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Johnathon Ross and Don McCanne on lessons from the Oregon experiment

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Johnathon Ross and Don McCanne on lessons from the Oregon experiment

The Effects of Medicaid Coverage — Learning from the Oregon Experiment

By Katherine Baicker, Ph.D., and Amy Finkelstein, Ph.D.
The New England Journal of Medicine, July 20, 2011

Working with a team of researchers, we have taken advantage of an unprecedented opportunity to gauge the effects of Medicaid coverage on low-income, previously uninsured adults, using the gold standard of medical and scientific research: a randomized, controlled trial. In 2008, Oregon used a lottery to allocate a limited number of Medicaid spots for low-income adults (19 to 64 years of age) to people on a waiting list for Medicaid. Those selected by random lottery draw won the opportunity to apply for Medicaid. In total, about 30,000 people were selected from the 90,000 on the waiting list. Approximately 10,000 of those selected ended up being enrolled in Medicaid; not everyone who was selected successfully filled out the required application and met the eligibility criteria.

The lottery provides an opportunity to estimate the causal effects of being allowed to apply for Medicaid (intention to treat). It also allows us to estimate the causal effects of being enrolled in Medicaid relative to being uninsured (the effects of “treatment on the treated,” which we focus on below), under the assumption that selection by the lottery to be able to apply for Medicaid affects the outcomes we studied only through its role in increasing insurance coverage.

We now have evidence of the effects of the first year of Medicaid coverage after the lottery. These results are based on administrative data from hospital discharges, credit reports, and death records, in addition to mail surveys we conducted. We found that Medicaid coverage increases the use of health care.

Responses by Johnathon Ross and Don McCanne, former presidents of Physicians for a National Health Program:

Johnathon Ross MD, MPH
Toledo Ohio, USA
August 25, 2011

This is interesting “experiment” and useful policy data but it reminds me of Tuskegee. What a sad commentary on our country that we question whether access to care is good for patients and that it might cost us something to provide it. We need a national health insurance program that is nondiscriminatory, fairly financed, effective, and efficient. An improved and expanded Medicare for all would be the easiest to implement since the administrative savings would be adequate to cover all the uninsured and improve coverage and financial security for everyone. Instead we will muddle along with the half baked reforms that have been passed and continue to waste hundreds of billions of dollars on the billing and insurance bureaucracy. Cost control will be the natural outcome of setting a national budget for health care. This will lead to better emphasis on those services which are most beneficial and reduce future costs and disability. ACO’s, bundled payments, managed care will never accomplish what a budget will. What are we doing? Caring citizens should protect and empower each other.

and…

Don McCanne MD
San Juan Capistrano California, USA
August 25, 2011

With our current level of knowledge about the favorable impact of insurance coverage, obviously it would have been unethical to design a study in which the control group – the uninsured – was exposed to both the financial hardship and impaired health outcomes of being uninsured. It is ironic that this would represent an intolerable violation in ethics within the health policy community, yet at the same time represents an acceptable standard for politicians.

The Affordable Care Act, as a political document, includes policies that seem to violate fundamental health policy ethics. It was enacted knowing that tens of millions will remain uninsured, under-insurance will become the new standard (60 to 70 percent actuarial values), and that it is the most expensive model of reform, providing little relief from the financial burden placed upon all of us.

Ethical policies and sterile politics could have been melded into a process that would have brought us truly universal coverage, with comprehensive benefits, financial security for everyone, and cost containment through the power of an efficient public monopsony. That, of course, would describe a single payer national health program – an improved and expanded Medicare for all.

Instead, the policy community compromised their ethics by cooperating with politicians who were catering to interests much more powerful than patients. But the greater ethical transgression was committed by the politicians themselves who ruled out in advance of the reform process the single payer model. They knew that if it were seriously considered, the superiority would have been obvious when compared to the fragmented, dysfunctional, inequitable, administratively overburdened, overpriced system that the politicians dumped on us.

We can still go back to the drawing boards and do it right.

http://healthpolicyandreform.nejm.org/?p=14971

The Ryan Medicaid Plan: A Threat to Middle Class Security

The Medicaid changes in the Ryan budget plan would have extraordinary implications not only for the poor individuals who are normally thought of as the principal beneficiaries but for a very broad swath of middle-class families who are far more likely to become reliant on Medicaid benefits at some point in their life than most currently realize.

By Scott Lilly
Center for American Progress, July 8, 2011

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For more than a decade policymakers in Washington and ordinary citizens across the country have engaged in a public dialogue on the federal budget that has frequently served to confuse rather than clarify the choices facing our nation. This year Rep. Paul Ryan (R-WI), chairman of the House Budget Committee, put forward a proposal that attaches significantly greater programmatic detail to the spending reductions he is proposing than previous advocates of large spending cuts. The proposal has been both praised and assailed for its content—but there is little question that it has served to move the budget debate to a more substantive and informative level.

The Ryan plan is important not simply because it provides greater detail as to how cuts in federal spending might be achieved but also because it has legislative credibility. On April 15, 2011 the Ryan budget was adopted by the U.S. House of Representatives by a vote of 235 to 193, with all but four members of the majority party (the Republicans) voting “yes.”

This paper examines one key proposal in the Ryan budget plan that has thus far received surprisingly little attention—the proposal to replace the current Medicaid program with block grant payments to states. The Medicaid changes would have extraordinary implications not only for the poor individuals who are normally thought of as the principal beneficiaries but for a very broad swath of middle-class families who are far more likely to become reliant on Medicaid benefits at some point in their life than most currently realize.

A full public discourse on whether the Congress should go forward with these particular cuts as opposed to other policy options available to the Congress requires some in depth probing as to what impact the cuts would likely have on various segments of the population, and whether or not the public at large would be comfortable with the risk that those benefits might disappear. It is also necessary to view the value of these benefits in comparison with other options that might be available to Congress and in particular, the overall policy direction of the broader Ryan proposal—a proposal that not only includes the permanent extension of the Bush era tax cuts but the adoption of additional tax cuts, including the lowering the top individual income tax rate from 35 percent to 25 percent.

Overall the proposal includes $5.8 billion in spending cuts (relative to the Congressional Budget Office baseline) that are heavily offset by $4.2 billion in revenue reductions. Net the plan generates only $1.6 trillion in deficit reduction. Medicaid reductions and most other spending cuts can be fairly seen as largely paying for further tax reductions rather than deficit reduction.

As a result, the federal budget will remain in deficit throughout this period and the public debt will grow by $5.8 trillion. That is less than the $7.4 trillion worth of debt that would accumulate if no deficit reduction plan were adopted, but far less than one might assume given the magnitude of spending cuts Rep. Ryan is proposing.
What does this mean for Medicaid? Under the Ryan plan, Medicaid accounts for $771 billion in spending cuts over the 10-year period of the proposal. That is more than one-eighth of the total cuts in the plan—many times more than the cuts in Medicare. Nonetheless, the Medicaid portion of the package has received far less attention than the Ryan proposal for Medicare. Medicaid is in fact the epicenter of the current budget debate.

Perhaps that is because many of us are under the misperception that Medicaid is simply one more benefit for the nation’s poor and that we have reached a point when we can no longer afford to be as generous to the poor as we were in the past.

But in fact Medicaid is not really a poverty program. As this paper will demonstrate, two-thirds of Americans living below the federal poverty line are not Medicaid beneficiaries. But the overwhelming majority of families who make up what is generally considered the nation’s middle class will be at significantly greater risk of facing financial catastrophe at some point in their lives if these benefits are taken away.

We all know people—or at least know of people—who had their lives changed in a split second. Whether it is an auto accident, the birth of a severely disabled child, a stroke, or devastating news from the doctor’s office, a well-planned and orderly life can be turned upside down almost instantly with grave consequences for not only the immediate victim but friends and family as well.

The medical costs associated with such events can run into hundreds of thousands and even millions of dollars. Many of us are lucky enough to have insurance that will cover most if not all of those costs. But few of us can manage the extraordinary burden of the long-term care requirements that such tragedies often leave in their wake. Few of us could cover such costs if we were the victims and even fewer could make a substantial contribution to the cost of providing such care for a relative that can no longer be cared for at home or in a community setting.

Many elderly and disabled Medicaid beneficiaries once lived in middle class households, and while they make up only 25 percent of Medicaid’s enrollees they account for two-thirds of Medicaid spending. It is difficult to envision reductions in Medicaid spending of the magnitude that would be required under the Ryan formula without significant reductions in this portion of the program.

Cutting eligibility for those who are neither elderly nor disabled would also be more problematic than is generally recognized. The overwhelming portion of Medicaid funds going to adults who are neither aged nor disabled goes for prenatal and maternity care and that care is at least partially responsible for the dramatic decreases in miscarriages and infant mortality that have taken place in this country. Reducing the health care available to children would reduce the number who arrive at school ready to learn and would also place the broader population at risk from the stand point of public health.

Finally, this paper will discuss whether the Ryan Medicaid proposal actually resolves the deficit and spending problems we now face or simply relocates them to state capitals. Even if the Ryan proposal to repeal the recently enacted health care legislation is adopted, the cost of providing current levels of service to currently eligible populations will increase by about $337 billion over the next decade. Under the current formula the federal government would pay about $192 billion of that increase leaving the states to pick up the remaining $145 billion.

Ryan would cut the federal contribution to $78 billion, leaving the states with well over a quarter of a trillion in new revenue necessary to fund the current Medicaid program. Under the Ryan proposal the portion of state revenues needed to fund current service and eligibility levels would go from 16 percent at present to 26 percent by 2021. While it is likely that the portion of state revenues going to Medicaid will rise significantly—crowding out other state servi
ces such as support for colleges and universities, aid to highways, public health, law enforcement, and the support of local schools —it is not likely that those shifts will resolve the entire shortfall.

As a result, the proposal will also place significant upward pressure on state and local taxes, including sales taxes and property taxes. Combined with the Ryan proposal to lower tax rates on the highest-income federal taxpayers, this will amount to a massive downward redistribution of after-tax income.

Medicaid is a huge program that touches many lives but is nonetheless poorly understood by both the public and policymakers. Perhaps more than any other government program it is the social safety net for middle class families—families that as the result of old age, injury, disease, or some other catastrophic happenstance could face medical and long-term care bills that far exceed what their savings and insurance will cover. Because it insured millions of Americans who got the care that they needed, millions of families did not confront financial disaster.

Changes to this program should be made with extreme caution and not before the public has a clear understanding of the consequences those changes might have on their lives and the lives of their neighbors. In the pages that follow, this paper details the costs and consequences of the Ryan plan as passed by the House of Representatives earlier this year.

Scott Lilly is a Senior Fellow at the Center for American Progress.

http://www.americanprogress.org/issues/2011/07/ryan_medicaid.html

Arizona Medicaid co-pays rejected by Appeals Court panel

Copays Break Law

By Mary K. Reinhart
The Arizona Republic, August 25, 2011

The three-judge panel of the 9th U.S. Circuit Court of Appeals said federal health officials failed to show how the copays, imposed in November after a seven-year court battle, served any purpose besides cutting the state’s Medicaid budget.

Raising copayments for more than 200,000 of Arizona’s poorest residents and making them mandatory, the judges said, helped balance the state budget but didn’t meet that federal standard.

“The administrative record reveals that the purpose of Arizona’s waiver application was to save money,” wrote Judge Richard Paez. “There is little, if any, evidence that the secretary considered the factors (federal law) requires her to consider before granting Arizona’s waiver. Thus, the secretary’s decision was arbitrary and capricious.”

The copays, which range from $4 to $30, were first approved by lawmakers in 2003 and were in place for about four months before a class-action suit was filed and a federal judge put them on hold. That stay was lifted in November by a separate appeals-court panel, which upheld a March 2010 ruling by U.S. District Judge Earl Carroll.

Since November, childless adults covered under the Arizona Health Care Cost Containment System, the state’s Medicaid program, and those who spend down their savings to become AHCCCS eligible can be turned down for medical care and medications if they can’t afford the copayment.

http://www.azcentral.com/arizonarepublic/local/articles/2011/08/25/20110825ahcccs-copays-break-law-ruling.html

Comment: 

By Don McCanne, MD

These are patients with incomes below the federal poverty level. Requiring a co-payment before access to care is permitted causes many of these individuals to go without medical care. It is appropriate that the Court of Appeals panel ruled that the HHS Secretary was “arbitrary and capricious” in approving the waiver that authorized the imposition of co-payments.

What is the purpose of co-payments? Some say that it is to prevent people from obtaining medical care that they don’t really need. Really? If a person has decided that she should see a physician, and she can afford the co-payment, would that really stop her from obtaining care? Highly unlikely.

Then is the co-payment for the purpose of raising revenues to help fund health care? The administrative hassle of processing co-payments offsets much of the gain that the co-payment revenues would bring.

Yet co-payments for low-income individuals clearly impair access to beneficial health care services. Thus co-payments provide little good and cause real harm.

Deductibles and coinsurance are another matter. For the very wealthy, they have no impact on health care access. But for middle-income individuals they are enough of a financial burden that they do cause patients to forego beneficial health care – obviously an undesirable policy.

How effective are deductibles and coinsurance in raising revenues to pay for health care? About 80 percent of health care is consumed by individuals who are no longer sensitive to the costs because they have already met their cost-sharing requirements. Thus they play a negligible role in funding our total national health expenditures.

The primary role that cost sharing plays in reducing health care spending is to prevent individuals from receiving care that they should have. (The value of reductions in non-essential services that result from cost sharing has been overstated since consultations with reassurance are still very beneficial health care services.)

So how much does foregoing beneficial care really save? Estimates based on the RAND HIE have suggested that the amount saved is about 30 percent. But 30 percent of what? It is 30 percent of the care consumed by healthy workers and their young healthy families, most of whom do not have major health expenses. Once you factor in the entire population, including all major medical disorders, the percentage of care that would be avoided is negligible.

Many other countries that spend far less while covering everyone do not have deductibles, co-payments, nor coinsurance. They have found them to be unnecessary in controlling costs. They are an insignificant revenue source, and they can cause harm, especially in vulnerable groups such as Arizona’s adult Medicaid population, and now in middle-income Americans who must live with the new standard of under-insurance.

It didn’t have to be this way.

Healthcare, babies and the national debt: The real cost

By Jonathan D. Walker, M.D.
Frost Illustrated (Fort Wayne, Ind.), Aug. 24, 2011

The term “infant mortality rate” is a measure of the number of babies that die under one year of age per 1,000 live births. It is a useful indicator of how effective a healthcare system is—the lower the number, the fewer babies die.

Although there are a lot of people who feel the U.S. has the best healthcare system in the world, according to the Center for Disease Control, the United States actually ranks 29th in the world for infant mortality. And it gets worse. Infant mortality for African Americans is consistently more than twice that for white Americans—infant mortality among African Americans in 2007 was 13.3 deaths per 1,000 live births compared to a rate for non-Hispanic whites of 5.6.

There are a lot of reasons why this disparity exists—it happens to be a very complex issue. One big factor is simply the lack of access to appropriate healthcare. Healthy babies need healthy mothers, and the process starts well before a woman gets pregnant. But, that process can’t happen if you don’t have insurance and can’t afford to see a doctor.

Every other developed country in the world has decided that people should be able to get the care they need when they need it, and without having to worry about going bankrupt. In America, the healthcare system has ended up protecting the interests of for-profit companies over the needs of individuals and, as a result, people are left without access to care. And, the problem is spreading—even people with insurance are finding that their copays and deductibles are becoming so expensive that they put off needed care because they can’t afford it.

And, now we have the debt crisis, and a lot of politicians who want to simply cut back on spending without thinking about the consequences. Unfortunately, this means that there will be less money available to solve problems like our higher infant mortality rate. And, that means that not only will babies continue to die, but people who need all types of medical care will only show up sicker and in worse shape, which means it will cost us even more to take care of them.

Those politicians don’t seem to get the fact that when you cut back on healthcare, not only do you hurt people, but you also make it more expensive for everybody else.

Instead of blindly cutting back on spending, we should start by making sure that everyone gets the care they need. Then we could sit down as a society and begin to control the free-for-all that exists amongst the for-profit companies that are fighting to get healthcare dollars while people suffer.

Every other developed country has figured this out, and their babies live. But, we seem to be incapable of trying to learn from them—powerful vested interests want us to think that any way besides our way must be wrong.

An entire world of solutions is out there, but in America, lobbyists and politicians can literally stop the debate with irrelevant accusations of “socialized medicine” or “government takeover of healthcare.” So we all end up paying more for healthcare and more people are afraid to go to the doctor because they can’t afford it.

If we could say that we actually had the best results in the world, perhaps this would be tolerable. Unfortunately, the real result is that the youngest, sickest and poorest of us will be hurt, and we will all pay the rising cost of treating the ones that survive. It means that babies—and especially African American babies— will be dying because no one wants to look at the obvious solutions that are all around us.

Dr. Walker is a local physician and member of Hoosiers for a Commonsense Health Plan.

http://www.frostillustrated.com/full.php?sid=9153&current_edition=2011-08-24

"Affordable" coverage for employees, but not their families

Measuring the Affordability of Employer Health Coverage

By Larry Levitt and Gary Claxton
Kaiser Family Foundation, August 24, 2011

A recent draft regulation issued by the Treasury Department describes who is eligible for premium tax credits to help them afford coverage offered through health insurance exchanges beginning in 2014. The approach that the regulation proposes for measuring the affordability of employer coverage could have significant financial consequences for a modest number of lower- and middle-income families.

Starting in 2014, the health reform law generally requires people to have health insurance and provides tax credits to help them afford it. Those who are offered health insurance through a job, however, are expected to take that coverage and generally are not eligible for premium tax credits. This includes both the worker and any family members who are eligible to enroll in the job-based coverage. There is an exception to this rule, though: if people are offered coverage by an employer that has patient cost-sharing above a certain level or is unaffordable, they are permitted to forgo the employer plan and apply for a tax credit that can be used for coverage in an exchange. Job-based coverage is considered unaffordable if the amount of the out-of-pocket premium for the employer coverage exceeds 9.5% of that person’s income.

While it’s clear how this applies to a single worker without any dependents, determining a family’s eligibility for premium tax credits is far less clear in the law. One way would be to look at what the family would have to pay for coverage based on its size and compare that to its income. A second way, which the Treasury Department has proposed, would judge affordability for the entire family based solely on whether the employee’s contribution for single coverage would exceed 9.5% of family income, regardless how much it would cost the entire family to enroll in job-based coverage. A third hybrid approach is also possible: affordability for the worker could be determined based on the required contribution for single coverage while affordability for the remaining family members would be based on the required contribution for family coverage.

What would this mean for families? We estimated the effect based on coverage in 2008 using demographic and insurance data from the Medical Expenditure Panel Survey and employee premium contribution information from the Kaiser/HRET Employer Health Benefits Survey. The analysis – which assumes no behavior changes by employers in response to the health reform law – suggests that there are about 3.9 million non-working dependents in families (technically, “health insurance units”) in which the worker has access to affordable employer-sponsored coverage but the family does not. Under the draft regulation, these family members would be excluded from getting federal tax credits to help them buy coverage in health insurance exchanges. On average they’d have to pay 14% of their income to opt into the employer coverage, substantially more than what they would pay in an exchange.

In the draft regulation, the Treasury Department indicated that it expects to exempt these family members from the requirement to buy insurance, so they won’t be penalized if they choose to forego coverage. Some of these families would probably still decide to enroll in their employer coverage even though they would have to pay a large percentage of income for it; that would likely be the case even if they were permitted to buy subsidized insurance in an exchange. People value insurance, and they particularly value employer-provided benefits. But, some of these family members would undoubtedly remain uninsured.

http://healthreform.kff.org/notes-on-health-insurance-and-reform/2011/august/measuring-the-affordability-of-employer-health-coverage.aspx

Comment: 

By Don McCanne, MD

Although this policy failure of the Affordable Care Act (ACA) was touched on briefly in a recent message, it is elaborated on here because of its great importance to families.

To avoid being assessed a penalty for being uninsured, most employees will be required to obtain their health insurance through their employment. They will not be allowed the option of obtaining coverage through the state insurance exchanges and will have to forego the tax credits available for exchange plans, unless their premium is unaffordable (over 9.5% of income).

But what about their families? The Treasury Department (IRS) has tentatively ruled that ACA prohibits them from using the insurance premium for the family to determine whether it meets the threshold of affordability. Only the individual employee’s premium can be used. Even though the premium for family members may be unaffordable, they are not allowed the option of using tax credits to purchase plans in the exchanges.

What are they to do? The IRS agrees that these family premiums are unaffordable so they are ruling that the family members have a right to remain uninsured without having to pay the penalty required by the individual mandate. Our government in action – protecting the right to remain uninsured!

This is not a Catch 22, but rather a Catch 4,000,000 since it is estimated that close to four million dependents will fall into this trap in which the worker has access to “affordable” employer-sponsored coverage but the family members do not. This will impact most heavily middle-income families since those with low incomes may be eligible for Medicaid, and those with very high incomes will likely be able to afford family coverage.

What happened to the American dream? The dream wherein hard working, middle income families could be assured of shelter, food, education, and health care? It seems that all they can be guaranteed today is the right to participate in a tea party, that is if they bring their own tea.

Will job insecurity lead to health insecurity?

When Unemployed Means Uninsured: The Toll of Job Loss on Health Coverage, and How the Affordable Care Act Will Help

By Michelle M. Doty, Sara R. Collins, Ruth Robertson, and Tracy Garber
The Commonwealth Fund, August 2011

Chronically high unemployment has left millions of Americans without health insurance, which disappeared along with their wages and other job benefits. Although continuing health coverage through COBRA is an option for some workers, the often prohibitively high cost means that relatively few elect to purchase it. When fully implemented in 2014, the Affordable Care Act will dramatically increase health insurance options for people who lose their jobs. Even so, gaps in coverage will remain a risk for many workers who become unemployed or are transitioning to a new job. To help bridge coverage gaps until 2014, policymakers should consider reestablishing the COBRA premium subsidies that helped millions of people who lost their jobs in 2008–2010.

http://www.commonwealthfund.org/~/media/Files/Publications/Issue%20Brief/2011/Aug/1540_Doty_when_unemployed_means_uninsured_COBRA_reform%20brief.pdf

And…

Maintaining Coverage, Affordability, and Shared Responsibility When Income and Employment Change

By Pamela Farley Short, Katherine Swartz, Namrata Uberoi, and Deborah Graefe
The Commonwealth Fund, May 2011

The Affordable Care Act builds on existing sources of public and private health insurance, while creating new health insurance exchanges and subsidies. A potential disadvantage of preserving many sources of health insurance is the likelihood of abrupt changes in coverage or financial responsibility when individual circumstances change. This brief describes four policy challenges related to such changes: adjusting premium and cost-sharing subsidies when incomes change; coordinating eligibility for premium credits, Medicaid, and the Children’s Health Insurance Program; encouraging and facilitating continuous coverage; and minimizing transitions between individual and small-business exchanges. Policy recommendations to reduce uncertainty, simplify coverage decisions, and minimize insurance transitions include extending coverage to the open enrollment period at the end of the year, generous treatment of income gains in correcting premium tax credits, and unifying the small-business and individual exchanges.

http://www.commonwealthfund.org/~/media/Files/Publications/Issue%20Brief/2011/May/1503_Short_maintaining_coverage_affordability_reform_brief.pdf

Comment: 

By Don McCanne, MD

How many individuals continue in the same employment for their entire careers, with the same employer-sponsored health plan, with the same network of health care providers, with the same…? Well, we can stop there. Nobody does.

Generally, individuals in well-paid occupations in high demand who change their employment may face some transitional issues with health plans and provider networks, but usually they fare quite well, even if annoyed at the prospect of perhaps having to change their primary health care professionals, or whatever.

But what about low and moderate income individuals? Job instability is the norm. Income levels can fluctuate considerably. Periods of prolonged unemployment are now more common, and, based on economic projections, will likely persist into the foreseeable future.

The Affordable Care Act has so many slippery variables that it is almost impossible to predict what one’s coverage will be beyond a couple of years, if that. Eligibility can change sometimes on a monthly basis (exchange plans) or yearly basis (Medicaid) for various programs including employer-sponsored plans, Medicaid, CHIP, state exchange plans, or state Basic Health Plans. Eligibility for tax credits for premiums in the exchange plans and for cost sharing reductions can be very unstable because of fluctuations in income. Even waiver of the penalty for failure to purchase private insurance can trigger in or out quite abruptly.

The newest Commonwealth Fund report addresses specifically the problem of coverage during intervals of unemployment. COBRA plans allow newly unemployed workers to continue with coverage under their former employer-sponsored plans but with the out-of-work former employees having to pay the full premiums. COBRA plans have had an unacceptably low participation simply because a person out of work cannot pay the premiums.

To address the problem of unaffordable COBRA premiums that became even more prevalent during the Great Recession, the American Recovery and Reinvestment Act (ARRA) authorized premium subsidies for the purchase of COBRA plans, but that program has expired.

To provide coverage during transitions of unemployment in the future, the authors of this report suggest that the subsidies be permanently resuscitated. The problem with this approach is, even with these temporary subsidies, the COBRA take-up rate was still well less than half of eligible former employees. Policies that don’t work shouldn’t take precedence over policies that do.

You can apply all of the patches that you can devise to the leaking ship of the Affordable Care Act, but it is still going to leak. As more patches are applied, it is further weighted down with greater expenses and with even more administrative burdens – enough to sink any ship.

You want something that floats? Try enrolling everyone at birth, permanently. The solid ship of Medicare for All would have no leaks to patch.

Invitation to a Dialogue: A National Health Plan

Letter
New York Times, August 23, 2011

To the Editor:

In “Will Health Care Reform Survive the Courts?” (State of Play, Sunday Review, Aug. 21), Philip M. Boffey states that “reforms would work far less well without an individual mandate” that requires citizens to buy health insurance or pay a penalty.

I disagree. Health care reform could provide better care at less cost by replacing individual mandates with a single-payer national health care plan financed by taxes. Congress’s power to mandate purchase of private products sold at a profit is disputable, but Congress’s power to tax is not.

Other industrialized countries have national health plans providing care to more citizens at less cost with better outcomes than our system. And they don’t use mandates that allow insurers to charge different prices for different people.

These health care systems have three common properties: public subsidies ensure that everyone has access to care regardless of health, wealth or employment; primary care is encouraged; and publicly accountable, transparent, not-for-profit agencies transfer funds from patient to provider.

There is no need to experiment with mandates. Convert our current health care system into a national health plan.

SAMUEL METZ
Portland, Ore., Aug. 21, 2011

The writer, an anesthesiologist, is a founding member of Mad as Hell Doctors, which advocates a single-payer system.

Editors’ Note: We invite readers to respond to this letter for our Sunday Dialogue. We plan to publish responses and Dr. Metz’s rejoinder in the Sunday Review. E-mail: letters@nytimes.com

http://www.nytimes.com/2011/08/24/opinion/invitation-to-a-dialogue-a-national-health-plan.html

Is reducing hospital readmissions an answer?

Incidence of potentially avoidable urgent readmissions and their relation to all-cause urgent readmissions

By Carl van Walraven MD MSc, Alison Jennings MA, Monica Taljaard PhD, Irfan Dhalla MD MSc, Shane English MD, Sunita Mulpuru MD, Saul Blecker MD, Alan J. Forster MD MSc
CMAJ (Canadian Medical Association), August 22, 2011

Urgent, unplanned hospital readmissions are increasingly being used to measure institutional or regional quality of care. The public reporting of readmissions and their use in considerations for funding suggest a belief that readmissions indicate the quality of care provided by particular institutions. However, urgent readmissions are an informative metric only if we know what proportion of them are avoidable. If they are rarely avoidable, they would be a poor gauge of the quality of patient care.

Current estimates of the proportion of urgent readmissions that are avoidable are unreliable. In a systematic review of 34 studies that reviewed how many readmissions were avoidable, 3 of the studies relied solely on combinations of administrative diagnostic codes, and most used undefined or subjective criteria. In addition, most of the studies were conducted at a single centre and used only one reviewer. The proportion of readmissions deemed avoidable varied widely, from 5.1%6 to 78.9%,7 which reflected in part the lack of standardized and reliable methods to identify avoidable readmissions.

We conducted a multicentre prospective cohort study to elicit judgments from multiple practising physicians who used standard implicit review methods to determine whether urgent re admissions were potentially avoidable. We analyzed these judgments using a latent class analysis. We also measured the proportion of readmissions deemed avoidable and compared hospital-specific proportions of all-cause and avoidable readmissions.

Conclusion

Urgent readmissions deemed potentially avoidable were relatively uncommon, comprising less than 20% of all urgent readmissions following hospital discharge. Hospital-specific proportions of patients who were readmitted were not related to proportions of those whose readmissions were deemed avoidable.

Given the variety of causes and circumstances of the potentially avoidable readmissions in our study, interventions to decrease the risk of readmission need to be multifactorial in nature and malleable to be appropriately tailored for each situation.

Our study has important implications for research into the quality of hospital care. First, determining whether urgent readmissions were avoidable is a subjective judgment that requires detailed patient data, multiple reviewers and an analysis that accounts for differing reviewer accuracy when collating judgments. Such judgments cannot be determined accurately on the basis of administrative data alone, given the infinite combinations of patient, hospital, treatment and post-discharge factors that can influence urgent readmissions. Second, we found no association between hospital-specific proportions of all-cause and avoidable readmissions. Therefore, urgent readmissions should be used with caution to gauge the quality of hospital care.

http://www.cmaj.ca/content/early/2011/08/22/cmaj.110400.full.pdf+html

Comment: 

By Don McCanne, MD

This Canadian study provides a great example of how we, in the United States, “think up” policies to control health spending while improving quality, and then apply those policies simply because they “should work.” Many of these policy decisions are used to divert our attention from much more effective measures such as a single payer national health program.

In this instance, the theory is that unplanned readmissions after a previous stay in the hospital are avoidable with appropriate in-hospital and post-discharge management. If the professionals and other personnel would do their jobs right, quality would improve and the costs of re-hospitalization would be avoided.

Although the Canadians, with their single payer system, evaluated readmissions from the perspective of improving quality, the emphasis in the United States, with its market medicine, has been on costs (e.g., refuse payment for re-admissions).

This study demonstrates that the reasons for readmission are very complex and highly variable and have very little relationship to either human or systems failure. Readmission rates should not be a major driver of policy.

Through this distraction, we’ve been fooled again. It’s not lousy health care professionals who are the source of our problems, it is the inhumane and outrageously expensive market-based health care financing and allocation system that is the problem. That’s what we need to fix. Then we could set aside issues of greed and concentrate on health care quality instead, like the Canadians are doing.

Jack Layton

March 5, 2006

“When you’re sick, you present your medicare card, not your credit card. New Democrats will not stand idly by. We will be fighting each and every day for our precious medicare system.”

Jack Layton
(July 18, 1950 – August 22, 2011)

http://www.vancouversun.com/health/Quotes+Jack+Layton+words/5289596/story.html

And..

Letter from Jack Layton, MP, Député Toronto – Danforth

Leader of the Official Opposition/Chef de l’Opposition officielle
Leader, New Democratic Party/Chef, Nouveau Parti démocratique
August 20, 2011
Toronto, Ontario

Dear Friends,

(excerpt)

To young Canadians:

All my life I have worked to make things better. Hope and optimism have defined my political career, and I continue to be hopeful and optimistic about Canada. Young people have been a great source of inspiration for me. I have met and talked with so many of you about your dreams, your frustrations, and your ideas for change. More and more, you are engaging in politics because you want to change things for the better. Many of you have placed your trust in our party. As my time in political life draws to a close I want to share with you my belief in your power to change this country and this world. There are great challenges before you, from the overwhelming nature of climate change to the unfairness of an economy that excludes so many from our collective wealth, and the changes necessary to build a more inclusive and generous Canada. I believe in you. Your energy, your vision, your passion for justice are exactly what this country needs today. You need to be at the heart of our economy, our political life, and our plans for the present and the future.

My friends, love is better than anger. Hope is better than fear. Optimism is better than despair. So let us be loving, hopeful and optimistic. And we’ll change the world.
 
All my very best,
 
Jack Layton

http://antemedius.com/files/Jack_Layton_s_lett_1310744a.pdf

Employers continue to shift health care costs to employees

Large Employers’ 2012 Health Plan Design Changes

National Business Group on Health
August 18, 2011

Medical Plan Costs

In 2012, 63% of employers will increase the employee percentage contribution to premium costs, and 39% will increase in-network deductibles.

Consumer-Directed Health Care

More employers will be offering a consumer-directed health plan (CDHP) in 2012 than in previous years, with 73% planning to offer at least one CDHP next year. In addition, 17% of employers have or will move to a full replacement CDHP design in 2012. The most common type of CDHP employers will offer next year is a high-deductible health plan (HDHP) with a health savings account (HSA) (75%).
 
The most common method employers use to load health accounts is by contributing a predetermined amount per participant, with 59% of employers with HSAs doing so, and 84% doing the same for health reimbursement accounts (HRA).

Pharmacy Benefits

To manage pharmacy benefits, most employers use prior authorization (76%). The next most popular techniques are:
• quantity limits (72%)
• step therapy (65%)
• three-tier design (59%)

Retiree Health

Fewer employers offer retiree benefits to current active employees, with 26% covering all current actives and 38% covering a portion of their actives. Very few employers offer retiree health benefits for new hires, with 12% offering coverage to pre-65 retirees and 7% offering post-65 supplemental coverage to new hires.
 
The top strategies being used to control retiree health care costs are capping company contributions (45%), increasing employee contributions (31%) and eliminating coverage for future retirees (28%).

http://capsules.kaiserhealthnews.org/wp-content/uploads/2011/08/2012-NBGH-Plan-Design-Survey-Report-Embargoed-Edition.pdf

And…

Survey: Employers shift rising health costs to their workers

By Sam Baker
The Hill, August 18, 2011

Businesses are shifting away from co-pays, wherein employees pay a fixed dollar amount for healthcare services and the plan picks up the rest. Instead, they’re charging workers a percentage of the total costs. That can help make consumers more aware of the total cost of the healthcare they use.

“We are clearly seeing a march toward a more aggressive consumerist system,” said Helen Darling, president of the National Business Group on Health.

Darling said Thursday that shifting from co-pays to coinsurance is “a more subtle way to increase what the consumer pays.” She predicted that eventually, only governments and unions will keep offering fixed co-pays.

http://thehill.com/blogs/healthwatch/health-insurance/177361-employers-shifting-healthcare-costs-to-workers

Comment: 

By Don McCanne, MD

Employers are reducing the transparency of the massive shift of health care costs to their employees by using many different methods that individually do not look too onerous, but cumulatively have a major impact.

Some of the methods of shifting more health care costs to their employees include greater premium contributions, greater use of large deductibles and consumer-directed health plans, greater restrictions on pharmacy benefits, and a sharp reduction or elimination of retiree health benefits. One of the more subtle but important methods is reducing the use of co-payments (a fixed dollar amount for a service or product) and instead using coinsurance (a percentage of the amount charged). The percentages are usually much larger than the co-payments would be.

Most of the businesses surveyed are very large corporations (83 percent have over 10,000 employees). Their corporate executives and their passive shareholders have done very well in the last few decades, being beneficiaries of the upward transfer of wealth in our society. Their employees have not done so well and have experienced greater difficulties in managing their personal finances.

Rising health care costs are a problem for all of us. They are now so great that we need progressive methods of financing health care. Yet shifting costs from the wealthy corporate plutocracy to the employees is a regressive form of financing.

Supposedly employers are still contributing a large share of the premium, but only nominally. Most economists agree that employees pay the employer component of the premium though forgone wage increases, and wages have certainly been flat. Again, this is regressive financing.

In crafting the Affordable Care Act, efforts were made to protect employer-sponsored plans so that they would still be the largest source of health care coverage. Is this wise?

Not only is the financing regressive, it leaves in place the administratively wasteful private health plans that intrude on health care by taking away certain benefits and taking away choices of health care providers. It leaves in place the fragmented financing model of private plans that has been incapable of slowing the rate of growth in costs to a level closer to those of other industrialized nations. Furthermore, it leaves health policy decisions in the hands of corporate executives who are beholden above all to their investors, whereas the employees are mere pawns to be used to create wealth for the investors. Why else would they be using so many means to shift more health care costs to the employees?

Every time I write one of these commentaries, I think that the logic of an improved Medicare for All would make it an imperative. Maybe the problem is that logic would lead to health care justice, and that seems to be unthinkable in the United States.

David Brooks' view on Medicare mistaken

By Debra Walter, M.D.
Letters, Arizona Daily Star, June 14, 2011

Re: the June 8 column by David Brooks “Medicare proposals reflect parties’ worldviews”:

While I agree the debate really reflects broad philosophical differences, he is quite mistaken in assuming private insurance plans represent “local control.”

Blue Cross, United, Aetna and others are just as national and centralized as Medicare; they all have divisional levels of control.

Any physician will tell you that Medicare is the easiest and least controlling of all insurance choices.

The debate is really about the sanctity of corporate control versus allowing our government to assist us in pooling our resources and funding health care for all.

The continued fantasy that for-profit health insurance companies are acting in our collective best interest hasn’t proven to be true yet.

The continued drain of our health care dollars into profit, administration and advertising will keep draining our health as a nation until we as a country decide to take charge and take care of ourselves without the corporate middleman.

Debra Walter is a physician in Tucson.

Abortion Training, Childhood Obesity, Single Payer Catch Medical Students’ Attention

Richard Bruno, a third-year medical student, joined his peers in drafting policy recommendations for the American Association of Family Providers

By Christen McCurdy
The Lund Report, Aug. 17, 2011

Oregon Health and Science University medical student Richard Bruno has taken his passions – healthier diets for kids, improved working conditions for medical students, preserving access to abortion training and investigating the feasibility of a single-payer healthcare system – to a national level.

“If there’s anything that sort of underlies all this, it’s that medical student advocacy is really something that should be encouraged at medical schools,” Bruno said. “Medical students can be a voice for the voiceless, uninsured patients who are out there. If we teach them to harness the power of their short, white coats, they could really start to make a difference starting now and throughout their careers.”

At the end of July, the American Association of Family Providers (AAFP) held its annual conference – which included a student congress – in Kansas City. Bruno and several colleagues drafted policy resolutions that are expected to come before its Scientific Assembly in September.

As far as abortion training for medical students, which came under attack when the Foxx Amendment passed Congress recently, Bruno felt “we should take a stronger stance on this issue, especially given the national push.” That amendment restricts the ability of medical schools to receive federal funding if they teach students how to perform abortions.

Improving the working conditions for medical students also caught Bruno’s attention. A recent article in the New York Times focused on the plight of sleep-deprived doctors, which led to patients receiving inferior care. “I’m just getting a taste of this as a third-year medical student,” Bruno said. “No one’s tracking my hours. No one’s telling me when to go home.”

Bruno also believes the AAFP should create a task force to research a single-payer healthcare system, referring to a study commissioned by Vermont published in the New England Journal of Medicine, which found that a single-payer system would not only save the state money, but be beneficial for everyone. 

Childhood obesity is another cause trumpeted by Bruno and his colleagues. Earlier this year the Oregon Medical Association rejected a resolution calling upon McDonald’s to stop marketing to children. “The OMA was trepidatious about calling out a single company,” he said.

Now Bruno is calling upon the AAFP to sever its ties to Coca-Cola, which advertises on that website.

“It’s pretty much a conflict of interest,” he said, because these advertisements contradict information on the same website, asserting that sugar-sweetened beverages are unhealthy.

http://www.thelundreport.org/resource/abortion_training_childhood_obesity_catch_medical_students%E2%80%99_attention