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Medicare is worthy model to provide health care for all

Medicare is worthy model to provide health care for all

By Jessica Schorr Saxe, M.D.
The Charlotte (N.C.) Observer, July 30, 2014

On July 30, 1965, President Lyndon Johnson signed Medicare into law, making 19 million Americans aged 65 and over eligible for health care coverage.

Given what you know about the federal government, how long do you think it took to implement?

Keep in mind that implementation involved identifying everyone over 65 for automatic enrollment in Medicare Part A (hospitalization) and identifying who would opt to enroll in (and pay for) Medicare Part B (office visits); enrolling the providers for Part A and the doctors and insurance companies for Part B; coordinating various government agencies; and developing policy.

Since there was no Internet, enrollment was accomplished by a quaint process using punch cards sent through the U.S. mail, supplemented by door-knocking.

Medicare was fully implemented on July 1, 1966 – 11 months after enactment – with 95 percent of eligible individuals signed up.

As we watch the cumbersome, protracted enactment of the Affordable Care Act, we should be aware that much of the problem is not the government, but the complications of dealing with insurance companies with their varying coverage, premiums, co-pays and networks, as well as their concerns about losing profits by paying for medical expenses.

While we laud the ACA for insuring the previously uninsured (and sometimes desperate), we should keep in mind those left behind: those still uninsured and often still desperate. As a doctor who sees low-income patients, I know many.

I recently saw a woman in her 40s who had had a stroke three months earlier. Her diabetes and blood pressure were seriously out of control. Because she had no insurance, she had not kept the primary care and neurology appointments made for her at her discharge from the hospital. She easily could have died waiting to seek medical care.

Another patient had suffered for years with a serious, yet treatable, skin condition. Why? After he lost his job, he lost his health insurance, and thus his dermatologist.

The public must look beyond the ACA to a system that will not leave so many locked out and suffering.

And when we do, we should start with Medicare as a framework, recognizing that:

  • Medicare operates more efficiently than private insurance, spending less than 2 percent on administration and overhead, whereas private insurance companies typically spend more than 12 percent, sometimes considerably more.
  • Participants in Medicare report greater health-care satisfaction than the privately insured.
  • Medicare costs have a slower rate of growth than costs under private insurance.
  • Medicare pays providers more quickly than private insurance.
  • Medicare has decreased poverty among the elderly.

And it achieves these successes while covering the aged and disabled – the sickest among us.

Is Medicare perfect? Hardly. But it is the best model the U.S. has, and it can be improved. Expanding Medicare to cover everyone – thus dispensing with the wasteful middleman, i.e. the insurance companies – would provide many benefits. It would save hundreds of billions of dollars a year in reduced administrative costs. It would have negotiating clout to rein in medical supply prices. It would give us the choice we want – not the choice of convoluted insurance plans, but the choice of doctors and hospitals.

And the issues agonizingly debated in Burwell v. Hobby Lobby of whether employers should have a say in the contraceptive decisions of their employees? Poof! The discussion would disappear because employers would no longer be involved in health insurance. That alone would save the nation from lawsuits and endless public debate.

Furthermore, letting employers out of the health care business would free them to spend their time on their own businesses and spare them worrying about whether their workforce can get needed health care. And it will make their businesses more competitive in the international marketplace.

We should celebrate the anniversary of Medicare’s enactment this year by moving toward improved and expanded Medicare for all, which will give us the access, quality, cost-control and choice that we deserve – and that our wealthy country can easily provide. Wouldn’t achieving that be cause to celebrate in its golden anniversary year of 2015?

Jessica Schorr Saxe is a family physician in Charlotte.

http://www.charlotteobserver.com/2014/07/30/5075944/medicare-is-worthy-model-to-provide.html#storylink=cpy

Happy birthday, Medicare

By Ed Weisbart, MD
St. Louis Post-Dispatch, July 30, 2014

Medicare is today entering its 50th year, and the need to expand it to all Americans has never been greater.

Private health insurers are putting more and more restrictions on which doctors and hospitals can take care of which patients. Premiums, co-pays, co-insurance and deductibles are rising, often sharply. And states like ours are picking and choosing which low-income people to save and which to let die.

We insist on clinging to the uniquely American model of private health insurance despite the fact that it costs us double what every other modern nation spends per person on care, that our life expectancy lags those nations’ by several years, and that it places each of us just one disease away from bankruptcy.

Why do we cling to it so feverishly?

Rabbi Susan Talve recently reminded me of a biblical story in which the slaves leaving Egypt tried 10 times to return home to slavery, to nearly nothing, instead of continuing on to the promised land. Why would they have done that?

Both answers are the same. No matter how rotten something may be, it’s human nature to resist giving it up for something new and tempting. Sometimes, that part of our nature does us great harm.

But here’s an important difference: Medicare is a nonprofit, social insurance program we have come to know very well. And as any senior or member of their family will tell you, they like it very much.

Medicare was enacted in 1965 because older Americans were dying needless, preventable deaths from not being able to afford health care. When they got sick, they would sell their homes and declare bankruptcy in a last-ditch effort for care. They were dying paupers after long lives of working hard toward the American dream.

Sound familiar? That’s exactly what’s happening today to Americans who have not yet reached Medicare age, despite the significant progress of the Affordable Care Act.

A 60-year-old husband and wife in Missouri with a combined household income of $62,200 today would pay a premium of $13,761 for a high-end Silver plan and still be faced with $12,700 out-of-pocket expenses, potentially consuming 42 percent of their household income on medical expenses.

And that doesn’t include anything more they might have to spend if they need to see a physician or go to a hospital that’s not in their plan’s network.

So despite the great news that millions more of us have insurance, medical bankruptcies will continue. More than 60 percent of those bankruptcies happen to people with insurance! We could end that problem if we improved Medicare and gave it to everyone.

Putting aside the fundamental issue of fairness, providing every American with improved Medicare is a wise investment for our nation.

Every one of the thousands of health insurance companies in this country uses legions of people who operate computer systems, analysts, sales people, and more, all dedicated to collecting premiums and minimizing payouts for claims — i.e. to fatten the company’s bottom line.

This paper-pushing and dollar-chasing affliction is everywhere. The average hospital in the U.S. employs more people in billing-associated jobs than it has hospital beds.

This level of bureaucratic waste diverts our nation’s resources and drives up the cost of doing business here. We would be wise to retrain those hardworking folks into positions that actually improve health.

Improving Medicare and providing it to all Americans would cost us less than what preserving our current system costs, and would give us powerful tools to control costs.

Today, Medicare’s 49th anniversary, let us stop clinging to the failed private insurance experiment and recommit ourselves to Medicare for All, the most fair and prudent solution.

Dr. Ed Weisbart is chairman for Physicians for a National Health Program-Missouri Chapter.

http://www.stltoday.com/news/opinion/columns/happy-birthday-medicare/article_db2d454f-d8b0-5e38-ae88-34b86565bc8c.html

Medicare’s success deserves celebration on its 49th birthday

By David Ball, RN, MHA
The Post and Courier (Charleston, SC), July 30, 2014 

Today is Medicare’s 49th anniversary, having become law in 1965 under President Lyndon B. Johnson. Before 1965, as many elderly became sick but too old to work, they simply became impoverished and died.

Despite its warts and room for improvement, Medicare remains more efficient than private health insurance. Its costs have risen more slowly, and yet it provides better access to care, better financial protection, and higher patient satisfaction.

In contrast to ideological disputes over the Affordable Care Act (Obamacare), Medicare offers 49 years of living proof that public, universal health coverage is superior to private insurance in every way.

Unlike the rollout of health care, government and state exchanges under the Affordable Care Act, Medicare was implemented smoothly and at low cost because the program is universal and didn’t juggle enrollment in hundreds of private insurance plans.

All industrialized nations, with the exception of the U.S. provide health care to their citizens. While we should take pride that seniors have wonderful health insurance in Medicare, we should be equally concerned that 40 million Americans under the age of 65 do not. This can be fixed without raising taxes.

The United States spends twice as much per capita as any other nation on health care. Despite the fact that we have the finest medical schools, research laboratories and hospitals in the world, they are of little value to patients who can’t pay for care.

With all we spend, we can afford to provide essential services to every American without imposing co-pays, deductions, caps or exclusions.

A bill in Congress, HR 676, would do just that. Titled the Improved Medicare for All Act, it would provide basic services, including preventative care, hospitalization, medications, mental health, and long-term care.

The Congressional Budget Office (CBO) determined it can be provided without raising taxes.

Universal health care would not only extend coverage to everyone below age 65, but it would improve coverage for seniors.

For example, Canada’s universal plan covers 79 percent of seniors’ costs compared with 51 percent covered by Medicare in the U.S.

Single payer also makes Medicare financially sustainable. Medicare would have saved $2 trillion if its costs had risen at Canadian rates since 1980.

While we can afford health care for all our citizens, we cannot afford the wasteful system we have today.

For-profit insurance companies suck a quarter of all health care premium dollars away from providing care and instead fuel a very healthy bottom line.

Medicare does what insurance companies do for a tenth of the cost.

If for-profit insurance companies disappeared tomorrow then those premium dollars could be put into our rural hospitals and clinics and not the pockets of insurance CEOs.

The way to improve Medicare is to drop the enrollment age from 65 to 0. Replace the paper pushing that for-profit insurance does at 71 percent efficiency with Medicare’s 98 percent efficiency.

Continue to deliver care privately – choose your own doctor and hospital, but fund it publicly – like police, fire departments and libraries.

http://www.postandcourier.com/article/20140730/PC1002/140739990/1025/

Expand Medicare for all Americans

By Vijay Das
CNN, July 30. 2014

On this date, July 30, nearly a half-century ago, the United States achieved a major victory. Medicare, the nation’s first national health insurance program, was born. As part of President Lyndon Johnson’s Great Society, Medicare extended health coverage to seniors who inevitably needed care. It’s been a well-accepted success and highlights the benefits of improving health care access.

But despite Monday’s cautiously optimistic report on Medicare’s solvency, a sustainable and comprehensive health care system requires covering everybody. Expanding Medicare for all is the fairest, most effective and straightforward way to ensure universal coverage in America.

With Medicare, seniors have greater access to care. Yet most people deal with an overly complex system that fails to provide the same benefits our seniors receive. Even after the passage of Obamacare, unacceptable burdens remain. Consider the health coverage of women.

Today women consume the most health care services.They have greater annual health care expenses than men and pay a greater proportion of their health care costs out-of-pocket. The Kaiser Family Foundation reports that about one in five women is still uninsured. More than half these women struggle with their medical bills.

The story is even worse for low-income women, who are more likely to forgo treatment because of its cost. About 4 million low-income women can cover only themselves and are unable to receive financial support to purchase insurance for their families.

Women make up two-thirds of the low wage workforce — and only 23% of low-wage jobs provide employer-sponsored health insurance. Obamacare was supposed to help. But 3 million low-income and minority women live in states that have yet to expand Medicaid, leaving them unable to obtain Obamacare’s coverage for our most vulnerable families, which was promised in the law.

To be sure, Obamacare does offer greater protections and support for working women to obtain basic insurance. But with the fluctuating and often excessive premiums, deductibles and co-pays, these bills remain onerous. Accesses to in-network physicians remain restricted.

Women, like so many working Americans, are getting nickel-and-dimed, unable to afford and access comprehensive medical coverage. Our health plans continue to be held hostage by private carriers who must spend on hefty overhead and marketing to guarantee ever-growing profits for their shareholders.

To make matters worse, the courts have further restricted the availability of comprehensive coverage. With the U.S. Supreme Court’s ruling in Burwell v. Hobby Lobby Stores Inc., which gave companies the ability to withhold benefits based on religious grounds, women may lose coverage for basic birth control and reproductive health needs.

It’s unconscionable that in the richest nation on Earth, health disparities linger because ordinary people can’t obtain good care. Working families continue to wrestle with pocketbook-busting medical expenses and tussle with companies that get in between them and their physician.

It doesn’t have to be this way. We could provide hassle-free health care to both men and women just as we do for everyone over 65. By opening Medicare to everyone, we could secure universal coverage and run a more efficient and just system.

Medicare is far from perfect, but the flexible program stands strong. By expanding it, we can better pay for quality care and bargain with hospitals, drug companies and device firms on behalf of everyday people. All Americans could obtain quality care from any physician. And similar to how they do it in most wealthy nations, the government will reimburse the provider or company for that care. Businesses could focus on staying competitive rather than haggling with insurance companies over costly health plans for their workers.

We can fund the plan by preserving how we pay for health care and asking our very well-off to contribute a little more. The government would levy a small increase in payroll taxes on employers — who would no longer have to pay health plan premiums — and also issue a small tax on stock and bond transactions.

A single-payer health care system built off Medicare would guarantee universal coverage and far better health outcomes. To that end, Michigan’s U.S. Rep. John Conyers, a Democrat, has again introduced his Medicare-For-All proposal. U.S. Rep. Jim McDermott, D-Washington, and U.S. Sen. Bernie Sanders, I-Vermont, have introduced a similar version.

Outside our nation’s capital, Vermont is working to implement universal coverage for its residents next year, aiming to serve as a model for the rest of the nation.

As Sanders said, “The United States is the only major nation in the industrialized world that does not guarantee health care as a right to its people.”

What America is doing on health care isn’t working for either men or women. If we want to join the rest of the industrialized world, we must increase eligibility to the widely popular program, Medicare, which celebrates its 49th anniversary on Wednesday. The nation deserves a system that values wellness above profits, and progress over inertia and false starts.

Vijay Das is a health care advocate for Public Citizen’s Congress Watch division. Follow him on Twitter @vijdas. Public Citizen is a progressive, nonprofit, nonpartisan organization that works on behalf of citizen interests before Congress, the executive branch agencies and the courts. The opinions expressed in this commentary are solely those of the writer.

http://www.cnn.com/2014/07/30/opinion/das-medicare-health-care-for-all/index.html?hpt=op_t1

The Problem With ‘Pay for Performance’ in Medicine

By Aaron E. Carroll, M.D.
The New York Times, The Upshot, July 28, 2014

“Pay for performance” is one of those slogans that seem to upset no one. To most people it’s a no-brainer that we should pay for quality and not quantity. We all know that paying doctors based on the amount of care they provide, as we do with a traditional fee-for-service setup, creates incentives for them to give more care. It leads to increased health care spending. Changing the payment structure to pay them for achieving goals instead should reduce wasteful spending.

So it’s no surprise that pay for performance has been an important part of recent reform efforts. But in reality we’re seeing disappointingly mixed results. Sometimes it’s because providers don’t change the way they practice medicine; sometimes it’s because even when they do, outcomes don’t really improve.

The idea behind pay for performance is simple. We will give providers more money for achieving a goal. The goal can be defined in various ways, but at its heart, we want to see the system hit some target. This could be a certain number of patients receiving preventive care, a certain percentage of people whose chronic disease is being properly managed or even a certain number of people avoiding a bad outcome. Providers who reach these targets earn more money.

The problem, one I’ve noted before, is that changing physician behavior is hard. Sure, it’s possible to find a study in the medical literature that shows that pay for performance worked in some small way here or there. For instance, a study published last fall found that paying doctors $200 more per patient for hitting certain performance criteria resulted in improvements in care. It found that the rate of recommendations for aspirin or for prescriptions for medications to prevent clotting for people who needed it increased 6 percent in clinics without pay for performance but 12 percent in clinics with it.

Good blood pressure control increased 4.3 percent in clinics without pay for performance but 9.7 percent in clinics with it. But even in the pay-for-performance clinics, 35 percent of patients still didn’t have the appropriate anti-clotting advice or prescriptions, and 38 percent of patients didn’t have proper hypertensive care. And that’s success!

It’s also worth noting that the study was only for one year, and many improvements in actual outcomes would need to be sustained for much longer to matter. It’s not clear whether that will happen. A study published in Health Affairs examined the effects of a government partnership with Premier Inc., a national hospital system, and found that while the improvements seen in 260 hospitals in a pay-for-performance project outpaced those of 780 not in the project, five years later all those differences were gone.

The studies showing failure are also compelling. A study in The New England Journal of Medicine looked at 30-day mortality in the hospitals in the Premier pay-for-performance program compared with 3,363 hospitals that weren’t part of a pay-per-performance intervention. We’re talking about a study of millions of patients taking place over a six-year period in 12 states. Researchers found that 30-day mortality, or the rate at which people died within a month after receiving certain procedures or care, was similar at the start of the study between the two groups, and that the decline in mortality over the next six years was also similar.

Moreover, they found that even among the conditions that were explicitly linked to incentives, like heart attacks and coronary artery bypass grafts, pay for performance resulted in no improvements compared with conditions without financial incentives.

In Britain, a program was begun over a decade ago that would pay general practitioners up to 25 percent of their income in bonuses if they met certain benchmarks in the management of chronic diseases. The program made no difference at all in physician practice or patient outcomes, and this was with a much larger financial incentive than most programs in the United States offer.

Even refusing to pay for bad outcomes doesn’t appear to work as well as you might think. A 2012 study published in The New England Journal of Medicine looked at how the 2008 Medicare policy to refuse to pay for certain hospital-acquired conditions affected the rates of such infections. Those who devised the policy imagined that it would lead hospitals to improve their care of patients to prevent these infections. That didn’t happen. The policy had almost no measurable effect.

There have even been two systematic reviews in this area. The first of them suggested that there is some evidence that pay for performance could change physicians’ behavior. It acknowledged, though, that the studies were limited in how they could be generalized and might not be able to be replicated. It also noted there was no evidence that pay for performance improved patient outcomes, which is what we really care about. The second review found that with respect to primary care physicians, there was no evidence that pay for performance could even change physician behavior, let alone patient outcomes.

One of the reasons that paying for quality is hard is that we don’t even really know how to define “quality.” What is it, really? Far too often we approach quality like a drunkard’s search, looking where it’s easy rather than where it’s necessary. But it’s very hard to measure the things we really care about, like quality of life and improvements in functioning.

In fact, the way we keep setting up pay for performance demands easy-to-obtain metrics. Otherwise, the cost of data gathering could overwhelm any incentives. Unfortunately, as a recent New York Times article described, this has drawbacks.

The National Quality Forum, described in the article as an influential nonprofit, nonpartisan organization that endorses health care standards, reported that the metrics chosen by Medicare for their programs included measurements that were outside the control of a provider. In other words, factors like income, housing and education can affect the metrics more than what doctors and hospitals do.

This means that hospitals in resource-starved settings, caring for the poor, might be penalized because what we measure is out of their hands. A panel commissioned by the Obama administration recommended that the Department of Health and Human Services change the program to acknowledge the flaw. To date, it hasn’t agreed to do so.

Some fear that pay for performance could even backfire. Studies in other fields show that offering extrinsic rewards (like financial incentives) can undermine intrinsic motivations (like a desire to help people). Many physicians choose to do what they do because of the latter. It would be a tragedy if pay for performance wound up doing more harm than good.

Aaron E. Carroll is a professor of pediatrics at Indiana University School of Medicine. He blogs on health research and policy at The Incidental Economist, and you can follow him on Twitter at @aaronecarroll.

http://www.nytimes.com/2014/07/29/upshot/the-problem-with-pay-for-performance-in-medicine.html?hp&action=click&pgtype=Homepage&module=third-column-region&region=top-news&WT.nav=top-news&_r=0

Missouri doctor in Charlotte to discuss Medicare-for-all

By Karen Garloch
The Charlotte Observer, July 28, 2014

As a primary care physician, now retired and volunteering at free clinics, Dr. Ed Weisbart sees plenty of evidence that the U.S. health care system isn’t working.

“I’m constantly seeing patients who can’t pay for health care, and as a result they’re desperately sick and they die,” he said. “I think we can do better.”

Weisbart, who chairs the Missouri chapter of Physicians for a National Health Program, will speak Thursday in Charlotte at a meeting of a North Carolina chapter of the same organization. The meeting is at 6 p.m. at Morrison Regional Library, 7015 Morrison Blvd. (To register, email: HCJusticeNC@gmail.com.)

Although millions more Americans now have insurance through the Affordable Care Act, Weisbart says the 2010 law doesn’t provide enough incentives to keep the population healthy. “The reason Americans live shorter lives than anyone else in 50 countries in the modern world is that we don’t have a business plan for improving public health and for long-term preventive medicine,” he said.

The answer, he says, is a single-payer system, such as Medicare for everyone. That would relieve the fear among many Americans that “if they get one bad illness, they would have to sell their house.”

Weisbart said insurance companies have little incentive to encourage preventive care because about 20 percent of their customers turn over each year. An insurer is financially penalized if its healthier consumers then switch to a competing company.

“That’s perverse,” Weisbart said. “You want to have all of the interests aligned, and the only way to do that is to put everyone in the same risk pool, including Congress and the president.” That way, he said, improvements would benefit the whole system for years to come.

“Other countries spend half of what we spend on actual health care, but they spend significantly more on social services and public health,” he said.

It wouldn’t require a new system, Weisbart said. Just a change in the wording of the 1965 Medicare law to make it apply to all people, not just those 65 and over.

Reducing administrative costs alone would help. Today, 31 percent of health care expenditures are for administrative overhead in this country, compared with 2 to 12 percent in other countries, Weisbart said.

For most people, any tax increase under the new system would be less than increases in premiums, co-pays and deductibles under the current system, he said. “The vast majority of Americans would come out way ahead.”

Despite political divisions over health care, Weisbart is confident a single-payer system will be adopted – at some point.

“Most major social changes look impossible two years before they happen,” he said. “I don’t know if we’re two years out or 40 year out. But every rational argument is aligned toward this, and the current path is completely unsustainable. The trick is to get people to understand it, and to get past misinformation out there.”

http://www.charlotteobserver.com/2014/07/28/5071943/missouri-doctor-in-charlotte-to.html#.U9flj0DN7To#storylink=cpy

David Dranove and Craig Garthwaite warn of a system without narrow networks

Code Red: Two Economists Examine the U.S. Healthcare System

By David Dranove and Craig Garthwaite
Narrow Networks Redux, July 29, 2014

The Affordable Care Act is premised, at least in part, on the notion that competition can be harnessed to reduce healthcare costs and improve quality.

When most people think about the benefits of competition, they tend to think about prices. Monopolies charge high prices; competitors charge low prices. There is nothing wrong with this perspective, but it misses a more fundamental point. In the long run, the greatest benefit of competition is that it has the potential to fuel innovation.

This is as true, in theory, for health insurers as it is for telecommunications and consumer electronics. It hasn’t always been true in practice; for several decades after the IRS made employer-sponsored health insurance tax deductible, insurers tended to offer the same costly indemnity products. But consumers eventually demanded lower premiums, and insurers responded with managed care. After the backlash, insurers developed high deductible health plans and value based insurance design. Insurers are now moving towards reference pricing. These plans offer consumers reimbursement up to a pre-specified level for treatments that can be easily broken into a treatment episode such as hip replacements or MRIs.

High deductibles and reference pricing are fine, but do not always work in practice. Chronically ill patients quickly exhaust their deductibles, and reference pricing does not work well for chronic diseases. In order to complement these tactics, some insurers are once again offering narrow network plans. We commented in earlier blog posts that the ACA would catalyze the return of these narrow networks and also warned that this might fuel another backlash. Unfortunately, a recent New York Times article shows, the backlash is well underway.

Make no mistake, restrictive networks are essential to cost containment. Through narrow networks, insurers can negotiate lower prices. More importantly, they can direct enrollees to providers who have lower overall costs and higher quality. Dranove has written two books about this. Don’t take his word for it. The independent Robert Wood Johnson Foundation has published two comprehensive studies showing that the competition triggered by networks has been successful in reducing costs and improving quality.

By definition, some providers are excluded from narrow networks, and this is where the trouble begins. Excluded providers who have lost out in the cauldron of competition always complain the loudest. We should have no sympathy for them.

What about patients? Some patients knowingly choose health plans with narrow networks in order to save money, and should not be surprised to find that some of their favorite providers are excluded. Others may be in the dark about their networks. The solution isn’t to regulate narrow networks out of existence; it is to shine some light on network structure.

Another concern may be that low income enrollees who cannot afford broader networks might be at a disadvantage. But if we want to provide big enough subsidies so that all enrollees have broad networks, we will have to either (a) raise taxes further, or (b) limit the number of uninsured we can enroll. Neither choice seems better than the status quo.

Now, this does not mean that we think there is no place for regulation of narrow network plans. We don’t think that the newly formed ACA exchanges, or any market, should be the proverbial Wild West. For example, if we want consumers to make educated choices across insurance plans, then they require timely and accurate information about which providers are in which networks. We would think this would be more than feasible, though healthcare.gov was somehow unable to provide this information to many of the initial enrollees. We understand that providers go in and out of networks all the time and it would be burdensome for insurers to inform enrollees of all network changes in real time. But insurers could provide regular updates. We also wonder if insurers have the capability of identifying, through billing records, when a particular patient’s provider has gone out of network, and sending that patient an immediate update. In these situations, patients should be allowed to change their choice of plans outside of the open enrollment period in the same way they might be able to if they had another qualifying event such as the birth of a child.

In addition, narrow network plans are only effective if there are multiple high quality providers offering services in an area. Given the recent wave of provider consolidations, it is critical that anti-trust authorities carefully monitor these mergers. After all, competition can only work in truly competitive markets.

But what we must avoid is mandating broader access. This would spell the end of market-based health reform. If insurers cannot exclude some providers, then providers have little incentive to lower prices and become more efficient.

Many states have already attempted to mandate minimum access through Any Willing Provider laws. These laws require insurers who have come to terms with a specific provider to accept all providers who agree to those same terms. This may sound fair, but the economic implications of AWP for patients are anything but fair. Under AWP, no providers need negotiate with insurers or accede to an insurer’s request for discounts. Providers can bide their time, knowing that they can always force their way into the network. Having lost all their leverage, insurers can no longer demand discounts, and prices invariably rise.

The push for broad access seems to be especially strong in sparsely populated states such as Montana. But proposals to assure access, which often take the form “At least X% of enrollees must live within Y miles of a provider” do more to drive up costs than any other rules we can imagine, because they grant effective monopoly rights to rural providers. Insurers facing such rules have two options (a) accede to the pricing demands of the local monopolies, or (b) drop coverage in areas where providers have been granted local monopolies. Montanans may as well have nationalized healthcare.

Narrow Networks Redux

****

Comment:

By Don McCanne, MD

This blog entry by David Dranove and Craig Garthwaite is another example, like yesterday’s, where economists from “the other side” clearly understand the policy issues, but are guided by an ideological preference for market solutions as opposed to more effective government solutions.

Narrow networks do terrible things. As these authors state, narrow networks provoke backlashes from patients who are unhappy with the restrictions. Healthy individuals select their plans primarily based on price but then are disappointed when they find that the networks are unable to meet either their needs or their choices. The narrow networks become anti-competitive when excluded providers leave the community and are not available for the next year of provider contracting. The authors point out that requiring the providers to be within a reason distance from patients drives up costs, as if cost containment is far more important than access. With the inevitable changes in patient plan enrollment and in provider network enrollment, narrow networks can be highly disruptive because of the need to leave your established care and enter new narrow networks. Perhaps worst of all, the authors state that “low income enrollees who cannot afford broader networks might be at a disadvantage.” But then they state that if we are to broaden the networks we must “either (a) raise taxes further, or (b) limit the number of uninsured we can enroll,” as if there were absolutely no other option for containing costs that did not involve narrow networks. They seem to believe that the trade-off is worth the cost of disadvantaging low income enrollees.

They contend that “restrictive networks are essential to cost containment,” after making the case that other market tools of competition have been inadequate. But ideology dictates that market competition must be the driving force for cost containment. They caution that mandating broader access “would spell the end of market-based health reform.”

The case they make for Montana seems to be the clincher on why narrow networks are such a highly flawed policy – a conclusion that they did not intend. They complain that requiring reasonable distances to health care creates a provider monopoly that will cause insurers to either charge outrageous rates or simply drop coverage. They say that “Montanans may as well have nationalized healthcare.” Maybe they should, as should the rest of us.

If the inadequacy of other tools of market competition have required insurers to turn to perverse narrow networks maybe we should be questioning whether market competition is the best policy for controlling costs. Come to think of it, maybe we should listen to these authors when they say that allowing broader access “would spell the end of market-based health reform.” Other national systems depending on government administered pricing provide care for everyone at an average of half of what we are spending per capita. Now that’s effective cost containment, and it’s accomplished without kowtowing to the ideologues who insist that health reform must be market based.

Happy birthday, Medicare

By Richard Propp, M.D.
Times Union (Albany, N.Y.), July 28, 2014

Happy 49th birthday, Medicare. What a bargain — what simplicity — and what a benefit, when compared to the cost and availability of health care to those under 65.

True, it doesn’t pay for everything. True, there are deductibles and co-pays. It is also true that while Medicare Advantage plans purport to provide greater benefits than those of traditional Medicare, these plans cost us, the taxpayers, more than traditional Medicare and restrict choice.

And most importantly, it is true that anti-government ultra-conservatives, like U.S. Rep. Paul Ryan, try year after year to destroy Medicare as we know it, through proposed phony privatization schemes like vouchers. They prevaricate with myths such as “Medicare is broke” (or is going broke, or will go broke).

The upcoming birthday of Medicare on July 30 represents a good time to push back.

Medicare was enacted in 1965 through the fearless political leadership of President Lyndon Johnson and implemented for 18.9 million seniors in only about 11 months. Half of them were so poor they previously had no guaranteed access to medical care. Almost overnight they had access to care and an important buffer against financial ruin in the event of serious illness.

The traditional Medicare program has been efficient. Its current overhead is less than 2 percent. Compare that to the overhead of private insurance plans, which averages about 13 percent (and runs much higher in the individual market). Overall, our fragmented multi-payer insurance system consumes about 30 percent of our nation’s health care spending, most of it bureaucratic waste.

The salient facts are these. Today, Medicare guarantees access to the genius of American health care to more than 50 million Americans under Title XVIII of the Social Security Act. There can be no discrimination by gender, race, ethnic group, sexual orientation, employment or financial status in any facility receiving Medicare funds.

Medicare represents our commitment to people who are 65 and over, to the disabled, to hospice patients and to patients with amyotrophic lateral sclerosis and end-stage kidney disease. Their health care is a right. That’s an important principle to build upon.

As for its sustainability, Medicare Part A is fully funded until 2026. Part B is fully funded for the indefinite future. Occasionally, the FICA tax is adjusted by a tiny fraction of a percentage point to compensate for variations in the economy and other factors. Premium adjustments are also possible, but the truth is that they’re too high already.

Medicare has other issues, as any system has, like being prohibited by law from negotiating for lower drug prices, or its perennial need to adjust reimbursement rates for compensating physicians. But these problems are and can be worked through with thoughtful negotiations and new laws.

Medicare is one of the greatest of U.S. public health programs, and needs not only to be protected but honored. My organization and others plan to celebrate this year with homemade American PIE (protect, improve, expand) at the historic Albany City Hall Rotunda at 2 p.m. on Wednesday, with Mayor Kathy Sheehan. It’s open to the public.

Medicare is not the problem; it is the solution — and could be the solution to our entire health care system.

Dr. Richard Propp is a member of the Capital District Alliance for Universal Healthcare. 

http://www.timesunion.com/default/article/Happy-birthday-Medicare-5652185.php

Dana Goldman and Tomas Philipson warn of double jeopardy of health insurance

‘Double Jeopardy’ In American Health Insurance

By Dana P. Goldman and Tomas J. Philipson
Forbes, April 1, 2014

Health insurance markets allow people to share risks; those lucky enough not to need health care pay premiums to cover care for the unlucky ones who do. This risk-sharing—which most of us are very willing to purchase — amounts to a modest income loss through our premiums when we are healthy to avoid serious financial trouble when we are sick.

However, a disturbing trend has emerged over the last few years. As health care costs have risen, many insurance companies have responded by starting to increase cost-sharing on to patients when they get sick, sometimes dramatically. This has occurred particularly for the unlucky patients who are the sickest and who need highly specialized therapies. Such so called “specialty drugs” are different than standard prescription drugs and often cost substantially more, many times because they are harder to manufacture. For example, the Centers for Medicare and Medicaid Services, the agency that implemented the Medicare Part D prescription drug benefit, allowed plans to create a ‘formulary tier’ specifically for drugs costing $600 or more per month—and about 90 percent of plans use them. And, among the plans who use the tier, more than half require patients to pay 25% or more of costs. The drugs on this tier are those of patients faced with many difficult conditions – it includes medications for rheumatoid arthritis, osteoporosis, MS, and even cancer.

This insurance design often means that the sickest patients also take the largest financial hits; what we argue amounts to a “double jeopardy” of current health insurance. Consider the case of cancer care which is a relatively rare event compared to diseases like hypertension or diabetes, but often leads to a cascade of high expenses. Insurance companies are now pushing those expenses on patients at the time of care, rather than covering them through premiums paid before illness. Ironically, this has led to outrage against manufacturers of cancer treatments rather than payers, For example, oncology specialists have often criticized the manufacturers for the high prices involved because their patients can’t afford the treatments. The irony is that other forms of care are much more expensive — such as the use of intensive care units (ICUs) — yet there is no outcry by physicians against the device manufacturers concerning these costs. The reason is that ICU care–which often costs about $4,000 per day in the most futile cases–is fully covered (as it should be), whereas the specialty treatments remain only partially covered.

Pushing these costs onto the patient at the time of sickness not only distorts treatment patterns, but also leads to inequity. One common strategy to manage these specialty products is to force patients to try cheaper treatments before insurers will cover more expensive ones – a practice euphemistically called ‘step therapy.’ For those who respond to the cheaper therapy, they get better and pay very little. But for those who are unlucky enough not the respond to the first treatment, they move to the next therapy, often at much higher cost. The result is both worse health prospects but also a larger financial burden for the same but more severe form of the same disease, another form of double jeopardy. The high out-of-pocket costs of second-line therapy may also encourage patients and their physicians to retry ineffective, first line therapies, sometimes at great risk to the patient. Patients with more recalcitrant disease are being asked to pay more—the opposite of what we want insurance to do.

Since the 1960’s, economists have noted that cost-sharing at the time of illness for medical services is a way to balance the financial risks of health care spending against improper incentives for care when sick. On the one hand, full coverage eliminates all financial risks to patients, but it provides no incentive to economize on care when sick. On the other hand, no insurance imposes too much risk on a patient while it provides better incentives to economize on care. Thus, economists agree that the optimal cost-sharing should strike a balance between financial protection and proper incentives to economize on care. In particular, when treatments are valuable and patients are willing to seek them at very high prices, economists recognize there is little value to high copayments because they would just impose financial risks through care that would have been undertaken anyway. However, double jeopardy of American insurance imposes financial risk on the patient at precisely the moment when it is likely least appropriate. A cancer patient is willing to pay large sums to cling on to life, but is hit with both the dreaded disease and a large medical bill at the same time.

What can be done to limit the damage of double jeopardy in insurance? In cases where treatment is effective, payers should provide real insurance and not impose substantial burdens on patients when they are sick—especially those who do not respond to conventional first line care. In face of market forces, we would expect patients or their benefit managers to sooner or later shun plans with double jeopardy designs. The second best alternative would be to encourage manufacturers to fix the insurance failure by providing copayment assistance for these patients. The analogy is Medigap coverage, which provides secondary insurance for costs that Medicare does not cover. In the private sector, such coverage is often outlawed on the grounds that it interferes with payer’s incentives to make patients economize on care.

The bottom line is that insurance that doesn’t cover the financial risks for the sickest seriously lowers the value of coverage to the insured pool, imposes the largest losses on the sickest even within the same diagnosis, and leads to finger-pointing at the wrong parties.

Dana P. Goldman is the Leonard D. Schaeffer Chair and Director of the Schaeffer Center for Health Policy and Economics at the University of Southern California. Tomas J. Philipson is the Daniel Levin Chair of Public Policy at the University of Chicago. Both are founding partners of Precision Health Economics LLC.

http://www.forbes.com/sites/tomasphilipson/2014/04/01/double-jeopardy-in-american-health-insurance/

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Comment:

By Don McCanne, MD

This is an important article. The topic is important because it represents one of the more serious flaws in recent trends of health care financing reform – a flaw which results in greater financial burdens being imposed on people with serious medical disorders. It is also important because it represents the views of two authorities in the health policy community who come from the “other side,” generally holding views at odds with the health care justice positions of PNHP. This time they are right.

Insurers are using several techniques that place patients in “double jeopardy” – facing both the burdens of serious illness and the high costs imposed on them by insurance plan design. When serious medical problems develop, the insurers impose higher cost sharing on patients through techniques such as ever higher deductibles, large coinsurance requirements (paying a higher percentage of costs rather than lower copayments), and tiering of drugs and specialized services with even higher coinsurance requirements for the most expensive tiers.

The authors note that, not only are the patients exposed to higher costs, but some insurers require less expensive treatments as a trial before high cost treatments will be authorized (stepped therapy). The risk of delay of definitive treatment is obvious in disorders such as cancer, not to mention that it introduces more inequity into health care.

Although they repeat the consumer-directed canard that cost sharing is essential to provide incentives to economize on care, they seem to express the opposite view when they state, “when treatments are valuable and patients are willing to seek them at very high prices, economists recognize there is little value to high copayments because they would just impose financial risks through care that would have been undertaken anyway.”

Further, they state, “double jeopardy of American insurance imposes financial risk on the patient at precisely the moment when it is likely least appropriate. A cancer patient is willing to pay large sums to cling on to life, but is hit with both the dreaded disease and a large medical bill at the same time.”

Their solution is even more interesting, considering where they come from. “In cases where treatment is effective, payers should provide real insurance and not impose substantial burdens on patients when they are sick — especially those who do not respond to conventional first line care. In face of market forces, we would expect patients or their benefit managers to sooner or later shun plans with double jeopardy designs.” Imagine that. They suggest that the markets will reject precisely those cost sharing plans that their colleagues on the “other side” are pushing – plans which have gained great traction in recent years, especially since the implementation of the Affordable Care Act.

An alternative proposal of theirs also seems to reject the concept of making the consumer a better health care shopper through cast sharing. “The second best alternative would be to encourage manufacturers to fix the insurance failure by providing copayment assistance for these patients. The analogy is Medigap coverage, which provides secondary insurance for costs that Medicare does not cover.” Wow. Right now their colleagues are recommending that Medigap be pared back to deliberately increase exposure of patients to the direct costs of health care.

We can be thankful that these authors have pointed out the perversities of cost sharing. They do speak of “balance” but not when the burden is significant. Although, what might seem to many to be modest levels of cost sharing, that balanced level has been shown to be a harmful burden for those of more modest means.

We should accept their principle that payers should provide real insurance without burdens or secondary insurance for uncovered costs. But far easier and much more efficient than altering the private insurance model would be to replace it with a universal prepaid health system with equitable public funding (i.e., single payer). Although Goldman and Philipson are not quite there, maybe we can coax them over.

Churning for Dollars — There Ought to Be a Law

By Donna Smith
Common Dreams, July 27, 2014

Remember Liz Fowler? She was the WellPoint executive who took a brief sabbatical from her direct paychecks from the private health insurance industry to write the Affordable Care Act while working for Senator Max Baucus. Once that project was wrapped up, Liz went to work briefly for the U.S. Department of Health and Human Services as she transitioned her way back to work as a lobbyist for health industry giant Johnson & Johnson.

I met with Fowler once in Washington, D.C. I was part of a delegation of people hoping to be heard on single-payer, improved and expanded Medicare for all for life health care reform, and she had the most sincere, concern-filled gaze I had ever seen in D.C. as she did her best to show support for those who wanted something other than the profit-based, market driven reform we got. She was a marvelous actress. Once her work was done in achieving victory for the health insurance industry through the Affordable Care Act/Obamacare, Fowler set off for greener again (and received plenty of cash).

Now, in Colorado, we’re seeing Patty Fontneau, the CEO of the health insurance exchange, making her departure to return to private industry. Fontneau will take a position as president of health insurance giant CIGNA’s private exchange business. Prior to heading up the exchange, she worked for a law firm and in finance. No doubt her new role at CIGNA will provide her an income that supports the lifestyle to which she became accustomed while earning nearly $200,000 annually (plus bonuses) as the head of the Colorado exchange. It’s a safe bet she never had to apply for or worry about any tax credits or subsidies to cover her own health insurance premiums.

The only time I ever met Fontneau was after I complained to the exchange board in a public meeting about the delay in receiving a Medicaid denial so I could get on with shopping for and signing up for a policy on the exchange. Her staff and Medicaid managers wanted to make sure I knew it was my error that caused the delay. (It wasn’t.) And I never really got the gaze of concern and sincerity that Fowler had mastered at the national level.

So, what’s wrong with all this cross-pollination of private and public interests and executives in our health care industry? It is an affront to the basic common sense of most Americans and Coloradans to ask us to think that executives like Fowler and Fontneau have not been rewarded for their loyalty and success in protecting the big business interests that drive our health system. These are not people who devote themselves to public service of any kind for very long — being a public servant doesn’t generally pay enough to keep them anchored to the public good over private profits and interests.

I wish there were some kind of law that prevented this sort of churning of industry executives in and out of positions funded with public dollars — or at least some sort of tax penalty or fine that had to be paid when the connections are just too obvious to be anything but rewards for being a friend to big business. Our health care system will continue to see this sort of executive churning and reward system until we transform the system into one that is about health care and not about massive profits for the health care industry.

Health care needs to be treated as a public good and a human right. CIGNA certainly is not in the business of providing that. Health insurance is not health care. Health insurance is a financial product sold to us to protect health and wealth which may do neither thing very well at all. So we weren’t duped by Fowler or Fontneau as they worked to help the health industry from the inside or as they left to do similar work more directly from outside the public administration of Obamacare. We patients and private citizens were always the means to an end — higher profits for the health industry and bigger salaries for those who help make it so. As an old adage goes and has ever stayed true, “Follow the money.”

On Wednesday, July 30, Medicare will celebrate its 49th anniversary. This nation and our state have benefited madly from the success of the Medicare program over the years as more seniors and the disabled were spared from poverty and suffering by having access to affordable health care. Improved and expanded Medicare for all for life would help end the same sort of trauma for all of us, and it would stop the process by which private industry profits are the top priority in our health care system.

Health Care for All Colorado will celebrate Medicare’s anniversary with an action on July 30th, and it’s a safe bet that very few health care executives or even those working on health care and currently earning a salary funded with public dollars will join in our action. They have other masters to serve, after all, and we the patients and more common folk of Colorado are not among them. And so long as we have private, for-profit health insurance companies calling the shots in our health system, we can expect they will run the show inside our state houses as they influence and own our elected officials and inside our doctors’ offices as they dictate what care we can and cannot have.

Donna Smith is the executive director of Health Care for All Colorado and the Health Care for All Colorado Foundation.

http://www.commondreams.org/views/2014/07/27/churning-dollars-there-ought-be-law

Kshama Sawant on single payer

Glimmers of healthcare politics at meeting of Western Washington docs

Tough talk from Kshama Sawant and others at annual gathering of Western Washington Physicians for a National Health Program.

By Ted Van Dyk
Crosscut.com (Seattle), July 23, 2014

Seattle City Council member Kshama Sawant also was critical of Obamacare, arguing that the administration colluded with drug and insurance companies in framing it. Sawant spoke longest and most avidly at the meeting. She called on committed single-payer supporters to follow the example of those who sought a $15 minimum wage in Seattle, and bring tireless pressure to bear on Democratic officeholders in particular. Sawant is a committed socialist who often referred to “working class interests” and “corrupt corporations, banks, and hedge fund operators.”

Kshama Sawant (video at 4:45):

“Our discussion should be formulated not on the basis of whether or not the ACA delivered something good. Maybe it did, but that’s not the point. The point is, what are we not getting from it, and why didn’t we win single payer health care? That’s what I would like to focus on.”

http://crosscut.com/2014/07/23/health-medicine/121125/western-wa-physicians-national-health-program/?page=single

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Comment:

By Don McCanne, MD

Socialist Kshama Sawant, a member of the Seattle City Council, came to national attention by leading her fellow council members in passing a $15/hour minimum wage for their city. Having shown that political activism can still be effective, she has important advice for us in our efforts to enact single payer reform.

Currently attention has been diverted from single payer, as most progressives are celebrating the supposedly great successes in implementation of the Affordable Care Act (ACA). Even the Republicans in Congress who have voted several times to repeal ACA, are now suing President Obama for not implementing it fast enough.

Those of us who continue to adamantly support single payer are facing criticism for not joining the ACA bandwagon. This is where Sawant’s message is so important. Whether “ACA delivered something good” is not the point. The point is, we have to inform the public on “what are we not getting from it.” And what we are not getting is most of the goals of reform! The accomplishments are extremely modest compared to the reform that we need.

What are we not getting from ACA that we would be getting from single payer?

  • Truly universal coverage
  • Dramatic reduction in administrative waste
  • Removal of financial barriers to care
  • Coverage of all essential health care services
  • Free choice of hospitals and health care professionals
  • Removal of the interventions and excesses of the private insurers
  • Taxpayer financing based on ability to pay
  • Infrastructure reform that would slow spending to sustainable levels

And what successes are the ACA supporters touting (though using different rhetoric)?

  • Coverage of only about half of the uninsured
  • Shift to underinsurance products
  • Guaranteed issue of these underinsurance products
  • Deductibles that keep patients away from care by erecting financial barriers
  • Insurance subsidies that are inadequate
  • Ultra-narrow networks that take away choice
  • Insurance marketplaces that increase administrative complexity and waste
  • Inadequate cost containment policies (except for perverse higher deductibles)

Sawant delivers a very strong leftist message on social justice issues, and includes in her comments the failures of the Democratic Party to act. But this point on what we are not getting from ACA and why we need single payer is not a leftist message. It is a call for all of us from across the political spectrum who support single payer to take control of the message. We can no longer allow ourselves to be a meek voice silenced by those who, for noble and ignoble reasons, celebrate the paltry successes of ACA.

Again, the something good that ACA did is not the point. The point is what we are not getting from ACA and would be getting under a single payer system. Let’s drown out the message of the ACA supporters who wimped out on real reform.

Arkansas – Poor people need to be taught how insurance works

Arkansas Weighs Plan To Make Some Medicaid Enrollees Fund Savings Accounts

By Michelle Andrews
Kaiser Health News, July 22, 2014

If all goes according to plan, next year many Arkansas Medicaid beneficiaries will be required to make monthly contributions to so-called Health Independence Accounts. Those that don’t may have to pay more of the cost of their medical services, and in some cases may be refused services.

Supporters say it will help nudge beneficiaries toward becoming more cost-conscious health care consumers. Patient advocates are skeptical, pointing to studies showing that such financial “skin-in-the-game” requirements discourage low-income people from getting care that they need.

Michigan and Indiana have already implemented health savings accounts for their Medicaid programs, modeled after the accounts that are increasingly popular in the private market. The funds, which may be supplemented by the state, can be used to pay for services subject to the plan deductible, for example, or to cover the cost of other medical services.

The program particulars in each state differ. But both states – and the Arkansas proposal — require beneficiaries to make monthly contributions into the accounts in order to reap certain benefits, such as avoiding typical cost sharing for medical services. Funds in the accounts may roll over from one year to the next, and participants may be able to use them to cover their medical costs if they leave the Medicaid program.

“We believe in consumerism,” says John Selig, director of the Arkansas Department of Human Services. By requiring Medicaid beneficiaries to make a monthly contribution to a Health Independence Account, “we think they’ll use care more appropriately and get a sense of how insurance works.”

Under the health law, states can expand Medicaid coverage to adults with incomes up to 138 percent of the federal poverty level (currently $16,105 for an individual). So far, about half have done so. But some conservatives have objected to the expansion of a government entitlement program, preferring a private market approach that they say encourages personal responsibility.

Arkansas and Iowa proposed and received approval from the federal Department of Health and Human Services for premium assistance programs that use federal funds to enroll the new Medicaid-eligible beneficiaries in marketplace plans.

For 2015, Arkansas is proposing to expand its experiment by introducing the Health Independence Accounts. Nearly all beneficiaries earning between 50 and 138 percent of the poverty level ($5,835 to $16105 for an individual) would have to participate through monthly contributions of between $5 and $25, depending on their income, or face cost-sharing requirements capped at 5 percent of income by Medicaid rules. In addition, Medicaid enrollees with incomes over the poverty level could be refused services if they don’t make their monthly contribution and don’t make a copayment. (This year, those with incomes between 100 and 138 percent of poverty already have co-pays.)

Under the new program, any of the private option enrollees would be able to avoid all cost sharing charges next year by making monthly contributions to their HIA.

Each month that a beneficiary makes a payment to his or her account, the state will contribute $15. Unused amounts will roll over from one year to the next up to a maximum of $200, which can be used by the beneficiary for health care costs if he or she leaves Medicaid for private coverage.

Advocates say they’re pleased that 175,000 Arkansans have gained coverage under the Medicaid expansion. But the proposal for next year gives them pause.

“There are concerns with adding cost sharing to those below the poverty level,” says Anna Strong, health care policy director at Arkansas Advocates for Children and Families.

Those concerns are well founded, say experts. “This is something that researchers have looked at a lot,” says MaryBeth Musumeci, associate director at the Kaiser Commission on Medicaid and the Uninsured. “Overarchingly, premiums and cost sharing have been shown to discourage or impede folks from getting needed care.”

Some experts note that at least 40 states already charge premiums or cost sharing for at least some beneficiaries. Beneficiaries have skin in the game already, they say, and they question the value of these special accounts that add a whole new layer of complexity for people who may not ever have had insurance before.

“We’re creating these incredibly complicated administrative structures, and I don’t think people will understand them,” says Judith Solomon, vice president for health policy at the Center on Budget and Policy Priorities.

http://www.kaiserhealthnews.org/Stories/2014/July/22/Michelle-Andrews-on-Arkansas-plan-for-Medicaid-savings-accounts.aspx

Comment:

By Don McCanne, MD

Arkansas is demonstrating to us the irrationality of basing reform on ideological concepts divorced from health policy science. Let’s look closer at this proposal for “Health Independence Accounts,” their version of consumer directed health care for very low income individuals, using the concept of health savings accounts.

  • “Nearly all beneficiaries earning between 50 and 138 percent of the poverty level ($5,835 to $16,105 for an individual) would have to participate through monthly contributions of between $5 and $25.”
  • It seems to matter little that these individuals have no discretionary income since they do not have enough revenues to meet their basic needs, much less contribute to a savings account.
  • If they are able to make their payments, then, according to this article, cost sharing is eliminated. Wasn’t a purpose of the savings accounts to help pay for cost sharing?
  • So what do they suggest is the purpose of the health savings accounts? They “can be used by the beneficiary for health care costs if he or she leaves Medicaid for private coverage.” So this is a financing plan for Medicaid that won’t be used, but saved until after the person leaves Medicaid? How does that help?
  • For those with incomes between 100 and 138 percent of the federal poverty level, failure to make a payment into the Health Independence Account could result in being refused health care services. Is this really a rational policy for trying to improve health care access for these low income individuals?

No, it’s not about improving health care access. According to John Selig, director of the Arkansas Department of Human Services, “We believe in consumerism. We think they’ll use care more appropriately and get a sense of how insurance works.”

This is ideology that is totally divorced from health policy science. Contrast that with ideology that is based on sound health policy science that results in everyone receiving the health care that they need within a system that is affordable for all. Of course, that would be a single payer national health program.

This is sometimes presented as an ideological divide between the “individual responsibility” and the “we’re all in this together” mindsets, but ideology cannot be divorced from policy science. Health care should not simply be teaching poor people about how insurance works. It should be about getting them the care that they need, when they need it.