not reduce short-term patient mortality rates. A version of the program is being rolled out nationally. The authors of the paper called the results “sobering.”

In an editorial published Tuesday in BMJ, formerly known as the British Medical Journal, two public health professors and a best-selling author in the field of behavior economics explain why they think paying doctors more based on quality metrics is inherently problematic.

Hospitals and doctors can easily change their reporting practices to improve their quality scores, they wrote. And financial incentives can undermine doctors’ intrinsic desire to help their patients, Drs. David Himmelstein and Steffie Woolhandler, both professors at City University of New York and visiting professors at Harvard, and Duke University Professor Dan Ariely wrote.

Himmelstein and Woolhandler are long-time advocates for a national health system. Ariely is an author of several books, including The (Honest) Truth about Dishonesty.

“Incentives may mutate honesty into legal trickery; gaming can so thoroughly distort reality that rewards become uncoupled from performance,” they wrote.

The idea that people will be motivated to do better if they are paid more as a result may seem like common sense, but medicine is complex, Himmelstein said. Often the measures used to determine success do not match the conditions of care or patient outcomes the program is meant to address, he said. The editorial points to trouble the government has faced in accurately measuring avoidable readmissions, when patients return to the hospital soon after being discharged because they do not receive the appropriate follow-up care.

Himmelstein said other fields have struggled with pay-for-performance programs. Under national education policy, schools that score poorly on standardized tests receive less funding.

“They’re the ones who need it most,” Himmelstein said. “Is the right reaction to poor quality that those institutions need fewer resources, not more?”

The editorial accompanied a paper by Australian researchers outlining criteria that quality standards should meet in order to be used in a pay-for-performance program, starting with whether the metric actually results in better health for patients.

http://www.boston.com/whitecoatnotes/2012/08/15/journal-editorial-pay-for-performance-faulty-policy-medicine/kPo1dkw2StIcksYhDMHijL/story.html

Medical journal cautions that 'pay for performance' may adversely affect health care

By Bill Toland
Pittsburgh Post-Gazette, Aug. 15, 2012

With insurers and Medicare hoping that they can cajole doctors and hospitals into providing better care by paying them for good performance, a pair of articles in a top medical journal is now arguing the opposite — that so-called “pay for performance” programs can have a detrimental effect, prompting some physicians to game the system in order to bring about desired results.

Insurers have their own evidence suggesting that paying doctors and hospitals extra money for carrying out certain standardized procedures can bring about improvements in quality, but the writers whose work appears in the peer-reviewed British Medical Journal this morning say that the long-term effect on patient outcomes is unclear.

“Despite a dearth of robust evidence that [pay-for-performance] is clinically effective in health care, payers charge ahead with implementing everywhere an intervention that has proven to work nowhere,” the authors wrote in an editorial that accompanies the main analysis.

Pay-for-performance programs presume that “as long as we just arrange the incentives correctly, people will figure out the exact things to do to maximize the revenue,” said Dan Ariely, one of the authors and a professor of behavioral economics at Duke University.

Often, they do figure it out — but while they are being rewarded for certain outcomes and processes, they are “neglecting some of their [other] obligations,” Mr. Ariely said.

In their editorial, the writers — several of whom are affiliated with Physicians for a National Health Program, which advocates for a single-payer health plan — note that “a growing body of evidence from behavioral economics and social psychology indicates that rewards can undermine motivation and worsen performance.”

The editorial also differentiates between “process-based” incentives — those tied to certain tasks — and “outcomes-based” incentives, which reward or punish a health care provider based on patient results.

Outcomes-based incentives are inherently less fair because they can reward, or punish, a provider for results or risk factors that may be partly out of their control. Some of the incentive schemes try to adjust for those risk factors, but that, too, can lead to unintended consequences.

For example, if a hospital knows that it can earn higher incentive payments by getting better outcomes on more complex medical cases, that can lead to “upcoding,” a practice wherein one diagnosis is re-coded as a more serious one. “Embellishing diagnoses [makes] patients seem sicker on paper, and hence boosts risk adjusted quality scores,” the paper said.

What about the many insurers that tout, say, vastly reduced Methicillin Resistant Staphylococcus Aureus (MRSA) infections and central-line bloodstream infection rates as evidence that pay-for-performance systems are working at hospitals?

“That’s not a scientific method,” said Steffie Woolhandler, a physician and professor of public health at the City University of New York.

A reduced infection rate does not necessarily mean that the payment was specifically responsible for the reduction — in other words, correlation does not equal causation.

Carey Vinson, vice president of quality and medical performance management at Pittsburgh’s Highmark Inc., said that the papers’ concerns are well-known in medical circles and, in some cases, well-founded. “There are limitations to research showing” the effectiveness of pay-for-performance, Dr. Vinson said.

But he also noted that there is plenty of evidence to suggest the current “fee-for-service” model, which reimburses hospitals and doctors for every test and unit of care, isn’t working, either.

“We agree that we’re not there yet,” he said. Insurers must take caution in designing and implementing performance programs, he said, and insurers and providers alike have to find a better way to link quality to payments.

One attempt to do so is Medicare’s new program that will penalize hospitals, starting Oct. 1, if their “preventable” readmission rates are too high, meaning patients are reentering the hospital too soon after discharge.

According to an analysis by Kaiser Medical News, more than 2,000 hospitals nationwide will be penalized, including more than 100 in Pennsylvania and most of the hospitals in southwestern Pennsylvania.

Dr. Woolhandler, and others, argue that “penaliz[ing] low-scorers can make matters worse, effectively punishing patients who have nowhere else to go,” especially those in urban and low-income areas.

Read the editorial at https://pnhp.org/docs/nc/bmj-incentives-edit.pdf.

Read more: http://www.post-gazette.com/stories/business/news/top-journal-dont-bet-on-performance-pay-649020/#ixzz246MNZ730

Medical journal cautions that ‘pay for performance’ may adversely affect health care

By Bill Toland
Pittsburgh Post-Gazette, Aug. 15, 2012

With insurers and Medicare hoping that they can cajole doctors and hospitals into providing better care by paying them for good performance, a pair of articles in a top medical journal is now arguing the opposite — that so-called “pay for performance” programs can have a detrimental effect, prompting some physicians to game the system in order to bring about desired results.

Insurers have their own evidence suggesting that paying doctors and hospitals extra money for carrying out certain standardized procedures can bring about improvements in quality, but the writers whose work appears in the peer-reviewed British Medical Journal this morning say that the long-term effect on patient outcomes is unclear.

“Despite a dearth of robust evidence that [pay-for-performance] is clinically effective in health care, payers charge ahead with implementing everywhere an intervention that has proven to work nowhere,” the authors wrote in an editorial that accompanies the main analysis.

Pay-for-performance programs presume that “as long as we just arrange the incentives correctly, people will figure out the exact things to do to maximize the revenue,” said Dan Ariely, one of the authors and a professor of behavioral economics at Duke University.

Often, they do figure it out — but while they are being rewarded for certain outcomes and processes, they are “neglecting some of their [other] obligations,” Mr. Ariely said.

In their editorial, the writers — several of whom are affiliated with Physicians for a National Health Program, which advocates for a single-payer health plan — note that “a growing body of evidence from behavioral economics and social psychology indicates that rewards can undermine motivation and worsen performance.”

The editorial also differentiates between “process-based” incentives — those tied to certain tasks — and “outcomes-based” incentives, which reward or punish a health care provider based on patient results.

Outcomes-based incentives are inherently less fair because they can reward, or punish, a provider for results or risk factors that may be partly out of their control. Some of the incentive schemes try to adjust for those risk factors, but that, too, can lead to unintended consequences.

For example, if a hospital knows that it can earn higher incentive payments by getting better outcomes on more complex medical cases, that can lead to “upcoding,” a practice wherein one diagnosis is re-coded as a more serious one. “Embellishing diagnoses [makes] patients seem sicker on paper, and hence boosts risk adjusted quality scores,” the paper said.

What about the many insurers that tout, say, vastly reduced Methicillin Resistant Staphylococcus Aureus (MRSA) infections and central-line bloodstream infection rates as evidence that pay-for-performance systems are working at hospitals?

“That’s not a scientific method,” said Steffie Woolhandler, a physician and professor of public health at the City University of New York.

A reduced infection rate does not necessarily mean that the payment was specifically responsible for the reduction — in other words, correlation does not equal causation.

Carey Vinson, vice president of quality and medical performance management at Pittsburgh’s Highmark Inc., said that the papers’ concerns are well-known in medical circles and, in some cases, well-founded. “There are limitations to research showing” the effectiveness of pay-for-performance, Dr. Vinson said.

But he also noted that there is plenty of evidence to suggest the current “fee-for-service” model, which reimburses hospitals and doctors for every test and unit of care, isn’t working, either.

“We agree that we’re not there yet,” he said. Insurers must take caution in designing and implementing performance programs, he said, and insurers and providers alike have to find a better way to link quality to payments.

One attempt to do so is Medicare’s new program that will penalize hospitals, starting Oct. 1, if their “preventable” readmission rates are too high, meaning patients are reentering the hospital too soon after discharge.

According to an analysis by Kaiser Medical News, more than 2,000 hospitals nationwide will be penalized, including more than 100 in Pennsylvania and most of the hospitals in southwestern Pennsylvania.

Dr. Woolhandler, and others, argue that “penaliz[ing] low-scorers can make matters worse, effectively punishing patients who have nowhere else to go,” especially those in urban and low-income areas.

Read the editorial at https://www.pnhp.org/sites/default/files/docs/nc/bmj-incentives-edit.pdf.

Read more: http://www.post-gazette.com/stories/business/news/top-journal-dont-bet-on-performance-pay-649020/#ixzz246MNZ730

Republicans join Democrats in supporting Medicare as a defined benefit program

Republicans, like Democrats, opposed to cutting Medicare benefits, wary of privatization

Kaiser Health Tracking Poll
August 2012

When it comes to Medicare, one of the most notable aspects of Republicans’ views is how uncharacteristically similar they are to those of Democrats and Independents, according to this month’s Post/Kaiser poll. A large majority of Republicans (69 percent) say they are opposed to reducing Medicare benefits, even in the service of debt reduction. At the same time, roughly six in ten Republicans would support cuts in benefits if they were targeted only at high income seniors. In both cases, these views put Republicans on the same side of the issue as Democrats, a rare occurrence of late.

At the same time, a majority of Republicans (55 percent) currently say they prefer that Medicare continue as a defined benefits program, rather than changing to a system in which seniors are guaranteed a fixed amount of money to be used to buy coverage either from Medicare or from a private plan, an option supported by 39 percent of Republicans. Here again, the balance of opinion among Republicans puts them closer to the views of Democrats and Independents than usual in this area. The issue is set up to be an important one this fall given Representative Ryan’s advocacy of moving toward some sort of premium support model, though both Representative Ryan and Governor Romney have explicitly stated that any such change would not impact today’s seniors but would take effect for younger people when they become eligible for Medicare in the future.

Democrats share with Republicans a preference for keeping Medicare as it is rather than switching to a premium support system (68 percent prefer to keep the current system, compared to 29 percent that would back the change). They are also opposed to cutting Medicare benefits as a way to reduce the federal budget deficit (85 percent oppose), unless those cuts are targeted only at the rich, in which case two in three would be supportive.

http://www.kff.org/kaiserpolls/upload/8342-F.pdf

Comment:  

By Don McCanne, MD

A large majority of Americans, regardless of political affiliation, are supportive of Medicare and do not want to see its benefits reduced, nor do they want it privatized through a defined contribution, premium support, or voucherized program. As dissatisfaction with our current dysfunctional health care financing system increases, it is inevitable that the public will eventually support an improved Medicare for everyone.

One concern in this poll is that Republicans and Democrats alike believe that Medicare benefits should be reduced for the wealthy. That would be a terrible mistake, and not only because of the administrative headache that would be created trying to match benefits with labile incomes. The wealthy will have to contribute more, but that should be done through progressive tax policies that are used to finance the entire system. The full complement of benefits should always be there for all of us, reinforcing the importance of social solidarity that is characteristic of the very successful health care programs in other nations.