PNHP

Is the Urban Institute asking the right question on ending the employer mandate?

Is the Urban Institute asking the right question on ending the employer mandate?

Why Not Just Eliminate the Employer Mandate?

By Linda J. Blumberg, John Holahan, and Matthew Buettgens
Urban Institute, May 2014

Controversy over the Affordable Care Act’s employer mandate continues. The requirement’s implications for coverage are small, and yet the negative labor market effects of keeping it in place could harm some low-wage workers.

Under the law, employers of 50 or more workers are subject to a penalty if at least one of their full-time workers obtains a Marketplace subsidy. Employees offered coverage deemed affordable and adequate are prohibited from obtaining subsidies, as are their family members, and employers can avoid penalties by offering coverage to at least 95 percent of workers. However, the Administration has delayed the requirements until 2016 for employers of 50-99, for larger employers until 2015, and softened requirements for that first year. Yet there are anecdotal reports of employers changing labor practices even though penalties have yet to be implemented.

Our analyses as well as that of others find that eliminating the employer mandate will not reduce insurance coverage significantly, contrary to its supporters’ expectations. Eliminating it will remove labor market distortions that have troubled employer groups and which would harm some workers. However, new revenue sources will be required to replace that anticipated to be raised by the employer mandate.

Conclusion

In summary, eliminating the employer mandate would eliminate labor market distortions in the law, lessen opposition to the law from employers, and have little effect on coverage. Alternative sources of revenue would have to be found to compensate for the federal loss of penalties. Both the elimination of the mandate and creating a new source of revenue to replace it will require legislation. Current legislation before Congress proposes to move the employer requirement from employers of 50 or more workers to employers of 100 or more. While this approach would help those firms between 50 and 99 employees and decrease the exposure to adverse incentives within that group, it shifts the threshold where labor market effects could take place to a different point and does not address the concerns of large, low-wage firms. The individual mandate, together with the Medicaid expansion and income related subsidies, is, as we have shown elsewhere,14 critical to expanding coverage under the ACA; the employer mandate is not.

http://www.urban.org/UploadedPDF/413117-Why-Not-Just-Eliminate-the-Emplo…

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Study Questions Need For Employer Health Care Requirement

By John Ydstie
NPR, May 28, 2014

A study called “Why Not Just Eliminate the Employer Mandate?” has been published by the Urban Institute, a center-left think tank based in Washington, D.C. It lists a number of reasons why dropping the mandate might be a good idea.

Linda Blumberg, one of the authors, says first of all, requiring firms to offer health insurance could be a bad deal for lots of low-wage workers.

“A lower-income worker is going to do better, most likely — financially — by getting subsidized coverage through one of the health insurance marketplaces instead of through their employer,” she says.

That’s because many of those workers make so little that they qualify for free coverage under Medicaid. Even workers making as much as 2 1/2 times poverty-level wages would get subsidies in the Obamacare exchanges, and that could make it a better deal than the coverage provided by their company.

Employer-sponsored plans do make sense for lots of workers because they allow those workers to buy their insurance with tax-free dollars. But for low-income workers who may not pay any income tax, there’s little benefit.

The Urban Institute study also concludes that the employer mandate won’t be very helpful in increasing insurance coverage. It finds that only about 200,000 more people will be covered under the mandate.

So, with these kinds of negatives, what’s the incentive for hanging on to the employer mandate?

Jon Gruber is an economist at the Massachusetts Institute of Technology who helped design the Massachusetts health care exchange under then-Gov. Mitt Romney. Gruber, who also consulted with the Obama administration on the Affordable Care Act, says that the most important incentive is money.

“The right way to think about the employer mandate is really as a revenue-raising tool,” Gruber says. “It does raise a lot of money.”

Gruber says the mandate has its pluses and minuses, but he says there’s about an even chance it won’t ever take effect.

“The strongest argument probably for getting rid of this is political, which is that while this is really not a very fundamental piece of the law, it’s catching a huge share of the flak around the law,” he says.

The Obama administration continues to stand behind the employer mandate, arguing that it will help get health insurance to more people and save taxpayers money.

http://www.npr.org/2014/05/28/316692125/study-questions-need-for-employe…

The Affordable Care Act is a highly inefficient, expensive, and administratively complex method of expanding health care coverage. One of the complexities is the mandate for employers to provide health insurance for their employees. The Urban Institute asks if the employer mandate should be eliminated, but is this the right question?

Once it was decided to use a multi-payer model of a multitude of private health plans and public programs to expand health care coverage, it was recognized that the funds provided by employers for their health benefit programs were an important revenue source in funding our national health expenditures. To ensure that those funds would still be there, the mandate for employer participation was included in the legislation.

This analysis by experts at the Urban Institute reveals that eliminating the employer mandate would result in only a modest increase in the numbers of uninsured – maybe 200,000 – though other estimates are higher. Of course, those individuals who would not be covered may not agree that this would be only a “modest” impact of this policy change.

The primary benefit would be to end the opposition of the business community. Some businesses would encourage their employees to obtain their coverage though government-subsidized exchange plans or the government-financed Medicaid program.

The Obama administration is opposed to this change since it would reintroduce the problem they were trying to avoid – finding new sources of government revenue to pay for the increases in enrollment in these tax-supported programs. But Jonathan Gruber suggests that the politics behind this unpopular provision may force the change.

So should we be asking if eliminating the employer mandate is a wise decision? It would be only one tweak in a highly complex system which supporters agree requires a great multitude of tweaks. The problem with incremental repair of this system is that the basic structure will still remain highly inefficient and will continue to waste tremendous resources, while falling short on on the goals of universality, equity, and affordability.

No, the correct question is, should we replace our highly dysfunctional health care financing system with an efficient, equitable, truly universal, affordable single payer national health program? Presumably only uncaring ideologues would answer in the negative.

Another Green Flag for Single Payer

Reflections on the VA Scandal

By Andrew D. Coates, M.D.

KevinMD — Dr. Kevin Pho — the popular physician blogger, suggests that single-payer advocates reevaluate the single-payer idea in light of the scandal now unfolding within the Veterans Health Administration. He calls the scandal “a red flag for those who want a national single-payer system in the United States.”

While his thoughtful essay teases out crucial details hidden in the mainstream discussion over the failures at the VA health system, the conclusion he draws seems to point in a direction opposite from the observations he makes.

Dr. Pho offers a succinct and powerful analysis of what led to the inability to keep up with the needs of many VA patients: “underfunding.” He adds several statistics (including data compiled by the libertarian Cato Institute) to demonstrate that the VA has been underfunded.

“While there are certainly advantages to a single-payer system, what happens if that single-payer doesn’t adequately fund the system?” Dr. Pho asks. “Lengthy waiting times and rationed care. The VA is a case study of that scenario.”

“The government,” Dr. Pho further observes, “has a track record of underfunding their single-payer health models.” Also, like many people, he equates “single-payer” with any publicly funded health care system.

Some of us might take pains to characterize the VA system as a publicly owned, publicly funded health system, analogous to the Scottish National Health Service, in order to distinguish it from a privately owned but publicly funded delivery system, like Canada’s Medicare. But KevinMD still has a point — if the public chooses not to provide adequate funds for its own system, it won’t work for its patients or its caregivers.

It is true that government austerity programs — programs to reduce taxes upon the wealthy that we’ve seen across the world and over several recent decades — have gutted a panoply social programs. Like millions of recipients of public health and safety-net programs worldwide, VA patients (and caregivers) have suffered the consequences of austerity.

But it is not true that “the government” always and everywhere underfunds public health programs. Take two very recent examples: the Scottish National Health Service and the health system in Madrid, Spain.

In February 2014, Scotland’s territorial health boards, which run the Scottish NHS, found their funding raised by an amount equal to the rate of inflation plus 1 percent. Announcing the funding increase, Health Secretary Alex Neil said, “The Scottish Government is committed to protecting spending on health.”

In January 2014, in Madrid, following months of sustained and vigorous public rebellion, the region’s government abandoned efforts to privatize the health system, a scheme to cut public funding for health care by over 700 million euros annually.

Dr. Patricia Alonso of the Madrid Physicians Association explained the essence of the matter on behalf of patients and caregivers alike when she said, “We were not going to allow somebody else to sell our system.”

Dr. Alonso’s remark illuminates an important aspect of taxpayer-financed health programs (in any democracy worthy of the name):  the patients and caregivers within the system are also its owners.

Dr. Pho introduces his piece saying that “Some are eager to link the VA scandal to Obamacare, and more broadly, government-run health care. Others extol the virtues of the VA, holding it as an ideal of what our health care system should look like. The truth, as always, probably lies somewhere in the middle.”

He concludes that the narrow political goal of Republicans fanning the flames of scandal is to “indict Obamacare” — and points out that this make little sense. KevinMD also recognizes a larger ideological goal — to use the VA scandal to impugn the idea that “the government” can provide healthcare (or anything worthwhile to the public.)

Right-wing ideologues often assert that “the government” is the enemy of “the public” — for in their view, there is no social or personal issue that the profit motive can’t fix, if only the hidden hand of the market could be free of government regulation.

And yet no one has been calling for the closure of the VA — nor has anyone suggested that either the public or the government abandon veterans by forcing them to purchase their care on the “free market,” individually, with their own money, instead.

The starting point for all sides in the debate over the VA scandal is the remarkable idea that every veteran deserves ready access to comprehensive health care, without a personal financial burden. It is significant that public funding for veterans’ healthcare is assumed. The idea that all the patients in the system deserve care — that no one deserves to be left out — is also assumed.

Some leading Republicans have called for a system that would allow veterans to use VA resources to purchase their care privately — with public funds — in addition to getting care from the VA hospitals and clinics. This would be change the VA into a system more analogous to the way that Medicare works (in the U.S. as well as Canada) than, to repeat the example, the Scottish National Health Service. Even this proposal would keep (and perhaps expand) public funding for veterans’ healthcare.

It is overall quite significant Dr. Pho (and many others) see so clearly that the fundamental problem for patients at the the VA amounts to underfunding. And true to form as a blogger, KevinMD traces the contours of the mainstream debate from a doctor’s point of view. In doing so he helps reveal that within the United States establishment, an important shift is underway when it comes to the debate over healthcare.

To use a NASCAR analogy, it may well turn out that the VA scandal really suggests a green flag moment for single payer.

Dr. Andrew D. Coates practices hospital medicine in upstate New York. He is president of Physicians for a National Health Program.

Aflac: American workers are at the edge of a financial cliff

American workers are at the edge of a financial cliff

2014 Aflac WorkForces Report

The economy is showing signs of improving, but Americans’ bank accounts are in need of resuscitation: Put simply, anemic pay raises combined with sharp increases in out-of-pocket health care costs have creditors knocking on many consumers’ doors.

  • 66 percent of employees would not be able to adjust to the large financial costs associated with a serious injury or illness.
  • 13 percent of workers are currently dealing with high medical bills.
  • 49 percent of employees have less than $1,000 on hand to pay out-of-pocket medical expenses.
  • 53 percent of workers would need to borrow from a 401(k) and/or use a credit card to cover unexpected medical costs.
  • 8 percent say high medical bills have hindered their ability to save.
  • 10 percent say high medical costs have negatively affected their credit scores.
  • 13 percent have been contacted by collection agencies about outstanding medical bills.

http://workforces.aflac.com/financial-facts.php

Comment:

By Don McCanne, MD

A well functioning health care system should make all appropriate health care accessible to everyone, and paying for the system should not lead to financial insecurity. The sector of health care financing that the Affordable Care Act was designed to protect was employer-sponsored coverage, based on the belief that this was the sector that was functioning well. Yet the 2014 Aflac WorkForces Report shows that this sector often is not providing the financial security that patients need.

We should quit trying to finance health care though a multitude of private and public plans that apply to individuals based on their continually evolving personal circumstances. That approach creates tremendous costly and wasteful administrative inefficiencies. Worse, even what are supposedly the best programs – employer-sponsored health plans – too often fail to provide the financial security that patients want and need.

Medical bill related financial insecurity would disappear for everyone if we would replace our current fragmented financing system with a single payer national health program that included first dollar coverage. Since it would use progressive financing, each of us would be able to afford it.

This is a simple concept. We don’t need the Aflac duck to explain it to us.

Make patients the priority, not profits

By Scott Goldberg
Chicago Tribune, May 27, 2014

As a medical student, I appreciated Tribune reporter Peter Frost’s story, “Lawsuit accuses Blue Cross and Blue Shield parent of funneling profit to execs” (May 22).

Nominally nonprofit health insurers are reaping huge financial gains by employing the same practices as for-profit insurers (claim denials, restrictive networks) and paying for as little actual health care as possible. They then use these gains to pay multimillion-dollar executive salaries and bonuses and to construct lavish buildings like the BCBS Illinois Tower along East Randolph Street in downtown Chicago. Frost’s article demonstrates that the problem with our healthcare system is not whether insurers are for-profit or nonprofit, but that they exist at all.

That is why myself and 80 other medical students from across the country demonstrated outside that tower on May 12 to denounce our healthcare system for putting the interests of private insurance companies over patient needs. We were there as part of a national movement of medical students, physicians, nurses and other health professionals calling for a single-payer national health program. The idea is straightforward — eliminate private insurers and have the government pay all medical claims directly, much like Medicare works for seniors today.

Every other industrialized country has a similar mechanism for providing universal, affordable and high-quality healthcare. The problem with the Affordable Care Act (also known as Obamacare) is that it entrenches insurers like Blue Cross Blue Shield and even mandates that taxpayers purchase their broken product.

Single-payer health care is not “socialized medicine.” It is simply the best way to reform our deeply flawed healthcare system.

Scott Goldberg is a medical student at the University of Chicago Pritzker School of Medicine.

http://www.chicagotribune.com/news/opinion/letters/chi-letter-patients-the-priority-not-profits-20140527,0,5623032.story

Single-payer system will cover everyone, save money and improve quality

By Laura Helfman, M.D.

PNHP note: The following is a letter that Dr. Laura Helfman sent to Sen. Bob Corker, R-Tenn., on May 23, 2014. 

Dear Senator Corker:

I am an emergency physician at Children’s Hospital (Erlanger) and a member of the Physicians for a National Health Program. I live in Coalmont, Tenn., in Grundy County where my husband has been a teacher for 28 years.

Although I was unable to join PNHP with their lobbying efforts yesterday, I wanted to let you know how I feel about our crisis in health care. I strongly support The American Health Security Act of 2013, Senate Bill S. 1782.

We have already seen in the first few months of the ACA (Obamacare) that competition is not keeping costs down. Out-of-pocket expenses have risen for all but a few Americans. An average family of four now spends more than $23,000 annually on health care costs, more than double what it was 10 years ago. This is unsustainable and unconscionable.

I think you will find that Republicans and Democrats of note are beginning to stand behind a public national single-payer insurance program which will cover everyone in America, save money and improve the quality of health care delivery. 

Senator Corker, I think you owe it to the people of Tennessee to critically look at this bill. I believe it is in keeping with your fiscal sensibilities as it eliminates waste and unnecessary administrative clutter. It is a sensible way to deliver health care. A healthier population will be a productive population. We cannot afford as a nation to continue to spend more than double the health care dollars than every other OECD nation and still have worse outcomes. The time is now to innovate for real change in health care.

Please review the synopsis of the bill below:

The American Health Security Act of 2013 (S. 1782) provides every American with affordable and comprehensive health care services through the establishment of a national American Health Security Program (the Program) that requires each participating state to set up and administer a state single payer health program. The Program provides universal health care coverage for the comprehensive services required under S. 1782 and incorporates Medicare, Medicaid, the Children’s Health Insurance Program, the Federal Employees Health Benefits Program and TRICARE (the Department of Defense health care program), but maintains health care programs under the Veterans Affairs Administration. Private health insurance sold by for-profit companies could only exist to provide supplemental coverage.

The cornerstones of the Program will be fixed, annual, and global budgets, public accountability, measures of quality based on outcomes data designed by providers and patients, a national data-collection system with uniform reporting by all providers, and a progressive financing system. It will provide universal coverage, benefits emphasizing primary and preventive care, and free choice of providers. Inpatient services, long-term care, a broad range of services for mental illness and substance abuse, and care coordination services will also be covered.

A seven-member national board (the Board) appointed by the President will establish a national health budget specifying the total federal and state expenditures to be made for covered health care services. The Board will work together with similar boards in each of the fifty states and the District of Columbia to administer the Program.

A Quality Council will develop and disseminate practice guidelines based on outcomes research and will profile health care professionals’ patterns of practice to identify outliers. It will also develop standards of quality, performance measures, and medical review criteria and develop minimum competence criteria. A new Office of Primary Care and Prevention Research will be created within the Office of the Director of the National Institutes of Health (NIH).

The Program is designed to provide patient-centered care supported through adequate reimbursement for professionals, a wealth of evidence-based information, peer support, and financial incentives for better patient outcomes. The Program seeks to ensure medical decisions are made by patients and their health care providers.

The Program amends the tax code to create the American Health Security Trust Fund and appropriates to the Fund specified tax revenues, current health program receipts, and tax credits and subsidies under the Affordable Care Act. While the final structure of the financing component is still under consideration and is subject to change, the tax revenues in the draft include a new health care income tax, an employer payroll tax, a surcharge on high income individuals, and a tax on securities transactions.

The federal government would collect and distribute all funds to the states for the operation of the state programs to pay for the covered services. Budget increases would be limited to the rate of growth of the gross domestic product. Each state’s budget for administrative expenses would be capped at three percent.

Each state would have the choice to administer its own program or have the federal Board administer it. The state program could negotiate with providers and consult with its advisory boards to allocate funds. The state program could also contract with private companies to provide administrative functions, as Medicare currently does through its administrative regions. State programs could negotiate with providers to pay outpatient facilities and individual practitioners on a capitated, salaried, or other prospective basis or on a fee-for service basis according to a rate schedule. Rates would be designed to incentivize primary and preventive care while maintaining a global budget, bringing provider, patients, and all stakeholders to the table to best determine value and reimbursement.

Finally, the Program also relieves businesses from the heavy administrative burdens of providing health care coverage, puts all businesses on an even playing field in terms of healthcare coverage, and increases the competitiveness of American companies in the global marketplace. Every other industrialized nation has been able to use the power of a public authority to provide universal health care. The American Health Security Act of 2013 seeks to do just that for all Americans and their businesses.

Thank you for your time.

Laura Helfman, M.D., is clinical instructor at the UT College of Medicine and practices emergency medicine at Children’s Hospital in Erlanger, Tenn.

Aflac: American workers are at the edge of a financial cliff

American workers are at the edge of a financial cliff

2014 Aflac WorkForces Report

The economy is showing signs of improving, but Americans’ bank accounts are in need of resuscitation: Put simply, anemic pay raises combined with sharp increases in out-of-pocket health care costs have creditors knocking on many consumers’ doors.

  • 66 percent of employees would not be able to adjust to the large financial costs associated with a serious injury or illness.
  • 13 percent of workers are currently dealing with high medical bills.
  • 49 percent of employees have less than $1,000 on hand to pay out-of-pocket medical expenses.
  • 53 percent of workers would need to borrow from a 401(k) and/or use a credit card to cover unexpected medical costs.
  • 8 percent say high medical bills have hindered their ability to save.
  • 10 percent say high medical costs have negatively affected their credit scores.
  • 13 percent have been contacted by collection agencies about outstanding medical bills.

http://workforces.aflac.com/financial-facts.php

A well functioning health care system should make all appropriate health care accessible to everyone, and paying for the system should not lead to financial insecurity. The sector of health care financing that the Affordable Care Act was designed to protect was employer-sponsored coverage, based on the belief that this was the sector that was functioning well. Yet the 2014 Aflac WorkForces Report shows that this sector often is not providing the financial security that patients need.

We should quit trying to finance health care though a multitude of private and public plans that apply to individuals based on their continually evolving personal circumstances. That approach creates tremendous costly and wasteful administrative inefficiencies. Worse, even what are supposedly the best programs – employer-sponsored health plans – too often fail to provide the financial security that patients want and need.

Medical bill related financial insecurity would disappear for everyone if we would replace our current fragmented financing system with a single payer national health program that included first dollar coverage. Since it would use progressive financing, each of us would be able to afford it.

This is a simple concept. We don’t need the Aflac duck to explain it to us.

Time bureau chief not informed on health care

By Joseph Sparks
Sparks Remarks blog, May 24, 2014

Which statement is true?

  1. The earth is flat.
  2. The sky is red.
  3. “Health care, especially in this country, is an enormously expensive laborious undertaking, and … no one’s figured out how to do it economically and efficiently.” – Michael Scherer, Washington Bureau Chief, Time Magazine on “Now with Alex Wagner” on May 22, 2014 (at about 5:45 minutes into the video).
  4. None of the above.

The correct answer is: “None of the above.” The earth is nearly spherical; the sky is blue, and there are at least 19,000 people who know how to make health care efficient and economical in this country. It can be done with a single-payer system, and legislation has been proposed that would implement single-payer, H.R. 676.

It is downright frightening that a Washington bureau chief would make such an egregious error.

A single-payer system has several advantages. They include:

  • Covers everybody – Single-payer provides universal coverage. There are no signups because everyone is automatically covered.
  • Eliminates co-pays and deductibles for medical care and pharmaceuticals – Since co-pays and deductibles are not required, out-of-pocket expenses are eliminated making health care affordable for everyone. Imagine going to a doctor or hospital and not needing your wallet. Further, when you are admitted, no clerk needs to check on your insurance status. That becomes a reality with single-payer.
  • Allows you to choose any caregiver or hospital – Single-payer provides more freedom because there are no restrictions imposed by limited insurance networks.
  • Stabilizes costs – Single-payer would lower or maintain costs at current levels making health care affordable now and in the future.

(A more detailed description of the problems with the current health care system and the benefits of a single-payer system can be found here.)

So, to say that nobody’s figured out how to do health care economically and efficiently is flat out wrong. When journalists do not discuss single-payer as the solution to the current health care crisis, they perform a disservice to their profession and the public.

In fact, when discussing any alternative health care system in this country, the questions that need to be asked are:

  • “Would this system cover everybody as a single-payer system would?”
  • “Would this system eliminate out-of-pocket expenses as a single-payer system would?”
  • “Would this system allow patients to choose any caregiver or hospital as a single-payer system would?”

When (not if) the answers are no, then next question needs to be, “Could you explain how your proposal is better than a single-payer system?”

If a Washington bureau chief does not know about single-payer, then it is unlikely that the public knows. It is vital that journalists inform other journalists of the single-payer option, and it is the responsibility of all journalists to inform the public because it is the only viable solution for economic and efficient health care.

(I urge everybody to go here and demand that MSNBC correct their mistake. If enough people protest, networks might start discussing single-payer.)

Joseph Sparks is a freelance journalist who resides in Washington, D.C. He covers health care, politics, and technology. 

Bureau Chief Not Informed On Health Care

ACA exchange plans are creating new administrative headaches for physicians

MGMA ACA Exchange Implementation Survey Report

Medical Group Management Association, May 2014

Medical Group Management Association (MGMA) conducted member research in April 2014 to better understand the impact of the Affordable Care Act’s (ACA) insurance exchange implementation on medical group practices. 

Summary of Findings

MGMA noted three main themes within the findings.

OBTAINING COVERAGE INFORMATION

Practices have experienced difficulty identifying patients with ACA exchange coverage and obtaining essential information related to that coverage.

  • 62% of respondents reported moderate to extreme difficulty with identifying a patient that has ACA exchange coverage as opposed to traditional commercial health insurance.
  • Compared to patients with traditional commercial coverage, nearly 60% of respondents indicated that for patients with ACA exchange coverage it is somewhat or much more difficult to:
  • Verify patient eligibility
  • Obtain cost-sharing or network information
  • Obtain information about the plan’s provider network in order to facilitate referrals

“We are going to have to hire additional staff just to manage the insurance verification processs.”

“Identification of ACA plans has been an administrative nightmare.”

“We thought we would be able to identify ACA insurance exchange products by their insurance card, but quickly found out this isn’t so. “

PATIENT COST-SHARING

Practices are facing a number of challenges related to patient cost-sharing for ACA exchange coverage.

  • 75% of respondents reported that patients with ACA exchange coverage are very or extremely likely to have high deductibles compared to patients with traditional commercial coverage.
  • Practices reported significant patient confusion about the substantial cost-sharing related to many ACA exchange products, and practices are working to help patients understand the complexities of their coverage.
  • Practices cited some of the main reasons for not participating with ACA exchange products were related to concerns about financial burdens from patient collections (such as burdens related to collecting high deductibles from patients and concerns about financial liability from the 90-day grace period).

“Patients have been very confused about benefits and their portion of the cost. Once the patients find out their deductible, they’ve cancelled appointments and procedures.”

“The at-risk piece of eligibility is tremendously hard to determine and explain to patients.”

“Patients don’t always understand how health insurance works, so we’ve been engaging in educational events for the community.”

NETWORK LIMITATIONS

Practices have concerns about the impact of the network design of many ACA exchange products.

  • Almost half of respondents reported they have been unable to provide covered services to ACA exchange patients because the practice is out of network.
  • 20% of respondents reported that their practice was excluded from a narrow network that they would have liked to participate in and 10% of respondents chose not to participate in a narrow network.
  • Narrow networks may create challenges related to patient referrals for appropriate treatment and hospital care. Even if the practice is included in the network, without robust representation by a wide range of providers, it may be difficult for a practice to coordinate a continuum of care consistent with the patient’s needs.

“Many patients purchased products with a very narrow network and didn’t understand the ramifications. They are very upset once they learn that they can’t go to the specialist or hospital of their choice. As primary care providers, we are now faced with the extra burden of trying to find them care within their new narrow network. Payer directories are woefully inaccurate and impossible to rely on.”

“Former patients were shocked to learn about their very narrow network of providers. It was terrible to have to inform them of their lack of coverage.”

“We are consistently denied ‘out of network’ approvals for the very sick who truly need to continue their care with providers who have worked with the patient for years.”

http://www.mgma.com/government-affairs/issues-overview/aca/aca-exchange-implementation-report/aca-surveyreport_online_2?ext=.pdf

Statement of Susan Turney, MD, MS, FACP, FACMPE, president and CEO of MGMA:

“Physician group practices are expressing dissatisfaction with the complexity and lack of information associated with insurance products sold on ACA exchanges. The more administrative complexity introduced into the healthcare system, the less time and resources practices can devote to patient care. Even though there hasn’t been a huge influx of patients into physician offices as many predicted, simple tasks such as obtaining patient insurance coverage information or finding specialists for in-network referrals have proven to be significant challenges.”

http://www.mgma.com/about/mgma-press-room/press-releases/2007-2012/mgma-statement-on-effect-of-aca-exchange-implementation-on-medical-group-practices

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Comment:

By Don McCanne, MD

Much has been written about the consequences of the high deductibles and narrow networks of the ACA exchange plans in impairing access and affordability for patients. This new survey demonstrates that these same features add more administrative headaches for physicians who are already overburdened by the administrative complexity of our dysfunctional health care financing system. For those who could care less about the physicians, keep in mind that these ACA plan features are preventing physicians from assisting patients in obtaining the health care that they should have. It is really about the patients.

The quotations in the report above are especially helpful to our understanding of the problems because they reveal the real world consequences of the highly flawed ACA exchange infrastructure.

Single payer would eliminate the confusion over coverage, the barriers of patient cost sharing, and the loss of choice due to network limitations. People would simply get the care that they need when they need it.

ACA exchange plans are creating new administrative headaches for physicians

MGMA ACA Exchange Implementation Survey Report

Medical Group Management Association, May 2014

Medical Group Management Association (MGMA) conducted member research in April 2014 to better understand the impact of the Affordable Care Act’s (ACA) insurance exchange implementation on medical group practices.

Summary of Findings

MGMA noted three main themes within the findings.

OBTAINING COVERAGE INFORMATION

Practices have experienced difficulty identifying patients with ACA exchange coverage and obtaining essential information related to that coverage.

  • 62% of respondents reported moderate to extreme difficulty with identifying a patient that has ACA exchange coverage as opposed to traditional commercial health insurance.
  • Compared to patients with traditional commercial coverage, nearly 60% of respondents indicated that for patients with ACA exchange coverage it is somewhat or much more difficult to:
  • Verify patient eligibility
  • Obtain cost-sharing or network information
  • Obtain information about the plan’s provider network in order to facilitate referrals

“We are going to have to hire additional staff just to manage the insurance verification processs.”

“Identification of ACA plans has been an administrative nightmare.”

“We thought we would be able to identify ACA insurance exchange products by their insurance card, but quickly found out this isn’t so. “

PATIENT COST-SHARING

Practices are facing a number of challenges related to patient cost-sharing for ACA exchange coverage.

  • 75% of respondents reported that patients with ACA exchange coverage are very or extremely likely to have high deductibles compared to patients with traditional commercial coverage.
  • Practices reported significant patient confusion about the substantial cost-sharing related to many ACA exchange products, and practices are working to help patients understand the complexities of their coverage.
  • Practices cited some of the main reasons for not participating with ACA exchange products were related to concerns about financial burdens from patient collections (such as burdens related to collecting high deductibles from patients and concerns about financial liability from the 90-day grace period).

“Patients have been very confused about benefits and their portion of the cost. Once the patients find out their deductible, they’ve cancelled appointments and procedures.”

“The at-risk piece of eligibility is tremendously hard to determine and explain to patients.”

“Patients don’t always understand how health insurance works, so we’ve been engaging in educational events for the community.”

NETWORK LIMITATIONS

Practices have concerns about the impact of the network design of many ACA exchange products.

  • Almost half of respondents reported they have been unable to provide covered services to ACA exchange patients because the practice is out of network.
  • 20% of respondents reported that their practice was excluded from a narrow network that they would have liked to participate in and 10% of respondents chose not to participate in a narrow network.
  • Narrow networks may create challenges related to patient referrals for appropriate treatment and hospital care. Even if the practice is included in the network, without robust representation by a wide range of providers, it may be difficult for a practice to coordinate a continuum of care consistent with the patient’s needs.

“Many patients purchased products with a very narrow network and didn’t understand the ramifications. They are very upset once they learn that they can’t go to the specialist or hospital of their choice. As primary care providers, we are now faced with the extra burden of trying to find them care within their new narrow network. Payer directories are woefully inaccurate and impossible to rely on.”

“Former patients were shocked to learn about their very narrow network of providers. It was terrible to have to inform them of their lack of coverage.”

“We are consistently denied ‘out of network’ approvals for the very sick who truly need to continue their care with providers who have worked with the patient for years.”

http://www.mgma.com/government-affairs/issues-overview/aca/aca-exchange-…

Statement of Susan Turney, MD, MS, FACP, FACMPE, president and CEO of MGMA:

“Physician group practices are expressing dissatisfaction with the complexity and lack of information associated with insurance products sold on ACA exchanges. The more administrative complexity introduced into the healthcare system, the less time and resources practices can devote to patient care. Even though there hasn’t been a huge influx of patients into physician offices as many predicted, simple tasks such as obtaining patient insurance coverage information or finding specialists for in-network referrals have proven to be significant challenges.”

http://www.mgma.com/about/mgma-press-room/press-releases/2007-2012/mgma-…

Much has been written about the consequences of the high deductibles and narrow networks of the ACA exchange plans in impairing access and affordability for patients. This new survey demonstrates that these same features add more administrative headaches for physicians who are already overburdened by the administrative complexity of our dysfunctional health care financing system. For those who could care less about the physicians, keep in mind that these ACA plan features are preventing physicians from assisting patients in obtaining the health care that they should have. It is really about the patients.

The quotations in the report above are especially helpful to our understanding of the problems because they reveal the real world consequences of the highly flawed ACA exchange infrastructure.

Single payer would eliminate the confusion over coverage, the barriers of patient cost sharing, and the loss of choice due to network limitations. People would simply get the care that they need when they need it.

A progressive alternative to Obamacare

By Geoffrey Cowley
MSNBC, May 23, 2014

BURLINGTON, Vermont—Al Gobeille is not your garden-variety health advocate. For the past two decades, he and his wife have hawked fried clams, liquor and ice cream on the Lake Champlain waterfront. He’s a big man with an impish grin and a can-do spirit rooted in an earlier career as a military officer. “Running a restaurant is a lot like being an army lieutenant,” he observes as locals queue up for Maple Creemees at the Burlington Bay Market & Café, one of his company’s four venues. “You stay alive by staying alert, and you lead by getting people to believe you care about them.” 

It’s an apt description of the new job Gobeille stumbled into last fall. As the chair of Vermont’s Green Mountain Care Board, this plainspoken entrepreneur is overseeing one of the boldest social experiments in Vermont’s history, or the nation’s for that matter. Under his board’s guidance, the state is creating a health care system that will insure every Vermonter—regardless of income or employment—through a public entity that defines benefits, sets uniform prices for medical services, and covers patients’ bills.

That’s the dream anyway. President Obama’s Affordable Care Act gives private insurers control of the market through 2016, but Vermont lawmakers have voted to adopt a single-payer system as soon as that federal mandate expires. If state officials can devise a viable financing plan—and keep all the critical stakeholders onboard—the transformation could come as soon as 2017.

“We’ve already agreed we want universal health care,” Gobeille says. “The challenge is to fund and deliver it in ways that everyone can live with. Some groups will benefit more than others, but we can’t leave anyone feeling ripped off. The winner-loser issue is the place where the alligators live.”

A bold alternative to Obamacare

Vermont’s plan is a radical departure from Obamacare, but it embodies the bolder vision the president once embraced as a candidate. “I see no reason why the United States of America, the wealthiest country in the history of the world, is spending 14 percent—14 percent!—of its gross national product on health care and cannot provide basic health insurance to everybody,” Obama told an AFL-CIO audience in 2008. “A single-payer health care plan, a universal health care plan—that’s what I’d like to see.”

By the time he signed the Affordable Care Act in March 2010, Obama had ditched that idea—along with the more modest one of letting consumers choose between public and private insurance plans. The advent of Obamacare was an epochal achievement, to be sure, but it leaves commercial insurers a dominant role, bets on market forces to control spiraling costs, and keeps large employers in charge of most people’s health care. Beyond the small subset of Americans (about 7% of those under 65) who buy insurance on the individual market, Obamacare simply preserves the status quo.

So four years ago, Vermont elected Democratic Gov. Peter Shumlin to pursue a bolder alternative. The legislature hopped on board, and in 2011 Shumlin signed Act 48, a law that defines health care as a basic public good, like roads, schools or potable water. It gets employers out of the insurance business by sponsoring coverage for everyone. And instead of making consumers choose among four levels of coverage with different premiums and cost-sharing formulas, as Obamacare does, Act 48 seeks to cover at least 80% of people’s essential health care costs. Under the ACA, only those who can afford gold or platinum plans get that level of security.

“I don’t think we can nibble around the edges to fix our health care system,” the governor declared again last winter, as the state scrambled to launch its private insurance exchange. “We should look at how regressive and unfair the current system is. And we should embark on the path of designing a new system that is built upon equity, fairness and common sense.”

Act 48 grew out of a report by William Hsiao, a Harvard health economist who has helped remodel health care systems in a dozen countries. Four years ago, state officials asked Hsiao’s team to assess several routes to universal care. The object of the game was to cover all Vermonters without (a) raising overall health spending, (b) cutting providers’ earnings, (c) forfeiting any federal support, or (d) increasing burdens on workers or employers.

Hsiao’s analysis, detailed in a 130-page report and summarized in a 2011 statement and journal article, make a compelling case for a single-payer system. In keeping with past national studies, his team found that if doctors and hospitals could submit claims to one central payer instead of dozens, the administrative savings alone would cut health care costs by 7% over 10 years. If the new system also took proven steps to promote wellness, curb fraud and reduce waste and duplication by medical providers, the cost of care would fall by a quarter.

Hsiao showed that by reinvesting those savings in its health system, Vermont could cover the 32,000 residents who remain uninsured under Obamacare, boost everyone’s benefits, and expand the clinical workforce—all while reducing the total amount that businesses and employees spend on care.

Taxpayers could balk

The initiative will count as a victory if it works even half that well, but alligators lurk at every turn.

The state’s first challenge is to coordinate its plans with federal agencies that administer Medicare and Medicaid and subsidize private health coverage for people without job-based plans. Medicare will remain separate from Green Mountain Care. But if the feds grant the necessary waivers, the state will pour all its other federal disbursements into one pot, starting in 2017. Those negotiations are underway and reportedly going well.

The state also needs to raise a staggering $2 billion in new taxes.  While it’s not really a tax increase—just a different way to amass the same money individuals and employers now spend on private insurance—$2 billion is still a staggering sum for a state whose entire tax base is now just $2.7 billion.

Hsiao suggested that the state levy a new payroll tax and earmark the proceeds for health care, but no one expects Shumlin to do that. “It’s too blunt,” says Gobeille. “If you suddenly started taxing every employer at 7% to finance health care, the shock would tip a lot little companies over.”

The financing plan will be a hard sell no matter how deftly Shumlin spreads the burden. But proponents believe resistance will fade if they can show people the true cost of employer-sponsored coverage.

The public already subsidizes that coverage when employers and workers deduct the cost from their taxable income. Those deductions cost the federal and state governments more than a quarter of a trillion dollars each year—and the biggest subsidies go to those with the costliest health plans. “We need to show Vermonters that we have a more efficient and more equitable way to raise the same money,” says Anya Rader Wallack, the policy expert who leads Vermont’s Health Care Innovation Project.

Gobeille crystalizes her argument with a just-wondering shrug: “Why should low-wage workers subsidize better health care than they can afford for themselves?” he asks.

Coming from an activist or a politician, the question would be easier to dismiss.  But Gobeille enjoys some street cred among skeptics. Shumlin appointed him to the Green Mountain Care Board in 2011, when the well-credentialed Wallack was leading it. She was flabbergasted (“What’s he going to do, cater lunch?” she asked at the time). But Gobeille emerged as such an effective diplomat that he inherited Wallack’s post (and her enthusiastic support) when she stepped down last year. “I’m experiencing health care reform as a business owner,” he says. “That’s how I got interested in the whole thing. The questions employers are asking are the same ones I’m asking myself.”

Doctors are uneasy

Taxpayers and business owners aren’t the only groups that need to be placated. Hospitals, doctors and other health care providers have a lot on the line too, and even some friendly ones worry about getting run over by the single-payer juggernaut. 

Act 48 authorizes the Green Mountain Care Board to establish a statewide health care budget and set uniform payment rules for different clinical services. Under the status quo, which Obamacare preserves, clinicians receive wildly different rates for providing the same care to different patients. The rate depends on who’s paying. In Vermont, Medicaid pays about 38% of what medical services actually cost. Medicare pays about 88%, and commercial insurers average 141%. In order to break even, doctors and hospitals have to monitor the mix of patients they serve, making sure they don’t accept more cut-rate patients than they can cover with other patients’ surpluses.

By leveling reimbursement rates, Act 48 will free providers to focus on patients’ health instead of their insurance status. The plan is to set rates slightly above the Medicare level, where profits will be modest but no patient will represent a liability. At the same time, Vermont will move away from traditional fee-for-service reimbursement. Rather than pay piecemeal for whatever tests and procedures a provider performs, the state will more often pay a group of providers a fixed annual sum to handle all of a patient’s health needs. Under this accountable-care model, groups that achieve good outcomes with minimal waste earn more money rather than less, and health care dollars tend to buy more health.

Vermont’s doctors and hospitals have already joined accountable-care organizations in droves, and they’re as frustrated as anyone by the current hodgepodge of reimbursement rates. But they have yet to coalesce behind the single-payer solution. The Vermont Medical Society is officially neutral, but its misgivings are audible in a 2013 report it helped sponsor.

“As proposed,” the report says, the state’s reimbursement model “could create a significant disincentive for health care practitioners to work in Vermont due to reduced compensation and increased payment uncertainty compared to what they might earn in other states.” Likewise, the report warns the care board not to assume that different types of hospitals and health facilities can deliver good care at standardized rates. “Some facilities could suffer gravely if actual policy conforms to [that] assumption,” the authors conclude.

Gobeille and his four fellow board members spend countless days traveling the state to hear such concerns first-hand. On a recent Tuesday morning, he grabbed a 7 a.m. coffee at his Burlington deli and drove 70 miles south to spend six hours immersed in the hopes and concerns of Rutland Mental Health Services/CCN, a quasi-public agency that provides vital community services through an ever-changing patchwork of grants, loans and service contracts.

As he tours the group’s programs and facilities—the long-term residence for profoundly disabled adults, the family-style halfway house for psychiatric inpatients, the college prep program for disadvantaged youth, the daycare center for socially isolated seniors, the diversion program that that keeps people with treatable mental-health issues from filling courts and jails—the message is the same at every stop. To paraphrase: People’s lives depend on our work. It’s delicate and complicated, and a careless footnote in your financing plan could shatter it.  

Insurers are sanguine

Is Gobeille amassing enough trust to build a new health system? It’s too soon to say, but if any state can succeed at this experiment, surely it’s Vermont. Hospital executives who were hostile or silent two years ago are now pursuing pilot projects to see how fixed global budgets will affect them. And the commercial insurance industry—by definition the biggest loser in the coming transformation—has put up no resistance at all so far.  Blue Cross Blue Shield of Vermont, the nonprofit corporation that dominates the state’s private market, is not only accepting the new order but celebrating it.

“It’s been obvious for years that we need to change the way we finance health care and deliver it,” says Don George, the company’s president and CEO. “The world is changing whether we like it or not. This company had to decide whether we would focus on the threat to our own organization or work with other stakeholders to build a better system.”

As it happens, Act 48 calls on the state to select a vendor, through competitive bidding, to handle claims and payments for the whole state. George’s civic-mindedness may yet prove to be good business. And one small state’s bold experiment may yet redefine health care in America.

http://www.msnbc.com/msnbc/vermont-progressive-alternative-obamacare

The answer is improved Medicare for all

By Judy Dasovich, M.D.
Springfield (Mo.) News-Leader, May 22, 2014

At the News-Leader’s recent economic forum, community members expressed concern about health costs.

Former Mercy President Robert Steele worried that “we’re spending money on health care that does not substantially increase the health of those we’re serving.” Employers tell him that it’s “breaking our bank.” Cox CEO Steve Edwards warns that Missouri hospitals are disadvantaged due to lack of Medicaid expansion.

Architect John Oke-Thomas said his company has been forced to bounce between Cox and Mercy plans in “order to survive.” John Kabell of Teamsters Local 245 says health care is “the biggest issue at the table with every set of negotiations we have.” Brad Thomas of Silver Dollar City says that navigating insurance requirements is a challenge.

I have good news for all these concerned citizens. There is a solution that provides economy, simplicity and security. U.S. House of Representatives Bill 676 and Senate Bill 1782 support a single-payer system of national health insurance, or improved Medicare for all. Traditional Medicare has overhead of less than 3 percent compared to an average of 14 percent for all private insurance companies, some as high as 20-25 percent.

Doctors and hospitals would not be owned by the government.

General tax revenues would pay for the continued private delivery of an essential service.

Americans would be free to choose and stay with any doctor or hospital, avoiding the danger and expense of bouncing between health systems. They would not lose their insurance if they became sick or lost their job. Employers could tend to their businesses instead of health care expenses and administration.

As taxpayers, we would support a system that uses the money paid in for patient care, not administrative waste and profiteering.

An analysis based on HR 676 by Dr. Gerald Friedman, professor of economics at the University of Massachusetts, shows that a nonprofit single-payer system would save an estimated $592 billion in its first year of implementation. 95 percent of people would pay less for health care than they do now, as would most businesses.

Americans pay more out of pocket than citizens of other countries with universal financing. We spend more per patient than those other countries but our outcomes are worse. We have higher infant and maternal mortality and overall mortality, and fewer years lived in a healthy state. It’s a myth that higher out-of-pocket costs control health care costs, so called “skin in the game.” If it did, Americans would have the cheapest health care in the world.

Despite the Affordable Care Act reforms, many people will remain without health insurance.

Device makers, insurance and pharmaceutical companies are making huge profits while Americans are burdened with high premiums, deductibles, co-pays and drug costs. The CEO of my insurance company, Coventry, makes $13 million per year, or $50,000 per day.

Meanwhile, Americans die because we ration health care by ability to pay, not need. We can change this by working to make improved Medicare for all the law of the land.

Judy Dasovich, M.D., lives in Springfield.

http://www.news-leader.com/story/opinion/contributors/2014/05/22/answer-improved-medicare/9458117/

Want to end secret wait lists? Staff the VA

By J. David Cox Sr., RN
The Huffington Post, May 22, 2014

The public’s outrage over excessive wait times and rigged recordkeeping at Veterans Affairs hospitals is more than justified. As a former VA nurse, I understand all too well that depriving veterans of timely access to care is a disservice to them and their sacrifice to this nation.

But cleaning house in the VA’s executive ranks will only treat the symptom. The disease plaguing the VA healthcare system is chronic understaffing of physicians and other frontline providers.

Until we fill thousands of vacant positions, open closed hospital beds and provide more dollars for building and maintaining medical facilities, we will never heal what ails the VA.

Physicians are dealing with excessive caseloads and insufficient support staff. Since 2009, 2 million veterans entered the VA health care system for a net increase of 1.4 million new patients. Each physician should be responsible for no more than 1,200 patients at a given time, according to the VA’s own guidelines, yet many VA doctors are treating upwards of 2,000 patients each.

Simply put, there isn’t enough time in the day for the available doctors to treat every veteran who is seeking care in a timely fashion.

Compounding matters is a performance system that sets unrealistic goals and incentivizes managers to increase the number of patients served, instead of improving the quality of care. Rather than face the understaffing issue head-on and risk poor ratings, many managers have taken the easy way out and have cooked the books to mask the wait times.

But blaming those managers for a performance system that was doomed from the start won’t help our veterans get the care they seek any faster.

Truth be told, there is nothing wrong with the VA that can’t be healed by what is right with the VA: the frontline providers who care for our veterans every day.

No one is complaining about the quality of care our veterans receive. That’s because the federal employees who look after our nation’s heroes work hard each and every day to provide them with world-class service.

Unfortunately, those same employees have lived in fear of speaking out about the problems they witness due to an established history of retaliation, including loss of duties and unfounded disciplinary actions. Our members have paid a heavy price for voicing concerns, submitting letters to agency leaders, raising issues in labor management meetings, and testifying before Congress on wait time issues and veterans’ access to care. When they have sounded the alarm, our members have faced retaliation and intimidation time and time again.

Employees shouldn’t feel afraid to speak up when they see managers more concerned with securing bonuses than providing patients with timely access to care for critical medical conditions. In fact, they should be encouraged to bring up these issues so they can be rectified before more veterans go without the treatment they so desperately need.

The waitlist and understaffing issues are one and the same. Until Congress gives the VA the resources to hire enough frontline clinicians to meet demand, our veterans will continue to face long waits. And to be clear, sending veterans to expensive health care providers outside the VA system on a massive scale will not fix the underlying resource deficiencies plaguing our veterans medical centers.

According to the Independent Budget for the Department of Veterans Affairs, developed each year by leading veterans groups, the Veterans Health Administration is facing a $2 billion funding shortfall for the upcoming fiscal year and another $500 million shortfall for fiscal 2016.

As the nation prepares to honor our fallen soldiers this Memorial Day, there is no better time to strengthen our support for the health care system that treats those veterans who made it home.

It’s time for the VA to get back to basics and focus on improving access to care for our nation’s veterans.

 The agency must cut excess management layers and use those resources to boost frontline staffing of doctors, nurses and others directly involved in patient care. The growth of middle management positions within the agency has ballooned to unprecedented levels, from fewer than 300 in 1995 to more than 1,700 by a recent count, costing taxpayers $203 million annually.

The VA long has been held up as a model healthcare delivery system that all other hospitals should emulate. The care our veterans receive is second to none, but that only counts when our veterans actually are treated.

J. David Cox Sr., RN, is national president of the American Federation of Government Employees, AFL-CIO, which represents more than 670,000 federal and D.C. government employees nationwide.

http://www.huffingtonpost.com/j-david-cox-sr/want-to-end-secret-wait-va_b_5372387.html