PNHP

Paul Ryan does not seem to understand high-risk pools

Paul Ryan does not seem to understand high-risk pools

Ryan wants to end Obamacare cost protections for sick consumers

By David Morgan
Reuters, April 27, 2016

U.S. House of Representatives Speaker Paul Ryan called on Wednesday for an end to Obamacare’s financial protections for people with serious medical conditions, saying these consumers should be placed in state high-risk pools.

In election-year remarks that could shed light on an expected Republican healthcare alternative, Ryan said existing federal policy that prevents insurers from charging sick people higher rates for health coverage has raised costs for healthy consumers while undermining choice and competition.

The rule, a cornerstone of President Barack Obama’s Affordable Care Act, has been praised by patient advocates for providing access to medical care for people who previously could not afford private health insurance. The Affordable Care Act also bars insurers from excluding coverage for pre-existing conditions.

“Less than 10 percent of people under 65 are what we call people with pre-existing conditions, who are really kind of uninsurable,” Ryan, a Wisconsin Republican, told a student audience at Georgetown University.

“Let’s fund risk pools at the state level to subsidize their coverage, so that they can get affordable coverage,” he said. “You dramatically lower the price for everybody else. You make health insurance so much more affordable, so much more competitive and open up competition.”

High-risk pools, which existed before the healthcare law, are state-level entities that guarantee coverage for people with health problems. Analysts say they can be prohibitively expensive and offer less than optimal health coverage.

http://www.reuters.com/article/us-usa-health-ryan-idUSKCN0XP00C

House Speaker Paul Ryan has promised to produce the Republican alternative to the Affordable Care Act, likely before the Republican convention in July. In his comments at Georgetown University yesterday he discussed what would be the most important policy supposedly designed to control health care spending for the vast majority of Americans: Establish state level risk pools for the 10 percent of people with the greatest health care needs. Let’s see what that means.

The top 10 percent of individuals in spending account for 65 percent of health care costs. By removing them from the standard insurance pools that means that the other 90 percent would have to pay insurance premiums that funded only 35 percent of total health care. Ryan says that this would lower insurance premiums through competition, but that is nonsense. Premiums would be much lower because two-thirds of health care costs are pulled out of the insurance plans in the marketplace. Surely most Americans would be happy with private insurance premiums that were one-third of what they would be if everyone were included. It would be a very popular program, and the Republicans would take credit for it.

But what about the 10 percent of people who account for two-thirds of our health care costs. Their premiums would have to be about 7 times what the premium would be if everyone were covered under a common risk pool, or about 20 times what everyone else is paying. As Paul Ryan says, they are “really kind of uninsurable.” So he proposes high-risk pools at the state level, with subsidized premiums. Expecting the states to subsidize two-thirds of our health care costs is a non-starter. Without massive increases in taxes, which are opposed by the Republicans anyway, the states would not be able to fund those pools.

We already have considerable experience with state high-risk pools. In recent decades, thirty-five states established such pools, and overall they were a spectacular failure. Also, the Affordable Care Act authorized temporary Pre-Existing Condition Insurance Plans (PCIP) which were also high-risk pools. These plans proved to be prohibitively expensive to administer, prohibitively expensive for consumers to purchase, and offered much less than optimal coverage, often with annual and lifetime limits, coverage gaps, and very high premiums and deductibles.

It is so obvious on the face of it. Most of us might be happy with our low premiums, but we would be very unhappy with the massive increases in regressive state taxes that would be enacted to pay for this. Vermont’s reform effort failed once the tax consequences were recognized, and that wasn’t even for high-risk pools.

As I wrote in a previous Quote of the Day, “With a single payer system this problem disappears. Funding is based on ability to pay, through the tax system, and not on the basis of anticipated medical expenses. Everyone receives the care they need, regardless of their health status. The fragmented plans supported by the repeal and replace people cannot do that.”

Why in Heaven’s Name Aren’t Teeth Considered Part of Our Health?

It is estimated that 108 million Americans have no dental insurance.

By Susan Sered
AlterNet, April 26, 2016

When we talk about the successes and shortcomings of the Affordable Care Act, and health care in the U.S. in general, little attention is given to dental care. While the ACA defines dental coverage as an essential benefit for those under 18, insurers aren’t required to offer dental coverage for adults. Medicare, the nation’s largest insurer, doesn’t cover routine dental work. And coverage for adults through Medicaid varies from state to state.

It is estimated that 108 million Americans have no dental insurance, and that one in four nonelderly Americans has untreated tooth decay.

Oral health isn’t just about nice teeth. As the surgeon general noted in a 2000 report, oral health is intimately connected to general health and can be implicated in or exacerbate diabetes, heart disease and stroke, and complications during pregnancy.

The absence of comprehensive dental care exacts a toll on millions of Americans in terms of poor health, pain and the social stigma associated with bad teeth.

People desperately need dental care.

In 2003 and 2004 (pre-Obamacare), I conducted a national study of uninsured Americans in southcentral Illinois, northern Idaho, the Mississippi delta, the Rio Grande Valley of Texas and in eastern Massachusetts.

I asked nearly 150 interviewees: “If President Bush were to declare universal health care for everyone starting tomorrow, what is the first problem you would take care of?” The most common answer by a landslide echoed this respondent’s: “I’ll be waiting outside the dentist’s office at 5:00 in the morning waiting for it to open.”

Many of the people I interviewed lived with untreated diabetes, asthma or even cancer, yet their oral health problems presented the greatest challenges to their quality of life.

Recently I returned to these communities to reinterview the people I’d met over a decade earlier. Very little has changed. While the majority of the people I interviewed now had health care coverage of some sort (for nearly 20 percent of them, it was as a consequence of becoming sufficiently disabled to be eligible for Social Security), very few had managed to secure dental coverage.

Then and now, people told me about visiting emergency rooms in hopes of alleviating pain or using addictive pain medications to make it through the day. People even told me that they had resorted to pulling out their own teeth.

Take Misty, for instance. When I met her 12 years ago in Mississippi, she was a “dirt poor” (her words) married mother of five, and she was living with diabetes, domestic violence and excruciating headaches. Despite all of these quite serious problems, she told me that she was more troubled by her bad teeth than by anything else. In fact, Misty told me that she’d had such bad toothaches that she pulled her own teeth. When I asked her how she can face the pain of pulling out her own teeth, she said:

[the infected tooth] hurts so bad… it’s a relief just to get it out of there.… I’ve gone two weeks with just being able to eat soup, because they are just so bad.

By 2016 Misty had left her abusive husband, moved to Arkansas and was accepted onto disability (SSI), which allowed her to get health care coverage through Medicaid. Still, however, she suffered because of her teeth.

It can be very hard to find dentists who accept Medicaid, and when Misty finally did, she had the rest of her teeth—25 in all—pulled in one day.

Misty’s situation isn’t uncommon. I have met women and men of various ages who, like Misty, have pulled their own teeth. I’ve also met people who were able to get part of their dental needs taken care of during brief periods of Medicaid coverage but then were left with unfinished treatment when the coverage ended.

Insurance stops at the teeth

Even though the link between dental health and overall health is clear, insurance plans tend to ignore teeth.

As health insurance began to appear to appear in the U.S.—initially in the 1920s and then more widely during World War II and in the postwar era—dentistry wasn’t part of the standard package of covered services.

As the nation’s largest insurer, Medicare plays an important role in shaping health care coverage norms. Medicare does not cover dental care. Today, according to government estimates, 70 percent of seniors lack dental coverage.

Since Medicare doesn’t cover dental, Dr. David Kroll, senior program officer at the Robert Wood Johnson Foundation, argues that this “inertia spilled over into the ACA.”

Americans who purchase dental plans typically find that the plans aren’t cheap, and often don’t cover much beyond routine preventative care. Plans often require hefty copays for procedures beyond preventative care and no or very limited coverage for dentures, bridges or periodontic work.

And, in recent years, the cost of dental care has increased faster than the cost of other medical care. For those without dental insurance, there are few low-cost services available.

The ACA provided for an expansion of Medicaid eligibility, though not all states accepted the offer of federal funding to expand Medicaid coverage. Even in the states that expanded Medicaid under the ACA, strict limits on oral health care remain for most low- and moderate-income Americans.

There is one bright spot: children’s dental coverage is a required benefit included on all ACA compliant plans, and Medicaid as well. According to national calculations of the Health Policy Institute and the American Dental Association, dental care utilization among Medicaid-enrolled children increased from 35.3 percent in 2005 to 48.3 percent in 2013.

Oral health isn’t just about nice teeth

In the absence of coherent oral health services, too many Americans end up like Gina, a young Idaho woman who holds her hand in front of her mouth while she talks so that no one will see her rotted teeth. She can’t even get a job as a telemarketer because she cannot speak distinctly enough to be hired.

Many Americans incorrectly assume that rotten teeth are the product of bad decision-making; if someone had just brushed and flossed then they’d have nice teeth. But routine dental care—think of the twice-yearly checkups that are routine for people with dental insurance—keeps teeth healthy and can catch problems when they are easy to treat.

The reality is that tooth decay signifies poverty in pernicious ways. Without expanding insurance to cover oral health, millions of Americans will continue to live with pain, stigma and the risks of systemic diseases that could be averted through an accessible and integrated system of dental care.

Susan Starr Sered is Senior Research Associate at Suffolk University’s Center for Women’s Health and Human Rights.

http://www.alternet.org/personal-health/why-heavens-name-arent-teeth-considered-part-our-health

Health care needs single-payer system

By Morton Tavel, M.D.
The News-Press (Fort Myers, Fla.), April 20, 2016

When considering the best way to solve our country’s health care woes, I am reminded of Winston Churchill’s famous comment about democracy as a form of government, in which he stated, in effect: It’s a terrible system, but everything else is worse. This same statement might apply to a single-payer system in medical care as proposed by Bernie Sanders at a recent Democrat presidential debate, for it, too, probably beats everything else.

First, a truly effective system will not be achieved unless we solve the many associated issues that include tort reform to control the exorbitant costs of physician medical malpractice insurance in many states, excessively high cost of drugs, inappropriate use of expensive tests and treatments, and several others. But all these issues can be solved, given the desire and, hopefully, willingness of our legislative bodies to work together for the benefit of all.

Although the Affordable Care Act (ACA, “Obamacare”) has been a step forward, it fails to address the problem of waste and complexity in the system. A single payer system would eliminate the entire commercial insurance industry — with $730 billion in revenues and a workforce of 470,000. Not only would this provide a more economical way to use healthcare resources by reducing expenses, it would also likely improve quality, and restore doctors’ authority. For all practices, administrative costs would plummet because there would be only one set of payment rules and forms, with the result that prior authorizations, narrow networks, and out-of-pocket payments could be eliminated.

There also appears to be evidence of growing physician support for a single-payer system. For example, a 2014 survey of Maine physicians conducted found that nearly 65 percent of respondents preferred the single-payer option over trying to fix the current system—up from 52 percent in a 2008 survey. Physicians in general now seem more open to a single-payer system.

Notwithstanding the Republicans’ constant calls for abandoning ACA, a majority of the population (51 percent) now supports Medicare for all, according to a national poll released recently. Many experts, however, believe that the movement for a single-payer system may start at the state level, since much of the public continues to mistrust Washington.

Although a government-run, single-payer system is the only way to provide effective basic medical health therapy and management, for those who desire a higher level of care — and can afford it — there should be a private-pay system, in contrast to the Canadian system. This would constitute a two-tiered system. This might be objectionable to egalitarians that wish to have a “one size fits all” system, but would be the most pragmatic approach.

Usually those against single payer system trot out the usual vague objections that we are becoming “socialistic.”  But what about our current Medicare system and Social Security itself; are those not socialistic?

Whether we like it or not, basic healthcare is like a utility—something everyone needs, and in the best interest of our society, everyone should receive. Although there are variations of the general theme as I have enumerated above, we are probably moving inevitably toward a single payer system. When it finally arrives, I believe everyone will be relieved, if not pleased, even including our warring politicians!

Dr. Morton Tavel lives on Sanibel.

http://www.news-press.com/story/opinion/contributors/2016/04/20/healthcare-needs-single-payer-system/83226924/

PNHP note: Physicians for a National Health Program (PNHP) is a nonpartisan educational organization. It neither supports nor opposes any candidate for public office.

The Mess That is MACRA

By Kip Sullivan, J.D.
The Health Care Blog, April 21, 2016

MACRA (the Medicare Access and CHIP Reauthorization Act) is a mess. It is extremely difficult to comprehend, it is based on assumptions that defy commonsense and research, and it may raise costs.

The Medicare Payment Advisory Commission (MedPAC) would never say what I have just said, but MedPAC definitely understands MACRA’s defects. The transcripts of MedPAC’s October 8, 2015 and January 15, 2016 meetings indicate that members and staff perceive daunting impediments to the implementation of MACRA. But those transcripts also suggest that MedPAC won’t tell Congress to rewrite or repeal MACRA. Rather, the evidence suggests MedPAC will mince words. It appears MedPAC will send CMS and Congress a few wishes dressed up as “principles” and wait for MACRA’s inevitable failure before offering more useful advice.

Before I attempt to explain MACRA, let me first convey to you MACRA’s mind-numbing complexity by quoting four commissioners. Each statement below is followed by the last name of the commissioner who made it, the date the statement was made, and the page number of the transcript where the statement appears.

“[T]he complexities involved are just absolutely enormous and mind-boggling.” (Hall, October 8, 2015, 158-159)

“I think … Congress has given us a very tricky set of semantics to work with…. What does ‘in’ mean? [Laughter]….Now, is that in our scope of discussion this morning – what these words [in MACRA] should mean?” (Nerenz, January 15, 2016, 86, 89-90)

“[W]hen you go through the law, in some parts of it it’s very hard to figure out how they fit together….” (Chairman Crosson, January 15, 2016, 90)

“I understand this is very complicated, but I think one of our first principles should be to try to simplify this, because it’s very complicated for providers to try to understand what path to take…. I understand that’s probably heroic….I think there’s a lot of aversion because folks don’t understand it….” (Thomas, January 15, 2016, 144)

Even the staff, who must explain MACRA to the commissioners, find themselves at a loss for words. Mark Miller said at the January 2016 meeting, “I don’t feel like I have a real strong handle on all these definitional issues….You know, we’ve had huge internal conversations. I’m surprised no one has resigned yet.” (94)

A bird’s-eye view of a Rube Goldberg device

To comprehend MACRA, it helps to understand the motives of its chief authors, including Representatives John Boehner and Nancy Pelosi. Like other managed care proponents, Boehner et al. thought the fee-for-service (FFS) method of paying for Medicare services was raising Medicare’s costs. Having made that evidence-free diagnosis, they decided the solution is (a) to turn the FFS incentive upside down by shifting insurance risk onto the backs of doctors and hospitals and, to minimize the possibility that risk-shifting will induce providers to short-change patients, (b) to measure the quality of a tiny fraction of all medical services delivered to patients.

Congress could have implemented this “solution” by simply instructing CMS to stop using pure FFS and to use instead pure capitation or some hybrid of capitation and FFS for all providers. Such a bill would have raised serious questions about its ability to lower costs without harming patients, but at least the questions would have been relatively easy to understand.

But instead of stating forthrightly they wanted to terminate FFS Medicare and replace it with a system resembling a giant federal HMO, Congress ordered CMS to implement a sprawling Rube Goldberg device with two compartments: One, known as the Merit-based Incentive Payment System (MIPS), would irritate doctors who stayed in FFS Medicare so much they would look for an alternative; and the second, the Alternative Payment Model (APM) program, would provide them with an alternative that would allegedly improve quality and lower costs.

But MACRA is so devoid of details about each compartment that it is impossible to predict anything. We know Boehner et al. wanted the first compartment, MIPS, to inflict large penalties and rewards, but we don’t know whether the MIPS compartment will be sufficiently irritating to drive its occupants out. Even if we knew how irritating MIPS will be, we wouldn’t be able to compare it to the APM program’s power to irritate because we don’t know what the APM entities will look like. In fact, at this date we can’t even be sure APMs will exist.

For all those reasons and more, we also don’t know whether either compartment will save money.

MIPS: Measuring the unmeasurable

The MIPS program was designed for doctors who can’t or won’t join the ACO-medical-home bandwagon. MIPS inflicts huge rewards and penalties (up to 9 percent of the average annual Part B payout per physician) based on a single “value” score (a score derived by the capricious jamming of crude quality and cost measures into one number) for each doctor. As commissioner Gradison put it, MIPS was designed for “the laggards, the people who stand for the status quo,” the knuckle-draggers who just won’t get with the Managed Care 2.0 program. (January 15, p. 133)

Evaluating how the laggards will view MIPS vis a vis the APM program is impossible because we have no idea how CMS will enforce the requirement that CMS produce a single score representing both the cost and quality of services provided by individual physicians. With the exception of a few services, measuring cost and quality accurately at the individual doctor level is not possible. There are two intractable impediments: Determining which doctor patients “belong” to (the attribution problem); and adjusting measures of physician cost and quality for factors outside of physician control such as patient health status (the risk-adjustment problem). The attribution and risk-adjustment methods used today are crude even for large groups; with the possible exception of a few of the simplest process measures, they are worthless at the individual physician level.

MedPAC is well aware of at least the risk-adjustment problem. Here is how MedPAC staffer Kate Bloniarz expressed her “concerns” about MIPS to the commission at its October 2015 meeting:

First is the challenge posed by assessing clinician performance at the individual level. The MIPS … is designed to produce an individual-level payment adjustment. But many quality and resource use measures are not reliable at the individual clinician level, and it is a particular challenge for outcomes measures. Based on CMS’s experience to date with individual-level payment adjustments, most clinicians will likely look average, and the Medicare program will only be able to reliably identify persistent outliers. (pp. 93-94 of the October 8 transcript)

At the January 2016 meeting Bloniarz repeated this criticism. She told the commission that CMS’s Physician Quality Reporting System (PQRS), which MIPS must use, could not distinguish 80 percent of the physicians from one another. (p. 74, January 15 transcript, and slide 10 of presentation)

If CMS cannot detect differences at the individual physician level for 80 percent or more of the doctors who serve Medicare patients, it seems likely that the pay-for-performance scheme Boehner et al. had in mind for the laggards in MIPS won’t have any effect on the vast majority of them. Which calls into question the ability of MIPs to “reform” doctors – to get them to “coordinate care” and do all those other wonderful things ACOs and “medical homes” were supposed to make them do. [1]

Ms. Bloniarz also expressed her concern that the reporting requirements for doctors under both MIPS and the APM program are “likely to be overly complex and further burden both providers and CMS….” (p. 94)

Sand castles on top of sand castles: The APM program

The second compartment in MACRA – the APM program – is difficult to describe for these reasons:

  • MACRA does not describe the entities that will qualify as APMs;
  • MACRA sets standards for these entities that cannot be met by the vast majority of conceivable entities, including today’s most faddish APMs – ACOs and “medical homes”;
  • MACRA says APMs must expose doctors to “risk above a nominal level,” but doesn’t say what “nominal” means; and
  • MACRA says doctors who join APMs will earn a 5 percent bonus on revenues received through APMs, but the law fails to define “revenue” (options include revenue from Part A, Part B, Part D, all or some of those parts, or revenue received for particular services).

Here is how Ms. Bloniarz explained the problem at the commission’s October 2015 meeting:

The first question is: What is an APM? The pool of APMs are all models under the Center for Medicare and Medicaid Innovation (except for innovation awards), models tested under the pre-existing Medicare demonstration authority, a demonstration required by law, and the Medicare shared savings program.

Then there is statutory language that further winnows down the number of APMs that can qualify clinicians for the incentive payment. They must meet three criteria

…: they must use certified eHR technology; they must have comparable quality measures to MIPS; and they must either bear financial risk above a nominal amount or be a medical home that has been certified for expansion by the Office of the Actuary. And I’ll note here that that certification has not occurred.

A key takeaway is that not all APMs will be eligible APMs for which clinicians can receive the incentive payment. They will need to meet the criteria set out in the law, and presently, very few models are likely to do so. (pp. 94-95)

I suspect the reason Congress did not populate the APM compartment with clearly defined entities is that Boehner et al. knew full well that the first iteration of “value-based” entities – the ACOs and “medical homes” authorized by the Affordable Care Act – have not panned out. We know that MedPAC understands that. In its reports to Congress, and in statements by staff and members, MedPAC has clearly indicated they understand that ACOs and “homes” are saving little or no money and are having at best minor and mixed effects on quality.

It is fair to say, then, that MedPAC understands that Congress has essentially instructed CMS to build a new layer of undefined, unproven APMs on top of the existing layer of poorly defined and unproven ACOs and “homes,” in other words, a second layer of sand castles over an existing layer of sand castles.

MedPAC’s reaction to the MACRA mess

If you were a member of MedPAC and you had to advise CMS and Congress on the implementation of the MIPS and APM programs, what would you do? You know that CMS can’t measure “value” in MIPS anywhere near accurately enough to provide useful feedback to the laggards who remain in MIPS. And you know CMS has to populate the APM compartment by 2017 even though virtually no examples of the fabled APMs exist, and you know the first-generation APMs that might serve as templates for CMS’s are not working.

I suspect most ordinary people would tell Congress that it must stop writing managed care fantasies into law and hoping CMS can make them work. I suspect most people would tell Congress to go back to the drawing board and propose legislation that describes flesh-and-blood entities (not abstract managed care fantasies) that actually have a track record documented by empirical research (not happy talk). The very least MedPAC should do is define clearly the crippling defects in MACRA and tell Congress to postpone MACRA’s implementation to give CMS and MedPAC time to develop more informed recommendations.

But it appears MedPAC has no intention of doing that. Not one of the 17 commissioners suggested at the October or January meetings that MACRA should be repealed, amended, or postponed. It appears, rather, that MedPAC will send CMS and Congress a list of abstract wishes for the APM program dressed up as “principles.”

When the commissioners arrived for their January 2016 meeting, the staff (presumably with Chairman Crosson’s blessing) asked them to discuss 12 “principles” that would guide CMS in its doomed effort to make sense of the APM compartment (see slides 12 through 14 here) The principles said nothing about the MIPS program.

The 12 APM principles will look very familiar to anyone who has followed the debate about ACOs – they look just like the elements in the flabby “definition” of ACO. [3] These principles would be worthless if they were applied even to the existing layer of sand castles; they tell us nothing about why CMS’s current crop of ACOs and “homes” are performing so poorly. It is extremely difficult to comprehend, therefore, why MedPAC is wasting its time formulating these vague principles for the second layer of sand castles – the APMs that don’t exist yet.

Congress and CMS don’t need to hear any more abstract and wishful remarks about MACRA. They need to hear useful feedback. MedPAC should tell Congress MACRA is an unworkable mess and must be repealed or amended.

[1] In addition to the CMS’s inability to measure quality at the individual physician level, Bloniarz should also have listed MIPS’ bizarre attribution scheme as another mind-bending impediment to the implementation of MACRA. Unlike ACOs and “medical homes,” where insurers “attribute” patients to doctors based on how often patients visited doctors in the past, MIPS requires that doctors “attribute” themselves to patients by selecting from several possible descriptions of their relationship to each patient, such as “lead” physician and “supportive” physician, and entering a code for this relationship on each claim form.

[2] Chairman Crosson, for example, has observed that MACRA’s APM compartment “is not designed to essentially work well with what exists right now because what exists right now isn’t getting us necessarily to where you want to be.…” (October 8, 2015, p. 119) Commissioner Naylor has questioned why MACRA is built on “programs or models that have not yet been proven or, in some cases, have been proven not to be working.” (January 15, 2016, p. 150) Other commissioners have endorsed the radical notion (radical by the shoot-first-aim-later standards of the managed care movement) that APMs should be subjected to research before CMS certifies them.

[3] For example, principle 1 says CMS should authorize only those APMs that have been shown to be “successful [at] controlling cost, improving quality, or both,” principle 6 says the entity “must assume risk,” and principle 8 says APMs must have “sufficient number of beneficiaries to detect changes in spending or quality.”

Kip Sullivan, J.D., is a member of the board of Minnesota Physicians for a National Health Program. His articles have appeared in The New York Times, The Nation, The New England Journal of Medicine, Health Affairs, the Journal of Health Politics, Policy and Law, and the Los Angeles Times.

http://thehealthcareblog.com/blog/2016/04/21/the-mess-that-is-macra/

Who benefits from an “improved” medical loss ratio?

Health insurer Centene’s profit beats as medical costs fall

By Amrutha Penumudi
Reuters, April 26, 2016

U.S. health insurer Centene Corp (CNC.N) reported a better-than-expected quarterly profit, helped by lower medical costs in certain patient populations and the acquisition of rival Health Net.

The company’s health benefits ratio, or the amount it spends on medical claims compared with its income from premiums, improved to 88.7 percent in the first quarter from 89.9 percent a year earlier.

http://www.reuters.com/article/us-centene-results-idUSKCN0XN14E

***

Anthem Falls As Medicaid, Obamacare Results Pressure Margins

By Zachary Tracer
Bloomberg, April 27, 2016

Anthem Inc., the No. 2 U.S. health insurer, fell in New York trading as costs tied to its Medicaid and Affordable Care Act businesses pressured margins.

The shares fell 2.8 percent to $142.91 at 11:24 a.m. Wednesday. Anthem spent 81.8 cents of every premium dollar on medical claims in the first quarter, up from a medical-loss ratio of 80.2 percent a year earlier, according to a statement.

http://www.bloomberg.com/news/articles/2016-04-27/anthem-profit-beats-estimates-as-insurer-s-enrollment-increases

***

Comment:

By Don McCanne, M.D.

Today’s message is just a reminder of one of our problems that the Affordable Care Act (ACA) did not fix. A well-functioning health care financing system should be designed to obtain maximum value by spending our funds on health care and not wasting them on excessive administrative services and on profits that add no value to health care. Yet ACA perpetuates policies that turn these priorities upside down, to the pleasure of Wall Street.

Centene is reporting greater profits attributed to a lower percentage of revenues spent on health care compared to the year before – the medical loss ratio decreased from 89.9 percent to 88.7 percent. A comparable medical loss ratio for Medicare would be about 98 percent – only 2 percent is used for administrative services, and there are no profits. Spending less on patient care and retaining more for Centene’s own administrative services and for profits, Wall Street deems to be an improvement.

In contrast, the percent of revenues that Anthem spent on health care increased – the medical loss ratio increased from 80.2 percent to 81.8 percent. For insurers to spend more on health care is considered to be bad news on Wall Street, and thus they punished Anthem by bidding down the price of their shares.

Since these insurers are giving us the opposite of what we want, why are we leaving them in charge of our health care dollars? Let’s fix Medicare and expand it to cover everyone. Yes, we would have a very high medical loss ratio – with 98 percent of our Medicare tax revenues spent on patient care – but it would be a much better deal for all of us – except for the insurance executives and Wall Street rent-seekers.

Who benefits from an “improved” medical loss ratio?

Health insurer Centene’s profit beats as medical costs fall

By Amrutha Penumudi
Reuters, April 26, 2016

U.S. health insurer Centene Corp (CNC.N) reported a better-than-expected quarterly profit, helped by lower medical costs in certain patient populations and the acquisition of rival Health Net.

The company’s health benefits ratio, or the amount it spends on medical claims compared with its income from premiums, improved to 88.7 percent in the first quarter from 89.9 percent a year earlier.

http://www.reuters.com/article/us-centene-results-idUSKCN0XN14E

***

Anthem Falls As Medicaid, Obamacare Results Pressure Margins

By Zachary Tracer
Bloomberg, April 27, 2016

Anthem Inc., the No. 2 U.S. health insurer, fell in New York trading as costs tied to its Medicaid and Affordable Care Act businesses pressured margins.

The shares fell 2.8 percent to $142.91 at 11:24 a.m. Wednesday. Anthem spent 81.8 cents of every premium dollar on medical claims in the first quarter, up from a medical-loss ratio of 80.2 percent a year earlier, according to a statement.

http://www.bloomberg.com/news/articles/2016-04-27/anthem-profit-beats-estimates-as-insurer-s-enrollment-increases

Today’s message is just a reminder of one of our problems that the Affordable Care Act (ACA) did not fix. A well-functioning health care financing system should be designed to obtain maximum value by spending our funds on health care and not wasting them on excessive administrative services and on profits that add no value to health care. Yet ACA perpetuates policies that turn these priorities upside down, to the pleasure of Wall Street.

Centene is reporting greater profits attributed to a lower percentage of revenues spent on health care compared to the year before – the medical loss ratio decreased from 89.9 percent to 88.7 percent. A comparable medical loss ratio for Medicare would be about 98 percent – only 2 percent is used for administrative services, and there are no profits. Spending less on patient care and retaining more for Centene’s own administrative services and for profits, Wall Street deems to be an improvement.

In contrast, the percent of revenues that Anthem spent on health care increased – the medical loss ratio increased from 80.2 percent to 81.8 percent. For insurers to spend more on health care is considered to be bad news on Wall Street, and thus they punished Anthem by bidding down the price of their shares.

Since these insurers are giving us the opposite of what we want, why are we leaving them in charge of our health care dollars? Let’s fix Medicare and expand it to cover everyone. Yes, we would have a very high medical loss ratio – with 98 percent of our Medicare tax revenues spent on patient care – but it would be a much better deal for all of us – except for the insurance executives and Wall Street rent-seekers.

External validity through structured speculation

Decision Theoretic Approaches to Experiment Design and External Validity (Working Paper 22167)

By Abhijit Banerjee, Sylvain Chassang, and Erik Snowberg
National Bureau of Economic Research, April 2016

Abstract

A modern, decision-theoretic framework can help clarify important practical questions of experimental design. Building on our recent work, this chapter begins by summarizing our framework for understanding the goals of experimenters, and applying this to re-randomization. We then use this framework to shed light on questions related to experimental registries, pre-analysis plans, and most importantly, external validity. Our framework implies that even when large samples can be collected, external decision-making remains inherently subjective. We embrace this conclusion, and argue that in order to improve external validity, experimental research needs to create a space for structured speculation.

Formats for structured speculation

In all external decision making problems, inference is unavoidably subjective. In structural modeling, the source of subjectivity is the model itself.

http://www.nber.org/papers/w22167

***

Comment:

By Don McCanne, M.D.

This highly technical paper is a difficult read, but it provides important lessons for design and application of health policy research. The subjective design of the research model and subjectivity of the resulting decision making impacts the external validity of the experiment. That is, can the results of the experiment be applied generally outside of the experimental model?

Perhaps the most famous example is the RAND Health Insurance Experiment. It demonstrated that employees and their families who had to pay part of the costs of their health care used less health care than did those who had no out-of-pocket spending, yet both groups had equally good health care outcomes (except for hypertensives). This conclusion was internally valid for this group, and it has been applied to the population at large. But is it really externally valid?

Employees and their families are a comparatively healthy sector of society, and in the RAND HIE they were studied during a healthy period of their lives. These results would not apply to the population at large that includes less healthy individuals who help run up our three trillion dollar national health care bill. Yet we have accepted the results of the RAND HIE as gospel even though other studies have confirmed that cost sharing does cause individuals to forgo beneficial health care services.

In the Oregon Experiment individuals with no insurance were compared with individuals who received Medicaid benefits by lottery. The conclusions published in the NEJM were that “Medicaid coverage generated no significant improvements in measured physical health outcomes in the first 2 years,” and this has been interpreted widely to mean that Medicaid does not improve health. The internal validity was regarding three measurements – BP, cholesterol and HbA1c during only two years. How could that possibly have external validity for the low-income population at large with innumerable infirmities that we know respond to beneficial health care services?

The subjectivity of sectors of the policy community is at question here. Model design is subjective and inference is subjective. Studies can be designed and interpreted to obtain the results desired. Cost sharing can be shown to reduce spending without having any adverse effect on health. Medicaid can be shown to have no benefit on health outcomes.

And what do we have now? Apparently policy science is so advanced that we are putting in place measures that do not require research to confirm their effectiveness. Narrow provider networks can reduce spending by deterring patients who, after all, really do not need care, they say. High deductibles can reduce spending without adversely affecting health, except for those who deferred the health care that they should have had. They say accountable care organizations will improve quality and significantly reduce spending, even though experience to date has largely failed to confirm that. The Merit-Based Incentive Payment System (MIPS) will convert the volume of health care delivery to the elusive concept of value, they hope, though the limited evidence indicates otherwise.

What is the purpose of health policy research? To improve quality? Isn’t quality determined by studying the diagnostic, therapeutic and preventive interventions in heath care – i.e, medical research? Is the purpose of policy research to control spending? Except by creating detrimental financial and logistical (network) barriers to beneficial care, policy studies have been remarkably ineffective. Public policies such as establishing a single payer system have been far more effective in controlling spending.

The authors of this NBER paper state, “in order to improve external validity, experimental research needs to create a space for structured speculation.” Haven’t we had enough of this structured speculation of the health policy community? Isn’t it time to adopt public policies that have been proven to be effective?

External validity through structured speculation

Decision Theoretic Approaches to Experiment Design and External Validity (Working Paper 22167)

By Abhijit Banerjee, Sylvain Chassang, and Erik Snowberg
National Bureau of Economic Research, April 2016

Abstract

A modern, decision-theoretic framework can help clarify important practical questions of experimental design. Building on our recent work, this chapter begins by summarizing our framework for understanding the goals of experimenters, and applying this to re-randomization. We then use this framework to shed light on questions related to experimental registries, pre-analysis plans, and most importantly, external validity. Our framework implies that even when large samples can be collected, external decision-making remains inherently subjective. We embrace this conclusion, and argue that in order to improve external validity, experimental research needs to create a space for structured speculation.

Formats for structured speculation

In all external decision making problems, inference is unavoidably subjective. In structural modeling, the source of subjectivity is the model itself.

http://www.nber.org/papers/w22167

This highly technical paper is a difficult read, but it provides important lessons for design and application of health policy research. The subjective design of the research model and subjectivity of the resulting decision making impacts the external validity of the experiment. That is, can the results of the experiment be applied generally outside of the experimental model?

Perhaps the most famous example is the RAND Health Insurance Experiment. It demonstrated that employees and their families who had to pay part of the costs of their health care used less health care than did those who had no out-of-pocket spending, yet both groups had equally good health care outcomes (except for hypertensives). This conclusion was internally valid for this group, and it has been applied to the population at large. But is it really externally valid?

Employees and their families are a comparatively healthy sector of society, and in the RAND HIE they were studied during a healthy period of their lives. These results would not apply to the population at large that includes less healthy individuals who help run up our three trillion dollar national health care bill. Yet we have accepted the results of the RAND HIE as gospel even though other studies have confirmed that cost sharing does cause individuals to forgo beneficial health care services.

In the Oregon Experiment individuals with no insurance were compared with individuals who received Medicaid benefits by lottery. The conclusions published in the NEJM were that “Medicaid coverage generated no significant improvements in measured physical health outcomes in the first 2 years,” and this has been interpreted widely to mean that Medicaid does not improve health. The internal validity was regarding three measurements – BP, cholesterol and HbA1c during only two years. How could that possibly have external validity for the low-income population at large with innumerable infirmities that we know respond to beneficial health care services?

The subjectivity of sectors of the policy community is at question here. Model design is subjective and inference is subjective. Studies can be designed and interpreted to obtain the results desired. Cost sharing can be shown to reduce spending without having any adverse effect on health. Medicaid can be shown to have no benefit on health outcomes.

And what do we have now? Apparently policy science is so advanced that we are putting in place measures that do not require research to confirm their effectiveness. Narrow provider networks can reduce spending by deterring patients who, after all, really do not need care, they say. High deductibles can reduce spending without adversely affecting health, except for those who deferred the health care that they should have had. They say accountable care organizations will improve quality and significantly reduce spending, even though experience to date has largely failed to confirm that. The Merit-Based Incentive Payment System (MIPS) will convert the volume of health care delivery to the elusive concept of value, they hope, though the limited evidence indicates otherwise.

What is the purpose of health policy research? To improve quality? Isn’t quality determined by studying the diagnostic, therapeutic and preventive interventions in heath care – i.e, medical research? Is the purpose of policy research to control spending? Except by creating detrimental financial and logistical (network) barriers to beneficial care, policy studies have been remarkably ineffective. Public policies such as establishing a single payer system have been far more effective in controlling spending.

The authors of this NBER paper state, “in order to improve external validity, experimental research needs to create a space for structured speculation.” Haven’t we had enough of this structured speculation of the health policy community? Isn’t it time to adopt public policies that have been proven to be effective?

Despite misleading ads, allowing drug negotiations would lower prices

By C.V. Allen, M.D.
The Modesto Bee, April 14, 2016

Sunday’s Bee included an advertisement (Page 2A) picturing Rep. Jeff Denham and a concerned elderly lady on Medicare being told “you could lose access to medicines you need.”

The ad thanked Denham for “protecting” Medicare Part D prescription coverage and urged readers like the woman pictured to oppose a bill in Congress that would allow Medicare to negotiate drug costs directly with pharmaceutical companies.

But such negotiations are a common cost-control method already used by the Veterans Administration, Medicaid and every industrialized nation that runs a health care system for its citizens.

Yet this bill is being fiercely fought by the pharmaceutical industry, which stands to lose considerable profits if it passes. That’s what the ad is really about.

At the insistence of the pharmaceutical industry, the original 2003 Medicare Part D (drug bill) forbade Medicare to negotiate costs with drug companies. That would be a strange request from a market-driven industry. But not so strange when you realize, in the words of Republican Rep. Walter Jones of North Carolina, “The pharmaceutical lobbyists wrote the bill.”

It was 1,000 pages long and voted on at 3 a.m.

Now, there is movement to eliminate this restriction on negotiations. Naturally, the pharmaceutical industry opposes this effort because, it says, negotiated prices won’t make any difference in the cost of the medicines. Wrong.

Medicaid currently has the ability to negotiate prices with drug companies. For similar medications, prices are approximately 40 percent less than what Medicare recipients pay. The Wall Street Journal cited studies suggesting that if Medicare was allowed to use its heft to negotiate in the marketplace, it would save about $16 billion annually. If it will have “no effect” on prices, why the violent opposition from big pharma?

One reason the drug companies love to cite is that if Medicare drug prices are negotiated, drug research would dry up. Wrong.

Drug companies spend almost twice as much on marketing as they spend on research. Many of the scientifically innovative drugs approved from 1998 to 2007 came from universities and biotech firms, not big pharmaceutical companies.

Meanwhile, negotiating drug prices is standard procedure in industrialized countries whose medication costs are uniformly less than ours – many by half.

Drug companies also contend that competition among various commercial insurers lowers drug costs already. Wrong again.

That’s the way it should work, but doesn’t. A recent study showed that eight of the 10 drugs that had the big cost increases from 2013 to 1014 were made by multiple manufacturers. Expanding that to the 15 drugs with the largest price increases shows that nine were made by multiple manufacturers. With so many manufacturers from which to choose, negotiating with several companies to get the best price would certainly lower the prices – assuming capitalism still works.

Another argument is that Medicare has more medication options than the Veterans Administration or Medicaid. That’s true, but irrelevant.

If 10 drugs do the same thing, why not limit the formulary to the least expensive drug? The VA formulary seeks out the least expensive choice among many drugs that have the same use and same benefit, lowering total costs to patients. There is no evidence the smaller but less expensive VA formulary alters outcomes or treatment of veterans. The same is true for those who depend on Medicaid.

If the concerned elderly lady in the ad wants to worry about something, perhaps she could focus on the growing negative influence of corporate America on our fragmented and expensive health care system.

C.V. Allen is a semi-retired physician in Modesto.

http://www.modbee.com/opinion/opn-columns-blogs/community-columns/article71872487.html

ColoradoCare to face industry onslaught

Health Care Industry Moves Swiftly to Stop Colorado’s “Single Payer” Ballot Measure

By Lee Fang
The Intercept, April 22, 2016

The campaign in Colorado to create the nation’s first state-based “single payer” health insurance system, providing universal coverage and replacing insurance premiums with higher taxes, has barely begun.

But business interests in Colorado are not taking anything for granted, and many of the largest lobbying groups around the country and in the state are raising funds to defeat Amendment 69, the single-payer ballot question going before voters this November.

The Council of Insurance Agents & Brokers, a national trade group, is mobilizing its member companies to defeat single payer in Colorado. “The council urges Coloradans to protect employer-provided insurance and oppose Proposition 69,” the CIAB warns. The group dispatched Steptoe & Johnson, a lobbying firm it retains, to analyze the bill.

Lobby groups that represent major for-profit health care interests in Colorado, including hospitals and insurance brokers, are similarly mobilizing against Amendment 69. The Colorado Association of Commerce & Industry — a trade group led in part by HCA HealthOne, a subsidiary of HCA, one of the largest private hospital chains in the country — is soliciting funds to defeat single payer. The business coalition to defeat the measure also includes the state’s largest association of health insurance brokers.

I asked Sean Duffy, a spokesperson for “Coloradans for Coloradans,” an ad hoc coalition against the single-payer ballot measure, how the state should address high health care costs and those struggling to afford health insurance premiums.

“We are focused on sharing with Coloradans the numerous questions, ambiguities, and concerns with Amendment 69,” said Duffy. He noted that “motivations for universal coverage are shared by many in Colorado” but that making Colorado a “one-state experiment, and the cost of doubling our state budget, potentially diminishing the accessibility and quality of care and creating an unaccountable, massive bureaucracy is just not a good idea for Colorado.”

As other states consider proposals to lower costs and expand coverage, health care interests keen to protect some of the largest profit margins in the economy will be sure to mobilize quickly to snuff them out.

https://theintercept.com/2016/04/22/colorad-single-payer/

***

MSNBC’s Chris Hayes interviews reporter Lee Fang (4 minutes)

http://www.msnbc.com/all-in/watch/co-could-be-first-state-with-single-payer-care-672121411514

***

Email message

From T. R. Reid, author of The Healing of America
April 21, 2016

(excerpts)

As you know, there’s a citizens’ initiative on the ballot in Colorado this November to create a state-specific plan that will cover everybody, eliminate deductibles, and let the patient, not the insurance company, choose the doctor, chiropractor, hospital, etc. If “ColoradoCare” passes, it can be a model and an incentive for other states where people like you are working to get health care for all.

I’m happy to report that our early polls show us ahead statewide.  I’m unhappy to tell you that our lead is not big enough to withstand the expected onslaught from our opponents. The insurance companies have funded a huge “No” campaign. The Koch Brothers are already running TV ads that say for-profit insurance is the ideal way to pay for health care.

So we need help. We need money…

http://coloradocareyes.co

***

Comment:

By Don McCanne, M.D.

Without additional enabling federal legislation, Colorado is not able to enact a bona fide single payer system. However, their ballot measure – Amendment 69, ColoradoCare – would improve efficiency, equity and coverage through the health care financing system in their state. Strong opposition is expected since ColoradoCare could be disruptive to some of the well-financed stakeholders, especially the private insurance industry.

The advocates of ColoradoCare are now seeking support for their effort (link above). It will be difficult to educate the public on the facts behind their reform proposal. Even when saturated with facts, the public often remains dubious because of the prevailing anti-government and anti-tax rhetoric. It is a massive project to convert the majority of the voters into passionate supporters of such a cause.

In the meantime, the opponents know that their task does not involve educating the public on the facts. They do not have to engage the other side in a information battle over the truth. They merely have to appeal to the passion of the voters. Simple rhetorical soundbites are usually enough to convince the voters that they do not have to waste their time studying some complicated government scheme in order to know how to vote on it. Just look at some of the rhetoric of the opposition group, Coloradans for Coloradans: “doubling the state budget,” “diminishing accessibility and quality,” and “creating an unaccountable, massive bureaucracy.” Who would support that? No need to try to find out the truth.

This is not just theoretical, as single payer activists supporting ballot measures in California and Oregon can attest to. In both cases, early polling was favorable, as it is now in Colorado. But closer to election time, intensive campaigns were launched by the opponents using simplistic sound bites and slogans, and the results were a disaster. California’s Proposition 186 lost by a 3 to 1 margin and Oregon’s Measure 23 lost by 4 to 1.

So what should we do? I have three suggestions.

1.  Contribute to their effort in any way you can. (Today I made a donation through their website.)

2.  If the effort should fail (and I hate to say that), then be sure that everyone understands that this was not a failure of single payer, especially since it is not even a bona fide single payer proposal. Rather it will have been a failure in mobilizing a social movement.

3.  Above all, do not let up in the least in your advocacy for a single payer national health program – an improved Medicare for all. That is the ultimate goal, and it could be accomplished in a single step without having to first enact compromised systems in several states. Difficult? Of course. But, in spite of many attempts, how many states have enacted single payer? In this age of advanced communications, mobilizing a social movement on a national basis makes more sense than trying to do it in selected individual states.

(ColoradoCare is not a project of PNHP since we are a single issue organization supporting a single payer national health program. But most members are individually very supportive of the Colorado effort as a beneficial interim measure to fill in until we can enact a national Medicare for all program.)

ColoradoCare to face industry onslaught

Health Care Industry Moves Swiftly to Stop Colorado’s “Single Payer” Ballot Measure

By Lee Fang
The Intercept, April 22, 2016

The campaign in Colorado to create the nation’s first state-based “single payer” health insurance system, providing universal coverage and replacing insurance premiums with higher taxes, has barely begun.

But business interests in Colorado are not taking anything for granted, and many of the largest lobbying groups around the country and in the state are raising funds to defeat Amendment 69, the single-payer ballot question going before voters this November.

The Council of Insurance Agents & Brokers, a national trade group, is mobilizing its member companies to defeat single payer in Colorado. “The council urges Coloradans to protect employer-provided insurance and oppose Proposition 69,” the CIAB warns. The group dispatched Steptoe & Johnson, a lobbying firm it retains, to analyze the bill.

Lobby groups that represent major for-profit health care interests in Colorado, including hospitals and insurance brokers, are similarly mobilizing against Amendment 69. The Colorado Association of Commerce & Industry — a trade group led in part by HCA HealthOne, a subsidiary of HCA, one of the largest private hospital chains in the country — is soliciting funds to defeat single payer. The business coalition to defeat the measure also includes the state’s largest association of health insurance brokers.

I asked Sean Duffy, a spokesperson for “Coloradans for Coloradans,” an ad hoc coalition against the single-payer ballot measure, how the state should address high health care costs and those struggling to afford health insurance premiums.

“We are focused on sharing with Coloradans the numerous questions, ambiguities, and concerns with Amendment 69,” said Duffy. He noted that “motivations for universal coverage are shared by many in Colorado” but that making Colorado a “one-state experiment, and the cost of doubling our state budget, potentially diminishing the accessibility and quality of care and creating an unaccountable, massive bureaucracy is just not a good idea for Colorado.”

As other states consider proposals to lower costs and expand coverage, health care interests keen to protect some of the largest profit margins in the economy will be sure to mobilize quickly to snuff them out.

https://theintercept.com/2016/04/22/colorad-single-payer/

***

MSNBC’s Chris Hayes interviews reporter Lee Fang (4 minutes)

http://www.msnbc.com/all-in/watch/co-could-be-first-state-with-single-payer-care-672121411514

***

Email message

From T. R. Reid, author of The Healing of America
April 21, 2016

(excerpts)

As you know, there’s a citizens’ initiative on the ballot in Colorado this November to create a state-specific plan that will cover everybody, eliminate deductibles, and let the patient, not the insurance company, choose the doctor, chiropractor, hospital, etc. If “ColoradoCare” passes, it can be a model and an incentive for other states where people like you are working to get health care for all.

I’m happy to report that our early polls show us ahead statewide.  I’m unhappy to tell you that our lead is not big enough to withstand the expected onslaught from our opponents. The insurance companies have funded a huge “No” campaign. The Koch Brothers are already running TV ads that say for-profit insurance is the ideal way to pay for health care.

So we need help. We need money…

http://coloradocareyes.co

Without additional enabling federal legislation, Colorado is not able to enact a bona fide single payer system. However, their ballot measure – Amendment 69, ColoradoCare – would improve efficiency, equity and coverage through the health care financing system in their state. Strong opposition is expected since ColoradoCare could be disruptive to some of the well-financed stakeholders, especially the private insurance industry.

The advocates of ColoradoCare are now seeking support for their effort (link above). It will be difficult to educate the public on the facts behind their reform proposal. Even when saturated with facts, the public often remains dubious because of the prevailing anti-government and anti-tax rhetoric. It is a massive project to convert the majority of the voters into passionate supporters of such a cause.

In the meantime, the opponents know that their task does not involve educating the public on the facts. They do not have to engage the other side in a information battle over the truth. They merely have to appeal to the passion of the voters. Simple rhetorical soundbites are usually enough to convince the voters that they do not have to waste their time studying some complicated government scheme in order to know how to vote on it. Just look at some of the rhetoric of the opposition group, Coloradans for Coloradans: “doubling the state budget,” “diminishing accessibility and quality,” and “creating an unaccountable, massive bureaucracy.” Who would support that? No need to try to find out the truth.

This is not just theoretical, as single payer activists supporting ballot measures in California and Oregon can attest to. In both cases, early polling was favorable, as it is now in Colorado. But closer to election time, intensive campaigns were launched by the opponents using simplistic sound bites and slogans, and the results were a disaster. California’s Proposition 186 lost by a 3 to 1 margin and Oregon’s Measure 23 lost by 4 to 1.

So what should we do? I have three suggestions.

1.  Contribute to their effort in any way you can. (Today I made a donation through their website.)

2.  If the effort should fail (and I hate to say that), then be sure that everyone understands that this was not a failure of single payer, especially since it is not even a bona fide single payer proposal. Rather it will have been a failure in mobilizing a social movement.

3.  Above all, do not let up in the least in your advocacy for a single payer national health program – an improved Medicare for all. That is the ultimate goal, and it could be accomplished in a single step without having to first enact compromised systems in several states. Difficult? Of course. But, in spite of many attempts, how many states have enacted single payer? In this age of advanced communications, mobilizing a social movement on a national basis makes more sense than trying to do it in selected individual states.

(ColoradoCare is not a project of PNHP since we are a single issue organization supporting a single payer national health program. But most members are individually very supportive of the Colorado effort as a beneficial interim measure to fill in until we can enact a national Medicare for all program.)

MACRA and the ethics of physician burnout

Medicare’s New Physician Payment System

Health Affairs, Health Policy Briefs, April 21, 2016

An overwhelming body of research in recent years found that medical care in the United States was neither efficient nor as effective as it could be. Inappropriate and excessive care is common even as rising health care costs burden government, business, and families.

Against this backdrop, government and private-sector leaders have resolved to transform how physicians are paid in a way that holds them more accountable for the care they deliver. The latest salvo in this effort was the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015, signed into law April 16, 2015.

What’s in the law?

Initially, physicians can choose a program called the Merit-Based Incentive Payment System (MIPS) or join an alternative payment model such as an accountable care organization or patient-centered medical home. If they make no choice or are deemed to be ineligible for an alternative payment model incentive payment, they will be assigned to MIPS.

At the same time, three existing payment incentive and quality improvement initiatives will be dissolved as separate programs and melded into MIPS. They are the Physician Quality Reporting System, Meaningful Use, and the Physician Value-Based Payment Modifier.

Physicians in MIPS must report performance measures to CMS. They’ll then be graded on four factors: quality of care (30 percent); resource use (30 percent); meaningful use of EHRs (25 percent); and clinical practice improvement activities (15 percent).

High-scoring physicians will get a bonus, and low-scoring physicians will see their fees reduced.

Physicians choosing the alternative payment model path will have to join an accountable care organization or an approved patient-centered medical home, or otherwise be in an alternative payment model entity where payment is at least partly based on quality performance and on total spending. Payment tied to performance must be 25 percent of a doctor’s or group practice’s Medicare revenue in 2019, increasing to 75 percent in 2022.

‘Volume to value’–slogan or sound policy?

Some critics argue that the volume-to-value movement is, for now, based more on faith than on strong evidence. For example, they cite the experience of countries in Europe that control spending primarily through regulating prices and fees in fee-for-service systems, instead of through performance measurement and payment incentives.

Critics also argue that “value” in medicine is an elusive concept and not one likely to be pinned down through a single composite score. As yet, these critics further allege, value has not been clearly pegged or produced by accountable care organizations, patient-centered medical homes, or integrated health care systems.

http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=156

***

The Mess That is MACRA

By Kip Sullivan
The Health Care Blog, April 21, 2016

MACRA (the Medicare Access and CHIP Reauthorization Act) is a mess. It is extremely difficult to comprehend, it is based on assumptions that defy commonsense and research, and it may raise costs.

The Medicare Payment Advisory Commission (MedPAC) would never say what I have just said, but MedPAC definitely understands MACRA’s defects. The transcripts of MedPAC’s October 8, 2015 and January 15, 2016 meetings indicate that members and staff perceive daunting impediments to the implementation of MACRA. But those transcripts also suggest that MedPAC won’t tell Congress to rewrite or repeal MACRA. Rather, the evidence suggests MedPAC will mince words. It appears MedPAC will send CMS and Congress a few wishes dressed up as “principles” and wait for MACRA’s inevitable failure before offering more useful advice.

MIPS: Measuring the unmeasurable

The MIPS program was designed for doctors who can’t or won’t join the ACO-medical-home bandwagon. MIPS inflicts huge rewards and penalties (up to 9 percent of the average annual Part B payout per physician) based on a single “value” score (a score derived by the capricious jamming of crude quality and cost measures into one number) for each doctor. As commissioner Gradison put it, MIPS was designed for “the laggards, the people who stand for the status quo,” the knuckle-draggers who just won’t get with the Managed Care 2.0 program.

Sand castles on top of sand castles: The APM program

I suspect the reason Congress did not populate the APM compartment with clearly defined entities is that Boehner et al. knew full well that the first iteration of “value-based” entities – the ACOs and “medical homes” authorized by the Affordable Care Act – have not panned out. We know that MedPAC understands that. In its reports to Congress, and in statements by staff and members, MedPAC has clearly indicated they understand that ACOs and “homes” are saving little or no money and are having at best minor and mixed effects on quality.

It is fair to say, then, that MedPAC understands that Congress has essentially instructed CMS to build a new layer of undefined, unproven APMs on top of the existing layer of poorly defined and unproven ACOs and “homes,” in other words, a second layer of sand castles over an existing layer of sand castles.

Congress and CMS don’t need to hear any more abstract and wishful remarks about MACRA. They need to hear useful feedback. MedPAC should tell Congress MACRA is an unworkable mess and must be repealed or amended.

http://thehealthcareblog.com/blog/2016/04/21/the-mess-that-is-macra/

***

Physician Burnout Is a Public Health Crisis, Ethicist Says

By Arthur L. Caplan, PhD
Medscape, March 4, 2016

We’ve got a problem in this country with doctors. It’s kind of an epidemic, but no one is talking about it. It is burnout. A recent study from the Mayo Clinic showed that in 2011, 45.5% of doctors reported that they felt burned out, and that number has now risen to 54.4% in 2014.

This is really trouble. It’s trouble because a doctor who feels this way can commit more errors. They suffer from compassion fatigue, or just not being able to empathize with others because they have their own emotional issues. They may retire early, thereby reducing the workforce. They may have problems managing their own lives; 400 doctors committed suicide last year, which is double the rate of the population average. There’s trouble for patients in having a workforce that’s burned out. There’s trouble for doctors in terms of their own health and well-being.

When we institute new software or when we have new bureaucratic regulations, I think somebody ought to ask what this does to the workforce. If one more doctor complains to me about Epic and other types of electronic record keeping and billing forms, it’ll be one doctor too many. It takes a lot of energy. It makes people unhappy. A lot of the software and computer assistance that’s out there doesn’t seem to help the doctor; it makes more work or makes them frustrated. It also seems to me that if you look at what’s going on with respect to regulations and administrative or bureaucratic requirements, nobody is saying, “Hey, is this user-friendly? What’s the burden that it’s putting on the doctor?” It’s just done to save money or allow people to collect bills more reliably, but it’s not asking what it’s taking out of our workforce.

Arthur L. Caplan, PhD is from the Division of Medical Ethics at the New York University Langone Medical Center.

***

Comment:

By Don McCanne, M.D.

We now have an epidemic of physician burnout. It has become a crisis not only because of what it does to physicians’ well-being but also because of a deterioration in the all-important physician-patient relationship and in the medical practice environment.

A major contributor to burnout is the subversion of physician independence to the massive misdirected oversight interposed by public and private insurance bureaucracies. Little need be said about the private insurance bureaucracies that waste tremendous resources while creating havoc in our health care delivery system. We merely need to eliminate the private insurers and replace them with a single payer national health program.

Our government has established policies that result in Medicare gradually being shifted to the private Medicare Advantage insurers and Medicaid being shifted to private managed care organizations. In the past we’ve covered the reasons why privatization is a terrible idea, and we won’t go into that now. We’ll merely say that moving on to single payer should eliminate the privatization schemes.

Today’s message is more narrowly targeted to the problem that the public bureaucracies are creating, especially Medicare. MACRA with its MIPS (merit-based incentive payment system) and its APMs (alternative payment models) epitomize the bureaucratic interference of the federal government in our public programs. For more details, you should read the full articles cited today. These are concepts thought up by the policy community working with our government bureaucrats. They are relying on intuition since there is little in policy science to support MIPS and APMs. Initial results have been quite disappointing yet they are moving full steam ahead with these programs.

The burden on physicians and other health professionals will be great and can only exacerbate current trends leading to burnout. Public policies that make health care worse are unethical policies – the gist of today’s message.

We need to expand policies that serve the public in their need to have affordable access to health care. On May 5 we will be releasing an update of the Physicians’ Proposal which describes the policies we need to ensure comprehensive health care for everyone, in a pleasant environment that optimizes the health care experience. Watch for it.

Once we have that system in place it will be imperative for us to exercise continuing due diligence in ensuring that our political and policy stewards support the ideology of health care justice for all through public policies, while dismissing would-be stewards who support Randian you’re-on-your-own ideology that dominates the private arena.