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Health reform devolves into ‘unaffordable under-insurance’

By Roger Bybee
In These Times, Nov. 30, 2011

Health care reform in the shape of the 2010 Affordable Care Act was supposed to relieve working Americans of the burdens of rising health care costs as they struggle to survive the jobless recovery.

Instead, working Americans are being confronted with a profound deterioration in the health care system and the emergence of a disastrous new stage in America’s downward slide on health care.

“‘Unaffordable under-insurance’ is rapidly becoming the new standard in the United States,” Dr. Don McCanne, senior health policy fellow for Physicians for a National Health Program, told workinginthesetimes.com.

BIG SYMPTOM: 17% DROP IN VISITS TO DOCTOR

One of the most telling symptoms of the “new normal”: visits to physicians’ office have dropped a stunning 17 percent from the second quarter of 2009 to the second quarter of 2011, according to a recent Kaiser Family Foundation, McCanne said.

This drop in doctor visits illustrates how the ever-growing burden of health care costs — in the form of out-of-pocket deductibles and co-pays — is making Americans reluctant to seek care despite having the supposed protection of health insurance. “We know that a lot of people are foregoing beneficial treatments for conditions like diabetes, or not getting vital preventive services like Pap smears,” McCanne observed.

SHORT-TERM SAVINGS FOR INSURERS

As people’s health conditions grow in severity because of a lack of care at an early stage, the eventual cost of treatment will be much more costly and the chances of a healthy outcome reduced. With high-deductible insurance plans proliferating among pattern-setting large employers like General Electric, this pattern of unaffordable under-insurance will be well-established by the time that the Affordable Care Act is fully implemented in 2014 with health care exchanges created at the state level.

According to Dr. McCanne, the various levels of coverage offered under the ACA will leave working families with the same problem of increasingly skimpy insurance coverage that is too expensive to actually utilize. “The ‘bronze’ plan will have an ‘actuarial value’ of 60 percent, meaning that people will be paying 40 percent of their health care costs,” said McCanne.

FAMILIES CAN’T AFFORD 40% OF THEIR HEALTH COSTS

Government subsidies and maximums on out-of-pocket costs will provide some assistance, but it still appears that the bronze plan will mean that consumers pay about 40 percent, he stated. The “silver” plan covers 70 percent [i.e. does not cover 30 percent] of health care costs, but the premiums will be higher, and most consumers will probably be drawn to bronze plan. But there is little likelihood that health care insurance premiums will remain stable under the bronze plan or any other option under ACA.

Even with usage of insurance declining, fueling huge profits, insurers in California and elsewhere have been jacking up premiums, noted McCanne.

Given the vast imbalance between workers and capital, corporations have been able to force workers to swallow the premium increases, with workers’ share of health care costs rising 63 percent between 2003 and 2007. With no effective cost controls contained in the Affordable Care Act — which, after all, was drafted by WellPoint insurance lobbyist Liz Fowler working alongside the insurers’ pet poodle Senate Finance Chair Max Baucus (D-Montana) — the problem of “unaffordable under-insurance” is only going to snowball as we head toward the era of “reform.”

DISAPPOINTING RESULTS FOR ACA THUS FAR

While the ACA has raised hopes that some of the worst abuses of the for-profit insurance industry will be curbed, McCanne and his colleagues at the PNHP caution that insurers are likely to easily circumvent regulations and that the ACA will be able to keep health care affordable.

For example, the ACA’s program for people with pre-existing conditions has enrolled a mere fraction of those expected to sign up, as insurance remains prohibitively expensive.

SYSTEM LIKELY TO BE MORE STRATIFIED BY INCOME

Overall, McCanne said, we appear to be headed toward a new health crisis where most people find themselves among the ranks of the “unaffordable under-insured” and health care is increasingly delivered in a rigidly-tiered system based on ability to pay.

Poor people depending on Medicaid will be especially hard-hit as the new breed of conservative governors exemplified by Wisconsin’s Scott Walker slash the Medicare rolls while increasing corporate tax breaks. The limitations of ACA-style reform – which which the Obama Administration chose to build around the mammoth and unproductive bureaucracy of the for-profit insurance industry – are becoming increasingly apparent. As PNHP leaders pointed out after the passage of the ACA, “The much-vaunted insurance regulations – e.g. ending denials on the basis of pre-existing conditions – are riddled with loopholes, thanks to the central role that insurers played in crafting the legislation. “

ACA’S OVER-TOUTED FEATURES

Some of the most highly-touted features of the ACA features contain built-in problems, they noted. For example, “Older people can be charged up to three times more than their younger counterparts, and large companies with a predominantly female workforce can be charged higher gender-based rates at least until 2017.”

Moreover, “About 23 million people will remain uninsured nine years” into ACA’s existence.

At the same time, the affordability and coverage of those with insurance will continue to deteriorate – until the bottom 99 percent start to rebel against a health system shaped to maximize the profits of insurers who seek to minimize care. The Occupy movement offers a hopeful sign that Americans are recognizing that the health care system, like other U.S. institutions, functions to benefit the top 1 percent at the expense of the vast majority, McCanne said.

For Dr. McCanne and fellow health professionals in Physicians For a National Health Program, the downward spiral in health care will finally end only with the U.S. installing a Canadian-style “Medicare for all” single-payer system that puts a halt to the machinations of for-profit insurers.

http://www.inthesetimes.com/working/entry/12348/health_reform_runs_into_unaffordable_under-insurance/

Clarification by Don McCanne: It is correct that the actuarial value of the bronze plans offered by the state exchanges is 60 percent, meaning that the insurer does not pay for 40 percent of the allowed costs. For those with incomes under 400 percent of the federal poverty level, cost sharing subsidies are provided, indexed to income. Also, there is an annual limitation on the total amount of cost sharing for benefits covered by the exchange plans (based on coverage requirements for health savings accounts).

What is not included are any health care services and products that are not specified in the plan as covered benefits. Also, any services that are received from providers outside of the plan networks may be excluded. These omissions can result in very high additional costs for which the patient is 100 percent responsible. An example might be a $100,000 cancer drug that the insurer conveniently labels as “experimental” and therefore not covered. Non-covered and out-of-network services can easily result in the patient having to pay 40 percent or more of the total health care bill.

Less care for fewer and fewer

By Helen Redmond
Healthcare-Now blog, Nov. 29, 2011

Evidence of how bad the U.S. health care crisis has gotten continues to pile up. And with the federal government preparing to impose automatic cuts in the Medicare health program for the elderly and Medicaid health program for the poor, it will only grow worse – unless something is done to change the direction.

A new study by the Commonwealth Fund found that the U.S. ranks last among high-income nations in preventable deaths. Up to 84,000 people die every year because they lack access to health care.

The economic crisis has led to unprecedented numbers of people losing employment-based health coverage, alongside the meltdown of the Medicaid program because of ongoing cuts at the state level. Both are drivers behind another statistic: Over 51 million Americans are uninsured, an all-time high.

Meanwhile, there is an unrelenting, bipartisan attack on Medicaid and Medicare. Instead of putting Pentagon spending on the chopping block, ending the trillion-dollar war in Afghanistan or closing tax loopholes for corporations like General Electric, which paid no taxes on $5.1 billion in profits in 2010, political leaders are ready to accept major cuts in medical care for the poor and elderly as a way of cutting the deficit.

Congress’ “supercommittee” failed to reach an agreement on proposals to reduce the federal government’s budget shortfall by $1.2 trillion, as stipulated with the deal that ended the debt-ceiling debacle over the summer. As a result, automatic spending cuts will be triggered, starting in 2013.

During their meetings, the six Democrats on the supercommittee offered a mind-boggling package of deficit-reduction measures, worth between $2.5 trillion and $3 trillion, according to press reports. All told, the Democrats recommended $400 billion in Medicare “savings,” half of which would have come from reducing benefits.

The Democrats couldn’t get Republicans to go along with their proposals, which included some tax increases to reduce the deficit. But if the deal had gone through, the cuts proposed for Medicare would have devastated the program. Cost-sharing is already far too high a burden on retirees living on fixed incomes. The cuts being sold today as “savings” would force seniors to pay more out-of-pocket, and threaten to push more into poverty and bankruptcy.

For their part, the Republicans hoped to use supercommittee negotiations not only for deeper cuts, but to push ahead on privatizing Medicare.

Rep. Jeb Hensarling, the Republican co-chair of the supercommittee, offered to negotiate on the basis of a bipartisan proposal developed by former Sen. Pete Domenici, a Republican, and former Clinton administration budget official Alice Rivlin, a Democrat, that would give seniors a choice between traditional Medicare procedures and a voucher system to buy insurance on the private market.

That effort likewise failed when the supercommittee couldn’t reach a deal, but the direction of negotiations is clear: speed up the privatization of Medicare, transfer more taxpayer money to private insurers via “premium subsidies,” and get rid of the idea that health care for seniors is an entitlement guaranteed by the government.

– – – – – – – – – – – – – – – –

LIKEWISE, THE Medicaid health program for the poor and disabled is undergoing privatization measures on the state level all the time, with more and more recipients transferred into managed-care plans. In Illinois, for example, Democratic Gov. Pat Quinn forced 40,000 elderly and disabled Medicaid recipients into HMOs run by Aetna and Centene. HMOs are notorious for restricting and denying care in order to boost profits.

Every state is taking a knife to Medicaid, and hundreds of thousands of recipients have been cut off in the drive to balance state budgets–all with the approval of the federal government under the leadership of President Barack Obama.

In California, for example, the Obama administration recently gave approval for huge cuts to Medi-Cal, a state program covering 7.6 million people that already spends less per recipient than any other state. Payments to doctors, dentists, clinics and nursing homes will be reduced–thus accelerating the dangerous national trend of dwindling numbers of health care providers willing to accept Medicaid patients because of low reimbursement rates.

In Arizona, the Feds approved a series of changes that include more co-pays for services, a fee for missed appointments and elimination of screening and treatment benefits for 19- and 20-year-old childless adults.

Meanwhile, employers are shifting more of the cost of health care onto workers–when they aren’t eliminating coverage completely.

Wal-Mart’s famous slogan “Save money. Live better” certainly doesn’t apply to its employees. The company recently announced that future part-time workers who put in less than 24 hours a week will no longer be eligible for company insurance plans. Employees who work more hours can no longer add spouses to their health plans. As the /New York Times/ reported:

Barbara Collins, a sales associate at the Wal-Mart in Placerville, Calif., said that the premiums for the HMO plan for herself and her 5-year-old son would rise to $18 every two weeks from $10. Her big concern, she said, was that her deductible would jump to $5,000 a year, from $1,000 – a daunting amount considering she earns $19,000 a year. “I don’t know how I’ll be able to afford it if I go to a doctor or to physical therapy,” she said. While Wal-Mart workers and their partners lose health coverage, or have to chose between paying a deductible or paying the rent, Alice Walton, heiress to the Wal-Mart fortune and certified member of the 1 percent, just opened Crystal Bridges Museum of American Art in Bentonville, Arkansas. The Walton Family Foundation contributed $800 million to build the museum – and Alice Walton reportedly paid $35 million for one painting.

As Wal-Mart shows, the employment-based system of health coverage is highly unstable and a disaster for workers because it links health care to having a full-time job. When the economy is booming, that’s less of a problem, but when the economy goes bust and unemployment rises, millions of workers lose coverage.

That’s when the health-care horror stories, of which there is never a shortage, begin to defy belief.

James Richard Verone’s horror story is both heartbreaking and infuriating. Afte
r 17 years at Coca-Cola, he was laid off from his job and lost his insurance. He developed a growth in his chest and had two ruptured discs in his back. The 59-year-old was in chronic pain. Desperate for relief, Verone planned a bank robbery, knowing that once incarcerated, he’d be entitled to health care. He quietly handed the bank teller a note demanding $1 and medical care. Verone then sat down and waited for the police to arrive.

– – – – – – – – – – – – – – – –

The much-ballyhooed Patient Protection and Affordable Care Act (PPACA), passed by Congress and signed into law by Barack Obama in 2011, is under attack.

An army of health insurance company lobbyists is working stealthily behind the scenes in every state – and openly with Health and Human Services Secretary Kathleen Sebelius at the federal level – to define the law’s regulations and gut any that limit the industry’s ability to determine benefits and make profits.

Wendell Potter, the former public relations director for insurance giant Cigna-turned-whistleblower, described one of the latest “interpretations” of the law that will benefit the industry:

Consumer advocates who have been in meetings at the White House in recent weeks say they believe the administration is bending over backward to accommodate the insurers. … They expressed concern that the final regulations would allow insurers to stack the decks against patients by allowing health plans to deem a second-level internal appeal of a denial as meeting the requirement for an independent external appeal.

One of the first provisions of the PPACA eliminated after the act became law was a long-term care benefits program called Community Living Assistance Services and Supports (CLASS).

Championed by the late Sen. Edward Kennedy, CLASS was meant to provide support so the elderly and disabled could stay at home, rather than move into nursing homes. The program was made a part of the PPACA as a tribute to Kennedy. But insurance industry lobbyists objected that the program was too costly, and Sebelius apparently agreed, announcing in October that the administration would not implement the CLASS program.

Meanwhile, the industry is on the verge of gutting the medical-loss ratio (MLR) rule. The MLR requires insurance companies to spend at least 80 percent of premiums on medical care – and if they don’t, the money must be rebated to policyholders.

Insurers hate the MLR rule for obvious reasons – they want to spend less on providing actual health care so they can increase returns for profits and salaries for executives. So lobbyists have been hard at work twisting arms at the state and federal level.

They may have gotten their way. The National Association of Insurance Commissioners (NAIC) – an organization representing the chief insurance regulators in all 50 states – voted to send a resolution to Congress in support of suspending or changing the calculation of the MLR.

If Congress agrees, $1 billion in expected rebates would be cancelled and the MLR rule voided. Lynn Quincy of the watchdog group Consumers Union said of the decision: “This is a serious setback in the struggle to protect consumers. … It is also a step back for working families.”

The insurance industry’s toxic influence can be seen as well in the actions of the prestigious Institute of Medicine (IOM).

The IOM was tasked by Sebelius with formulating a package of essential health benefits to be offered by private health plans sold through the state insurance exchanges that will be set up under the PPACA.

Incredibly, the IOM recommended a set of benefits modeled on the skimpy, high co-pay, high-deductible coverage that small businesses currently offer – and that millions of workers can’t afford. Physicians for a National Health Program (PNHP) sent an open letter with over 2,000 signatures to the Obama administration opposing the recommendations. It stated:

We protest the Institute of Medicine’s (IOM) recommendation that cost rather than medical need be the basis for defining the “essential benefits” that insurance policies must cover when the federal health reform law takes effect in 2014. … The inadequate coverage the IOM recommends would shift costs from corporate and government payers onto families already burdened by illness.

So why did the respected IOM make such an awful recommendation? Could it have anything to do with the $2 million donation to the IOM from Leonard D. Schaeffer, CEO of insurance giant WellPoint?

– – – – – – – – – – – – – – – –

WITH THE PPACA, insurance companies won both a mandate forcing everyone to have health coverage and no working cost controls that would inhibit their profits. They will be happy to underinsure millions of people with the $447 billion in taxpayer subsidies that will be transferred to their coffers under the PPACA.

Underinsurance is guaranteed profits for the insurance companies – and guaranteed misery and financial hardship for patients.

Especially during next year’s election campaign, the Obama administration will claim that more Americans will be insured under the PPACA. That may be true – but the real question is whether it’s legitimate to describe as “health insurance” policies with $15,000 annual deductibles, with out-of-pocket expenses ranging into the thousands of dollars, without comprehensive coverage.

People “insured” under these policies will very easily find themselves pushed into bankruptcy if they get sick – no different than the current system.

Another highly touted gain in the PPACA is the expansion of eligibility for Medicaid – an estimated 20 million people will be added to the program. But how can that happen when Medicaid funding is being slashed to the bone, providers are leaving the program in droves, and state governments are coming up with new ways to push people off the Medicaid rolls?

Barack Obama’s health care legislation is fundamentally flawed. Any provisions that would do some good in extending coverage to more people and limiting insurance company abuses are being eviscerated – while the health care industry stands to make a windfall from other parts of the law.

That’s the reality of the health care crisis in the U.S. today. But the insurers aren’t having it all their way. The greed of the corporations that own and control health care has been pushed back into the spotlight by the Occupy Wall Street movement.

Like the banks, the insurance industry is being exposed as part of the profit-
gouging 1 percent that is ripping off the 99 percent. Health care as a human right is among the Occupy movement’s demands, and nurses, doctors and other health care providers have joined the occupations, marched with protesters, organized teach-ins and provided on-site medical care.

The slogan “Health care for the 99 percent” can direct more people to the need for a single-payer, nonprofit, national health care system that includes everyone.

– – – – – – – – – – – – – – – – –

This article originally appeared in the Nov. 29 edition of Socialist Worker.

http://www.healthcare-now.org/less-care-for-fewer-and-fewer/

Occupy welcomes physician sharing vision for single-payer health system

By Zack Rubin
The Daily Tar Heel (Chapel Hill, N.C.), Dec. 5, 2011

Dr. Steve Auerbach has shared his vision for a single-payer health system with Occupy movements nationwide, and on Friday he brought it to Chapel Hill.

Auerbach, a pediatrician and a leader of the advocacy group Physicians for a National Health Program, pointed at a handwritten sign reading “Corporate greed makes us sick” while speaking to a crowd in Alumni Hall.

“It’s not a moral statement, it’s a matter of fact,” he said.

After his speech at the University, Auerbach and a crowd moved on to Peace and Justice Plaza outside the town’s courthouse to continue the discussion.

Auerbach’s speeches were part of a series of “teach-ins” being held across the country by “Health care for the 99 percent,” a branch of the Occupy Wall Street movement. He also spoke Saturday in Durham and Greensboro.

Auerbach discussed the role of insurance companies and lobbyists in health care. He criticized the fact that insurance companies might not cover people with certain conditions.

“If you take home one message, it’s this: You can’t make money insuring sick people,” he said. “That’s insane, it makes no sense.”

He said a single-payer health care system — where medical care for the entire population is funded by one entity, such as a government-run organization — would solve the inequality.

Some veterans of the Occupy movement viewed the speech and participated in the walk to Occupy Chapel Hill, including freshman Laura Carroll.

“I had been to some of the Occupy events before the raids happened, and I wanted to see how the movement shifted,” she said.

Other attendees said they were simply curious.

“I’ve sort of been watching from afar,” said freshman Mariah Earle. “My family always ridiculed the single–payer system, so I learned some actual factual things.”

Junior Addison Evans said speakers like Auerbach can spark conversation on campus.

“It is important to have informed debate,” said Evans, who received extra credit from her professor for attending.

Auerbach said he was glad to be part of the tradition of doctors advocating in civil rights movements.

“I consider myself extremely patriotic,” he said. “Despite 30 years of propaganda, the American people get it.”

http://www.dailytarheel.com/index.php/article/2011/12/occupy_welcomes_physician_sharing_vision_for_single_payer_health_system

Michael Dukakis on ACOs: "We tried that, folks. It didn’t work."

By Chelsea Conaboy
The Boston Globe, November 28, 2011

The creation of accountable care organizations or a global payment structure won’t fix the health care system in Massachusetts and make it more affordable, former governor Michael Dukakis told an audience at Harvard last week.

Speaking during the Harvard School of Public Health Voices from the Field series, Dukakis said urging the health care market to fix itself is “a colossal waste of time.”

Here’s an excerpt from the event:

“If we paid a little attention, it might be a good idea, to the experience of other countries around the world who are doing this and who, for some reason, seem to be able to provide rather good health care to their people at half the cost we do — whatever the siltstone, whether it’s Australian medicare or a multi-payer system in Germany or an essentially privatized system in Switzerland — every one of them regulates cost, without exception.

“What do we do? Come up with this ACO, global payment thing… We’ve done it. ACOs and global payments. What did we used to call them? HMOs and capitation. We tried that, folks. It didn’t work. Why are we doing it again?

“Now don’t get me wrong. Nobody loves having to regulate. We had something called the rate-setting commission when I was governor… We treated hospitals as public utilities. They couldn’t raise their rates a nickel unless they went to the rate-setting commission. We certainly didn’t have these huge disparities between what Partners gets and what the BI gets. Wouldn’t allow it. So, we’ve got to get on with the business of regulating costs. And I think the least bureaucratic way to do it, rather than getting into setting elaborate fee schedules and so forth, is essentially to use the authority we have in this state under the state insurance statutes to regulate the rate of increase and the cost of premiums… You’ve got to involve the key players – providers, consumers, legislators, and so forth – in the process of developing how we’re going to regulate and then carefully monitoring it so that, in point of fact, it works and works effectively and at the same time make sure that we provide people with excellent health care, which we do in this state.

“What I’m worried about is that we’re futzing around with new institutional arrangements, accountable care organizations.”

http://www.bostonglobe.com/lifestyle/health-wellness/2011/11/28/michael-dukakis-acos-tried-that-folks-didn-work/i6WTqNZOg8OB3fL170Y54I/story.html

Comment:

By Don McCanne, MD

Michael Dukakis certainly recognizes accountable care organizations as being merely a new variant of HMOs with capitation. He worries about us “futzing around” with ACOS, but we need to go him one better. Let’s quit “futzing around” with private insurers and establish an improved Medicare for everyone.

Health providers, advocates criticize Institute of Medicine on insurance recommendations

By Chelsea Conaboy, Globe Staff
Boston Globe, White Coat Notes, Dec. 1, 2011

More than 2,400 health care providers and advocates sent a letter to Secretary of Health and Human Services Kathleen Sebelius today objecting to recommendations made by a panel of the Institute of Medicine regarding what benefits must be covered in state health insurance marketplaces developed under the Affordable Care Act.

States are required by the federal law to create insurance exchanges for individuals and small businesses, similar to the one Massachusetts started in 2006.

The panel was charged with creating a framework for the essential health benefits that must be covered based on a “typical” plan available today. The critics objected to the group’s decision to start with a typical small business plan rather than a more comprehensive plan offered by larger employers.

Michael Chernew, a professor of health care policy at Harvard Medical School and a member of the institute’s panel, said the critique was “completely unfair.”

The authors said that “enshrining these skimpy plans as the new standard” will threaten the health of Americans and the country’s finances as people faced with high out-of-pocket costs forgo necessary care.

Here’s an excerpt from the letter, circulated by the Physicians for a National Health Program, with leadership from several Boston area physicians including Dr. Danny McCormick, an internist and assistant professor at Harvard Medical School and a former Institute of Medicine fellow:

The inadequate coverage the IOM recommends would shift costs from corporate and government payers onto families already burdened by illness. Yet this strategy will not lower costs. Delaying care often creates even higher costs. Steadily rising co-payments and deductibles over the past two decades have failed to stem skyrocketing medical inflation. And nations that assure comprehensive coverage – with out-of-pocket costs a fraction of those in the United States – have experienced both slower cost growth and greater health gains than our country. Our patients urgently need what people in these other nations already enjoy: universal and comprehensive coverage in a nonprofit system that prioritizes human need over corporate profit.

The authors went on to say they believed the panel that drafted that Institute of Medicine recommendations was “riddled with conflicts of interest” because it included executives from health insurers and consulting firms with ties to the health industry.

Chernew said the panel decided to base its recommendations on a typical small business plan because the exchanges primarily will be used by individuals and small businesses. However, he said, that choice won’t have a large impact on the plans.

The essential benefits covered under small and large business plans don’t differ dramatically, Chernew said. Where those plans do diverge is on the amount of costs left to the consumer. But, Chernew said, those coverage guidelines, already laid out under the Affordable Care Act, were not within the panel’s purview.

Chernew said he can understand why people might criticize the panel’s decision to include costs as a factor in the recommendations, but it was necessary.

“The entire system runs the risk of collapsing if it just becomes too expensive,” he said.

As for the charge of a conflict of interest, Chernew said, “I don’t find that particularly credible.”

Insurance executives could benefit more if the plans sold in the exchanges cost more, he said, because their profits under the federal law are calculated as a percentage of total costs.

Chelsea Conaboy can be reached at cconaboy@boston.com. Follow her on Twitter @cconaboy.

http://www.boston.com/Boston/whitecoatnotes/2011/12/health-providers-advocates-criticize-institute-medicine-insurance-recommendations/8JFeoXCdlykDFQ6hTisDrN/index.html

Letter to Sebelius criticizes IOM's 'essential benefits' recommendations

By Andis Robeznieks
Modern Healthcare, Dec. 1, 2011

More than 2,400 people have signed an open letter to HHS Secretary Kathleen Sebelius protesting the Institute of Medicine’s recommendations for defining “essential benefits,” which the signers said give more weight to “cost rather than medical need.”

The letter, signed mostly by doctors — including IOM members — and circulated by the Physicians for a National Health Program single-payer advocacy group, also stated that the IOM committee that drafted the report was “riddled with conflicts of interest” as several members had “amassed personal wealth” through association with insurance companies and other for-profit healthcare ventures.

In a statement released after the report was issued, America’s Health Insurance Plans President and CEO Karen Ignagni said that a recommendation to reflect the scope of benefits and design under a typical small employer was an “important step toward maintaining affordability.” But the PNHP saw praise by the insurance industry, which, according to the letter, has “sought to undermine real health reform at every turn,” as evidence of the report’s bias.

“Our patients urgently need what people in these other nations already enjoy: universal and comprehensive coverage in a nonprofit system that prioritizes human need over corporate profit,” the letter concluded.

Read more: Letter to Sebelius criticizes IOM’s ‘essential benefits’ recommendations – Healthcare business news and research | Modern Healthcare
http://www.modernhealthcare.com/article/20111201/NEWS/312019957#ixzz1fNqVOVeg?trk=tynt

Dr. John Geyman's new book on primary care: 'Breaking Point'

By Wendell Potter
Firedoglake, Nov. 27, 2011

Just last week, the 34-nation Organization for Economic Cooperation Development (OECD) released the results of its most recent study of the health care systems in the 40 counties considered to be “developed.” It came as no surprise to see that the U.S. health care system — if we can even call it a system — is still by far the most expensive on the planet.

We spend two-and-a-half times more on health care per person than the OECD average. The average expenditure per person in the U.S. is $7,960. The OECD average, by comparison, is just $3,233. Yet we rank 29th in the number of hospital beds per person and 29th in the average length of a stay in the hospital. We have high rates of avoidable hospital admissions for people with asthma, lung disease, diabetes, hypertension and other common illnesses, and we lag behind many other countries on other measures of quality and accessibility.

And when it comes to access to physicians, we’re considerably closer to the bottom than the top. We rank 26th in the number of physicians, especially primary care doctors, per 1,000 people.

All of the bad news for the U.S. in the OECD report is troubling if not shocking, but that last data point — that 25 countries have more physicians per capita than we do — even caught me by surprise.

But after reading Dr. John Geyman’s latest book, “Breaking Point—How the Primary Care Crisis Endangers the Lives of Americans,” I now understand why and how we have sunk so low. Not only does Geyman explain what has happened to our primary care infrastructure over the past several decades, he makes the most compelling case I’ve read anywhere about the urgency of rebuilding it. He also suggests ways we can do it.

If you’re not acquainted with Geyman, you should be. He is one of the wisest and most prolific writers about health care in America. “Breaking Point” is his 12th book and follows another must-read: “Hijacked: The Road to Single Payer in the Aftermath of Stolen Health Care Reform.”

As you can tell by the title of that book, Geyman is not a big fan of the Affordable Care Act, a.k.a. “Obamacare.” While he notes that the reform law will expand access over the next several years, “it will not make a dent in the primary care crisis.”

In fact, he goes on, “the 32 million Americans who gain some kind of insurance coverage between now and 2019 will find it more difficult than ever to find a primary care physician. Insurance without a physician — how much of a gain is that?”

A former Republican country doctor, Geyman writes that when he graduated from medical school in 1960, there already was a growing shortage of general practitioners, but not nearly as severe as today. In 1960, 18 percent of U.S. doctors were in general practice. By 2000, the number had fallen to 12 percent, and it continues to spiral downward because of the many disincentives in the U.S. for medical students to go into primary care.

Those disincentives have led to primary care physicians becoming an endangered species.

“Specialization, subspecialization and sub-subspecialization are increasingly taking over the physician workforce,” he writes. “The reasons for these changes have much to do with money and the business of medicine. The decline in generalist medicine and primary care is inexorable with present policies in health care, and present trends signal a disaster unfolding.”

That disaster is indeed unfolding, although you’d hardly know it from the politicians and pundits who are more interested in ideology and the gamesmanship of reform than truly addressing the problems with workable solutions. And while the far-reaching reforms that are needed have so far been beyond the ability of lawmakers to enact—also having to do with money and the business of medicine—the disaster that is unfolding is increasingly being felt by American families.

Because of increases in population and the dwindling supply of general practitioners, more and more Americans are unable to find a personal primary care physician for themselves or their family. As a result, Geyman writes, their care has become increasingly expensive and fragmented.

Why does primary care matter? Geyman lists several reasons. Patients with regular access to primary care doctors receive more preventive services, and they have fewer preventable emergency room visits and hospital admissions. Because they get to know their patients well over time, primary care doctors order fewer tests than specialists, and they help protect their patients from inappropriate, unnecessary and expensive over-utilization of specialist services.

Having primary care leads to earlier diagnosis and treatment of illnesses, enhancing quality and outcomes of care. Primary care doctors are also ideally suited to coordinate care for patients who need multiple specialists. And studies have shown that patients with an ongoing relationship with a primary care doctor are more compliant with treatment.

Geyman believes, and I agree, that primary care must be at the heart of a transformed U.S. health care system — and it ultimately will be transformed because the status quo is not sustainable. And, like me, he is an optimist — transformation not only is possible, it is inevitable.

Toward the end of “Breaking Point,” Geyman provides us with “ten lessons for primary care and health policy” that every reform advocate and every lawmaker truly interested in reform should read. Only someone with Geyman’s knowledge as a physician in private practice for decades and a renowned scholar of health care systems around the world could develop what essentially is a roadmap out of our unfolding disaster.

The last of those ten lessons is especially important for advocates who were disheartened and disillusioned when Congress passed the Affordable Care Act because of its shortcomings and the fact that it gives the insurance industry a renewed lease on life. Lesson #10: “The fight for sustainable and accountable health care can be a long one, but it can be won in the end by those prepared to keep at it.”

“Breaking Point” is worth reading not only to get a better understanding of the value of primary care but also Geyman’s wise counsel, reality-based optimism and challenge for us to stay in the fight and never give up. “We can all make a difference if we choose to do so,” he concludes. “Let’s go for it!”

Indeed. It’s time for all of us to rally, especially with the fate of the Senate and White House at stake.

http://fdlbooksalon.com/2011/11/27/fdl-book-salon-welcomes-john-geyman/

The PROMETHEUS Bundled Payment Experiment

The PROMETHEUS Bundled Payment Experiment: Slow Start Shows Problems In Implementing New Payment Models

By Peter S. Hussey, M. Susan Ridgely and Meredith B. Rosenthal
Health Affairs, November 2011

As mandated by the Affordable Care Act of 2010, the Centers for Medicare and Medicaid Services recently announced a national Medicare bundled payment initiative. There is strong support for bundled payment on conceptual grounds. However, there is only limited empirical evidence to support the use of bundled payment, and concerns have been raised about the feasibility of its implementation.

This paper presents findings from an evaluation of the initial “road test” of PROMETHEUS Payment. PROMETHEUS (an acronym for Provider Payment Reform for Outcomes, Margins, Evidence, Transparency, Hassle Reduction, Excellence, Understandability, and Sustainability) is a bundled payment model managed and implemented by the Health Care Incentives Improvement Institute, a nonprofit organization.

After three years of implementing systems and processes to support a bundled payment model, pilot participants have yet to make bundled payments or execute new payment contracts.

PROMETHEUS was designed to pay for all of the care required to treat a defined clinical episode, particularly those services recommended by clinical guidelines or experts. The multiple services that are anticipated to be required under a particular episode of care are referred to as “bundles.”

PROMETHEUS has defined twenty-one bundles that include chronic medical conditions such as diabetes, acute medical conditions such as acute myocardial infarction, and procedures such as hip replacement.

Our data collection occurred over the years 2009–11.

Progress of the pilots

As of May 2011, none of the pilot sites had achieved the goal of using PROMETHEUS as a payment method or had executed bundled payment contracts between payers and providers. The participants expressed disappointment at the slow progress, which for some lagged months or years behind their planned milestones.

Bundled payment is complex and must build on existing complex health care systems. As implemented, PROMETHEUS builds on fee-for-service claims infrastructure and thus adds to the complexity of existing payment systems. Services that are part of a clinical episode, and thus subject to bundled payment, are identified using the information about the patient’s diagnoses and services that providers report on fee-for-service insurance claims. The same information is also used to classify each service as either typical care or a potentially avoidable complication.

The decision rules that determine whether specific services are part of a bundle and, if so, whether they constitute typical care or potentially avoidable complications are complex and depend on the quality of the information that providers include on claims, which are not designed with the needs of a bundled payment system in mind.

Identifying bundles during claims processing is important not only so that payments can be processed appropriately by insurers, but also so that providers can rapidly receive information on their patients who had initiated clinical episodes subject to bundled payment. No site succeeded in modifying its claims processing methods to identify bundled services using the PROMETHEUS Engine or an alternative.

Executing contracts is difficult because of the number and complexity of considerations involved, including the market power – or lack thereof – of individual payers and providers in their own health care markets.

Shared savings has turned out to be more difficult to implement than expected. Interviewees at two sites reported that neither payers nor providers were eager to set aside funds from which to make the bonus payments. In addition, some payers did not accept the idea that they should share any savings.

All three sites are using electronic health records as a crucial component of their strategies for care redesign. However, the sites have found that their record systems lack key capabilities that would enable more effective care redesign.

Providers in all three sites have begun planning and implementing care delivery before payment methods actually change. However, they recognize that without new payment incentives in place, these efforts will be limited because they may decrease provider revenues.

We found that the PROMETHEUS road test encountered major challenges, and none of the pilot sites had made bundled payments as of May 2011. The pilot has taken longer than expected to implement primarily because of the complexity of the model and the fact that it builds on existing complex health care systems. Despite efforts by the institute and the pilot sites, some of the most prominent issues that have been raised with respect to bundled payment remained obstacles to implementation.

The debate we observed about how payers and providers should share risk around episodes of care mirrors the current debate about the final form of accountable care organization risk-sharing regulations.

http://content.healthaffairs.org/content/30/11/2116.abstract

Comment:

By Don McCanne, MD

The PROMETHEUS Bundled Payment Experiment held the promise of improving the quality of care while controlling costs simply by bundling together services of multiple health care providers into a single package covering a specific acute or chronic disorder. After three years of implementation, the payers and providers have not been able to make bundled payments or execute new payment contracts. The experiment is an abject failure.

The authors of this report suggest that the experiment has been of value because the participants have learned lessons, and they understand the complex obstacles to implementation, even if they were unable to surmount them. They conclude, “Payment and delivery reform models may yet yield desired improvements in health care quality and spending, but notable gains may not come quickly or easily.”

It is so clear that the health reform efforts to date have been a fiasco, and yet what do we do? We diddle around playing the PROMETHEUS board game, trying to get past “Go” so we can collect $200, but without going to jail (though perhaps some players should).

It is long past time to get serious about reform. We have more than enough money to finance a premier health care delivery system for everyone. We simply need to start spending our health care dollars more wisely, by enacting a financing system that places patients first – a single payer national health program (Improved Medicare for All).

Does the U.S. Have the World's Best Health Care System?

By Wendell Potter
CommonDreams.org, Nov. 29, 2011

A little more than a year ago, on the day after the GOP regained control of the House of Representatives, Speaker-to-be John Boehner said one of the first orders of business after he took charge would be the repeal of health care reform.

“I believe that the health care bill that was enacted by the current Congress will kill jobs in America, ruin the best health care system in the world, and bankrupt our country,” Boehner said at a press conference. “That means we have to do everything we can to try to repeal this bill and replace it with common sense reforms to bring down the cost of health care.”

Boehner is not the first nor the only Republican to try to make us believe that the U.S. has the world’s best health care system and that we’re bound to lose that distinction because of Obamacare. I’ve heard GOP candidates for president say the same thing in recent months, charging that we need to get rid of a President who clearly is trying to fix something that doesn’t need fixing, something that isn’t broken in the first place.

Well, those guys need to get out more. Out of the country, in fact. They need to travel to at least one of the many countries that are doing a much better job of delivering high quality care at much lower costs than the good old USA.

If they’re not interested in a fact-finding mission abroad, then perhaps they might take a look at two recent reports before they make any other statements about the quality of American health care.

Last week, the 34-nation Organization for Economic Cooperation (OECD) released the results of its most recent study of the health care systems in its member countries, including the U.S., plus six others, for a total of 40. And those results are illuminating.

If Boehner and his fellow Republicans had characterized the U.S. system as the most expensive in the world, they would have been right on target. But they would have been way off base by calling it the best.

The OECD report is just the most recent evidence that Americans are not getting nearly as much bang for the health care buck as citizens of most other developed countries — and even some countries in the developing world.

The OECD found that the United States spends two-and-a-half times more on health care per person than the OECD average. The U.S. even spends more than twice as much as France, which many experts contend has one of the best health care systems on the planet.

The average expenditure per person in the U.S. is $7,960, a third more than in Norway, the second highest. The OECD average, by comparison, is just $3,233. (It is $3,873 in France.)

Here are some reasons why: Hospital spending is 60 percent higher than the average of five other relatively expensive countries (Switzerland, Canada, Germany, France and Japan); spending on pharmaceuticals and medical goods is much higher here than any of the other countries; and administrative costs are more than two-and-a-half times the average of the others.

It was not all bad news for us. We’re number one in the five-year breast cancer survival rate and number two (behind Japan) in the five-year colorectal cancer survival rate. We’re also number one in costly knee replacements and number two (again behind Japan) in the number of MRI units per million people.

But we rank 29th in the number of hospital beds per person and 29th in the average length of a stay in the hospital. And we have high rates of avoidable hospital admissions for people with asthma, lung disease, diabetes, hypertension and other common illnesses.

When it comes to access to physicians, we’re also near the bottom of the pack. We rank 26th in the number of physicians, especially primary care or family doctors, per 1,000 people.

In terms of life expectancy, we rank 28th, just behind Chile. The average age of death in the U.S. is 78.2, well below the average of 79.5 years in the other OCED countries.

The OECD study backs up the results of a report released by the Commonwealth Fund in October, which showed that the U.S. is actually losing ground to other countries in assuring that its citizens have equal access to affordable, efficient care.

The Commonwealth Fund “scorecard” found that the U.S. is failing to keep up with gains in health outcomes made by other nations. We now rank last out of 16 countries in the Commonwealth Fund study when it comes to deaths that could have been prevented by timely and effective medical care.

A big reason for the dismal results is the fact that more and more Americans are falling into the ranks of the uninsured and underinsured. As of last year, according to the Commonwealth Fund, 81 million adults in the U.S. — 44 percent of all adults under age 65 — were either uninsured or underinsured at some point during the year, up from 61 million as recently as 2003.

So the next time you hear a politician claim that the U.S. has the best health care system in the world, be aware that he or she is trying to get you to believe something that is demonstrably not true, undoubtedly for no reason other than to advance their political agenda. We deserve better — in both rhetoric and results.

Wendell Potter is former vice president of corporate communications at CIGNA, one of the United States’ largest health insurance companies. In June 2009, he testified against the HMO industry in the U.S. Senate as a whistleblower. He is now the Senior Fellow on Health Care for the Center for Media and Democracy in Madison, Wisconsin.

http://www.commondreams.org/view/2011/11/29-6

Vt. gets $18M for health exchange

By CHRIS GAROFOLO
Brattleboro Reformer, Wednesday, November 30, 2011

BRATTLEBORO — The U.S. Department of Health and Human Services announced on Tuesday Vermont will receive more than $18 million to fund the design and development of a larger health benefits exchange to serve as the foundation for the state’s future single-payer plan.

Thirteen states received grants to establish affordable insurance exchanges — a so-called one-stop online marketplace where consumers can choose a private health insurance plan fitting their individual insurance needs — to provide more flexibility and resources within the Affordable Care Act.

Overall, the federal $220 million in Affordable Insurance Exchange grants will help uninsured citizens buy private health insurance through online marketplaces.

“This is what we hoped for,” said State Rep. Mike Mrowicki, D-Putney, who was recently appointed to the Health Access Oversight Committee.

“It’s part of the plan that we’re hoping to take to the next step in creating our exchange and continuing along that path of being ready to, either 2014 or 2017, implement our new health care system,” he added. “I think it vindicates support for what we’re going here in Vermont and trying to help us move forward. I think it’s actually a great opportunity for Vermont because there are some states that are actually stepping back and that leaves more room for Vermont to be in the forefront of health care reform.”

The Vermont Agency of Human Services will use the funds to design a Health Benefits Exchange to work with consumers and other interested parties to continue insurance market reforms and develop new information technology systems.

Funding will also pay for a number of staff positions to ensure exchange implementation activities and coordination work moving forward.

According to Vermont’s Director of Health Care Reform Robin Lunge, the state intends to continue moving forward in the design of a benefits exchange to provide a platform for the evolution of the envisioned single-payer health care system.

“We’re very excited to get the federal funding that we were looking forward to. We’re continuing in the next steps for designing the health benefits exchange,” Lunge said. “We see the federal health benefit exchange as the way to create the foundation for the single-payer system. So we get the federal support to create state-of-the-art information technology systems (for example) and to help us design the next step in health benefits through the exchange.”

Gov. Peter Shumlin, a first-term Democrat, said the federal grant is a critical step toward overhauling the health care system within Vermont.

“This was great news from Washington because the $18 million federal grant will enable us to create an easy-to-use web-based system to help people find health care benefits, plan for affordable benefit packages for Vermonters, and more,” Shumlin said. “This grant will move us further along the path toward a single-payer health care system in Vermont that controls skyrocketing costs threatening Vermont families and businesses.”

The Shumlin administration said Vermont’s health benefit exchange will vastly simplify the insurance purchasing and enrollment programs beginning as soon as 2014. The state plans to convert the exchange by 2017 to a public, single-payer health care model.

For Vermont lawmakers, the arrival of the federal money is perfect timing. The state is in the process of designing a single-payer, publicly-financed system that will provide insurance to all Vermonters.

The Legislature passed the reform measure this spring, which set up a five-member Green Mountain Care Board to design a cost containment system and how the state will deliver the services.

Critics have questioned how Vermont’s government can afford such a program and fear businesses may flee the state, leaving future economic growth in jeopardy. Nevertheless, advocates for the groundbreaking legislation say this federal boost helps keep Vermont on the right track.

Said Lunge: “In terms of moving toward single-payer, I think what most people should keep in mind is that we see single-payer as an opportunity.”

Lawmakers against the health care reforms question having federal money establish a benefits exchange in Vermont that will be replaced by a single-payer system within the next four to six years.

The federal health and human services department reported more than half of the states are now creating marketplaces to help millions purchase insurance.

“We are committed to giving states the flexibility to implement the Affordable Care Act in the way that works for them,” HHS Secretary Kathleen Sebelius said in a statement. “And exchanges will give consumers more choices and make it easy to compare and shop for insurance plans.”

Establishing an insurance exchange is the first step for state residents to receive federal tax credits and premium subsidies for meaningful health insurance under the federal law. But the program can also manage an insurance exchange eventually to help administer a single-payer system.

U.S. Sen. Patrick Leahy, D-Vt., said in a release the state has proven itself as a national leader on health insurance policy and practice.

“These funds will allow our state to develop a health insurance marketplace that in the short term will help Vermonters choose affordable health insurance, and that in the long term will be a stepping stone to the state’s goal of universal health coverage,” he said. “Today’s difficult economy means fewer Americans have access to health insurance or have the ability to pay for health care. This award will help Vermont move closer to the goal of insurance access for every Vermonter and to address the problem of rising health costs.”

Of the 13 states awarded grants on Tuesday, 12 are receiving Level One status to provide one year of funding to those already making progress using their exchange planning grant. The thirteenth state, Rhode Island, is receiving the first-in-the-nation Level Two grant to offer multi-year funding for states further along in its planning.

Chris Garofolo can be reached at cgarofolo@reformer.com or 802-254-2311 ext. 275.

http://www.reformer.com/ci_19437115

Does ACA's "Basic Health Program" stabilize coverage?

Balancing Coverage Affordability and Continuity under a Basic Health Program Option

By John A. Graves, Ph.D., Rick Curtis, M.P.P., and Jonathan Gruber, Ph.D.
The New England Journal of Medicine, November 30, 2011

According to the Congressional Budget Office, the Affordable Care Act (ACA) will bring health insurance coverage to an estimated 32 million currently uninsured people. It does so through various mechanisms, including an expansion of Medicaid to Americans with incomes up to 138% of the federal poverty level (133% plus a 5% “income disregard”), premium and cost-sharing subsidies for coverage purchased through a new insurance exchange, small-employer tax credits, and an individual mandate to obtain health insurance.

The ACA’s incremental approach to near-universal coverage has raised concerns that changes in income, employment, and family composition will shift people into and out of different coverage arrangements over time – a phenomenon referred to as “churning.” Avoiding disruptions in coverage is an important goal because it can reduce unnecessary administrative costs and improve health plans’ incentives to invest in achieving longer-term health outcomes. Continuity of coverage can also help maintain clinician–patient relationships, especially in places where there are substantial differences between the clinicians participating in Medicaid and those participating only in private plans.

To address concerns about churning, some states are considering adopting a Basic Health Program (BHP) – an ACA-created option modeled after Washington State’s Basic Health Plan. Under this option, a state would receive an annual lump-sum payment equal to 95% of the projected cost of the subsidies for coverage through an insurance exchange for households with incomes between 139 and 200% of the federal poverty level. The state would then assume responsibility for financing a BHP for adults in that income range that met or exceeded the generosity and scope of benefits available in the exchange. A number of states are considering this option, including California, where BHP legislation has already passed the senate and final consideration is planned for 2012.

The eligibility range for a BHP is narrow – and there’s no guarantee that there will be continuity of access for people moving from Medicaid to a BHP, or vice versa. A BHP could theoretically extend access to the same plans and providers as Medicaid does, but in practice, states may find that providers willing to accept reimbursement that is often below their costs for their most indigent patients will be unable or unwilling to do so for an additional population. Moreover, introducing a BHP may create a new point of disruption: although patients might retain their coverage when moving above or below 138% of the poverty level ($30,843 for a family of four in 2011), they would be more likely to have coverage disruptions when moving above or below 200% of the poverty level ($44,700 for a family of four). Such disruptions could occur if the mainstream plans and providers used by people with incomes above 200% of the poverty level do not participate in the BHP. Finally, introducing a BHP would reduce the subsidized population in the insurance exchange by about half, which could compromise its efficiency and market role and reduce the proportion of uninsured people who gain access to mainstream coverage.

To investigate BHPs’ potential for reducing churning between Medicaid and an exchange by acting as a bridge between them, we used data from a dynamic income microsimulation model of the ACA. Since we follow an initially eligible cohort over a 2-year period, we can more easily model relative changes in churning in varied policy environments.

For our analysis, we used a national sample of adults 18 to 61 years of age who were initially uninsured or enrolled in nongroup coverage and who were eligible for subsidized coverage (had an income below 400% of the poverty level). We then simulated eligibility for Medicaid, a BHP, and an exchange in three policy environments: the baseline ACA structure, under which people with incomes up to 138% of the poverty level are eligible for Medicaid and those with higher incomes are eligible for the exchange; an integrated BHP, under which Medicaid and the BHP are run as a single program, with identical plans and providers; and three separate programs, with Medicaid, the BHP, and the exchange all operating independently, with different reimbursement rates, cost-sharing structures, and provider networks. Both Washington State’s original BHP and California’s pending BHP legislation would fit in the third category.

Our main findings are summarized in the Kaplan–Meier curves (see graph, available at link below), which show the overall proportion of subsidized adults who would remain continuously eligible for their initial program over a 24-month period.

As the graph shows, operating separate BHP, Medicaid, and exchange programs substantially increases churning. Under that policy, just 44% of adults remain eligible for their initial program after 1 year and less than one third remain so after 2 years; under the baseline ACA structure, the proportions are 63% and 49%, respectively. Given the dynamic nature of the wages and incomes of adults with moderate incomes, this finding is not entirely surprising: a separate BHP coverage category based on a narrow income range increases the likelihood of eligibility shifts between programs.

Perhaps more striking, however, is our finding that a BHP operating within Medicaid would result in slightly more eligibility losses than would the baseline ACA structure. Although we find that a BHP would reduce churning (i.e., increase retention) at the 138%-of-poverty threshold, there would be a more-than-offsetting increase in churning between the exchange and the Medicaid–BHP at 200% of the poverty level. The net result would be slightly more overall churning than with the baseline ACA structure. Moreover, these program-eligibility shifts would now happen around a “notch” created at 200% of the poverty level, where there are much larger implications for enrollees, in terms of premiums and cost sharing, of moving from Medicaid–BHP to private coverage. For example, a family moving from a Medicaid-like BHP program to the exchange tax-credit structure at 200% of the poverty level could suddenly see the value of its benefits fall by as much as 25% (depending on state decisions about patient cost sharing under the BHP). The ACA’s sliding-scale subsidies were designed to avoid such notches, which create major inequities between people with marginally different incomes and penalize them for additional work and earnings.

Ensuring access to stable and affordable coverage is an important ACA goal. Whether by design or through attrition of willing plans and providers, however, operating a BHP with provider networks different from those of both Medicaid and the exchange could further stratify the low-income and moderate-income population into three separate classes of coverage. As our modeling shows, such stratification would exacerbate the concerns about churning that BHPs were designed to address. Moreover, even a BHP integrated with Medicaid would slightly increase churning overall, with the increased churning around the 200%-of-poverty point more than offsetting the reduced churning around the 138%-of-poverty point. Although various policy considerations should enter into decisions about adopting a BHP, the need to achieve coverage and provider stability is an argument against doing so.

http://www.nejm.org/doi/full/10.1056/NEJMp1111863

Comment:

By Don McCanne, MD

Section 1331 of the Patient Protection and Affordable Care Act (ACA) authorizes states to establish “basic health programs” to cover individuals with incomes between 133% and 200% of th
e federal poverty level, who are not otherwise eligible for Medicaid. The primary thrust of ACA is to cover many of the currently uninsured by expanding Medicaid and by establishing new state health exchanges offering private health plans. This NEJM article evaluates whether adding a third option – a basic health program – would improve stability and continuity of coverage for this low-income sector.

This is an important question since setting up an additional program adds considerable administrative costs and complexity to our health care financing system. The brief answer is “no.” After two years with three separate programs, less than one-third would still be in the programs in which they were originally enrolled.

Suppose the states decided against establishing basic health programs, what would happen under the baseline ACA structure with just Medicaid and the private exchange plans? Half of individuals would no longer be in their initial programs. This is only over a period of two years. Because of continual fluctuations in eligibility (changing income levels, etc.), stability over a decade or two would be virtually nonexistent.

This instability can be quite disruptive. Between Medicaid, basic health programs, and private exchange plans, there may be little or no overlap in provider networks. A change in coverage could also have a major impact on out-of-pocket expenses required of the insured individuals.

One intent of the basic health programs would be to save the government money by paying providers at levels close to those of Medicaid. Many physicians already reject Medicaid because of these low rates. Adding many more new patients to the Medicaid program, plus introducing an entirely new, under-funded, basic health program, would surely cause providers to flee both Medicaid and the basic health programs. The patients might have a basic health ticket, but nowhere to use it.

The entire ACA infrastructure is irreparably fragmented and dysfunctional. It needs to be replaced with… yes, an improved Medicare for all.

Teaneck, NJ, calls for immediate enactment of HR 676, national single payer health care

By Kay Tillow
All Unions Committee For Single Payer Health Care–HR 676, November 30, 2011

Paula Friedman, Chair of the Retiree Committee of the Bergen County Central Trades and Labor Council in New Jersey, reports that their latest victory is the successful passage of a resolution by the Township of Teaneck calling for the “immediate enactment” of HR 676, national single payer health care legislation introduced by Congressman John Conyers (D-MI).

The resolution notes that HR 676 “would assure universal coverage of all medically necessary services, contain costs by slashing bureaucracy, protect the doctor-patient relationship, (and) assure patients a completely free choice of doctors….” Teaneck Council Member Elie Katz made the motion that was seconded by Council Member Monica Honis. The vote was unanimous.

The HR 676 Resolution states that “the rising cost of insuring public employees can be reduced and best met not by limiting benefits but by providing benefits under a national, publicly-funded health insurance program…” This is particularly important to New Jersey where the attacks on public employee benefits have been massive.

In addition, the resolution states that “the complex bureaucracy arising from our fragmented, for-profit, multi-payer system of healthcare financing consumes approximately thirty percent (30%) of the United States health care spending while the single-payer Medicare system has administrative cost of less that 5%…” and that “managed care and other market-based reforms have failed to contain healthcare costs, which now threaten the international competitiveness of U. S. manufacturers…”

Friedman said that the Retiree Committee has been working to educate municipal governments in Bergen County and seeking their endorsement for HR 676, also known as Expanded and Improved Medicare for All. The committee is made up of representatives from the UAW, Teamsters, Sheetmetal Workers, AFT, Letter Carriers, CWA, and Lithographers, among others..

Friedman encourages unions, labor councils, and retiree councils across the country to endorse HR 676 and then pick up this campaign to win cities and states to also endorse.

The Teaneck Resolution is here:
http://unionsforsinglepayer.org/files/other_endorsers/Teaneck_NJ_Resolution.pdf

The list of union endorsers of HR 676 is here:
http://unionsforsinglepayer.org/union_endorsers

Sample union resolution for HR 676:
http://unionsforsinglepayer.org/files/union_endorsers/sample_resolution.doc

City Councils and State Legislatures endorsing HR 676:
http://unionsforsinglepayer.org/more

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