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For Cost Control, Vouchers and Medicare Don't Mix

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For Cost Control, Vouchers and Medicare Don't Mix

By Austin Frakt
Kaiser Health News, Aug 19, 2010

With the ambition of reducing the federal debt, Congressman Paul Ryan has offered a proposal to convert Medicare to a voucher-based program. Under the plan, in time all Medicare beneficiaries would receive program benefits from private plans subsidized by government payments (vouchers). In principle, such a system could reduce federal Medicare costs if the subsidy grows more slowly than medical inflation, shifting more of the costs to care to individuals. The history of Medicare and its politics suggest it is unlikely to work out that way.

About Ryan’s plan, economist Paul Krugman wrote in the New York Times, “[W]e already know, from experience with the Medicare Advantage program, that a voucher system would have higher, not lower, costs than our current system.” Krugman is correct: When it comes to Medicare, vouchers and cost control, it seems you can’t get all three.

Though rarely described this way, the private Medicare Advantage plans are a (voluntary) voucher system. When covering a beneficiary, an Advantage plan receives a fixed monthly payment from Medicare that depends on the beneficiary’s county of residence and health status. That fixed monthly payment is tantamount to a voucher. With it, beneficiaries can select from any Advantage plan operating in their county. They can also stick with traditional fee-for-service Medicare–and about three in four beneficiaries do so.

But today, the market-based arm of the program costs more, not less, per beneficiary. Those fixed monthly payments to Advantage plans are, on average, 13 percent above fee-for-service Medicare costs. It didn’t start out that way. Originally, private Medicare plans were paid 95 percent of per beneficiary fee-for-service costs. The logic was that private plans ought to be able to provide Medicare services more efficiently than traditional Medicare through a combination of controlling utilization and driving hard bargains with providers. So, Medicare used to take five percent off the top.

Then Congress began to ratchet up payments, first with the 1997 Balanced Budget Act and more recently with the 2003 Medicare Modernization Act. (This year’s health reform law aims to reduce Advantage payments, though still not below 100 percent of fee-for-service costs on average.) Ironically, traditional Medicare payment regulatory reforms–like the prospective payment of hospitals and home health agencies–have been more successful (even if not anywhere near successful enough) in mollifying the rate of growth in the program’s costs.

What’s going on? Why is the market-based Advantage voucher system not helping to control Medicare costs? The answer is that health care cost control is tough, technically and politically. Provider groups typically resist it. When it pertains to Medicare, beneficiaries resist it too. By adding another private-sector layer to the program–health insurers–the Advantage program invites a third source of political pressure. Rent-seeking by providers and insurers, as well as the power of the beneficiary constituency, align in their encouragement of higher Advantage payments. Congress, apparently, is willing to yield to that encouragement.

So, it’s really no surprise that Advantage plans have not, to date, been part of a Medicare cost control solution. Congress has not consistently been willing to say no to the combination of powerful interests that advocate for higher payments to private plans. Given the track record, it is also not unreasonable to conclude the mandatory voucher program Ryan advocates wouldn’t save money either. As Krugman suggests, it could even be worse because in time 100% of beneficiaries would be enrolled in vouchers, not the 24 percent that are enrolled today.

The politics of Medicare are such that Ryan’s idea, paying for care entirely through private plans, costs more. That’s not due to a market failure, but a political one. Congress likes to spend money; insurers, providers and beneficiaries like to receive it. Congress spends even more when it can satisfy those interests under the guise of a seemingly pro-market, pro-competitive program.

When it comes to cost control and considering the political calculus of Congress, vouchers and Medicare don’t add up.

Austin Frakt is a health economist and an Assistant Professor of Health Policy and Management at Boston University’s School of Public Health. He blogs at The Incidental Economist .

http://www.kaiserhealthnews.org/Columns/2010/August/081910Frakt.aspx

For Cost Control, Vouchers and Medicare Don’t Mix

By Austin Frakt
Kaiser Health News, Aug 19, 2010

With the ambition of reducing the federal debt, Congressman Paul Ryan has offered a proposal to convert Medicare to a voucher-based program. Under the plan, in time all Medicare beneficiaries would receive program benefits from private plans subsidized by government payments (vouchers). In principle, such a system could reduce federal Medicare costs if the subsidy grows more slowly than medical inflation, shifting more of the costs to care to individuals. The history of Medicare and its politics suggest it is unlikely to work out that way.

About Ryan’s plan, economist Paul Krugman wrote in the New York Times, “[W]e already know, from experience with the Medicare Advantage program, that a voucher system would have higher, not lower, costs than our current system.” Krugman is correct: When it comes to Medicare, vouchers and cost control, it seems you can’t get all three.

Though rarely described this way, the private Medicare Advantage plans are a (voluntary) voucher system. When covering a beneficiary, an Advantage plan receives a fixed monthly payment from Medicare that depends on the beneficiary’s county of residence and health status. That fixed monthly payment is tantamount to a voucher. With it, beneficiaries can select from any Advantage plan operating in their county. They can also stick with traditional fee-for-service Medicare–and about three in four beneficiaries do so.

But today, the market-based arm of the program costs more, not less, per beneficiary. Those fixed monthly payments to Advantage plans are, on average, 13 percent above fee-for-service Medicare costs. It didn’t start out that way. Originally, private Medicare plans were paid 95 percent of per beneficiary fee-for-service costs. The logic was that private plans ought to be able to provide Medicare services more efficiently than traditional Medicare through a combination of controlling utilization and driving hard bargains with providers. So, Medicare used to take five percent off the top.

Then Congress began to ratchet up payments, first with the 1997 Balanced Budget Act and more recently with the 2003 Medicare Modernization Act. (This year’s health reform law aims to reduce Advantage payments, though still not below 100 percent of fee-for-service costs on average.) Ironically, traditional Medicare payment regulatory reforms–like the prospective payment of hospitals and home health agencies–have been more successful (even if not anywhere near successful enough) in mollifying the rate of growth in the program’s costs.

What’s going on? Why is the market-based Advantage voucher system not helping to control Medicare costs? The answer is that health care cost control is tough, technically and politically. Provider groups typically resist it. When it pertains to Medicare, beneficiaries resist it too. By adding another private-sector layer to the program–health insurers–the Advantage program invites a third source of political pressure. Rent-seeking by providers and insurers, as well as the power of the beneficiary constituency, align in their encouragement of higher Advantage payments. Congress, apparently, is willing to yield to that encouragement.

So, it’s really no surprise that Advantage plans have not, to date, been part of a Medicare cost control solution. Congress has not consistently been willing to say no to the combination of powerful interests that advocate for higher payments to private plans. Given the track record, it is also not unreasonable to conclude the mandatory voucher program Ryan advocates wouldn’t save money either. As Krugman suggests, it could even be worse because in time 100% of beneficiaries would be enrolled in vouchers, not the 24 percent that are enrolled today.

The politics of Medicare are such that Ryan’s idea, paying for care entirely through private plans, costs more. That’s not due to a market failure, but a political one. Congress likes to spend money; insurers, providers and beneficiaries like to receive it. Congress spends even more when it can satisfy those interests under the guise of a seemingly pro-market, pro-competitive program.

When it comes to cost control and considering the political calculus of Congress, vouchers and Medicare don’t add up.

Austin Frakt is a health economist and an Assistant Professor of Health Policy and Management at Boston University’s School of Public Health. He blogs at The Incidental Economist .

http://www.kaiserhealthnews.org/Columns/2010/August/081910Frakt.aspx

The Flimflam Man

By PAUL KRUGMAN, Op-Ed Columnist
The New York Times, August 5, 2010

One depressing aspect of American politics is the susceptibility of the political and media establishment to charlatans. You might have thought, given past experience, that D.C. insiders would be on their guard against conservatives with grandiose plans. But no: as long as someone on the right claims to have bold new proposals, he’s hailed as an innovative thinker. And nobody checks his arithmetic.

Which brings me to the innovative thinker du jour: Representative Paul Ryan of Wisconsin.

Mr. Ryan has become the Republican Party’s poster child for new ideas thanks to his “Roadmap for America’s Future,” a plan for a major overhaul of federal spending and taxes. News media coverage has been overwhelmingly favorable; on Monday, The Washington Post put a glowing profile of Mr. Ryan on its front page, portraying him as the G.O.P.’s fiscal conscience. He’s often described with phrases like “intellectually audacious.”

But it’s the audacity of dopes. Mr. Ryan isn’t offering fresh food for thought; he’s serving up leftovers from the 1990s, drenched in flimflam sauce.

Mr. Ryan’s plan calls for steep cuts in both spending and taxes. He’d have you believe that the combined effect would be much lower budget deficits, and, according to that Washington Post report, he speaks about deficits “in apocalyptic terms.” And The Post also tells us that his plan would, indeed, sharply reduce the flow of red ink: “The Congressional Budget Office has estimated that Rep. Paul Ryan’s plan would cut the budget deficit in half by 2020.”

But the budget office has done no such thing. At Mr. Ryan’s request, it produced an estimate of the budget effects of his proposed spending cuts — period. It didn’t address the revenue losses from his tax cuts.

The nonpartisan Tax Policy Center has, however, stepped into the breach. Its numbers indicate that the Ryan plan would reduce revenue by almost $4 trillion over the next decade. If you add these revenue losses to the numbers The Post cites, you get a much larger deficit in 2020, roughly $1.3 trillion.

And that’s about the same as the budget office’s estimate of the 2020 deficit under the Obama administration’s plans. That is, Mr. Ryan may speak about the deficit in apocalyptic terms, but even if you believe that his proposed spending cuts are feasible — which you shouldn’t — the Roadmap wouldn’t reduce the deficit. All it would do is cut benefits for the middle class while slashing taxes on the rich.

And I do mean slash. The Tax Policy Center finds that the Ryan plan would cut taxes on the richest 1 percent of the population in half, giving them 117 percent of the plan’s total tax cuts. That’s not a misprint. Even as it slashed taxes at the top, the plan would raise taxes for 95 percent of the population.

Finally, let’s talk about those spending cuts. In its first decade, most of the alleged savings in the Ryan plan come from assuming zero dollar growth in domestic discretionary spending, which includes everything from energy policy to education to the court system. This would amount to a 25 percent cut once you adjust for inflation and population growth. How would such a severe cut be achieved? What specific programs would be slashed? Mr. Ryan doesn’t say.

After 2020, the main alleged saving would come from sharp cuts in Medicare, achieved by dismantling Medicare as we know it, and instead giving seniors vouchers and telling them to buy their own insurance. Does this sound familiar? It should. It’s the same plan Newt Gingrich tried to sell in 1995.

And we already know, from experience with the Medicare Advantage program, that a voucher system would have higher, not lower, costs than our current system. The only way the Ryan plan could save money would be by making those vouchers too small to pay for adequate coverage. Wealthy older Americans would be able to supplement their vouchers, and get the care they need; everyone else would be out in the cold.

In practice, that probably wouldn’t happen: older Americans would be outraged — and they vote. But this means that the supposed budget savings from the Ryan plan are a sham.

So why have so many in Washington, especially in the news media, been taken in by this flimflam? It’s not just inability to do the math, although that’s part of it. There’s also the unwillingness of self-styled centrists to face up to the realities of the modern Republican Party; they want to pretend, in the teeth of overwhelming evidence, that there are still people in the G.O.P. making sense. And last but not least, there’s deference to power — the G.O.P. is a resurgent political force, so one mustn’t point out that its intellectual heroes have no clothes.

But they don’t. The Ryan plan is a fraud that makes no useful contribution to the debate over America’s fiscal future.

http://www.nytimes.com/2010/08/06/opinion/06krugman.html

What’s next after 'reform'?

Queen City News
Letter to the Editor
Wednesday, August 11, 2010

To the Editor:

The foreseeable outcome, four months after passage of the Patient Protection and Affordable Care Act of 2010 (PPACA), is greatly in question. Polls show three diverse opinions: the Democratic, the Republicans working to repeal it, and those feeling it makes no difference.

Dr. John Geyman, emeritus professor of medicine at the University of Washington, has written a comprehensive appraisal of PPACA in his book, “Hijacked: The Road to Single Payer in the Aftermath of Stolen Health Care Reform,” September 2010, Common Courage Press (print and eBook format). It is an account to be read by virtually every person who values the future of health care in the U.S.

The four basic system problems that exist in current U.S. health care – costs, affordability, access and quality of care – are intricately related to the alliance of the five biggest players in our failed health care model, namely (a) the insurance industry, (b) the drug industry, (c) the hospital industry, (d) business (e) and organized medicine.

Geyman convincingly lays out the roles played by each and shows how our system, based upon “monopolistic capitalism,” is not the way to hold down costs. It is easy to understand his contention that political buy-out of health policy by the five free market entities at the Congressional level is the mechanism through which thousands of people suffer, and many die unnecessarily, as our health standing among the industrialized countries of the world declines and costs escalate at unsustainable levels.

Geyman warns against the destructive socioeconomic path we are on and the disregard for the health and well-being of the majority of people in this country by our policy makers.

If you are concerned as I am, go to www.healthcare-now.org and become an advocate for single payer.

Richard A. Damon, M.D.
Bozeman, MT

http://www.queencitynews.com/modules.php?op=modload&name=News&file=article&sid=11886

What’s next after ‘reform’?

Queen City News
Letter to the Editor
Wednesday, August 11, 2010

To the Editor:

The foreseeable outcome, four months after passage of the Patient Protection and Affordable Care Act of 2010 (PPACA), is greatly in question. Polls show three diverse opinions: the Democratic, the Republicans working to repeal it, and those feeling it makes no difference.

Dr. John Geyman, emeritus professor of medicine at the University of Washington, has written a comprehensive appraisal of PPACA in his book, “Hijacked: The Road to Single Payer in the Aftermath of Stolen Health Care Reform,” September 2010, Common Courage Press (print and eBook format). It is an account to be read by virtually every person who values the future of health care in the U.S.

The four basic system problems that exist in current U.S. health care – costs, affordability, access and quality of care – are intricately related to the alliance of the five biggest players in our failed health care model, namely (a) the insurance industry, (b) the drug industry, (c) the hospital industry, (d) business (e) and organized medicine.

Geyman convincingly lays out the roles played by each and shows how our system, based upon “monopolistic capitalism,” is not the way to hold down costs. It is easy to understand his contention that political buy-out of health policy by the five free market entities at the Congressional level is the mechanism through which thousands of people suffer, and many die unnecessarily, as our health standing among the industrialized countries of the world declines and costs escalate at unsustainable levels.

Geyman warns against the destructive socioeconomic path we are on and the disregard for the health and well-being of the majority of people in this country by our policy makers.

If you are concerned as I am, go to www.healthcare-now.org and become an advocate for single payer.

Richard A. Damon, M.D.
Bozeman, MT

http://www.queencitynews.com/modules.php?op=modload&name=News&file=article&sid=11886

Will Insurance Companies Game the ACA?

By Kevin Drum
Mother Jones, Mon Aug. 16, 2010

Starting in 2014 insurance companies will no longer be allowed to discriminate against people with preexisting conditions. They’ll have to take all comers for (almost) the same price, regardless of how healthy they are.

The incentive here is obvious: within the confines of the law, insurance companies will do their best to lure the healthiest patients into their programs and convince the sickest ones to switch. But how much leverage do they have to do this? Looking for clues, Aaron Carroll takes us back to a study done in 1997, when Medicare patients were allowed to switch back and forth between HMOs and traditional fee-for-service plans:

What did the researchers find? People who wound up joining the (private) HMOs used 66% less care before joining than those who stayed in the (public) Medicare group. Somehow the private insurance HMOs figured out a way to get the healthy people to jump ship out of the another plan into theirs!

Not only that, but people who left the (private) HMOs and went back to the (public) Medicare used 180% more care after leaving than the people who stayed. Somehow the private insurance HMOs figured out a way to convince the sicker people to jump ship back to the public plans.

Fascinating! But I’m not sure this tells us as much as it seems to. It does appear to tell us that private insurers are pretty good at marketing themselves to healthy people and then signing them up as customers. But the dice are loaded here: they were competing against a publicly funded fee-for-service program that didn’t care if the sickest patients got dumped on them. In fact, it’s worse than that: the fee-for-service folks probably wanted the sickest patients since it meant more money for them. So the private insurers may have done a good job of maximizing their profit, but only because their competition didn’t fight back. Under ACA, it’s mostly going to be private insurers vs. private insurers, and that’s a whole different ball game.

But what about the second half of this study, which shows that private insurers were good at dumping sick people? That’s more worrisome. It’s still the case that they could only succeed as well as they did because the public system wasn’t fighting back. But that only speaks to why they succeeded so brilliantly. When it’s private insurers vs. private insurers, dumping tactics probably won’t work as well, but they’ll still have to be used by any insurer who wants to stay in business. After all, if even one private insurer is aggressively trying to dump its sick patients, every other private insurer has to do the same thing if they want to stay profitable. In the end, the sick patients might all stay in the system (though there will probably be some leakage to Medicaid), but they’re going to be treated badly the entire time as insurers do their best to get them exasperated enough to try switching to someone else.

Aaron’s conclusion: “Insurance companies are very, very good at what they do. I don’t doubt that they will find ways to remain profitable. That’s not a moral judgment. I don’t hate them for it; it is their nature.” In other words, the fight isn’t over yet. The quality and detailed nature of the regulations HHS puts in place are going to make a big difference to the success of ACA. Insurance companies are going to be keeping a very sharp eye on this, and hopefully the rest of us will too.

http://motherjones.com/kevin-drum/2010/08/will-insurance-companies-game-aca

Is NAIC agreement on medical loss ratios in patients' interests?

Commissioners OK health rate plan

By Sarah Kliff
Politico
August 17, 2010

The National Association of Insurance Commissioners approved Tuesday morning (by a unanimous vote) a preliminary outline of what insurers will be able to count as medical costs, a document necessitated by the health reform bill’s requirement that insurers spend at least 85 percent of subscriber premiums on medical costs in the large group market and 80 percent for small group and individual plans.

While insurance commissioners moved forward unanimously, familiar fault lines emerged between consumer advocates and industry over the document and how it categorizes medical spending.

“In general, we are very pleased,” said NAIC consumer advocate Timothy Jost, a professor of health policy at Washington & Lee University. “The process has been very open and participatory. We feel like our concerns have been listened to.”

“The NAIC is conducting a transparent and thorough process as it develops the [medical loss ratio] MLR definition, but the current proposal could have the unintended consequence of turning back the clock on efforts to improve patient safety, enhance the quality of care and fight fraud,” AHIP president Karen Ignagni said in a statement.

http://www.politico.com/news/stories/0810/41179.html

NAIC approved reporting form (blank):
http://www.naic.org/documents/index_health_reform_mlr_blanks_proposal.pdf

Letter from AHIP’s Karen Ignagni:
http://www.politico.com/static/PPM153_ahip_081510.html

Comment: 

By Don McCanne, MD

The National Association of Insurance Commissioners (NAIC) has finally come to agreement on the reporting form that likely will be used to determine whether or not the private insurers are in compliance with the required medical loss ratios (MLRs). The agreement is being reported as a victory for health care consumers and a defeat for the private insurance industry, but this ignores the crucial overriding issue.

The debate was over how much of their administrative costs the private insurers would be able to pass off as quality improvements that could be classified as medical expenses. Such reclassifications would allow the insurers to spend more for other non-medical purposes such as marketing and profits. Much of their attempted overreach – some described in Karen Ignagni’s letter – was rejected.

This is not a victory for the health care consumer. We are still stuck with a middleman industry that has been granted the right to keep 15 to 20 percent of our premium dollars to use for their own purposes. Congress and the President rejected a model of reform – an improved Medicare for all – that would have eliminated much of this waste plus the waste of the excess administrative burden that the insurers place on physicians and hospitals. The insurers get to include the latter as medical costs, further padding their margins, but administrative waste doesn’t benefit anyone’s health.

With all of the attention being given to the details of implementing the Patient Protection and Affordable Care Act (PPACA), too many have forgotten about the fact that the financing model in PPACA is irreparably flawed and can never bring us affordable health care for everyone. Instead of frittering away our efforts in the peripheral skirmishes, we need to pull together and win this war.

Is NAIC agreement on medical loss ratios in patients’ interests?

Commissioners OK health rate plan

By Sarah Kliff
Politico
August 17, 2010

The National Association of Insurance Commissioners approved Tuesday morning (by a unanimous vote) a preliminary outline of what insurers will be able to count as medical costs, a document necessitated by the health reform bill’s requirement that insurers spend at least 85 percent of subscriber premiums on medical costs in the large group market and 80 percent for small group and individual plans.

While insurance commissioners moved forward unanimously, familiar fault lines emerged between consumer advocates and industry over the document and how it categorizes medical spending.

“In general, we are very pleased,” said NAIC consumer advocate Timothy Jost, a professor of health policy at Washington & Lee University. “The process has been very open and participatory. We feel like our concerns have been listened to.”

“The NAIC is conducting a transparent and thorough process as it develops the [medical loss ratio] MLR definition, but the current proposal could have the unintended consequence of turning back the clock on efforts to improve patient safety, enhance the quality of care and fight fraud,” AHIP president Karen Ignagni said in a statement.

http://www.politico.com/news/stories/0810/41179.html

NAIC approved reporting form (blank):
http://www.naic.org/documents/index_health_reform_mlr_blanks_proposal.pdf

Letter from AHIP’s Karen Ignagni:
http://www.politico.com/static/PPM153_ahip_081510.html

Comment: 

By Don McCanne, MD

The National Association of Insurance Commissioners (NAIC) has finally come to agreement on the reporting form that likely will be used to determine whether or not the private insurers are in compliance with the required medical loss ratios (MLRs). The agreement is being reported as a victory for health care consumers and a defeat for the private insurance industry, but this ignores the crucial overriding issue.

The debate was over how much of their administrative costs the private insurers would be able to pass off as quality improvements that could be classified as medical expenses. Such reclassifications would allow the insurers to spend more for other non-medical purposes such as marketing and profits. Much of their attempted overreach – some described in Karen Ignagni’s letter – was rejected.

This is not a victory for the health care consumer. We are still stuck with a middleman industry that has been granted the right to keep 15 to 20 percent of our premium dollars to use for their own purposes. Congress and the President rejected a model of reform – an improved Medicare for all – that would have eliminated much of this waste plus the waste of the excess administrative burden that the insurers place on physicians and hospitals. The insurers get to include the latter as medical costs, further padding their margins, but administrative waste doesn’t benefit anyone’s health.

With all of the attention being given to the details of implementing the Patient Protection and Affordable Care Act (PPACA), too many have forgotten about the fact that the financing model in PPACA is irreparably flawed and can never bring us affordable health care for everyone. Instead of frittering away our efforts in the peripheral skirmishes, we need to pull together and win this war.

How to Plan an In-District Lobby Visit

Setting up the meeting

Call or email the District Office. When you call your legislator’s district office, ask to speak with the person who handles the legislator’s schedule. Tell this person (quite possibly the District Director, or an administrative assistant) the date and time you would like to meet with your legislator at the in-district office and the general topics you wish to discuss.

If you choose to email the office (you can typically find the right email on your congressman’s website, or by calling their district office), use this sample to arrange a meeting. If you do not hear back or receive confirmation from the schedule within seven days, make a follow-up phone call.

Seek appointments during congressional recess periods when your Member of Congress returns to your district (you can check the calendar at www.house.gov). Legislators are also frequently home in the district Friday through Monday when Congress is in session.

If there is more than one person attending the meeting, let the scheduler know their names and affiliations. (A good delegation is between five to eight people.) If someone in your group knows the legislator personally or professionally, make sure that the scheduler is aware of the relationship.

Meet with somebody. If your Member of Congress can’t meet with your group, don’t feel snubbed. Meet with the staff member who works on the issue that most concerns you. For most issues relating to health care reform, you will want to meet with the domestic policy staffer. Usually that person will be based in Washington, but there will also be an aide in the local office who can meet with you. Try to meet with the highest ranking aide possible in the local office, i.e. the Senior Aide.

Confirm your appointment. After you schedule a meeting, send a confirmation email that includes a list of those who will attend the meeting.

Send materials ahead of time. It’s a very wise idea to send an electronic packet of information to your representative ahead of the meeting about the topic. For example, sending a summary of HR 676 and one or two related, concise documents will help the representative or staffer prepare for your group. Contact the national office at info@pnhp.org for help putting together a good packet.

Preparing for the Meeting

Research your representative. You can use the Congressional Directory: www.house.gov, www.senate.gov.

Just punch in your ZIP Code and the site provides you with contact information and a web page for your Member of Congress. If you are uncertain whether he or she has endorsed the Improved and Expanded Medicare for All Act, H.R. 676, visit www.thomas.gov and enter the number of the bill (i.e. HR 676) into the search engine. This will tell you the legislative status of the bill, and give a list of its current endorsers.

Determine your agenda and goals for the meeting. Your group’s members should meet beforehand in order to determine the agenda and to delegate who will raise which agenda items. Have different people cover different issues, but have one person act as a facilitator for the discussion and deliver the bulk of your message. Your main objective is to get your Member to commit to endorsing single-payer legislation (if he or she hasn’t already done so) and to attempt to enlist other legislators to do so.

A good agenda might look like this:

  1. Introduction of constituents and of PNHP
  2. Thank the representative for previous positive actions or support
  3. Tell one or two compelling personal stories
  4. Make the ask (i.e. ask representative to support HR 676)
  5. Give brief background on the issue
  6. Discuss the ask, answer questions and address concerns
  7. Arrange next steps and follow-up communications

Prepare an information packet to leave with your legislator. The leave-behind packet should include copies of whatever information you also sent in advance, as well as information about PNHP and your contact information. Contact the national office at info@pnhp.org for help assembling this packet.

Conducting the Meeting

When conducting a lobby visit, follow the ABCs. Be accurate, brief, and courteous.

Be accurate. Don’t feel that you have to be an expert. If you don’t know the answer to a question, say so. Nothing is worse than being caught in a lie or inaccuracy. Offer to look into the question and get back to the Member (this is also an excellent opportunity to stay in touch).

Be brief. Make sure that whoever the main facilitator is has a way to gently move the meeting along if one person is rambling or stuck on one point. Always ask for specific actions; always get a specific commitment and then follow up. No matter how supportive or unsupportive your legislator is, there is always a next step. Contact the national office if you need help identifying a good ask.

Ask good questions and maximize your time in the meeting by zeroing in on the basics: How will s/he vote? Do party leaders have positions on the issue? What is their influence likely to be? Is the office hearing from opponents? If so, what are their arguments and what groups are involved? Does the Member know any other key House Members or Senators who should be contacted to get favorable action on the bill? The Member likely won’t give you an answer on the spot. Tell them you will follow up with an aide in two weeks, and be sure to do so. Offer to answer their questions or to provide additional information.

If the Member says no, be sure to find out why. Ask them what, specifically, they oppose in the bill.

Be courteous. Be open to counter-arguments, but don’t get stuck on them. Remember: This meeting shouldn’t be an end in itself. Think of it as the beginning of a relationship with your representative that will allow you to voice your opinion on topics in the future. With this in mind, make sure the relationship you build is a positive one.  Agree to disagree, if necessary. They may not share your viewpoint, but your information does have an impact on how they vote. Look for areas of agreement and affirm them. Convey your appreciation for positive steps, no matter how small, and try to end the meeting on a positive note.

Debrief/Follow up. After the meeting, find a place where you can relax with your delegation and compare notes on the meeting. This is important because different people might have different interpretations of what happened. Agree as a group on who will do which follow-up tasks. Send a thank-you note after the meeting to the representative via the person who scheduled the meeting, and, if commitments were made during the meeting, repeat your understanding of them. Don’t forget to give a phone number and address where you can be reached. Finally, let PNHP know how the meeting went by sending an email to info@pnhp.org.

Economic crises and cost sharing don’t mix

The economic crisis and medical care usage

By Annamaria Lusardi, Daniel J. Schneider, Peter Tufano
National Bureau of Economic Research
Working Paper 15843
March, 2010

We use a unique, nationally representative cross-national dataset to document the reduction in individuals’ usage of routine non-emergency medical care in the midst of the economic crisis. A substantially larger fraction of Americans have reduced medical care than have individuals in Great Britain, Canada, France, and Germany, all countries with universal health care systems. At the national level, reductions in medical care are related to the degree to which individuals must pay for it, and within countries are strongly associated with exogenous shocks to wealth and employment.

http://www.nber.org/papers/w15843

Comment: 

By Don McCanne, MD

This five-nation study of the impact of the financial crisis on usage of routine medical care demonstrates that both a decline in employment and a decline in wealth are strongly associated with reductions in medical care. But once again, the United States is an outlier.

U.S. citizens pay the highest out-of-pocket amounts for health care, and therefore were two to five times more likely than Europeans to reduce their use of health care. In difficult economic times, higher cost sharing has a greater negative impact on health care access.

The Patient Protection and Affordable Care Act (PPACA) will intensify this problem because most of the subsidized private plans will have low actuarial values, requiring larger deductibles, higher coinsurance (percentage of costs paid by the patient), and higher copayments (dollar amount paid by the patient).

The health care financing system should be designed to allow individuals to have the health care that they need without exposing them to financial hardship, and that protection certainly should extend into times of economic crises.

Now that PPACA has established underinsurance as the norm, we can anticipate greater reductions in necessary care, especially during difficult economic times. Or instead we could ensure that people receive the care that they need by replacing our financing system with a single payer national health program. As voters, it’s our choice.

Economic crises and cost sharing don't mix

The economic crisis and medical care usage

By Annamaria Lusardi, Daniel J. Schneider, Peter Tufano
National Bureau of Economic Research
Working Paper 15843
March, 2010

We use a unique, nationally representative cross-national dataset to document the reduction in individuals’ usage of routine non-emergency medical care in the midst of the economic crisis. A substantially larger fraction of Americans have reduced medical care than have individuals in Great Britain, Canada, France, and Germany, all countries with universal health care systems. At the national level, reductions in medical care are related to the degree to which individuals must pay for it, and within countries are strongly associated with exogenous shocks to wealth and employment.

http://www.nber.org/papers/w15843

Comment: 

By Don McCanne, MD

This five-nation study of the impact of the financial crisis on usage of routine medical care demonstrates that both a decline in employment and a decline in wealth are strongly associated with reductions in medical care. But once again, the United States is an outlier.

U.S. citizens pay the highest out-of-pocket amounts for health care, and therefore were two to five times more likely than Europeans to reduce their use of health care. In difficult economic times, higher cost sharing has a greater negative impact on health care access.

The Patient Protection and Affordable Care Act (PPACA) will intensify this problem because most of the subsidized private plans will have low actuarial values, requiring larger deductibles, higher coinsurance (percentage of costs paid by the patient), and higher copayments (dollar amount paid by the patient).

The health care financing system should be designed to allow individuals to have the health care that they need without exposing them to financial hardship, and that protection certainly should extend into times of economic crises.

Now that PPACA has established underinsurance as the norm, we can anticipate greater reductions in necessary care, especially during difficult economic times. Or instead we could ensure that people receive the care that they need by replacing our financing system with a single payer national health program. As voters, it’s our choice.

Is WellPoint's business model viable?

Big and beleaguered: WellPoint's bad image

By Emily Berry
American Medical News
August 16, 2010

Thus far, WellPoint and insurance trade group America’s Health Insurance Plans have responded to criticism about rate increases with variations on the same theme: Medical costs, driven by physicians and hospitals, are rising so dramatically that insurers cannot avoid raising rates.

The argument doesn’t appear to work if WellPoint and AHIP are trying to elicit sympathy or understanding from the public or policymakers.

As it went on the defensive using studies demonstrating higher medical costs, WellPoint reduced payment for physicians in most of its markets by double-digit percentages for certain procedures, and the cuts were across all specialties, said Susanne Madden, CEO of the consulting firm Verden Group in Nyack, N.Y.

“They’ve done a spectacular job destroying customer loyalty and physician loyalty at the same time, and they’re not making any friends in government,” she said. “They don’t seem to have a grasp on the fact that if they do not have physicians as allies in some way, shape or form, they’re going to have a hard time.”

If it cannot raise rates, WellPoint — and other national insurers — will have to cut costs, experts said. This is where physicians might be affected. WellPoint is likely to cut costs by further reducing payments for hospitals and physicians and restricting networks, experts said.

http://www.ama-assn.org/amednews/2010/08/16/bisa0816.htm

Comment: 

By Don McCanne, MD

WellPoint’s phenomenal business success has been largely due to its ability to offer competitive premiums by limiting what it has had to pay out in health care benefits. Will WellPoint’s business model continue to be viable?

It has targeted its marketing to the healthy workforce and their young, healthy families, and to the portion of the individual market that can pass underwriting standards. Under the Patient Protection and Affordable Care Act (PPACA) WellPoint will no longer be able to exclude individuals with greater health care needs, neither by favorable selection nor by retroactive rescissions. Without other innovative cost controls, premium increases will be inevitable.

Under PPACA, WellPoint will also be required to provide a standard package of benefits, preventing them from reducing health care spending by cutting benefits. They will also be required to provide plans with tiered actuarial values, prohibiting them from requiring ever greater out-of-pocket cost sharing by the patient. Thus premiums will have to reflect the actual increases in health care costs.

It would be possible for WellPoint to slash reimbursement rates for physicians and hospitals, but that would be a terrible business decision wince it would risk a massive exodus from their provider networks.

It is likely that WellPoint and other insurers will establish more restrictive networks with providers who are willing to accept payment reductions in exchange for greater volume, but that loss of choice would certainly further alienate their plan subscribers, also threatening their market.

The plans may search for other innovations, including some of those in PPACA, but at this time there is little prospect that cost savings could be achieved without creating greater animosity amongst patients and providers.

To comply with PPACA, WellPoint will have to increase premiums and market primarily plans with low actuarial values of 60 or 70 percent, leaving excessive out-of-pocket costs for those with health care needs. The subsidies in PPACA are too small to prevent financial hardship, and there is little political will to expand the federal budget by increasing the subsidies.

The situation can only grow worse with time. The WellPoint model will inevitably end up in the trash heap of failed policies as it is replaced with a single payer national health program – a program that would meet the needs of patients and their health care professionals.