PNHP

The High Burden of Health Care Costs on Insured Adults

The High Burden of Health Care Costs on Insured Adults

Beyond Coverage: The High Burden of Health Care Costs on Insured Adults in Massachusetts

By Sharon K. Long
BCBS of Mass Foundation, RWJ Foundation, Urban Institute, March 2014

These findings highlight the vulnerability that Massachusetts families experience when faced with high health care costs. Overall, 42.5 percent of all nonelderly adults in the state reported that health care costs had resulted in financial problems or health care access problems for their families in the past year, with the burden greater for low-income adults (46.5 percent for those with income at or below 138 percent FPL) and middle-income adults (53.9 percent for those with income between 139 and 399 percent FPL). Nearly three-quarters (70.6 percent) of those who were uninsured for all or part of the year reported problems with health care costs. However, neither higher income nor health insurance coverage protected Bay State families: 31.7 percent of higher-income adults and 38.7 percent of adults with insurance coverage for the full year also reported that health care costs had resulted in problems for their families.

Health care costs are creating difficult choices for families in Massachusetts. Insured adults frequently reported going without needed care because of costs, cutting back on non-health-related spending to pay for health care, and reducing their family’s financial security to pay for health care, both by reducing savings and by taking on debt, including credit card debt. As a result, medical debt had a significant impact on many families, particularly middle-income families, with contacts from collection agencies quite common.

http://bluecrossmafoundation.org/system/assets/drupal/download/publicatio…

****

Health Insurance Coverage Is Just The First Step: Findings From Massachusetts

By Sharon Long, Kate Willrich Nordahl, Kaitlyn Kenney Walsh, Kathy Hempstead, and Ariel Fogel
Health Affairs Blog, March 26, 2014

The challenges faced by low-income and middle-income Massachusetts families are particularly worrisome given that the consumer protections for out-of-pocket health care costs are generally better in Massachusetts than those required under the ACA. For individuals with family income between 100 and 200 percent of poverty who are enrolled in the state’s subsidized health insurance program, out-of-pocket spending for covered prescriptions and medical services is limited to $1,000 per benefit year. The ACA allows individuals in this income cohort to have out-of-pocket costs that can sum to more than double this amount ($2,250).

http://healthaffairs.org/blog/2014/03/26/health-insurance-coverage-is-ju…

The provisions of the Affordable Care Act (ACA) have provided the nation with health care coverage similar to that which has existed in Massachusetts. However, “the consumer protections for out-of-pocket health care costs are generally better in Massachusetts than those required under the ACA.” Though Massachusetts has better coverage, “Overall, 42.5 percent of all nonelderly adults in the state reported that health care costs had resulted in financial problems or health care access problems for their families in the past year.”

Over half of middle-income adults in Massachusetts also “reported that health care costs had resulted in financial problems or health care access problems for their families.”

Furthermore, “neither higher income nor health insurance coverage protected Bay State families: 31.7 percent of higher-income adults and 38.7 percent of adults with insurance coverage for the full year also reported that health care costs had resulted in problems for their families.”

This is the shocking truth about our new national standard of underinsurance: In spite of having greater financial protection than that offered through the Affordable Care Act, over one-half of middle-income adults and nearly one-third of higher-income adults in Massachusetts still had problems with health care costs. And many of those who didn’t have problems likely avoided them by being fortunate enough to remain healthy. That is not the way an egalitarian health care financing system should work.

This ACA turkey won’t fly. All of us, including many of those with higher incomes, would benefit from single payer.

Canada is paying more and getting less from private insurers

Canadians spend more on private health insurance for smaller payouts

Medical Xpress, March 24, 2014

Spending by Canadians on private health insurance has more than doubled over the past 20 years, but insurers paid out a rapidly decreasing proportion as benefits, according to a study published today in the CMAJ (Canadian Medical Association Journal).

The study, by University of British Columbia and University of Toronto researchers, shows that overall Canadians paid $6.8 billion more in premiums than they received in benefits in 2011.

Approximately 60 per cent of Canadians have private health insurance. Typically obtained as a benefit of employment or purchased by individuals, private health insurance usually covers prescription drugs, dental services and eye care costs not paid by public health care.

Over the past two decades, the gap between what insurers take in and what they pay out has increased threefold. While private insurers paid out 92 per cent of group plan insurance premiums as benefits in 1991, they paid only 74 per cent in 2011. Canadians who purchased individual plans fared even worse, with just 38 per cent of their premiums returned as benefits in 2011.

“Small businesses and individual entrepreneurs are the hardest hit – they end up paying far more for private health coverage,” says study lead author Michael Law, an assistant professor in UBC’s Centre for Health Services and Policy Research, “It’s essentially an extra health tax on one of our main economic drivers.

“Our findings suggest that private insurers are likely making greater profits, paying higher wages to their executives and employees, or spending more on marketing,” Law adds.

http://medicalxpress.com/news/2014-03-inefficiency-private-health-canada.html

CMAJ article (first page, paywall for rest): http://www.cmaj.ca/content/early/2014/03/24/cmaj.130913.extract

Comment:

By Don McCanne, MD

Although Canada’s single payer system provides excellent coverage for most health care, a market for private health insurance sprung up to cover prescription drugs, dental services and eye care that were not covered by the original program. The for-profit insurers did what they are expected to do. They began by retaining 8 percent of premiums for administrative costs and profits. But after two decades, they now retain as much as 62 percent of premiums for profits, high executive compensation, marketing and other administrative costs.

Although some are calling for more regulation of Canada’s private insurers, they should have learned from the experience in the United States. No amount of regulation will eliminate their inefficiencies and waste. Coverage for these services should be rolled over into the public single payer system.

Opponents protest that Canada cannot afford to offer these benefits in their public program. Nonsense. Most Canadians are already receiving drugs, dental care and eye care, and it is being paid for out-of-pocket or through private insurance. The money is already being spent; it just needs to be spent better. Placing these benefits into the public program would do the following things: 1) administered pricing would ensure value, 2) financial barriers to care would be reduced, 3) financing would be more equitable, and 3) the excesses and waste of the private insurers would be eliminated.

When we enact our single payer system here in the United States, we’ll need to be sure that we don’t make the same mistakes as Canada, though they are far fewer than our blunders.

Canada is paying more and getting less from private insurers

Canadians spend more on private health insurance for smaller payouts

Medical Xpress, March 24, 2014

Spending by Canadians on private health insurance has more than doubled over the past 20 years, but insurers paid out a rapidly decreasing proportion as benefits, according to a study published today in the CMAJ (Canadian Medical Association Journal).

The study, by University of British Columbia and University of Toronto researchers, shows that overall Canadians paid $6.8 billion more in premiums than they received in benefits in 2011.

Approximately 60 per cent of Canadians have private health insurance. Typically obtained as a benefit of employment or purchased by individuals, private health insurance usually covers prescription drugs, dental services and eye care costs not paid by public health care.

Over the past two decades, the gap between what insurers take in and what they pay out has increased threefold. While private insurers paid out 92 per cent of group plan insurance premiums as benefits in 1991, they paid only 74 per cent in 2011. Canadians who purchased individual plans fared even worse, with just 38 per cent of their premiums returned as benefits in 2011.

“Small businesses and individual entrepreneurs are the hardest hit – they end up paying far more for private health coverage,” says study lead author Michael Law, an assistant professor in UBC’s Centre for Health Services and Policy Research, “It’s essentially an extra health tax on one of our main economic drivers.

“Our findings suggest that private insurers are likely making greater profits, paying higher wages to their executives and employees, or spending more on marketing,” Law adds.

http://medicalxpress.com/news/2014-03-inefficiency-private-health-canada…

CMAJ article (first page, paywall for rest):http://www.cmaj.ca/content/early/2014/03/24/cmaj.130913.extract

Although Canada’s single payer system provides excellent coverage for most health care, a market for private health insurance sprung up to cover prescription drugs, dental services and eye care that were not covered by the original program. The for-profit insurers did what they are expected to do. They began by retaining 8 percent of premiums for administrative costs and profits. But after two decades, they now retain as much as 62 percent of premiums for profits, high executive compensation, marketing and other administrative costs.

Although some are calling for more regulation of Canada’s private insurers, they should have learned from the experience in the United States. No amount of regulation will eliminate their inefficiencies and waste. Coverage for these services should be rolled over into the public single payer system.

Opponents protest that Canada cannot afford to offer these benefits in their public program. Nonsense. Most Canadians are already receiving drugs, dental care and eye care, and it is being paid for out-of-pocket or through private insurance. The money is already being spent; it just needs to be spent better. Placing these benefits into the public program would do the following things: 1) administered pricing would ensure value, 2) financial barriers to care would be reduced, 3) financing would be more equitable, and 3) the excesses and waste of the private insurers would be eliminated.

When we enact our single payer system here in the United States, we’ll need to be sure that we don’t make the same mistakes as Canada, though they are far fewer than our blunders.

Jimmy Carter says Medicare should be expanded to all ages

President Jimmy Carter: “A Call To Action”

The Diane Rehm Show, March 26, 2014

Diane Rehm: Briefly, how do you feel about the Affordable Care Act?

President Jimmy Carter: I was disappointed the way it was done and the complexity that it assumed. Instead of taking a leadership role from the White House and saying, “This is what we think is best,” they had five different congressional committees do it and it got, I think, the lowest common denominator, which is the most complex system. I would really have favored just the expansion of Medicare to include all ages, rather than just to deal with old people.

Video (38 second clip of quote above; also full 51 minute video): http://thedianerehmshow.org/shows/2014-03-26/president-jimmy-carter-call-action

Comment:

By Don McCanne, MD

Characterizing the Affordable Care Act as “the lowest common denominator – the most complex system,” President Jimmy Carter tells us that he would have favored “the expansion of Medicare to include all ages.”

He’s right, and here’s why. There have been numerous analyses of multiple models of reform. Most of them have included a model that would build on our private insurance system and expand Medicaid, just as is found in the Affordable Care Act. Of these analyses, this is the most expensive model and it falls short on important goals such as universality, equity, administrative efficiency, and affordability.

In contrast, single payer is the least expensive of the effective models and achieves virtually all of the goals of reform. An improved version of Medicare that is expanded to include everyone would be such a model. A health service model – socialized medicine – would also work, but the nation is still too leery of that much government involvement. The popularity of Medicare indicates that this is about the level of government involvement that most would support.

We have to keep reminding Americans that the exchanges are marketing private insurance – not government insurance, so they cannot confuse a government exchange with government insurance. In fact, the exchanges are prohibited from even including a government “public option” (which wouldn’t have worked anyway since the rest of the fragmented, dysfunctional system would have been left in place). Those who defend the private Medicare Advantage plans have to be reminded that they burn up more taxpayer dollars for administration and profits while depriving patients of choice because of their limited networks of providers. Once payment between government Medicare and private Medicare Advantage is equalized, the the private insurers cannot possibly compete with the government program because of their inherent inefficiencies. This was already proven by the failure of the Medicare + Choice plans that preceded Medicare Advantage.

It’s too bad that Jimmy Carter didn’t start talking about Medicare for all when he was president. It might have been helpful if the public had had a few decades to think about it before we got to the point that legislation could be passed. They could have pressured the politicians to do it right.

Don’t quit before you start

By Ellen Oxfeld
Rutland (Vt.) Herald, March 27, 2014

This week in a Vermont Public Radio interview, Senate President Pro Tem John Campbell backed away from an unwavering commitment to the historic task set out in Act 48 — creating a publicly funded guaranteed health care system for all Vermonters.

Campbell’s stated reason for this is disappointing. He demurred that he was not sure that a single-payer financing plan would be “politically viable” in the Legislature because of the “costs” of single payer.

Senator Campbell needs to reconsider. It’s true that financing a single-payer plan will cost about $2 billion; but that is actually less than we Vermonters are already paying. (In fact, in 2011, we Vermonters paid $2.5 billion in private premiums and out-of-pockets for our health care.)

It is also odd to see a Senate leader shrinking from his delegated role of doing just what he has been selected to do, lead. In the past, Senator Campbell has been a leader on many issues, such as marriage equality and in passing Act 48, the 2011 road map legislation for single-payer. Yes, successfully enacting an equitable and viable single-payer financing package will not be easy. It will take political courage.

But the facts support moving forward, not giving up before even trying. After all, in five official studies commissioned since 2001 by the state of Vermont, the conclusion has always been the same — there is no other way to guarantee health care for all Vermonters while containing costs other than a publicly financed (“single-payer”) system.

The Senate president stated that he would like an “alternate” plan in case single-payer financing does not work out. But we already have an alternate plan in place — the Affordable Care Act. And although that act has certainly helped some individuals to purchase private insurance, it still leaves in place our multi-tiered system of different private plans, with different levels of coverage and the expenses created by the complex administration of such a system.

Furthermore, a situation in which there are multiple levels of private plans can never guarantee access to health care for all. It can still leave people with inadequate financial protection, or even without health care coverage at all, in the event that they change jobs, lose jobs, or experience changes in their financial status.

Act 48 was not passed on a fanciful whim. It passed because it built upon two decades of experience and numerous studies. Alternatives to a publicly financed health care plan for all were studied and tried, but none offered the possibility of both universality and cost control. Publicly financed systems throughout the world surpass our present system by guaranteeing access to health care for all while simplifying administration and containing costs effectively.

The vision of guaranteed health care and an affordable health care system can be reached in Vermont. Vermonters will be ill served if our political leaders step away from the road map laid out in Act 48, which they voted for and passed.

Ellen Oxfeld is a resident of Middlebury.

http://www.rutlandherald.com/article/20140327/OPINION04/703279947

Jimmy Carter says Medicare should be expanded to all ages

President Jimmy Carter: “A Call To Action”

The Diane Rehm Show, March 26, 2014

Diane Rehm: Briefly, how do you feel about the Affordable Care Act?

President Jimmy Carter: I was disappointed the way it was done and the complexity that it assumed. Instead of taking a leadership role from the White House and saying, “This is what we think is best,” they had five different congressional committees do it and it got, I think, the lowest common denominator, which is the most complex system. I would really have favored just the expansion of Medicare to include all ages, rather than just to deal with old people.

Video (38 second clip of quote above; also full 51 minute video):http://thedianerehmshow.org/shows/2014-03-26/president-jimmy-carter-call…

Characterizing the Affordable Care Act as “the lowest common denominator – the most complex system,” President Jimmy Carter tells us that he would have favored “the expansion of Medicare to include all ages.”

He’s right, and here’s why. There have been numerous analyses of multiple models of reform. Most of them have included a model that would build on our private insurance system and expand Medicaid, just as is found in the Affordable Care Act. Of these analyses, this is the most expensive model and it falls short on important goals such as universality, equity, administrative efficiency, and affordability.

In contrast, single payer is the least expensive of the effective models and achieves virtually all of the goals of reform. An improved version of Medicare that is expanded to include everyone would be such a model. A health service model – socialized medicine – would also work, but the nation is still too leery of that much government involvement. The popularity of Medicare indicates that this is about the level of government involvement that most would support.

We have to keep reminding Americans that the exchanges are marketing private insurance – not government insurance, so they cannot confuse a government exchange with government insurance. In fact, the exchanges are prohibited from even including a government “public option” (which wouldn’t have worked anyway since the rest of the fragmented, dysfunctional system would have been left in place). Those who defend the private Medicare Advantage plans have to be reminded that they burn up more taxpayer dollars for administration and profits while depriving patients of choice because of their limited networks of providers. Once payment between government Medicare and private Medicare Advantage is equalized, the the private insurers cannot possibly compete with the government program because of their inherent inefficiencies. This was already proven by the failure of the Medicare + Choice plans that preceded Medicare Advantage.

It’s too bad that Jimmy Carter didn’t start talking about Medicare for all when he was president. It might have been helpful if the public had had a few decades to think about it before we got to the point that legislation could be passed. They could have pressured the politicians to do it right.

Obamacare is not universal health care

The Affordable Care Act leaves some of our neediest citizens without insurance or a reliable source of care

By Max Romano
The Baltimore Sun, March 26, 2014

Mary is single, in her late 50s, widowed and earning about $2,000 a month cleaning bathrooms downtown. She’s had no health insurance for the last decade, but she’s received medical care when she needed it at free clinics and emergency rooms.

But now it’s the era of Obamacare, and Mary hears that she has to buy health insurance. We check her options on Maryland Health Connection, the state’s online health insurance exchange:

The cheapest “bronze plan” is only $2.20 per month, which will avoid a year-end fine for being uninsured, but it pays for little up until the $6,000 deductible. The “silver plans” cost $130 to $360 per month with a $900 annual deductible, but for those she’d have to choose between a health savings account, a limited HMO provider network, a 40 percent or a $40 co-pay, and many other confusing options.

None of it sounds like straightforward “affordable care” to her.

This isn’t a story about error messages or frozen screens. Website crashes make news; they don’t make history. This is about the real implications of Obamacare, about which ideas work in real life and which just sound good on paper.

Mary was just one of dozens of low-income Baltimoreans I met as a health insurance enrollment volunteer in a Baltimore free clinic over the past six months, but she shares the experience of thousands of Marylanders this season. Once the website glitches subsided, the reality set in that the government was telling uninsured people to spend a significant portion of their incomes on health insurance. I have seen how many low-income Marylanders will remain uninsured after the March 31st deadline because of the cost and complexity of buying insurance.

If we really want universal health care, we need a public system that actually includes all people, such as extending Medicare to all Americans. Obamacare’s individual mandate to buy health insurance does not reach everyone because many uninsured individuals will not “buy-in” to an expensive and overly complex insurance system.

Unlike some critics, I do not think the Affordable Care Act (a.k.a. Obamacare) got everything wrong: It has made health insurance for individuals cheaper and better. Obamacare expands Medicaid to cover more low-income people, creates tax credits to make insurance cheaper for individuals, makes it illegal for insurance companies to deny coverage based on preexisting conditions and stops insurers from rescinding coverage when beneficiaries get sick.

But while Obamacare patches some of the gaping holes in the health insurance market, it also fails to create access for many of the people who never budgeted for insurance before. The bottom line is that Obamacare will insure millions, but it will also leave tens of millions of Americans still uninsured.

The only way to reach “universal coverage” would be for all Americans to be enrolled in basic public health insurance. This sort of “single-payer system” already exists for Americans over 65 (i.e. Medicare). While many politicians criticize single-payer systems, the millions of seniors who staunchly defend their Medicare are living proof that universal public coverage is worthwhile.

True universal coverage would protect our nation’s most vulnerable from medical bankruptcy, it would save tremendously on administrative costs currently siphoned off by the insurance industry, and it would vastly simplify insurance in this country.

Plans are in motion to create a universal public health insurance system for Vermonters of all ages, but the hodgepodge of government programs and private insurers in Maryland continues to leave some of our neediest without a reliable source of care.

In Washington, my very own U.S. Rep. Elijah Cummings co-sponsored the Expanded & Improved Medicare for All Act in 2013, which tried to create this kind of comprehensive system to insure every American, but he needs more allies in Congress to turn this bill into law. On a local level, “Healthcare is a Human Right — Maryland” is a grass roots alliance of physicians, labor groups, and other Marylanders working to promote true universal health care in our state, and they have several local organizing chapters that need your support.

After months of trying to help low-income Marylanders like Mary sign up, I’m more convinced than ever that Obamacare will not reach many of the people who need health insurance the most and that universal public coverage is the only way we can provide real health care for all in Maryland.

Max Romano is a medical student and public health student at Johns Hopkins University and a volunteer at the Shepherd’s Clinic, a free clinic for the uninsured in northeast Baltimore. The opinions expressed herein are the author’s alone and do not represent the views of Johns Hopkins University or the Shepherd’s Clinic. His email is mromano4@jhmi.edu.

http://www.baltimoresun.com/news/opinion/bs-ed-obamacare-medicare-20140326,0,5129108.story#ixzz2x5adCqZw

Matt Anderson questions his “medical home”

Nine Questions About My New Medical Home

By Matthew Anderson
Health Affairs Blog, March 17, 2014

Sometime in the past five years — it’s hard for me to say exactly when — I suddenly found myself living in a new home.  I must admit I am still a bit disoriented by how this happened. But it did. People keep telling me that everything will be ok but I am not entirely sure.

1. Is this a home or is it a hostel?

2. Will my old friends still be welcome in my new home?

3. Does Mommy love me or is she just paid to say so?

4. Why are we playing computer games during family time?

5. Are there any family secrets left?

6. Everyone tells me how important I am, so why is my allowance being cut?

7. Do I have to go to Church now?

8. Can we get some family therapy?

9. Can’t we afford a better home?

There was a time when family medicine saw itself as a counter-culture in medicine with a mission to incorporate a different set of values.  Our job should be to improve the wellbeing and health of our patients and their communities, not the bottom line of the corporations who thrive off our labor.

Such a dream will not happen until health care is seen as a public good instead of a private commodity.  A national health system, it seems, is the only economically rational and humane way forward.

Comment:

By Don McCanne, MD

What is a patient-centered medical home? To some it means the place you go to get health care – full primary care and a convenient and efficient entry path into more specialized services. To others it means a way of organizing the business of health care to make it more accountable for reducing costs, guided by the dictates of private insurers and government bureaucrats implementing the Affordable Care Act.

Matthew Anderson’s nine questions about the nature of the medical home should serve as a teaser to read the full article on the Health Affairs Blog. It is not simply about the medical home concept, but it questions the whole direction in which our health care system is headed. Not only should you read it, but you should download it and share it with others.

Dr. Anderson has the right values. He is a driving force behind The Social Medicine Portal (An Alternative to Corporate Health) and an editor of the journal, “Social Medicine.”

The Social Medicine Portal: http://www.socialmedicine.org/welcome-to-the-social-medicine-portal/

Social Medicine: http://www.socialmedicine.info/index.php/socialmedicine/index

Repeating his astute words, “Our job should be to improve the wellbeing and health of our patients and their communities, not the bottom line of the corporations who thrive off our labor. Such a dream will not happen until health care is seen as a public good instead of a private commodity.  A national health system, it seems, is the only economically rational and humane way forward.”

Of Patients and Prices

By A.W. Gaffney, M.D.
Truthout, March 26, 2014

There are many good reasons to impatiently anticipate the end of one’s medical training, which not infrequently lasts upwards of five years following medical school. But counterpoised to the oft-cited benefits — greater autonomy, reliably increased remuneration, less reliably improved hours, and so forth — there is also, unfortunately, an almost entirely unrecognized drawback: a largely unavoidable entanglement in the business of health care.

Now for some, such an entanglement might make the transition from training seem all the more attractive. But clearly, one need only hear about patients (or their surviving family members) being chased by collections agencies for medical bills, or about the growing problem of “medical bankruptcies” among the insured, or even about the bizarre unaffordability of asthma inhalers to see that something is seriously askew with the way the price of health care can adversely impact the circumstances of the ill. As my own clinical training now winds down, I frequently reflect on how to navigate today’s highly problematic health care terrain – in which patients are increasingly exposed to the cost of care provided.

I think it’s only fair to begin, however, by recognizing that unlike ethical issues revolving around artificial hearts or organ transplants, the problem of the cost of health care isn’t entirely new. Hippocrates (or whoever it was that wrote the Precepts) generally saw nothing wrong in doctors looking after their pecuniary interests, though he also opined that they mustn’t “extort money from those who are at death’s door.” The problem of US national health spending has likewise been recognized for some time: in 1971, as health care expenditures rapidly outstripped inflation, Richard Nixon proclaimed that the nation faced a “deepening crisis,” which has been more or less the conventional wisdom ever since (if not without reason).

However, an awareness that something might be awry with what prices patients were being charged by hospitals, physicians, pharmaceutical companies, ambulance companies and more or less everyone in the health care industry seems to have surged into the spotlight in more recent years. The journalist Steven Brill, for instance, in an important issue-length article “Bitter Pill” in Time last year, investigated the stories of patients who received massive itemized bills for health care, which, in several instances, might very well be termed “money from those who are at death’s door.”

He discussed one person, for instance, who between diagnosis with metastatic lung cancer and death a mere 11 months later had accumulated some $900,000 in medical bills, debt that was then dumped onto his devastated wife. Additionally jarring, however, was Brill’s exploration of the extremely high prices being charged for individual services or items to such patients (e.g. $77 for each tiny square of cotton gauze), which originated from a confidential list of hospital prices dubbed the “chargemaster.”

Elizabeth Rosenthal of the New York Times has explored the issue further in an ongoing and highly revealing series. Like Brill, she finds instances of absurd prices (e.g. $3,355.96 for five stitches in the ER), though in most cases, these prices are frequently several times higher than what insurance companies – which directly negotiate reimbursements with hospitals and providers – actually pay. However, for the uninsured, the “underinsured” (i.e. those who have insurance, but with high deductibles, coinsurance or copays), those who are out-of-network, or those who have limits on coverage, the “chargemaster” is real enough. For these individuals and families, massive and arbitrary medical bills – for conditions ranging from the trivial to the deadly – can be tantamount to financial ruin.

Why is this issue coming to the spotlight now? Partially, it’s a reflection of ongoing trends in the health care system that predated Obamacare but that are also not ended by it. Insured patients increasingly have more financial liability, or as the saying goes, “skin in the game,” when they receive health care. High-deductible employer plans are more and more common, “four-tier” prescription drug plans are the norm, and themost commonly purchased “silver” plans on the Obamacare exchanges have an actuarial value of only 70%. All of this equates to increased “cost sharing,” or out-of-pocket money paid for health care, on top of annual premiums (which are also rising). Between uninsurance and underinsurance, it’s not all that surprising that unpaid medical bills apparently constitute half of accounts reported to collection agencies, compromising the credit scores and the financial opportunities of those affected. Along similar lines, 62% of US bankruptcies, according to one study, are caused by medical illnesses – even though most of these bankrupt individuals actually had health insurance at the time of their illness.

Everyone agrees there is a problem here, but — not surprisingly — the fix is far more contested. For many, transparent and more reasonable prices are the key to the puzzle: as Rosenthal puts it, we could require health care providers to provide “price lists and upfront estimates to allow consumers to make better choices.” Brill likewise advocates for the elimination of the “chargemaster,” what he calls the “source of the poison coursing through the health care ecosystem.” And as it turns out, “price transparency” is already becoming a reality: since January 1 in Massachusetts, at least, doctors and hospitals are now required under law to provide price information on services and procedures to patients who request it.

From the physicians’ perspective, an awareness of patients’ rising financial liabilities has also led to a variety of proposals. Last summer, three physicians published an article entitled “First, Do No (Financial) Harm” in the Journal of the American Medical Association (JAMA), which argued that medical professionals nowadays must universally consider the financial ramifications of their decisions for patients before recommending care. A patient whose insurance didn’t cover physical therapy for lower back pain, they argue, might instead be directed to a less expensive local yoga class. Similarly, physicians could discuss options for avoiding hospitalizations in patients with high copays for inpatient stays.

Now, there seems nothing controversial about avoiding unnecessary hospitalizations, nor do I have anything against yoga. Saving money by prescribing the least expensive among a number of drugs with equal efficacy likewise is a no-brainer (regardless of the financial means or insurance of the patient). But consider how ethically problematic this whole framework is once we move beyond the low-hanging fruit. Should inferior but less costly procedures or treatments be recommended to poorer patients, or provided upon their request? Should a patient’s insurance deductible impact the decision of whether or not a hospitalization is indicated? Are we really ready for a multi-tiered medical system (superimposed on a multiplicity of already existing disparities) in which the therapy most likely to save a life or limb or palliate a symptom is no longer de facto optimal but is instead one of a number of options to be considered depending on the financial means of the patient?

Now, to be fair to the writers of the JAMA article, blithely ignoring the reality that one’s decisions have costs for patients — i.e. pretending that we now have a system of universal health care free at the point of service — doesn’t seem like a morally superior approach to take either. But this merely raises the question of why the spectrum of solutions proposed by most in the mainstream seems so impoverished. The JAMA piece provides a framework for adapting to the status quo, but doesn’t pass judgment on whether this is at all desirable. Brill, on the other hand, devotes considerable time in his article to discussing Medicare’s superior efficiency and ability to negotiate fair prices for health care services. Yet he doesn’t consider one natural conclusion from such logic: extending Medicare to the whole population. Rosenthal at one point expresses concern that the out-of-pocket limits of Obamacare plans (up to $12,700 annually for families on top of premiums) will mean that patients “will still not be very discerning shoppers.” Such logic, however, unfortunately takes it as a given that patients should be shoppers, and that substantial “cost sharing” (i.e. copays and deductibles) is inevitable, immutable and universal. A reader might not know, for instance, that Edward Kennedy proposed health care legislation in 1969 that would have established universal health care for the country with “first dollar” coverage. He or she might be similarly surprised to learn that the health care systems of many other countries generally score higher in terms of quality, cost about half of the US system, have no uninsurance, and have greatly limited – and in some cases zero – out-of-pocket expenses for patients at the point of care.

A reader might also be forgiven for walking away from these articles with the sense that transparent lists of reasonable health care prices would go some way toward solving the grave problems of the US health care system. Now transparency is almost always a good thing, and more reasonable prices might help the uninsured and underinsured from getting stuck with outlandish bills for minor treatments. On the other hand, such reforms will not be very useful in cases of major illness, and there isn’t any reason to conclude that they would reduce medical bankruptcies or control overall costs. Seriously ill? You could easily bump up against the $12,700 out-of-pocket annual maximum of your family’s health care plan by the time you’ve completed a year – or maybe even a month? – of a new cancer treatment.

As I complete my clinical training, I’ll soon — like most physicians — be submitting bills to insurance companies for procedures or services that I provide. These bills will, at times, land in the lap of the uninsured or underinsured. How should I proceed? I can certainly aim to pursue the least expensive among clinically equivalent therapies, and to avoid unhelpful tests or interventions altogether, though that seems like basic good practice regardless of the finances or insurance coverage of the patient. But what about the slippery slope that will inevitably appear when patients with competing financial obligations — rent, food, education, or even other health care needs — understandably seek to save their limited resources by pursuing inferior medicines, tests, or procedures? Down that road, there must be no doubt, lies class-based, not evidence-based, medicine: It is a road we cannot follow. The Confucian physician Chu Hui-ming, born some four centuries ago, wrote that “there are no two kinds of drugs for the lofty and the common; the poor and the rich receive the same medicine.” Do we believe this today?

There is, I believe, no satisfactory solution to this problem on the level of the individual practitioner, patient or even hospital. An awareness of the dangers of our path must therefore lead us away from contentment with the status quo, out of the currently accepted confines of the policy debate, and towards bolder alternatives. It has led in my case to a commitment to the establishment of a single-payer system, with national health insurance for all, free at the point of service. Many others — which in most polls now include a majority of physicians and the public — seem to feel similarly.

The alternative? A slow, lamentable drift toward the practice of medicine explicitly tiered by class, overlaid on a system already riven with rising inequality. Under such a system, the price of care might be transparent, but at a cost that would soon be unforgivable.

A.W. Gaffney is a physician and a writer with a focus on health care policy and politics. In addition to Truthout, his writing has appeared in Salon, Dissent, and In These Times. He blogs at www.theprogressivephysician.org and tweets at @awgaffney.

http://www.truth-out.org/news/item/22693-of-patients-and-prices

Single-payer needed if we are to have security

Star Tribune, March 21, 2014

The closing of the Riverwood Centers represents yet another failure of a health care system based upon a dysfunctional patchwork of insurance coverage (“Center’s closing could strand mentally ill,” March 18). The combination of stalled public funding and diminishing payments from private insurance companies has brought about the demise of a crucial resource for thousands of Minnesotans who struggle with severe mental illness.

We live in a society that spends double per capita as other wealthy democracies, yet fails to meet the basic health needs of its people. It’s long past time to do what’s right — to implement a Minnesota single-payer system that would ensure that all health providers, including safety-net facilities, receive fair compensation for the services they provide. Under single-payer, all Minnesotans would have the security of knowing their health needs would always be met, without the looming threat of medical bankruptcy. And never again would they be forced to go scrambling for crisis care, as they are now.

Dr. Dave Dvorak, Minneapolis

• • •

Back in 1981, my father was diagnosed with colon cancer. It was extensive, and most of his colon had to be removed. Horrible enough, but to add to his ordeal, when he returned from the hospital, there waiting in his mailbox was a letter from his insurance company stating that, due to his cancer diagnosis, his coverage was being canceled, effective immediately.

That day he began calling other insurance companies one by one, looking for new coverage, and every one of them turned him down. He asked if he could get coverage with a ridiculously high $10,000 deductible, and still the answer was no. In the eyes of the insurance industry, he was an untouchable.

Now, 33 years later, thanks to the Affordable Care Act, this can’t happen to anyone else. Anyone who says the ACA should be scrapped hasn’t experienced what my father went through. Is the ACA a perfect solution? No, single-payer would be better, but the ACA goes a long way toward protecting us from some of the abuses inherent in our for-profit health care system.

Bruce McFarlan, Minneapolis

http://www.startribune.com/opinion/letters/251575871.html

Matt Anderson questions his “medical home”

Nine Questions About My New Medical Home

By Matthew Anderson
Health Affairs Blog, March 17, 2014

Sometime in the past five years — it’s hard for me to say exactly when — I suddenly found myself living in a new home.  I must admit I am still a bit disoriented by how this happened. But it did. People keep telling me that everything will be ok but I am not entirely sure.

1. Is this a home or is it a hostel?

2. Will my old friends still be welcome in my new home?

3. Does Mommy love me or is she just paid to say so?

4. Why are we playing computer games during family time?

5. Are there any family secrets left?

6. Everyone tells me how important I am, so why is my allowance being cut?

7. Do I have to go to Church now?

8. Can we get some family therapy?

9. Can’t we afford a better home?

There was a time when family medicine saw itself as a counter-culture in medicine with a mission to incorporate a different set of values.  Our job should be to improve the wellbeing and health of our patients and their communities, not the bottom line of the corporations who thrive off our labor.

Such a dream will not happen until health care is seen as a public good instead of a private commodity.  A national health system, it seems, is the only economically rational and humane way forward.

What is a patient-centered medical home? To some it means the place you go to get health care – full primary care and a convenient and efficient entry path into more specialized services. To others it means a way of organizing the business of health care to make it more accountable for reducing costs, guided by the dictates of private insurers and government bureaucrats implementing the Affordable Care Act.

Matthew Anderson’s nine questions about the nature of the medical home should serve as a teaser to read the full article on the Health Affairs Blog. It is not simply about the medical home concept, but it questions the whole direction in which our health care system is headed. Not only should you read it, but you should download it and share it with others.

Dr. Anderson has the right values. He is a driving force behind The Social Medicine Portal (An Alternative to Corporate Health) and an editor of the journal, “Social Medicine.”

The Social Medicine Portal: http://www.socialmedicine.org/welcome-to-the-social-medicine-portal/

Social Medicine: http://www.socialmedicine.info/index.php/socialmedicine/index

Repeating his astute words, “Our job should be to improve the wellbeing and health of our patients and their communities, not the bottom line of the corporations who thrive off our labor. Such a dream will not happen until health care is seen as a public good instead of a private commodity.  A national health system, it seems, is the only economically rational and humane way forward.”

Are we forgetting about the underinsured?

America’s Underinsured

By Cathy Schoen, Susan L. Hayes, Sara R. Collins, Jacob A. Lippa, and David C. Radley
The Commonwealth Fund, March 2014

The twin goals of health insurance are to enable affordable access to health care and to alleviate financial burdens when injured or sick. It is well known that the uninsured are at high risk of forgoing needed care and of struggling to pay medical bills when they cannot postpone care. Studies further find that insured people who are poorly protected based on their households’ out-of-pocket costs for medical care are also at risk of not being able to afford to be sick.

Using newly available data from census surveys, this report provides national and state-level estimates of the number of people and share of the population that were insured but living in households that spent a high share of annual income on medical care in 2011–12. In the analysis, we refer to these people as “underinsured.” However, this group is only one subset of the underinsured. Our estimates do not include insured people who needed care but went without it because of the out-of-pocket costs they would incur, or the insured who stayed healthy during the year but whose health insurance would have exposed them to high medical costs had they needed and sought care.

The analysis finds that in 2012, there were 31.7 million insured people under age 65 who were underinsured. Together with the 47.3 million who were uninsured, this means at least 79 million people were at risk for not being able to afford needed care before the major reforms of the Affordable Care Act took hold.

In all states, people with low incomes are at greatest risk for being underinsured or uninsured. Nationally, in 2012, nearly two-thirds (63%) of those with incomes below the federal poverty level were either underinsured or uninsured. Among those with incomes between 100 percent and 199 percent of poverty, nearly half (47%) were underinsured or uninsured.

A decade or more of people losing health coverage and a steady erosion in the financial protection of insurance has also put middle-income families at risk. In 2012, one of five people (20%) under age 65 with middle incomes (between 200% and 399% of poverty)—an estimated 15.6 million people—were either underinsured or had no health insurance.

Low- and Middle-Income Households Most at Risk

The exposure to high out-of-pocket medical care costs even when people have insurance reflects insurance trends — including higher deductibles and cost-sharing, as well as gaps in benefits or limits on coverage — in both the employer and individual insurance markets. This puts insured families at risk in terms of access to health care and financial well- being. Studies indicate that low- and middle-income insured individuals and families who face high out- of-pocket costs for medical care relative to their incomes are nearly as likely as the uninsured population to go without care because of costs, forgo care when sick, struggle to pay medical bills, or incur medical debt. Both population groups — underinsured and uninsured — are at far higher risk of access or medical bill concerns than those with more protective coverage.

Premiums for Employer-Sponsored Insurance Have Risen More Rapidly Than Incomes, Value of Benefits Declined

Over the past decade, the cost of health insurance has risen far faster than incomes for middle- and low-income working-age families.

At the same time that premiums have risen, the value of benefits has declined. Deductibles more than doubled for plans provided by larger and small employers. This increase — plus other cost-sharing or limits on benefits — has left insured patients paying a higher share of medical bills. With little or no growth in incomes over a decade, insurance and care have become less affordable.

Medicaid and Income-Related Premium Assistance

Using newly available information on out-of-pocket payments for premiums, we estimate that 29 million insured people — 11 percent of the total under-age-65 population and 13 percent of the insured population under age 65 — paid premiums that exceeded the Affordable Care Act premium contribution thresholds for those at their household income level before reforms. In other words, they had high premium out-of-pocket costs compared with incomes, with “high” defined as in excess of Affordable Care Act contribution thresholds.

However, not everyone who pays high premiums relative to income will be eligible for help. The 29 million insured people includes 13.7 million with incomes below 138 percent of poverty who are paying premiums above the Affordable Care Act thresholds for this group. Of these, 8.8 million had private insurance they bought on their own or through employers. Based on their income alone, they would likely be eligible for expanded Medicaid if their state decides to participate in Medicaid expansions.

For those with incomes above Medicaid eligibility, the law restricts eligibility for premium assistance in marketplaces to people buying insurance on their own and to workers who have employer coverage where the employee’s premium costs for self-only coverage exceeds 9.5 percent of income. Among the 29 million insured with high premium costs in 2012, 11.7 million had employer-sponsored coverage and incomes that would be too high to qualify for expanded Medicaid.

Medicaid Expansion Makes a Critical Difference

Many of the states not participating in Medicaid expansion have among the highest rates of uninsured or underinsured people as a share of their total state populations. Without Medicaid expansion, this vulnerable group will remain at high risk for access, health, and financial problems.

Changing the Insurance Map of the Country

Substantial gains, however, will depend on the plans people choose and state efforts to ensure high-value benefit designs and accessible networks. One concern is to what extent people with low or modest incomes will opt for “bronze” level plans. People choosing bronze-level plans will pay 40 percent of medical care costs on average and thus remain at financial risk. Additionally, in choosing a bronze plan, people with low incomes forgo the cost-sharing subsidies that are tied to silver plans that substantially reduce out-of-pocket spending for medical care. As of February 2014, 62 percent of those enrolling in the new marketplaces selected silver plans, 19 percent had selected gold or platinum, and 19 percent had selected bronze.

In addition, it is important to note that the Affordable Care Act’s limits on out-of-pocket costs for covered benefits also apply only to in-network providers. As discussed in a recent report profiling insured people with medical debt, even with the new limits, the insured may encounter high medical care costs if they receive care from out-of-network clinicians.

From the Conclusion

However, the new marketplaces offer plans that include substantial cost-sharing and annual caps on out-of-pocket patient costs that apply to in-network providers only. With these benefit designs, there is the risk that the nation could convert the uninsured into the underinsured and fail to stop the erosion in insurance protections for people with private insurance coverage.

Full report (40 pages – several Exhibits and Tables):
http://www.commonwealthfund.org/~/media/Files/Publications/Fund%20Report/2014/Mar/1736_Schoen_americas_underinsured.pdf

Comment:

By Don McCanne, M.D.

This Commonwealth Fund report provides an estimate of the numbers of underinsured – people who could experience financial hardships and impaired access in the face of medical need. Although the authors express optimism that the numbers of uninsured will decline as a result of the provisions of the Affordable Care Act (ACA), there is a high probability that there will be a substantial increase in the numbers of people who will be underinsured.

The private insurance design features supported by ACA makes continued underinsurance an inevitability. The insured are vulnerable because of low actuarial value plans with high-deductibles and other cost sharing, narrow and ultra-narrow networks that impair access to in-network providers, inadequacies of the subsidies, and the perpetuation of an expensive, administrative wasteful model of financing care – a model that we all pay for, including the underinsured.

What is not expressed in the Commonwealth data is the number of people who may not have attempted to access care because of concerns of high out-of-pocket costs. Studies have shown that these people do forgo care that they should have.

A sobering thought is the even larger numbers of individuals not represented in this study. These are the people who remained healthy and never had to test the adequacy of their insurance. Tens of millions of people are vulnerable and would become financially insecure if they did develop significant health problems. This includes many individuals with employer-sponsored insurance. They are underinsured and don’t know it.  Excluding these individuals from the underinsured count results in estimates far below the actual numbers.

The design of ACA makes it clear that both the uninsured and underinsured will remain a problem in the foreseeable future, but it will be underinsurance that will likely provoke widespread discontent. Its prevalence may well become the most compelling reason to abandon the perversities brought to us by the private insurance industry. People will be ready to replace our dysfunctional system with a single payer national health program that would eliminate, for everyone, financial barriers to health care.