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Inequity of means-testing federal health benefits

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Inequity of means-testing federal health benefits

NBER Working Paper No. 23990; Means-Testing Federal Health Entitlement Benefits

By Andrew Samwick
National Bureau of Economic Research, November 2017

Abstract

Recent federal legislation has linked the price paid for health insurance benefits to current income. Under the Patient Protection and Affordable Care Act of 2010, individuals and families with income as high as 400 percent of the federal poverty level are eligible for premium tax credits that limit their health insurance premiums to under 10 percent of their income. Under the Medicare Modernization Act of 2003, higher-income beneficiaries face income-related premiums over three times the standard premium for Part B coverage. For workers at or near retirement age, means-testing based on current income provides an incentive for early retirement, dissaving, and income manipulation, raising concerns about the efficiency of such means-testing. Further, current income is subject to short-term fluctuations, making it a noisy predictor of ability to pay. Using the Health and Retirement Study and linked Social Security earnings histories, this paper introduces a measure of lifetime income that compares favorably to current income as a basis for means-testing. It offers less short-term variation in premiums while improving incentives for pre-retirement work and saving.

From the Conclusion

Policy makers must balance equity and efficiency considerations when designing social insurance programs. Both the Medicare Modernization Act of 2003 and the Affordable Care Act of 2010 introduced means-testing of federal health entitlement benefits based on current income. Means-testing based on current income for those near or in retirement has several disadvantages as a basis for entitlements: it provides incentives to lower income by reducing saving and work; it provides incentives to manipulate income or change its composition; and it bases transfers on a noisy measure of ability to pay. Against these disadvantages is the possibility of providing insurance against adverse shocks to current income. This paper provides a first analysis of the extent to which the provisions of these laws have introduced these disadvantages relative to means-testing based on Medicare Average Earnings, a measure of lifetime income based on earnings subject to the Medicare payroll tax.

This study has illuminated the need to measure and evaluate the extent to which means- testing on current income introduces economic inefficiencies and inequities.

To the extent that the use of current income is shifting behavior in unproductive ways, means-testing based on lifetime earnings can be considered as a potential alternative.

http://www.nber.org…

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Comment:

By Don McCanne, M.D.

This paper is important because it demonstrates the counter-intuitive inefficiencies and inequities of means-testing federal health benefits, particularly for Medicare Part B premiums and for premium tax credits under the Affordable Care Act. The author suggests that this unfairness can be mitigated partially by using lifetime earnings instead of current earnings to determine the means-tested premium contribution for these federal programs. But this ignores the most serious flaw in using means-tested premiums and that is that premiums are used at all.

In an equitable health care system the financing of health care and the delivery of health care services should be totally separated. Everyone should have equal access to the health care delivery system based on medical need, with income or wealth playing no role. The financing of the system should be based on ability to pay. The latter is easy since the universal risk pool can be financed through progressive taxes.

A wealthy nation should be able to support, through equitable taxes, a health care system that has adequate capacity and provides appropriate access to primary care and specialized services. Charging premiums decreases equity since the burden is inversely related to income. Means-testing the premium reduces that inequity but it also reduces the political support of higher-income individuals who might resent paying more. Since the wealthy have a much greater political voice, there likely would be a greater effort to further privatize Medicare, fragmenting the Medicare Advantage market into Cadillac plans for the wealthy and an underfunded, spartan public plan for the masses.

One of the improvements for an Improved Medicare for All should be to eliminate any premiums and cost-sharing so that everyone has equal access to health care regardless of means.

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Nobel Laureate Richard Thaler on why we choose the wrong health plans

Why So Many People Choose the Wrong Health Plans

By Richard H. Thaler
The New York Times, November 4, 2017

If you get health insurance from your employer, you have to make decision every year about which coverage to choose.

So here is a warning: If you are simply sticking with an old plan with a low deductible, that may well be a wrong and costly choice.

Because of human quirks, lack of understanding and overly complicated plans, many people are paying more without getting anything extra in return.

Economists have a term for a situation like this, where one option is better than another under any circumstances, dominance. And that is what we see in many workplaces: The cheaper health care plan, at every level of medical spending, often has a higher deductible — a higher spending hurdle that must be reached before reimbursements begin.

(He describes studies showing that the high deductible plan is usually the more rational choice.)

There are, however, many financial incentives for going the high-deductible route. Some are embodied in health savings accounts, of H.S.A.s, which provide tax breaks and are only offered in combination with high-deductible plans.

There is another compelling advantage: Many companies contribute to these accounts for their employees.

I realize this is all complicated. Unfortunately, it is impossible to say which specific plan is best for your family without looking closely at the details.

If you want hints about how to crunch the numbers for yourself, the accompanying article may help you.***

Richard H. Thaler, a professor of economics at the University of Chicago, has won the 2017 Nobel Memorial Prize in Economic Sciences.

https://www.nytimes.com…

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Which Health Plan Is Cheaper?

By Richard H. Thaler
The New York Times, November 4, 2017

But there is an imperfect, yet fairly, simple way to check whether a high-deductible plan might qualify for “no-brainer” status, meaning, it enables you to save on health care no matter how often you go to the doctor.

Start with your premiums

Figure out how much you would have to pay in total annual premiums for low- and high-deductible plans.

Do a zero-expense test

Then turn to the high-deductible plan. If your employer contributes to a Health Savings Account for you, subtract that amount — say, $1,000 — from the cost of the premiums.

Compare the result for the two plans. The high-deductible plan is bound to be cheaper. The difference is how much you would save if you have zero health care expenses.

Clear the high-deductible hurdle

Next, try a test that is more difficult for high-deductible health plans: Consider what happens if your expenses are exactly equal to the deductible for each plan.

For example, say the low-deductible plan has an annual premium of $3,650 and a deductible of $1,000. You’d pay $4,650 if your bills equal the amount of the deductible.

By comparison, the high-deductible plan has an annual premium of $2,000 and a deductible of $3,250. You would spend $5,250 if you hit the deductible, except for one important thing: Your employer contributes $1,000 to your H.S.A., so your total costs only come to $4,250.

That is $400 less than the amount for the low-deductible plan.

So far, in this case, the high-deductible plan is a “no-brainer.”

Do it all again

Finally, repeat these steps, using the maximum-out-of-pocket limit for each plan in place of the deductible. If the high-deductible plan is still cheaper, it may be a “no-brainer.”

That’s it. You’re done with the simple test.

A note of caution

Remember, these calculations are not perfect because there are complicating factors.

https://www.nytimes.com…

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Comment:

By Don McCanne, M.D.

Last month Richard Thaler received the Nobel Prize for his work in behavioral economics, showing that people are “predictably irrational, consistently behaving in ways that defy economic theory” (NYT, Oct 9). Thus he is quite qualified to explain to us why it is irrational to choose a health plan with a low deductible rather than a high deductible, though he does concede that it is complicated.

The example he uses shows that the employee will pay less for care that reaches the amount of the deductible providing the employer contributes $1,000 to the employee’s health savings account (HSA). Of course, the insurance actuaries do not assume that $1,000 of the deductible will be forgiven, thus the actual premium does not reflect that savings. In essence, by making the $1,000 contribution, the employer has reduced the deductible by that amount whereas the premium is set for a plan with a deductible that is $1,000 higher. There are many other potential variables that the insurance actuaries will not miss thus ensuring that the premium paid to the insurer is set at the optimum level balancing competitive pricing with insurer profits.

Thaler barely touches on a more important consideration here under behavioral economics. Faced with higher deductibles patients will reduce their use of often beneficial health care services which can impair their health outcomes. This is the opposite of what we should expect from a health care financing system. Instead the system should assist patients in receiving the care that they should have.

Imagine behavioral economics under a single payer system with first dollar coverage. With no deductible, the patient makes the decision to access care based on perceived need for that care. That is as it should be. There is no need to complicate that decision by adding consideration of out-of-pocket expenses for the care. The economic decisions are limited to investment of time, loss of hours at work, and perhaps incidentals such as transportation which still may be significant, but not a matter of health insurance design.

Thaler suggests raising premiums and putting the extra money into an HSA so that there is enough to cover the full deductible, or, even better, the employee’s maximum cost sharing so the individual would not have to worry about deductibles or other out-of-pocket costs. This would do what a single payer system with first dollar coverage would do except with much greater administrative complexity and consequent waste of resources.

Let’s take advantage of our understanding of behavioral economics and set up an efficient system in which individuals simply obtain the care they need when they need it, without any worry about how they are going to pay for it. A single payer national health program would do just that.

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How burnout is plaguing doctors and harming patients

By Jay Desai, M.D.
The Conversation, November 5, 2017

The presidential symposium at this year’s Annual Meeting of the Child Neurology Society of America in early October in Kansas City raised many eyebrows. The first presentation of this symposium focused on burnout rates among neurologists around the country.

Many of my colleagues felt that this was an inappropriate choice, especially with so many trainees and young child neurologists in the audience. Typically, the presidential symposium at a conference of such eminence addresses an issue of scientific importance. But some other colleagues felt that this discussion was essential and that the elephant in the room cannot be ignored anymore.

As I sat through it, I felt that the presentation was outright depressing, with speakers belting out dismal data about the state of mind of neurologists around the country. The most striking statistic was that about 60 percent of neurologists in the U.S. were experiencing burnout symptoms, including emotional exhaustion or lack of a sense of accomplishment. They also showed signs of depersonalization, which is an impaired perception of self and others that can lead to lack of empathy, including for patients.

I have been taking care of patients for more than two decades since graduating from medical school in 1994. I had not even heard of physician burnout until about four years ago when a lot of data started getting published. However, it is now a subject of discussion among physicians on wards, in clinic and at conferences, as we all realize that it is a menace.

The core that provides care

Unsurprisingly, the rot extends beyond the field of neurology. Several reports recently have highlighted that physician burnout rates across many major specialties in the U.S. have reached epidemic proportions. For example, a survey earlier this year suggested that the physician burnout rate exceeded 50 percent for the fields of emergency medicine, obstetrics and gynecology, family medicine, internal medicine, critical care, anesthesiology, pediatrics, neurology, urology, cardiology, rheumatology and infectious disease.

This is bad for doctors, and it’s bad for patients. Physician burnout is a public health hazard, because it is a danger to patient safety and leads to poorer care.

The presidential symposium got me thinking about my own professional life. Was I positive about my career? What made me continue to pursue the practice of neurology? And, did anyone at work inspire me to remain engaged?

As I reflected on these questions about what helps me avoid burnout, an obvious answer came immediately: I knew that I continually looked up to two senior physicians in my division who trained me to be a child neurologist about a decade ago and now happen to be my colleagues.

But then I realized that there were some others who served as my inspiration at a subconscious level.

One of them is a medical social worker who joined us just a few months back. Imposing in stature, with a crop of curly high-top hairdo that makes him appear even taller, he is at ease when interacting with kids and parents alike. The focus of his work is to provide support to families that are overwhelmed with the care of children with chronic neurological illnesses. I can rely on him to come up with solutions to any of my patients’ problems, whether it is finding mental health support or getting insurance coverage. And he manages to handle an extremely demanding schedule without ever appearing to be hurried. While many of us dread electronic medical record keeping, his notes wondrously manage to not only incorporate precise wordings but also have the most aesthetically pleasing fonts.

The other co-worker who inspires me guards the front desk of our office. He ushers in patients and their families. This may not sound like an important job to laypersons. But he gives a new meaning to the art of making a first impression, the art of putting sick patients and their families at ease. And he does so day in day out with warmth that few can ever manage to radiate.

The four individuals mentioned above have little in common, except that they directly interact with and take good care of patients and their families.

The superstructure

At the same time, I, like most doctors across America, have scores of colleagues who never interact with a patient or directly contribute to the actual care. These include billers, coders, financial counselors, accountants, managers, directors, strategists and so on. They play an increasingly critical role in the complex multi-payer health care setup as it operates today.

Unfortunately, the nurses, the therapists, the physicians, the pharmacists, the social workers – the folks who interact with patients and directly contribute to the provision of care – are arguably becoming smaller in their significance within the health care system of America.

The entire industry’s focus seems to have shifted to administration and the business side of medicine. There are data to support this: We spend way more on administrative costs than any other country around the world to deliver care, particularly in the hospital setting. This shift in focus is likely the central cause of burnout.

Can the setup be overhauled or the course be reversed?

My grandfather once risked his life and crossed a flooded river on a horseback to steer a woman in the midst of a complicated labor to safety. He treated the poor free of charge, and he took money from the rich to build a hospital in an area of India where medical care was in short supply. He had nothing much to worry about then, except his conscience.

In 21st-century America, we can’t hope to recreate such a utopian scenario. But we can certainly restructure the health care setup enough to help us restore some of the passion. In my opinion, adopting a single-payer health care system will help cut administrative layers. A majority of physicians in the U.S. support moving to a single-payer model, according to a recent survey.

I offer an additional or an alternative solution, one that will require innovative strategies to implement: Any person engaged in the health care industry in an administrative capacity ought to spend at least 20 percent of time and effort in interacting directly with patients. This will put the patients back in the focus and bring passion back into the field of medicine.

Dr. Desai is a neurologist and an assistant professor at the University of Southern California.

https://theconversation.com…

‘Choosing Wisely’: How much low-value care is preventable?

Choosing Wisely Campaign: Valuable For Providers Who Knew About It, But Awareness Remained Constant, 2014–17

By Carrie H. Colla and Alexander J. Mainor
Health Affairs, October 24, 2017

Abstract

Together with physician specialty societies, the Choosing Wisely® campaign has codified recommendations of which health care services’ use should be questioned and discussed with patients. The ABIM Foundation administered surveys in 2014 and 2017 to examine physicians’ attitudes toward and awareness of the use of low-value care. The surveys included questions on the factors driving that use, physicians’ comfort in having conversations with patients about that use, and physicians’ exposure to the Choosing Wisely campaign. Despite continued publicity and physician outreach efforts, there were no significant changes between 2014 and 2017 in awareness of the campaign among physicians (awareness increased from 21 percent to 25 percent) or physician-reported difficulty in talking to patients about avoiding a low-value service (42 percent reported that such conversations had gotten harder in 2014, and 46 percent did so in 2017). Barriers to the adoption of recommendations included malpractice concerns, patient demand and satisfaction, and physicians’ desire for more information to reduce uncertainty. Multifaceted interventions that reinforce guidelines through personalized education, follow-up, and feedback, as well as aligned financial incentives, should be pursued to reduce the use of low-value services.

From the Introduction

Low-value care — care that provides little or no benefit to patients given costs, patients’ preferences, and available alternatives — is widespread in the United States. It is commonly estimated that up to 30 percent of care is waste, which contributes substantially to costs. Since its founding in 2012, the ABIM Foundation’s Choosing Wisely® campaign has sought to address the overuse of care by providing physicians and patients with information and training on potentially low-value services. While Choosing Wisely services vary widely in their potential impact on care and spending, they are a starting point in the conversation between patients and providers about low-value care.

Most physicians familiar with the campaign believe that it is valuable. However, it has yet to make a large difference in physicians’ or patients’ behavior.

Drivers of the use of low-value care

Physicians were asked to identify drivers of low-value care use, regardless of whether they thought the drivers were “major” or “minor” contributors to the use of that care. The most common reasons identified in the 2017 survey for ordering an unnecessary test or procedure were physicians’ malpractice concerns (87 percent), physicians’ desire for more information to reduce uncertainty (84 percent), and “just to be safe” (78 percent). On average, respondents identified five distinct reasons for the use of unnecessary care. Notably, all of these reasons increased in frequency from 2014 to 2017. The increases were significant in the case of not enough time to spend with patients, malpractice concerns, keeping patients happy, having access to new technology in the practice, feeling that patients should make the final decision, fee-for-service payment, and the physician wanting more information for reassurance.

From the Discussion

The estimates of awareness of the Choosing Wisely campaign in this survey are considerably lower than other estimates. Primary care providers have shown greater awareness of the campaign than specialists. Reports of the following barriers to reducing the use of low-value care in other research have been consistent with our findings: malpractice concerns and patient demand for services, concern about missing a serious diagnosis, community standards of care, lack of time to engage patients in shared decision making, the number of tests and treatments recommended by specialists, the proliferation of clinical performance measures with uncertain links to quality of care, and financial incentives.

Little empirical evidence has been found to support two commonly identified barriers to reducing the use of low-value care: demands from patients and physicians’ fear of malpractice liability. The demand for inappropriate services occurred in fewer than 1 percent of patient-clinician encounters in cancer care. This “myth of the demanding patient” — the idea that eager patients, rather than physicians, are driving the proliferation of unnecessary tests and procedures — risks leading to an underestimate of the impact of physicians’ choices on the provision of low-value care.

Physicians’ fear of malpractice liability is also commonly identified as a major contributor to the use of low-value care. However, empirical research has found that “defensive medicine” contributes roughly 3 percent to overall health care spending and that physicians do not change how they practice in response to changes in malpractice liability.

http://www.healthaffairs.org…

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Comment:

By Don McCanne, M.D.

It is often stated that 30 percent of health care could be eliminated without impairing medical outcomes. An effort to reduce low-value care – sometimes referred to as “medical waste” – is what the Choosing Wisely Campaign is all about. Specific presumed low-value services were selected and widely publicized as services that could be sharply reduced in volume and thus reduce our excess spending on health care.

Although this seems like a good idea, the program has been quite ineffective. Use of these services has been driven primarily by physicians rather than patients (“myth of the demanding patient”). Although physicians frequently claim that the purpose is to reduce the risk of malpractice liability, much of it is to reduce uncertainty or “just to be safe.”

Everyone would agree that care that is never of any value at all should be abandoned. But it is much more difficult to determine at which threshold care that is of low value should be abandoned. “Although the probability is low, this just might be an instance where this procedure would benefit my patient.” Besides, when recommendations for common serious disorders keep changing (mammography, PSA screening, etc.), how could we ever develop clearly consistent guidelines for management of the multitude of lesser disorders?

So the costs of that 30 percent of health care that is considered to be medical waste would be very difficult to recover, as the Choosing Wisely Campaign is demonstrating. That isn’t to say that we shouldn’t keep trying to reduce what might be unnecessary care, but we should not allow this effort to detract from proceeding with other reform that can recover a massive amount of waste – administrative waste, that is. A well designed single payer system would recover hundreds of billions of dollars by eliminating the administrative waste that is so prevalent in our dysfunctional health care financing system.

That is the point. Tremendous efforts are made to reduce medical waste, without much progress being made, whereas this effort has been used almost as an excuse to avoid a program that would greatly improve health care value – an improved Medicare for all. We should keep making efforts to refine medical management, but let’s move on immediately with enacting a financing system that would reap tremendous rewards.

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How to get a leaner, better, less costly health care system

By John Perryman, M.D.
Chicago Sun-Times, Letters, November 3, 2017

We in the United States have a problem. Our health care system does not perform well. We lead industrialized nations in infant and maternal mortality, lag in life expectancy, and rank 81st in the world in mortality that could be prevented by good medical care. Despite this, we spend far and away the most for health care. Our per capita costs are about $10,000/year, whereas most industrialized nations are between $4,000 and $8,000.

About 17 percent of our economy goes to health care, compared with 8 percent to 11 percent in other Organization for Economic Co-operation and Development countries.

Administrative costs are much higher in the U.S. than elsewhere. We spend anywhere from 2 to 5 times more per capita on administrative costs than any other country. Private insurers spend from 10 percent to 30 percent of revenues on non- health care expenses. These include marketing, lobbying, profits, executive salaries, and denying care. In 2016, health insurers made over $13 billion in profits, with CEOs pulling down eight-figure salaries.

While the average administrative cost of private insurers is about 20 percent of revenues, traditional Medicare is about 3 percent.

Many medications cost 50 percent to 100 percent more here than elsewhere, and we spend twice the OECD average per capita. Drug prices are rising at about 16 percent a year.

What is single-payer, and what will it do? Based on the proposal in the House of Representatives (HR 676), it is a government funded national health insurance plan. Providers and hospitals will not be owned by the government; HR 676 is not socialized medicine. Everyone is covered for their entire lifetime. Comprehensive coverage is provided for medical, dental, pharmaceutical, eye and long-term care.

There is no cost sharing, such as deductibles, co-pays or co-insurance. How can we afford this? By eliminating private health insurance for these services and cutting out hundreds of billions in administrative costs that add no value to our system. By having a single national network that can effectively negotiate prices with pharmaceutical and medical device makers.  Single-payer will result in a leaner, better performing system with improved care and lower costs. Lives will be saved, and suffering reduced. It is time.

https://chicago.suntimes.com…

Not being able to keep your health insurance under single payer

One big thing people don’t know about single payer

By Drew Altman
Axios, November 2, 2017

It is generally assumed that the biggest obstacle to a national health plan like Medicare for All will be the large tax increase needed to pay for it. But new polling shows another challenge: Almost half of the American people don’t know that they would have to change their current health insurance arrangements if there was a single-payer plan.

Would switching to a single-payer system mean changing your health insurance?

Percent who think they could keep their current plan:

47% – Total
52% – Democrats
50% – Independents
44% – Republicans
44% – People with employer coverage

Why it matters: Current insurance plans leave a lot to be desired for many people, and it is entirely possible that some people would want to switch to a Medicare for All style plan. But the public has resisted being forced to change their health care in the past — don’t forget the uproar over the cancelled plans at the launch of the Affordable Care Act.

So requiring people to change could trigger blowback and would certainly provide a talking point to help opponents scare people about single payer.

The details: Overall, the general idea of a national health plan is pretty popular, with 53% of the American people favoring a national health plan — 30% strongly favoring it and 23% somewhat favoring it. On the other side, 31% strongly oppose it and 13% somewhat oppose it. Democrats and Republicans split on the idea, as expected.

But as the chart shows, somehow, 47% of the American people think they would be able to keep their current health insurance — even though a single payer Medicare for All style plan would do away with employer-based insurance.

Advocates of single payer consider it a virtue that employer-based health insurance would be eliminated. Health reformers on the right would also do away with employer-based insurance, but they would replace it with tax credits for private insurance, not a government plan.

There are also more targeted public insurance proposals for people who can’t get Medicaid or marketplace coverage — including a government-run public option, a Medicare buy-in for 50-64 year olds, or a Medicaid buy-in option on the ACA marketplaces. They wouldn’t threaten people’s current health care arrangements, but they are far from the rallying cry for some progressives Medicare for All may be, and they’re no slam dunks in the current political environment.

The bottom line: There is no sweeping health reform plan without tradeoffs, as we learned with both the ACA and the Republican repeal-and-replace plans. The fact that so many people don’t know that a national health plan would require them to change their insurance arrangements underscores the challenge of making the transition from a popular idea to a reality for a single-payer national health plan.

https://www.axios.com…

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Comment:

By Don McCanne, M.D.

A friend of mine from Switzerland explained to me the reason that the voters rejected single payer for their country. She said that most Swiss were quite satisfied with their current plans and did not want to risk replacing them with a single plan run by the government. Likewise, in the United States many are satisfied with their employer-sponsored plans and may be uncomfortable with the prospect of changing to a plan run by government bureaucrats.

It is not too difficult to explain why people would be better off with a well designed single payer program than they are under private health plans, whether individual or group. One of the more important considerations is the stability of a plan that provides coverage for life. Obviously employer-sponsored plans change every time there is a change in employment and whenever the employer decides to change the plan(s) offered. Choice of providers is limited by most plans today resulting in fragmentation of health care with changes in provider networks. Employer-sponsored plans have been declining in actuarial value primarily through increases in deductibles and other cost sharing. The PNHP single payer model eliminates cost sharing thus removing financial barriers to care and preventing financial hardship due to excessive out-of-pocket costs. Financing of single payer is more equitable since it is based on income rather than on a premium that may not be affordable for low- and moderate-income individuals and families. Portability of coverage is not a problem since everyone is covered everywhere at all times. The list goes on.

Some would be concerned about losing the employer contribution to the insurance premium if we were to switch to single payer. But most economists agree that the employers’ contribution is paid by forgone wage increases. The premium contribution would be replaced by equitable taxes, but it would depend on the tax policies put in place as to whether the employers’ contribution would be replaced with taxes on the employer, or would be advanced to the employees as salary or wage increases, or some of both. Also, the tax expenditures (deductibility) for employer-sponsored plans are regressive since higher income individuals receive a greater tax benefit than do those with lower incomes. Regardless, the funding of health care under single payer would be much more equitable than it is now.

Thus, objectively there is no contest. A single payer national health program – an improved Medicare for all – would be vastly superior to our current fragmented, dysfunctional financing system. But facts and objectivity may be inadequate for someone whose mind is made up, as anyone can attest to who has had a conversation with a passionate Trump supporter who refuses to concede on issues for which well documented facts refute their positions. People are like that, even people who do not support Trump.

This does demonstrate the importance of educating the public on single payer Medicare for all. But the principles have to be repeated so often that they become memes, and we will always have to contend with the opponent meme-sayers. Our advantage is that we do not waiver on the truth, and they do. Most people can eventually recognize the difference.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

Half of U.S. health care payments to be made through APMs

Learning & Action Network (LAN)

Our Mission: To accelerate the health care system’s transition to alternative payment models by combining the innovation, power, and reach of the public and private sectors.

https://hcp-lan.org

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SPEECH: Remarks by Administrator Seema Verma at the Health Care Payment Learning and Action Network (LAN) Fall Summit

Centers for Medicare and Medicaid Services, October 30, 2017

The LAN offers a unique and important opportunity for payors, providers, and other stakeholders to work with CMS – in partnership – to develop innovative approaches to improving our health care system. Since 2015, the LAN has focused on working to shift away from a fee-for-service system that rewards volume instead of quality. We support this move.

We all agree that quality measures are a critical component of paying for value. But we also understand that there is a financial cost as well as an opportunity cost to reporting measures. Until we get to a smaller set of more impactful measures that assess outcomes rather than processes, the burden associated with reporting measures will run the risk of outweighing their intended purpose. We understand the problem…we understand the frustration…and we understand that something needs to be done.

That’s why we’re revising current quality measures across all programs to ensure that measure sets are streamlined, outcomes-based, and meaningful to doctors and patients. This includes a review of the Hospital Star Rating program. And, we’re announcing today our new comprehensive initiative, “Meaningful Measures.”

“Meaningful Measures” takes a new approach to quality measures to reduce the burden of reporting on all providers. It draws on advice and input from the LAN as well as the National Academies of Medicine, the Core Quality Measures Collaborative, and the National Quality Forum. Continued input from the LAN will be critical in this effort.

Our vision is to develop models that promote a patient centered system of care within a market driven health care system. Models should empower consumers to make decisions that are right for them and providers should compete around value and quality. We want patients to be activated shoppers and need to make sure they have the information and the incentives to make decisions that are right for them.

https://www.cms.gov…

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CMS announces new ‘Meaningful Measures’ initiative

By Greg Slabodkin
Health Data Management, October 30, 2017

The Centers for Medicare and Medicaid Services on Monday announced a new initiative intended to streamline quality measures, reduce regulatory burden and promote innovation in the healthcare industry as it transitions from fee-for-service to value-based payment.

The effort, called the Meaningful Measures initiative, is being described as a “new approach to quality measurement.” CMS Administrator Seema Verma made the announcement during a plenary session at the Health Care Payment Learning and Action Network (LAN) Fall Summit in Arlington, Va.

According to the agency, the Meaningful Measures initiative will “involve only assessing those core issues that are most vital to providing high-quality care and improving patient outcomes,” while adding that CMS “aims to focus on outcome-based measures going forward, as opposed to trying to micromanage processes.”

In her presentation on Monday at the LAN Fall Summit, Verma said that CMS is re-examining its “process for conducting quality measurement across the board,” such as implementing the Medicare Access and CHIP Reauthorization Act (MACRA) in a way that minimizes the burden and costs providers face in meeting the requirements.

Jeff Smith, vice president of public policy for the American Medical Informatics Association, was guarded in his assessment of new CMS initiative.

“The goals are laudable, but the talking points have been with us for several years now,” observed Smith. “Measurement depends on agreed-upon definitions of quality, and in an electronic environment, it requires access to and use of computable data. If CMS is going to turn these talking points into reality, it will need to put forth far more resources and commit additional experts to a complete overhaul of electronic quality measures for value-based payments.”

https://www.healthdatamanagement.com…

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U.S. Health Care System Ties 29% of Payments to Alternative Payment Models

Markets Insider, October 30, 2017

A report released today showed that 29% of total U.S. health care payments were tied to alternative payment models (APMs) in 2016 compared to 23% in 2015, an increase of six percentage points. The report was issued by the Health Care Payment Learning & Action Network (LAN), a public-private partnership launched in March 2015 to drive adoption and alignment of APMs. Payment reform plays a critical role in building a health care system that results in better accessibility, quality, affordability, empowerment, and innovation. Results were in line with the goals of the LAN to tie 30% of total U.S. health care payments to APMs by 2016 and 50% by 2018.

The report marks the second year of the LAN APM Measurement Effort, the largest and most comprehensive of its kind at the national level. The findings capture actual 2016 health care spending from four data sources: the LAN, America’s Health Insurance Plans (AHIP), the Blue Cross Blue Shield Association (BCBSA), and the Centers for Medicare and Medicaid Services (CMS) across commercial, Medicaid, Medicare Advantage, and fee-for-service (FFS) Medicare market segments, and categorize them according to the four categories of the original LAN APM Framework.

The LAN APM Measurement Effort determined the following results:

* 43% of health care dollars in Category 1 (e.g., traditional FFS or other legacy payments not linked to quality)

* 28% of health care dollars in Category 2 (e.g., pay-for-performance or care coordination fees)

* 29% of health care dollars in a composite of Categories 3 and 4 (e.g., shared savings, shared risk, bundled payments, or population-based payments)

Report findings show some interesting trends. First, there was a shift away from legacy FFS payments and a marked growth in Category 2, where payments are tied to value. Second, there was a six percentage point increase in alternative payment model payments (Category 3 and 4), bringing total APM spending to approximately $354.5 billion dollars nationally.

“We are encouraged by these results and the great progress being made towards APM adoption,” said Trent Haywood, Chief Medical Officer at the Blue Cross and Blue Shield Association. “These findings underscore the importance of the public and private sectors working in concert supporting providers towards APM adoption. We know that providers need information and support from health plans to take on risk. This Measurement Effort helps develop the rationale for continued payment reform, and we as health plans must continue to share information, clinical support and data on spending and quality to determine to encourage further progress.”

http://markets.businessinsider.com…

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CMS loses money as Medicare ACOs remain risk-averse

By Maria Castellucci
Modern Healthcare, October 31, 2017

The CMS’ Medicare shared savings program paid out more in bonuses to accountable care organizations than the savings those participants generated, as many were unprepared to take on downside risk, new federal data show.

About 56% of the 432 Medicare ACOs generated a total of $652 million in savings in 2016, according to the CMS dataset released last week. However, participant bonuses eclipsed those savings. The CMS paid $691 million in bonuses to ACOs, resulting in loss of $39 million from the program.

“Medicare isn’t saving money,” said David Muhlestein, chief research officer at Leavitt Partners.

That’s because 95% of the Medicare ACOs — or 410 — participated in Track 1 of the Medicare Shared Savings Program, which doesn’t require ACOs to take on any downside risk, so they aren’t on the hook for penalties if they miss their targets. Just 22 ACOs participated in advanced tracks — Track 2 or Track 3 — with downside risk. In those tracks, the ACO must pay back any losses to the CMS.

ACOs continue to shy away from downside because it’s difficult to prepare for. To participate in Tracks 2 or 3, the ACO must show the CMS it has extra capital on hand to pay losses if it misses performance targets.

Acquiring the extra capital is no easy feat, said Allison Brennan, vice president of policy at the National Association of ACOs. Typically, organizations spend millions of dollars to establish an ACO. The organizations usually have to build data analytics tools, enhance information technology and hire care coordinators and additional staff to oversee the venture.

These investments make it challenging for ACOs to free up any extra capital to take on downside risk, Brennan said.

http://www.modernhealthcare.com…

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Value of CMS’ voluntary bundled-payment program remains unclear

By Virgil Dickson
Modern Healthcare, October 31, 2017

For the third consecutive year, researchers cannot determine whether a voluntary Medicare bundled-pay initiative actually cut costs and improved care.

In a CMS-funded analysis released Oct. 26, the Lewin Group said providers were starting to reap the benefits of the Bundled Payments for Care Improvement initiative, but it’s still unclear whether the savings and improved quality actually stemmed from the program.

“Because we are measuring multiple outcomes across the range of model, participant, and episode combinations, by chance alone some results will appear significant, although in reality, they are not true effects of the initiative,” the report stated.

The results are disappointing, as BPCI is one of the longest-running programs to transition Medicare from a fee-for-service system to one that focuses on value and quality.

“We still don’t know the answer to whether bundled payments improve care,” said James Scott, CEO of Applied Policy, a reimbursement consulting firm.

http://www.modernhealthcare.com…

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Survey: Only 1 in 4 providers strongly agree EHRs prepared them for new healthcare economy

By Julie Spitzer
Becker’s Health IT & CIO Review, October 30, 2017

PwC’s Health Research Institute surveyed 300 healthcare provider executives working at for-profit, nonprofit and government-owned facilities on their experience implementing and using EHRs.

While 31 percent of providers said their organization moved to an EHR as part of a broader business strategy, 69 percent said they did so to meet CMS’ meaningful use requirements.

Just 23 percent of providers strongly agree EHRs have helped their organization’s population health and value-based care strategies.

https://www.beckershospitalreview.com…l

PwC Health Research Institute Spotlight; EHRs in the New Health Economy: Essential but insufficient
https://www.pwc.com…

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Clarity on 2017 MIPS: 4 things physicians must do to participate

By Andis Robeznieks
AMA Wire, October 31, 2017

At this point, there are two big items that should be on physicians’ to-do list regarding their 2017 obligations for the new Medicare Merit-based Payment System (MIPS): Verify that they that they are on the right path for their goals for the program; and, if not, take advantage of the “one patient, one measure” reporting option to avoid a 4 percent payment penalty in 2019.

For physicians who have not collected quality-measure data, are confused by the whole MIPS process, or who are just preparing for more active participation in 2018, the minimum reporting option may be the best course of action to take. The AMA “One Patient, One Measure, No Penalty” tutorial offers a step-by-step guide to complete the minimum-reporting process and help physicians avoid a 4 percent Medicare payment penalty for 2019.

https://wire.ama-assn.org…

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Comment:

By Don McCanne, M.D.

The mission of the Learning & Action Network (LAN) is to “accelerate the health care system’s transition to alternative payment models.” In endorsing this concept CMS Administrator Seema Verma uses the rhetoric of “rewarding quality instead of volume” and advancing her vision of “a market driven health care system.” In doing so she introduces the rhetorical concept of “Meaningful Measures.”

The LAN report has shown that there has been an explosion in the growth of alternative payment models (APMs), yes, the APMs called for in MACRA (the SGR replacement). Yet, as typified by the accountable care organizations (ACOs) and the Bundled Payments for Care Improvement program (BPCI), the APMs are not delivering. Even electronic health records (EHRs) were driven more by “meaningful use requirements” rather than population health and value-based care.

The health care reform process has been and continues to be driven by rhetoric, heavily tinged by ideology, without much substance. For years, we’ve been exposed to talking points, but the health care system remains in a quagmire because of the lack of much needed infrastructure changes such as those of a well designed single payer system.

You might want to read Seema Verma’s full speech – beautiful rhetoric calling for freeing us from regulatory burdens while empowering consumers (patients) to “make decisions that are right for them” while “providers compete around quality and value.” Oh, and if you have any idea on how to accomplish that, she invites your input.

Trent Haywood, Chief Medical Officer at the Blue Cross and Blue Shield Association seems to understand what it is all about. “We as health plans must continue to share information, clinical support and data on spending and quality to determine to encourage further progress.” It is a portal to sell us more administrative services – a whole lot more.

In the meantime, physicians will face a 4 percent Medicare payment penalty for 2019 if they do not meet the MACRA requirements – a program designed to herd physicians into APMs. Physicians have the option this year of complying with MACRA through MIPS (Merit-based Incentive Payment System) by providing one measure on one patient, and that will allow them to avoid the penalty. That solution must have been quite an intellectual challenge for the policy community.

The LAN goal is to have half of all health care payments through APMs next year even though they do not seem to be working, and they really don’t even seem to understand what they are (thus the “one patient, one measure” escape).

The policy community says that we single payer advocates need to start answering questions about our proposals. Well, we do have the answers in the form of very specific policy proposals. Maybe instead they should provide us with answers about their alternative payment models which will cover half of health care spending next year in spite of the fact that they don’t work, and they don’t even seem to understand just what the heck they are.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

Doctors in Atlanta demand health equity and Medicare for All

Physicians rally at Atlanta hospital for universal single-payer health plan

FOR IMMEDIATE RELEASE, November 1, 2017
Contact: Clare Fauke, Physicians for a National Health Program, 312-782-6006, clare@pnhp.org

WHAT: Doctors Rally for Health Equity and Medicare for All
WHEN: Friday, November 3, 5:00-5:30 p.m.
WHERE: Grady Memorial Hospital Pavilion, 80 Jesse Hill Jr Drive SE, Atlanta, GA 30303
WHO: Dozens of doctors and medical students in white coats

Atlanta—On Friday, dozens of doctors and medical students in white coats will rally at Grady Memorial Hospital demanding health equity and Medicare for All. While congressional Republicans attempt to dismantle America’s health care safety net, polls show record support for a universal health program such as H.R. 676 in the House or S. 1804 in the Senate.

“We’ll never achieve health equity without single payer health insurance as the first step,” said Akshaya Kannan, a medical student at Emory University who will lead the rally.

Many of the doctors are in Atlanta this weekend for the annual meeting of Physicians for a National Health Program (PNHP), nonprofit research and educational organization of more than 21,000 doctors and health professionals who support Medicare for All. The theme of this year’s conference is “Single Payer: Health Care Equity.”

“Every day I watch both insured and uninsured patients struggle to pay for care,” said Claudia Fegan, M.D., a Chicago-based internist and national coordinator for Physicians for a National Health Program. “In our fractured, profit-based health care system, money is always the elephant in the exam room. Not surprisingly, a majority of American doctors now support a single-payer health program.”

Rally for Health Equity speakers include:

  • Tabia Henry Akintobi, Ph.D., M.P.H., Associate Professor of Community Health and Preventive Medicine at Morehouse School of Medicine
  • Claudia Fegan, M.D., national coordinator of Physicians for a National Health Program and chief medical officer for the Cook County Health and Hospital System and John H. Stroger Jr. Hospital of Cook County
  • Akshaya Kannan, medical student at Emory University School of Medicine
  • Kate Dirks, medical student at Emory University School of Medicine
  • Kimberly Manning, M.D., physician at Grady Hospital
  • Linda Liu, medical student at the University of Chicago Pritzker School of Medicine

Kathleen Sebelius and Bill Frist digging for the Medicare Advantage gold

​The newest Medicare startup

By Sam Baker
Axios Vitals, October 24, 2017

Keep this on your radar: My colleague Bob Herman reports Devoted Health, a new insurance company that will only sell Medicare Advantage plans, just raised $62 million, according a new financial disclosure. The startup will start selling Medicare Advantage plans in 2019.

The players: Some big names are backing Devoted Health: Former HHS Secretary Kathleen Sebelius and former Senate Majority Leader Bill Frist are on the board. Todd and Ed Park, brothers who both worked at electronic health record and billing company athenahealth, are the co-founders; they also recruited Venrock’s Bob Kocher as chief medical officer.

Get smart: Medicare Advantage is where the big money is. The ACA marketplaces grab a lot of headlines, but they are a blip on the radar when compared with the hundreds of billions of dollars tied up in private Medicare plans and care for seniors.

https://www.axios.com…

Devoted Health:
https://devoted.com…

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Comment:

By Don McCanne, M.D.

“Medicare Advantage is where the big money is,” and Former HHS Secretary Kathleen Sebelius and former Senate Majority Leader Bill Frist are going for it. Our trusted public servants have led us down the path of privatization of Medicare by way of the private, for-profit Medicare Advantage plans. Now that they have left government, the payoff awaits them.

When we could have a vastly superior publicly-financed and publicly-administered improved Medicare for all, why do we continue to tolerate this? Satisfying the greed of the few takes precedence over ensuring the health of all of us? Where are our values in all of this?

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

2017 Annual Meeting Materials

PNHP’s 2017 Annual Meeting in Atlanta was a rousing success. To read highlights from the meeting, click here. To review our program book, which includes speaker bios and workshop descriptions, click here.

To access a selection of slideshows and handouts from the Annual Meeting and Leadership Training, please see below. To view photos and video from the meeting, visit our Flickr and YouTube pages.

We also encouraged members to post to social media using the hashtag #PNHP2017. Click here to read member tweets, and be sure to follow PNHP on Facebook and Twitter.

Leadership Training (Nov. 3)

Agenda & schedule for the Leadership Training

Speaking for Single Payer
By Ed Weisbart, M.D. and Claudia Fegan, M.D.
Download slideshow here
Download handout here

Moving Your Representative
By Robert Zarr, M.D., M.P.H. and Eagan Kemp
Download slideshow here

Deep Listening and Storytelling: Tools for Effective Leadership
By Carol Paris, M.D.; Emily Henkels; and Augie Lindmark
Download handout here

Working With Media
By Adam Gaffney, M.D. and Clare Fauke
Download slideshow here
Download handout here

Chapter Organizing
By Brandi Jones; Kay Tillow; and Garrett Adams, M.D., M.P.H.
Download slideshow here

Rally for Health Equity (Nov. 3)

Leadership Training participants marched from the Omni Atlanta Hotel At CNN Center to nearby Grady Hospital where we rallied with H-STAT (Health Students Taking Action Together) to demand health equity via single-payer reform.

Our members created signs at lunch, prior to the march. Click here for advice on how to make your own protest sign and email organizer@pnhp.org for advice on how to organize a single-payer rally in your community.

Annual Meeting (Nov. 4)

Agenda & schedule for the Annual Meeting

Health Policy Update
By David Himmelstein, M.D. and Steffie Woolhandler, M.D., M.P.H.
Download long slide set here
Download short slide set here
Download alternate visual from Dr. Ed Weisbart here
Download handout here

Single Payer: An Issue of Social Justice
Panel featuring Camara Jones, M.D., M.P.H., Ph.D.; Michael Bird, M.S.W., M.P.H.; Olveen Carrasquillo, M.D., M.P.H.; and Claudia Fegan, M.D. (moderator)
Download Camara Jones slideshow here
Download Olveen Carrasquillo slideshow here

The Opiod Crisis
By Bruce Trigg, M.D.
Download slideshow here

Health Effects of Mass Incarceration
By Lello Tesema, M.D.
Download slideshow here

What Happened with California’s SB 562?
By Paul Song, M.D.
Download slideshow here

On Health Divides and Social Divides
By Sandro Galea, M.D., Dr.P.H.
Download slideshow here

International Health Systems: Germany, Switzerland & the Netherlands
By Matt Anderson, M.D., M.Sc. and Kieke Okma, Ph.D.
Download handouts here and here

The Conservative and Business Cases for Single Payer
By Roger LaBonte, M.D.; Ed Weisbart, M.D.; and Richard Master
Download slideshow here

Resolutions as a Tactic for Single Payer
By Kay Tillow; Andrea DeSantis, D.O.; and Brad Zehr
Download slideshow here
Download handouts here [1] [2] [3] [4] [5] [6] [7] [8]

Medicare for All Rounds: Single Payer Advocacy in the Clinical Setting
By Linda Liu, MS4 and Shirlene Obuobi, MS4
Download slideshow here

The Impact of Market-Based Health Care on the Opioid Epidemic
By Bruce Trigg, M.D.; Elizabeth Salisbury-Afshar, M.D., M.P.H.; and Karen Hochman, M.D., M.P.H.
Download slideshow here

Structural racism and single payer
By Dorothy Charles and Claudia Fegan, M.D.
Download slideshow here

Legislative Work for Single Payer
By Dan Riffle; Eagan Kemp; and Carol Paris, M.D.
Download slideshow here
Download handouts here and here

Your Role in the Movement for Single Payer
By Margaret Flowers, M.D.
Download slideshow here

Historical Lessons in Pursuit of Health Equity
By David Barton Smith, Ph.D.
Download slideshow here

Vote by Vote (The Democracy Song)
By Ed Weisbart, M.D. and Cindy Jenkins
Download lyrics here
Download sing-along slides here

CME Credit

Physicians for a National Health Program (PNHP) was pleased to partner with the American Public Health Association (APHA) to offer Continuing Medical Education (CME) credit for physicians and qualifying medical professionals who attended our 2017 Annual Meeting. Participants were eligible for a maximum of 8.75 AMA PRA Category 1 Credits.

Bernie Sanders in Canada

Bernie Sanders compares U.S. health-care struggles to rights movements

By Theresa Boyle and Alex McKeen
thestar.com, October 29, 2017

American Senator Bernie Sanders says insurance and drug companies, and those with extreme wealth, are hurting health care in the United States and warned Canadians not to allow that to happen on this side of the border.

“It is a shame, it is a disgrace,” he said in a speech in Toronto on Sunday, explaining that 28 million Americans do not have health insurance and that the current U.S. government wants to drop public coverage for millions more to pay for tax cuts for the most wealthy.

The independent senator from Vermont received four standing ovations from a crowd of about 1,500 at the University of Toronto’s Convocation Hall as he described his crusade to reform health care in his country.

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The following link includes a video of Bernie Sanders’ presentation plus an introduction by Ontario Premier Kathleen Wynne and an interview of him by Danielle Martin. (The video is labeled “WATCH LIVE.” Since the opening quartet did not record satisfactorily, advance to 18:00 for the start.)

https://www.thestar.com…

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Comment:

By Don McCanne, M.D.

This video provides a pleasant break from our somber reform activities since it demonstrates the passion of the people of a nation who really care about their health care system and are so pleased to see that someone south of their border cares as well: Bernie “Tommy Douglas” Sanders.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.

The cost of regulatory overload

Regulatory Overload: Assessing the Regulatory Burden on Health Systems, Hospitals and Post-acute Care Providers

American Hospital Association, October 2017

Every day, health systems, hospitals and post-acute care (PAC) providers – such as long-term care hospitals, inpatient rehabilitation facilities, skilled nursing facilities and home health agencies – confront the daunting task of complying with a growing number of federal regulations. Federal regulation is largely intended to ensure that health care patients receive safe, high-quality care. In recent years, however, clinical staff — doctors, nurses and caregivers — find themselves devoting more time to regulatory compliance, taking them away from patient care. Some of these rules do not improve care, and all of them raise costs. Patients also are affected through less time with their caregivers, unnecessary hurdles to receiving care and a growing regulatory morass that fuels higher health care costs.

This report assesses the administrative impact that existing federal regulations from just four agencies – CMS, OIG, OCR and ONC – have on health systems, hospitals and post-acute care providers across nine domains:

1. Quality reporting;

2. New models of care/value-based payment models;

3. Meaningful use of electronic health records;

4. Hospital conditions of participation (CoPs);

5. Program integrity;

6. Fraud and abuse;

7. Privacy and security;

8. Post-acute care; and

9. Billing and coverage verification requirements.

Major Findings

1. Health systems, hospitals and PAC providers must comply with 629 discrete regulatory requirements across nine domains.

2. Health systems, hospitals and PAC providers spend nearly $39 billion a year solely on the administrative activities related to regulatory compliance in these nine domains.

3. An average size hospital dedicates 59 FTEs (full-time equivalents) to regulatory compliance, over one-quarter of which are doctors and nurses.

4. The timing and pace of regulatory change make compliance challenging.

5. Among the nine areas investigated, providers dedicate the largest proportion of resources to documenting CoP (conditions of participation) adherence and billing/coverage verification processes.

6. Meaningful use has spurred provider investment in IT (information technology) systems, but exorbitant costs and ongoing interoperability issues remain.

7. Quality reporting requirements are often duplicative and have inefficient reporting processes, particularly for providers participating in value-based purchasing models.

8. Fraud and abuse laws are outdated and have not evolved to support new models of care.

General Opportunities to Reduce Burden

A reduction in administrative burden will enable providers to focus on patients, not paperwork, and reinvest resources in improving care, improving health and reducing costs. Given these findings, we have several general recommendations to reduce administrative requirements without compromising patient outcomes, both overall and within each domain.

• Regulatory requirements should be better aligned and consistently applied within and across federal agencies and programs, and subject to routine review for effectiveness to ensure the benefits for the public good outweigh additional compliance burden;

• Regulators should provide clear, concise guidance and reasonable timelines for the implementation of new rules;

• CoPs should be evidence-based, aligned with other laws and industry standards, and flexible in order to support different patient populations and communities;

• Federal agencies should accelerate the transition to automation of administrative transactions, such as prior authorization;

• Meaningful use requirements should be streamlined and should increasingly focus on interoperability, without holding providers responsible for the actions of others;

• Quality reporting requirements should be thoroughly evaluated across all programs to better determine what measures provide meaningful and actionable information for patients, providers and regulators;

• PAC rules should be reviewed and simplified to remove or update antiquated, redundant and unnecessary rules; and

• With new delivery system and payment reforms emerging, Congress, CMS and the OIG should revisit the Stark Law and AKS and their respective regulations, as well as other requirements aimed at combating fraud, and make meaningful changes to ensure that statutes provide the flexibility necessary to support the provision of quality, high-value care.

From the Conclusion

Health systems, hospitals and PAC providers are besieged by federal regulatory requirements promulgated by CMS, OIG, OCR and ONC, many of which are duplicative and cumbersome and do not improve patient care. In addition to the regulatory burden put forth by those agencies, health systems, hospitals and PAC providers are subject to regulation by additional federal agencies, such as the Department of Labor, the Drug Enforcement Administration, the Food and Drug Administration and by state licensing and regulatory agencies. They also operate under stringent contract requirements imposed by payers, such as Medicare Advantage, Medicaid Managed Care plans and commercial payers, which also require reporting data in different ways through different systems. States and payers contribute to burden through, for example, documentation, quality reporting and billing procedures layered on top of the federal requirements.

Regulatory reform aimed at reducing administrative burden must not approach the regulatory environment in a vacuum — evaluating the impact of a single regulation or requirements of a single program — but instead must look at the larger picture of the regulatory framework and identify where requirements can be streamlined or eliminated to release resources to be allocated to patient care.

http://www.aha.org…

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Comment:

By Don McCanne, M.D.

A quick look at the nine domains of regulatory overload is all you need to be reminded of the nightmare created by these evolving requirements. Inefficiencies, wasted resources, and provider burnout ensue, which negatively impact the primary mission of the health care system: patient care.

It is estimated that health systems, hospitals, and post-acute care providers spend about $39 billion per year on administrative activities related to compliance in these domains. This report provides suggestions for reducing this regulatory overload, though only a portion of the costs would be recovered since appropriate regulatory oversight is still essential.

For perspective, think of the recoverable administrative waste that characterizes our fragmented health care financing system – most of it in the private sector. We spend over a trillion dollars a year on administration, and somewhere around $300 billion to $500 billion is recoverable merely by transitioning to a well designed single payer system. Thus the total spending attributed to regulatory overload is, at most, only a tenth of what could be recovered.

The opportunities listed to reduce the burden of regulatory overload should be considered but with the realization that they are limited by the constraints of our current dysfunctional health care financing system. What needs to be done first is to correct the fundamental flaw in our health care financing infrastructure by enacting and implementing a single payer system, and then the list can be surveyed to fine tune any residual regulatory burdens.

We desperately need reform, but let’s get it right.

Stay informed! Visit www.pnhp.org/qotd to sign up for daily email updates.