PNHP

Employers expanding use of higher deductibles

Employers expanding use of higher deductibles

The Prevalence and Cost of Deductibles in Employer Sponsored Insurance:
A View from the 2012 Employer Health Benefit Survey

Kaiser Family Foundation, November 2012
The percent of covered workers enrolled in a plan with a general annual deductible has increased significantly over time.  In 2006, just over half (52%) of covered workers had a deductible for single coverage, compared with almost three-quarters (72%) in 2012.
Overall, the average general annual deductible is $1,097 for covered workers enrolled in a single coverage plan requiring a deductible; an increase of 88% since 2006.
Deductibles are much higher for workers enrolled in HDHP/SO plans (savings options), with 25% of workers enrolled in a plan with a deductible between $1,000 and $1,400, and 25% of workers in a plan with a deductible greater than $2,500.
Although workers at small firms are no more likely to be enrolled in health coverage that includes a deductible, they typically face much higher deductibles than workers at large firms.  The average deductible for covered workers enrolled in single coverage at a small firm is nearly twice as much as the deductible for covered workers at larger firms.
Covered workers enrolled in PPO and POS plans with many higher-wage workers tend to have lower deductibles than their counterparts at firms with fewer higher-wage workers.  Covered workers in HMO, PPO and HDHP/SO plans at firms with some unionized workers have lower general annual deductibles than workers at firms without unions.
Conclusion
In addition to contributing more towards premiums, covered workers are increasingly faced with higher cost sharing.  A larger proportion of workers are required to meet a deductible prior to utilizing services and these deductibles are increasing in size.  It has become commonplace for covered workers to be enrolled in a plan with a deductible of $1,000 or more.  While many working families have sufficient savings and coverage in case of a medical emergency, the growth in workers’ contributions and cost sharing may increasingly become a financial strain on some households.
http://www.kff.org/insurance/snapshot/chcm110212oth.cfm

Ever higher deductibles have now become the standard for employer-sponsored plans. The new state exchange plans to be offered to individuals and small businesses will have to have higher deductibles as well because of their comparatively low actuarial values.
The conclusion in this report states that “the growth in workers’ contributions and cost sharing may increasingly become a financial strain on some households.” This is an overly conservative statement since innumerable studies have shown that high deductibles already do cause both financial hardship and impairment of access to appropriate health care.
A single payer system controls costs without the necessity of imposing financial barriers such as high deductibles. Let’s change to policies that take care of patients first rather than policies that shift costs from employer or government budgets to individual patients, especially since ultimately we’re all funding those budgets anyway, whether as consumers or taxpayers.

Get second opinion on Medicare Advantage plan

By Brent Schillinger, M.D.
Palm Beach Post, Nov. 10, 2012

The airwaves, the Internet and newspapers have been loaded with a lot of seasonal advertising. This is not a reference to the political ads that until Election Day seemed to be bombarding us 24/7. I’m talking about the ads urging senior citizens to sign up for a Medicare Advantage program.

The period between Oct. 15 and Dec. 7 has been designated an open enrollment period for Medicare Advantage, which is basically the new name for what used to be known as Medicare HMO plans. Medicare Advantage is a marketing strategy, which suggests that seniors who stay with traditional Medicare are at a disadvantage.

When the legislation was signed into law by President George W. Bush, the Medicare Advantage programs were basically an experiment by the private health insurance companies to say, “The private sector can offer the same benefits as Medicare, only better — and the free market will prove it.”

The Medicare Rights Center, a senior advocacy group, takes a critical position: “The idea behind the plans is to provide better services and lower out-of-pocket costs. However, it doesn’t always work that way.

“While the plans must provide a benefit ‘package’ that is at least as good as original Medicare’s and cover everything Medicare covers, the plans do not have to cover every benefit in the same way. For example, plans may pay less for some benefits, like skilled nursing facility care, and offset this by offering lower co-payments for doctor visits.”

The Medicare Advantage patient may save a bit up front, but in order to maintain profits for the private insurers, the consumer must realize there is usually a sacrifice when it comes to choices that one would have had, had he or she remained in traditional Medicare. There is a whole host of potential problems, such as:

* Care can actually end up costing more, to the patient and the federal budget, than it would under original Medicare, particularly if one suffers from a very serious medical problem;

* Some private plans are not financially stable and may suddenly cease coverage;

* One may have difficulty getting emergency or urgent care, due to rationing

* The plans only cover certain doctors, they often drop providers without cause, and then the continuity of care is broken;

* Members have to follow plan rules to get covered care;

* There always are restrictions in the choices of doctors, hospitals, and other providers, again a form of rationing that keeps profits up for the insurance company bondholders but may limit patient choice;

* It can be difficult to get care away from home;

* The extra benefits offered can turn out to be less than promised;

* The Medicare Advantage plan may ration certain high-cost medications.

In spite of the obvious problems, Congress continued to barrel along, offering incentives and allowing accounting advantages to encourage enrollment in the Medicare Advantage experiment. A recent study published in the International Journal of Health Services calculates that the private insurers have drained over $200 billion in excess payments from the Medicare budget.

How did this happen? Under the funding mechanism, the private plans are paid, on average, 9 percent to 13 percent more than traditional Medicare programs to provide the same coverage. This legislation was a bonanza for the private insurers. So what we are left with are plans that are fraught with problems but are generating profits for the insurance industry. Other than the stockholders, who could argue that paying 9 percent to 13 percent more for the same thing is sound financial thinking?

Perhaps taxpayers need to question whether they should be financing an experiment that costs billions more than it would have if people had remained in traditional Medicare. The Affordable Care Act, known as Obamacare, takes some preliminary steps to fix this flawed reimbursement formula, but only time will tell how that will play out.

For the senior consumer as well as the practicing physician, it’s a confusing state of affairs. For the doctors, learn as much as you can about the options. For the patients, start by speaking with your physician. He or she should be able to guide you in the best direction. For additional information visit www.pbcms.org.

Brent Schillinger, M.D., is president of the Palm Beach County Medical Society Services Foundation.

http://www.palmbeachpost.com/news/news/opinion/commentary-get-second-opinion-on-medicare-advantag/nS2Dd/

Real Danger of “Obamacare”: Insurance Company Takeover of Health Care

By Nomi Prins
Thoughts: Nomi Prins blog, Nov. 10, 2012

Election rhetoric shuns the big picture in favor of the bigger platitude. Now that The Show is over, we are left with the equivalent of a Sunday morning hangover following a binge of promises and lies. We leave the theatre of political spectacle on steroids for the real world of unstable economy, a globally and publicly subsidized financial sector, and increased costs of living on everything from food to education to health-care; outpacing declining median incomes. The average cost for health insurance for a family is $15,745 per year vs. a median income of $50,502, or about half post-tax take-home pay.

“Obamacare” is the name commonly used for the Patient Protection and Affordable Care Act (PPACA) of 2010. The very moniker is indicative of how name-and-image-centric our world has become; Medicare was never called “Johnsoncare” when President Johnson signed it into law in 1965 and Johnson was not exactly a man of small-personality. At any rate, Obamacare or the PPACA ranks as one of the most misrepresented issues from the campaign, by both sides of the ever-slimming aisle.

The Tea-Party Conservative types get it embarrassingly wrong when they call it a “government takeover of health care.” Likewise, Progressive Obama-supporters are deluded in accepting it as the most sweeping healthcare reform since Medicare. (Side note: I wish the word ‘sweeping’ could be retired from politics until it actually means -sweeping.)

Here’s why. The PPACA does nothing to restructure the health insurance industry, anymore than the Dodd-Frank Act restructures the banking industry. This means everything else it attempts to do, positive or negative, will be vastly overshadowed by an industry accelerating to morph itself into a acquisition machine in order to circumvent anything that even smells like a restriction, including laws that exist and ones to come.

How? By doing the same thing energy and telecom companies did after they were deregulated in 1996, and that banks did after they were summarily deregulated (after moving that way for decades) in 1999. They are merging, consolidating, eliminating competitors, and controlling their domain. They are manufacturing power.

Investment bankers are roaming the world to exploit this hot new opportunity. That’s one reason insurance companies don’t even call themselves that anymore. Now, they are ‘managed health care’ companies. Call yourself a managed health care company, and you can buy everything from other insurance companies to hospitals to clinics to doctors. The more consolidation, the more fees bankers rake in, and the more premiums and medical reimbursements and health care procedures, each company can control.

The result of 1996 energy deregulation was a glut of crime-spawned bankruptcies like Enron. Likewise WorldCom led a pack of telecom degenerates in the production of tens of billions of dollars worth of accounting fraud. The final repeal of Glass-Steagall ignited a merge-fest of investment and commercial banks, their linkages ensuring that taxpayers, whose deposits have been protected since the New Deal, provide a safety-net upon which they can mint toxic assets loosely based on over-leveraged home mortgages, and engage in risky, speculative activity; big banks don’t go bankrupt when they fabricate values or lose big on stupid bets, they get federally subsidized in all sorts of ways.

You know who else is similarly too big to fail? The insurance industry. UnitedHealth Group, the nation’s largest health insurer covers 50% of the insurable population in over 30 states. Blue Cross-Blue Shield, covers 100 million people through a constellation of 38 sub-companies. They, and other insurance companies are growing in breadth. When companies consolidate, the result is less transparency, less competition, and more possibility for fraud and shady behavior. Every. Single. Time.

Obamacare and Accounting Fraud

By January 2014, the PPACA will require insurance companies to list their prices on competitive exchanges. In Obama-theory, this is supposed to reduce premiums via competition. But what if, say, only three companies control nearly all of the premiums? Consider the fact that it costs the same $3 to extract your money from a Chase, Bank of America or Citigroup ATM (if you don’t get it directly from the firm you bank at.) They constitute a monopoly that defies anti-trust inspection (thank you, Department of Justice.) What incentive would any of them have to charge less? None. That’s why they don’t.

Managed Health Care companies don’t just administer private, but government health insurance policies as well. The http://www.healthcare.gov website says that under the PPACA, the life of the Medicare Trust Fund will be extended to 2024 as a result of reducing waste, fraud, abuse, and slowing cost growth. President Obama promised to reduce Medicare fraud 50% by 2012 according to the site – but if he did, he forgot to mention it during the campaign period. 

To supposedly combat price hikes, the PPACA calls for a new Rate Review program, wherein insurance companies must justify premium hikes of more than 10% to a state or federal review program. Given that banks aren’t supposed to hold more than 10% of the nation’s deposits in any one institution, and three do, this isn’t a comforting constraint.

While it is positive that the PPACA requires coverage of people with pre-existing conditions and prohibits lifetime caps, it can’t control what people pay for insurance, because it doesn’t limit actual premiums, which have risen 13% on average since the Act was passed.

The medical cost ratio limitation the PPACA instills; that 80% of premiums must be used for medical care in the case of individuals and small groups, and 85% in the case of large groups) to supposedly ensure companies operate on a more efficient premium in vs. premium out basis, is a joke. Its punch line is accounting manipulation.  Call everything a medical cost; even buying another company, and the ratio is meaningless.

WellPoint got the Joke

WellPoint got that joke immediately. The largest for-profit “managed health care” company in the Blue Cross and Blue Shield Association, it began trading publicly on December 1, 2004. Depending on the state, it operates under Blue Cross and Blue Shield, Blue Cross or Anthem. 

After the PPACA was passed, in March 2010, WellPoint allegedly reclassified certain administrative costs as medical care costs in order to meet the law’s new medical loss ratio requirements (which requires insurers spend at least 80% or 85% of premiums on health care services, depending on the type of plan, individual or group respectively.)

A month earlier, WellPoint announced its Anthem Blue Cross unit would raise insurance rates for some individual policies in California up to 39%. Federal and California regulators are still investigating this, but the premium hikes remained.

WellPoint is also one of Wall Street’s favorite “managed health care” companies; cause it keeps getting bigger through acquisitions that pay hefty fees to the bankers involved. On October 23rd, WellPoint got approval from Amerigroup’s shareholders to acquire Amerigroup, a Medicaid-focused health insurer, in a $4.9 billion cash deal. The deal makes WellPoint the nation’s largest Medicaid insurer, and provides it greater access to Medicaid patients who also qualify for Medicare.

It was the largest cash deal ever, and the largest premium paid for a company in the managed health care realm. As a result, Goldman Sachs (who advised Amerigroup) and Credit Suisse (who advised WellPoint) retained their top positions in the global healthcare deal advisory league table.

The value of Amerigroup, as a company, dropped 34% within two weeks of that agreement, in stark shades of what happened when Bank of America took over Merrill Lynch in the fall of 2008.

This summer, Amerigroup and Goldman Sachs faced a shareholder lawsuit filed by the city of Monroe Employees Retirement System and Louisiana Municipal Police Employees Retirement System. It alleged that Goldman advised Amerigroup to accept WellPoint’s offer quickly, rather than seek other bids, because the bank had structured a complex, and fee-heavy derivatives transaction on the back of the deal. The insurers resolved the suit by tweaking the deal parameters. All parties denied ‘any wrongdoing.’ But where there’s smoke in complex derivatives land, there is fire.

Other Mergers

After the Supreme Court upheld the PPACA, a spate of mergers rippled through the managed health care realm, to ostensibly cope with smaller profit margins and  ‘compliance costs.’  But really, it’s because each firm wants to corner as much as possible of the market, in as many states as it can, to garner more premiums and control more disbursements and prices at the upcoming insurance ‘exchanges.’

In late August, the third largest insurance company in the US, Aetna announced it was buying Coventry Health Care for $5.7 billion. Coventry provides Medicare and Medicaid services, thus the takeover expands Aetna’s Medicare and Medicaid business. Being part of Aetna enables Coventry to grab more consumers on more state-run health insurance exchanges, reducing competition in the process. The Department of Justice is examining anti-trust issues surrounding the deal, but it’s still expected to close in mid-2013.

On October 17th, UnitedHealth Group issued $2.5 billion of bonds as part of its $4.9 billion acquisition of Brazil’s Amil Participacoes. Bank of America Merrill Lynch, Goldman Sachs, J.P. Morgan Chase & Co., Morgan Stanley, UBS and Wells Fargo Securities were lead underwriters on the deal.

They are not buying international companies in order to increase accounting transparency. Like other multinationals, they are doing so to move profits around and circumvent restrictions and tax laws. They are using cash, or raising extra debt, to do so, rather than to reduce premiums or increase disbursements to medical professionals.

And if you’re keeping score – billion of dollars are flowing from insurance companies – NOT to reduce premiums to patients and NOT to reimburse doctors and NOT to enhance the quality of care, but to simply expand nationally and globally. Meanwhile, their CEOs are doing quite well from all that non-health care related movement.

Total compensation for the bulk of health care company CEOs rose by 14.7% in 2011 by 14.7%, or $11.1 million, to $87 million. Cigna’s CEO David Cordani made $19.1 million. UnitedHealth Group’s CEO, Stephen J. Hemsley bagged $49 million in salary, stock options, and other compensation last year. The highest-paid CEO made 94 times the average compensation level of primary care physicians. And none of them had to pick up a single scalpel in the process.

Doctors as profit centers

Not just patients, but physicians have been bled steadily from the current state of insurance company controlled health care through diminishing insurance reimbursements, electronic medical records mandates whereby they spend as much time complying with Kafkaesque controls over their decisions on performing surgeries and providing care, and debt. New doctors are graduating with an average of $250,000 in debt, which, combined with diminishing disbursement and soaring costs, will keep many, underwater. Forever.

According to Dr. Michael H. Heggeness, President of the North American Spine Society, a group of 6500 global spinal and orthopedic surgeons (at which I delivered a speech last month), “The last people, that most of the population feels sorry for are doctors, yet they are in an economic crisis of their own. In 2002, 80% were in private practice, now 70% are in hospitals because they can’t afford to make a private practice work.”

Meanwhile the more hospitals are viewed as profit centers, the more their Chairmen will cut costs to maximize returns, and not care quality. They will seeks ways to sell underperforming assets, programs or services and reduce the number of nonessential employees, burdening those that remain. No doubt the private equity community will be getting more into this game, as insurance companies buy more hospitals, doctors, clinics, and perhaps drug companies, or vice versa, and ‘restructuring’ accelerates.

And if insurance companies can manage doctors directly, they can control not just costs, but treatment – our treatment. It’s not an imaginary government takeover anyone should fear; but a very real, here-and-now insurance company takeover, to which no one in Washington is paying attention.

Nomi Prins is an independent journalist, speaker, and author of several books, including “Other People’s Money: The Corporate Mugging of America.” She is a former managing director at Goldman Sachs and and ran the international analytics group at Bear Stearns in London. She is a member of Senator Bernie Sanders’ (I-Vt) Federal Reserve Reform Advisory Council and is a senior fellow at the nonpartisan public policy think-tank,  Demos.

http://www.nomiprins.com/thoughts/2012/11/10/real-danger-of-obamacare-insurance-company-takeover-of-healt.html

Burns and Pauly take a critical look at accountable care organizations

Accountable Care Organizations May Have Difficulty Avoiding The Failures Of Integrated Delivery Networks Of The 1990s

By Lawton R. Burns and Mark V. Pauly
Health Affairs, November 2012

Abstract

Accountable care organizations are intended to improve the quality and lower the cost of health care through several mechanisms, such as disease management programs, care coordination, and aligning financial incentives for hospitals and physicians. Providers employed several of these mechanisms in forming the integrated delivery networks of the 1990s. The networks failed, however, because of heavy financial losses stemming from hospitals’ purchase of physician practices and their inability to align incentives, garner capitated contracts, and develop the infrastructure to manage risk. Although the current mechanisms underlying accountable care organizations continue to evolve, whether and how they will have an impact on quality and costs remains open to question. Care coordination and information technology are proving more complicated and expensive to implement than anticipated, providers may lack the ability to implement these mechanisms, and primary care providers are in short supply. As in the 1990s, success depends on targeting specific populations, such as people with multiple chronic conditions who need and may benefit from coordinated care.

Future Directions

What does that imply for the emergence, performance, and success of accountable care organizations? It requires a reconsideration of our earlier conjecture that the organizations will be more likely to improve quality than to lower costs. With intense financial pressure from Medicare generated by lower Medicare payments, the organizations may be forced to limit costs — and, if they cannot do so by ridding their systems of waste, perhaps to do so by achieving fewer quality improvements.

More generally, Medicare may wish to use accountable care organizations to contain costs. In effect, the organizations will be told, “Here is how much money you will get per patient, and you are not allowed to charge any more; do the best you can with that.”

This draconian incentive system will truly constitute a test of how much waste there is in the system.

http://content.healthaffairs.org/content/31/11/2407.abstract

Comment:

By Don McCanne, MD

The Affordable Care Act includes several measures supposedly to control health care spending, but analysis of the health policy literature to date suggests that none of these will have more than a negligible impact. Most hope is held out for accountable care organizations (ACOs), but this report by Burns and Pauly suggests that these new entities include many of the flaws of previous similar efforts, primarily the failed integrated delivery networks of the 1990s.

In reading their full article you will understand better why we cannot expect dramatic results from ACOs and the mechanisms that they would use such as disease management, care coordination, realignment of financial incentives, health information technology, electronic health records, computerized physician order entry, clinical decision support systems, and especially the Medicare shared savings program.

As opposed to well established integrated health systems like Kaiser Permanente, these new systems will be formed from the existing health care community. The authors explain that there is no guidebook to develop and implement a coherent system by combing the existing professionals and institutions. Efforts will require considerable money and time. New personnel such as care coordinators and information technology staff will be required. As they state, “We have seen no model of a ‘flat’ accountable care organization — one requiring no increase in numbers or layers of staffing.” And it will be difficult “to ensure that all changes are internally congruent.”

Although most agree that there is a need for reinforcement of our primary care infrastructure, the authors provide evidence that the demands of care coordination under ACOs will cause a reduction in time spent on direct patient care. One study indicated that care coordination would require an additional 3.2 weeks per year of physician time.

The successful Kaiser and Group Health models took many decades to develop. You cannot suddenly take the existing fragmented delivery system and create competing, truly integrated systems in each community. That is what was wrong with Enthoven’s managed competition model, and that is what is wrong with the incipient accountable care organization model.

The greatest risk of ACOs seems to be that Medicare will use them to help meet the political goal of “reducing entitlement spending,” sacrificing the emphasis on quality because of cost considerations, and applying pressure to ratchet down spending. The latter is particularly a problem because private health systems are not very adept at identifying and ferreting out waste, rather they reduce spending primarily by impairing access. Selectively limiting Medicare spending will further compound access problems by a reduction in the numbers of willing providers, likely diminishing public support of Medicare.

In contrast, a single payer system is designed to reduce the abundance of identifiable waste, especially administrative, while improving both quality and access. It would be fine to continue with a demonstration project studying integration of health care to see if such delivery system reform could improve quality, but we don’t want to allow that to displace the much needed financing and health system reforms of single payer. That’s where we would have the greatest return on quality, access and costs.

UNM medical student receives national award for health activism: PHOTOS

James Besante, a second-year student at the University of New Mexico School of Medicine, was recently given the Nicholas Skala Student Activist Award by a national physicians group for his health care reform advocacy efforts in New Mexico.

James Besante, a second-year student at the University of New Mexico School of Medicine, was recently given the Nicholas Skala Student Activist Award by a national physicians group for his health care reform advocacy efforts in New Mexico.

Photo: Molly Tavella, PNHP

James Besante, a second-year student at the University of New Mexico School of Medicine, was recently given the Nicholas Skala Student Activist Award by a national physicians group for his health care reform advocacy efforts in New Mexico.

Photo: Molly Tavella, PNHP

James Besante, a second-year student at the University of New Mexico School of Medicine, was recently given the Nicholas Skala Student Activist Award by Physicians for a National Health Program (PNHP) for his health care reform advocacy efforts in New Mexico.

Photo: Mark Almberg, PNHP

Burns and Pauly take a critical look at accountable care organizations

Accountable Care Organizations May Have Difficulty Avoiding The Failures Of Integrated Delivery Networks Of The 1990s

By Lawton R. Burns and Mark V. Pauly
Health Affairs, November 2012
Abstract
Accountable care organizations are intended to improve the quality and lower the cost of health care through several mechanisms, such as disease management programs, care coordination, and aligning financial incentives for hospitals and physicians. Providers employed several of these mechanisms in forming the integrated delivery networks of the 1990s. The networks failed, however, because of heavy financial losses stemming from hospitals’ purchase of physician practices and their inability to align incentives, garner capitated contracts, and develop the infrastructure to manage risk. Although the current mechanisms underlying accountable care organizations continue to evolve, whether and how they will have an impact on quality and costs remains open to question. Care coordination and information technology are proving more complicated and expensive to implement than anticipated, providers may lack the ability to implement these mechanisms, and primary care providers are in short supply. As in the 1990s, success depends on targeting specific populations, such as people with multiple chronic conditions who need and may benefit from coordinated care.
Future Directions
What does that imply for the emergence, performance, and success of accountable care organizations? It requires a reconsideration of our earlier conjecture that the organizations will be more likely to improve quality than to lower costs. With intense financial pressure from Medicare generated by lower Medicare payments, the organizations may be forced to limit costs — and, if they cannot do so by ridding their systems of waste, perhaps to do so by achieving fewer quality improvements.
More generally, Medicare may wish to use accountable care organizations to contain costs. In effect, the organizations will be told, “Here is how much money you will get per patient, and you are not allowed to charge any more; do the best you can with that.”
This draconian incentive system will truly constitute a test of how much waste there is in the system.
http://content.healthaffairs.org/content/31/11/2407.abstract

The Affordable Care Act includes several measures supposedly to control health care spending, but analysis of the health policy literature to date suggests that none of these will have more than a negligible impact. Most hope is held out for accountable care organizations (ACOs), but this report by Burns and Pauly suggests that these new entities include many of the flaws of previous similar efforts, primarily the failed integrated delivery networks of the 1990s.
In reading their full article you will understand better why we cannot expect dramatic results from ACOs and the mechanisms that they would use such as disease management, care coordination, realignment of financial incentives, health information technology, electronic health records, computerized physician order entry, clinical decision support systems, and especially the Medicare shared savings program.
As opposed to well established integrated health systems like Kaiser Permanente, these new systems will be formed from the existing health care community. The authors explain that there is no guidebook to develop and implement a coherent system by combing the existing professionals and institutions. Efforts will require considerable money and time. New personnel such as care coordinators and information technology staff will be required. As they state, “We have seen no model of a ‘flat’ accountable care organization — one requiring no increase in numbers or layers of staffing.” And it will be difficult “to ensure that all changes are internally congruent.”
Although most agree that there is a need for reinforcement of our primary care infrastructure, the authors provide evidence that the demands of care coordination under ACOs will cause a reduction in time spent on direct patient care. One study indicated that care coordination would require an additional 3.2 weeks per year of physician time.
The successful Kaiser and Group Health models took many decades to develop. You cannot suddenly take the existing fragmented delivery system and create competing, truly integrated systems in each community. That is what was wrong with Enthoven’s managed competition model, and that is what is wrong with the incipient accountable care organization model.
The greatest risk of ACOs seems to be that Medicare will use them to help meet the political goal of “reducing entitlement spending,” sacrificing the emphasis on quality because of cost considerations, and applying pressure to ratchet down spending. The latter is particularly a problem because private health systems are not very adept at identifying and ferreting out waste, rather they reduce spending primarily by impairing access. Selectively limiting Medicare spending will further compound access problems by a reduction in the numbers of willing providers, likely diminishing public support of Medicare.
In contrast, a single payer system is designed to reduce the abundance of identifiable waste, especially administrative, while improving both quality and access. It would be fine to continue with a demonstration project studying integration of health care to see if such delivery system reform could improve quality, but we don’t want to allow that to displace the much needed financing and health system reforms of single payer. That’s where we would have the greatest return on quality, access and costs.

Universal Health Care And ‘Patient Dumping’

By Samuel Metz, M.D.
Health Affairs, Letters, October 2012

Sara Rosenbaum and coauthors describe one hospital’s unhappy experience with “patient dumping” (Aug 2012). The primary motivation behind hospitals’ aggressively transferring emergency patients to other facilities is to rid themselves of nonpaying or low-paying patients. The authors conclude with suggested steps to enhance provisions of the Emergency Medical Treatment and Labor Act (EMTALA), intended to prevent such practices.

Not discussed in the article was one method to reduce, if not eliminate, patient dumping: a universal health care plan. Vermont enacted legislation to create a statewide universal health care program; once fully implemented, the system will render every patient a paying patient and reimburse providers equally for all patients.[1] Under these circumstances, there will be little financial gain from patient dumping.

Statewide single payer systems for publicly funded universal health care are advocated in many states, including Colorado.[2] Should Colorado be fortunate enough to pass such legislation, the procedural suggestions of Rosenbaum and colleagues would be rendered unnecessary. Indeed, EMTALA itself would be unnecessary.

NOTES

1. Hsiao WC, Knight AG, Kappel S, Done N. What other states can learn from Vermont’s bold experiment: embracing a single-payer health care financing system. Health Aff (Millwood). 2011;30(7):1232–41.

2. White CR. Background of a Colorado draft proposal for single payer health care [Internet]. Lakewood (CO): Health Care for All Colorado Foundation; [cited 2012 Aug 28]. Available from: http://healthcareforallcolorado.org/?p=955&ID=343&d=1

Health Affairs, October 2012;mar 31:2355; doi:10.1377/hlthaff.2012.0950

http://content.healthaffairs.org/content/31/10/2355.3.full.pdf+html

"Obamacare will prove to be a gold mine for astute traders and investors"

NOTE: Do not bother reading this article; simply take only three seconds to skim it. Its essence can be elucidated by reading this one sentence gleaned from the article: “Obamacare will prove to be a gold mine for astute traders and investors on the long side and the short side.”

26 ways to profit from ‘Obamacare’

By Nigam Arora
MarketWatch, November 8, 2012

Obama has been re-elected; “Obamacare” is the law of the land. It doesn’t matter if you agree or disagree with Obamacare, you might as well generate big profits from it.

Obamacare has been profitable for us. We bought Amerigroup Corp. at $22.05, and, as of this writing, the stock is at $91.44 — this is a whopping 315% return.

It wasn’t long ago when we aggressively bought Tenet Healthcare at $20.40. Yesterday THC hit a 52-week high of $27.60.

Here are 26 ways to profit from both the long and the short side.

Hospital stocks

The best way to profit on the long side from Obamacare is to buy hospital stocks as utilization rates will increase and uncollected receivables will go down.

Under Obamacare, the pool of paying patients will increase. It is estimated that currently about 30 million Americans are uninsured. The increase in the number of paying patients will be huge.

By law, hospitals have to serve all patients who show up at their emergency rooms including indigents as well as those with no insurance. Hospitals also have difficulty collecting from low income Americans who may have no insurance or are underinsured. Some hospitals aren’t able to collect as much as 30% of their billings.

The earnings of some hospitals may increase by as much as 25%.

Our favorite stock in this sector is THC. Other hospital stocks on our list buy are Community Health Systems, HCA Holdings, LifePoint Hospitals, and Universal Health Services.

Medicaid HMOs

These HMOs focus on Medicaid and other government programs and will be big beneficiaries of Obamacare.

We own AGP but it is not suitable for those not in the stock. AGP is being bought by WellPoint.

Other names on our buy list are Centene Corp., Molina Healthcare, and WellCare Health Plans.

Medicare Part D

Medicare Part D is a private plan which provides prescription drug coverage for those eligible for Medicare. Government payments received by insurance companies for this program are likely to see reductions.

Humana is our top pick to short sell, but we will wait for this stock to meet all of our six screens before acting.

Branded pharmaceuticals

In the long run, branded pharmaceuticals will be hurt. Obama will be under intense pressure to reduce rising health care costs in Medicaid and Medicare. Branded drugs are a sitting duck simply because Big Pharma sells them for far less abroad than in the United States.

Large-cap pharmaceutical stocks are in favor these days. The market participants perceive them as safe. The reasoning goes that people will always be using drugs irrespective of what happens in Europe, China or to the U.S. economy.

It doesn’t hurt that these stocks also pay high dividends. Buying high dividend stocks is the rage. However Bush tax cuts expire at the end of this year; if there is no compromise in Washington, income-tax rate on dividends will jump and high dividend stocks will give up some of their recent gains.

Secret to making money by short selling is to sell short stocks that are popular and whose fundamentals are likely to deteriorate. We are short Market Vectors Pharmaceutical.

We have recently taken profits on Lilly, but we plan to short it again.

Two other stocks to short on our list are Merck and Pfizer.

Generic pharmaceuticals

In the short run, Obamacare is positive for generic pharmaceutical companies such as Teva, Mylan, and Dr. Reddy’s Labs. In the long run, these companies will suffer as there will be intense pressure on the prices they can charge. There is an opportunity here on the long side in the medium term, but it will become a short opportunity in due course.

Medical devices

Obamacare levies a tax on medical devices. Further pressure on medical device companies such as Medtronic, Stryker, St. Jude Medical, and Zimmer Holdings to reduce prices will increase.

We plan to short sell these companies when they meet our six screens.

Testing laboratories

There will be more medical tests as more patients are insured. In the short run, implementation of Obamacare is positive for testing companies such as Quest Diagnostics and Laboratory Corp. of America.

In the long run, Obamacare is very negative for these companies because they will come under heavy pressure to reduce rates. These are some of the best ways to profit from the short side in the long-term.

Drug distributors

As more pharmaceuticals are used, the ruling is positive for drug distributors such as McKesson, Cardinal Health, and AmerisourceBergen.

Obamacare will prove to be a gold mine for astute traders and investors on the long side and the short side. The key to making money will be the timing of entries and exits using a proven method such as ZYX Change Method. If you cannot short, consider the inverse ETF RXD.

http://www.marketwatch.com/story/26-ways-to-profit-from-obamacare-2012-11-08

Comment:

By Don McCanne, MD

The SEC will affirm that shareholders of health care firms must always have priority over the patients that should benefit from their products and services. The Affordable Care Act has expanded investor ownership within our health care system. As this article states, “Obamacare will prove to be a gold mine for astute traders and investors.”

Is this what our health care system is all about?

It doesn’t have to be this way

“Obamacare will prove to be a gold mine for astute traders and investors”

NOTE: Do not bother reading this article; simply take only three seconds to skim it. Its essence can be elucidated by reading this one sentence gleaned from the article: “Obamacare will prove to be a gold mine for astute traders and investors on the long side and the short side.”

26 ways to profit from ‘Obamacare’

By Nigam Arora
MarketWatch, November 8, 2012

Obama has been re-elected; “Obamacare” is the law of the land. It doesn’t matter if you agree or disagree with Obamacare, you might as well generate big profits from it.

Obamacare has been profitable for us. We bought Amerigroup Corp. at $22.05, and, as of this writing, the stock is at $91.44 — this is a whopping 315% return.

It wasn’t long ago when we aggressively bought Tenet Healthcare at $20.40. Yesterday THC hit a 52-week high of $27.60.

Here are 26 ways to profit from both the long and the short side.

Hospital stocks

The best way to profit on the long side from Obamacare is to buy hospital stocks as utilization rates will increase and uncollected receivables will go down.

Under Obamacare, the pool of paying patients will increase. It is estimated that currently about 30 million Americans are uninsured. The increase in the number of paying patients will be huge.

By law, hospitals have to serve all patients who show up at their emergency rooms including indigents as well as those with no insurance. Hospitals also have difficulty collecting from low income Americans who may have no insurance or are underinsured. Some hospitals aren’t able to collect as much as 30% of their billings.

The earnings of some hospitals may increase by as much as 25%.

Our favorite stock in this sector is THC. Other hospital stocks on our list buy are Community Health Systems, HCA Holdings, LifePoint Hospitals, and Universal Health Services.

Medicaid HMOs

These HMOs focus on Medicaid and other government programs and will be big beneficiaries of Obamacare.

We own AGP but it is not suitable for those not in the stock. AGP is being bought by WellPoint.

Other names on our buy list are Centene Corp., Molina Healthcare, and WellCare Health Plans.

Medicare Part D

Medicare Part D is a private plan which provides prescription drug coverage for those eligible for Medicare. Government payments received by insurance companies for this program are likely to see reductions.

Humana is our top pick to short sell, but we will wait for this stock to meet all of our six screens before acting.

Branded pharmaceuticals

In the long run, branded pharmaceuticals will be hurt. Obama will be under intense pressure to reduce rising health care costs in Medicaid and Medicare. Branded drugs are a sitting duck simply because Big Pharma sells them for far less abroad than in the United States.

Large-cap pharmaceutical stocks are in favor these days. The market participants perceive them as safe. The reasoning goes that people will always be using drugs irrespective of what happens in Europe, China or to the U.S. economy.

It doesn’t hurt that these stocks also pay high dividends. Buying high dividend stocks is the rage. However Bush tax cuts expire at the end of this year; if there is no compromise in Washington, income-tax rate on dividends will jump and high dividend stocks will give up some of their recent gains.

Secret to making money by short selling is to sell short stocks that are popular and whose fundamentals are likely to deteriorate. We are short Market Vectors Pharmaceutical.

We have recently taken profits on Lilly, but we plan to short it again.

Two other stocks to short on our list are Merck and Pfizer.

Generic pharmaceuticals

In the short run, Obamacare is positive for generic pharmaceutical companies such as Teva, Mylan, and Dr. Reddy’s Labs. In the long run, these companies will suffer as there will be intense pressure on the prices they can charge. There is an opportunity here on the long side in the medium term, but it will become a short opportunity in due course.

Medical devices

Obamacare levies a tax on medical devices. Further pressure on medical device companies such as Medtronic, Stryker, St. Jude Medical, and Zimmer Holdings to reduce prices will increase.

We plan to short sell these companies when they meet our six screens.

Testing laboratories

There will be more medical tests as more patients are insured. In the short run, implementation of Obamacare is positive for testing companies such as Quest Diagnostics and Laboratory Corp. of America.

In the long run, Obamacare is very negative for these companies because they will come under heavy pressure to reduce rates. These are some of the best ways to profit from the short side in the long-term.

Drug distributors

As more pharmaceuticals are used, the ruling is positive for drug distributors such as McKesson, Cardinal Health, and AmerisourceBergen.

Obamacare will prove to be a gold mine for astute traders and investors on the long side and the short side. The key to making money will be the timing of entries and exits using a proven method such as ZYX Change Method. If you cannot short, consider the inverse ETF RXD.

http://www.marketwatch.com/story/26-ways-to-profit-from-obamacare-2012-11-08

Comment:

By Don McCanne, MD

The SEC will affirm that shareholders of health care firms must always have priority over the patients that should benefit from their products and services. The Affordable Care Act has expanded investor ownership within our health care system. As this article states, “Obamacare will prove to be a gold mine for astute traders and investors.”

Is this what our health care system is all about?

It doesn’t have to be this way

"Obamacare will prove to be a gold mine for astute traders and investors"

NOTE: Do not bother reading this article; simply take only three seconds to skim it. Its essence can be elucidated by reading this one sentence gleaned from the article: “Obamacare will prove to be a gold mine for astute traders and investors on the long side and the short side.”

26 ways to profit from ‘Obamacare’

By Nigam Arora
MarketWatch, November 8, 2012
Obama has been re-elected; “Obamacare” is the law of the land. It doesn’t matter if you agree or disagree with Obamacare, you might as well generate big profits from it.
Obamacare has been profitable for us. We bought Amerigroup Corp. at $22.05, and, as of this writing, the stock is at $91.44 — this is a whopping 315% return.
It wasn’t long ago when we aggressively bought Tenet Healthcare at $20.40. Yesterday THC hit a 52-week high of $27.60.
Here are 26 ways to profit from both the long and the short side.
Hospital stocks
The best way to profit on the long side from Obamacare is to buy hospital stocks as utilization rates will increase and uncollected receivables will go down.
Under Obamacare, the pool of paying patients will increase. It is estimated that currently about 30 million Americans are uninsured. The increase in the number of paying patients will be huge.
By law, hospitals have to serve all patients who show up at their emergency rooms including indigents as well as those with no insurance. Hospitals also have difficulty collecting from low income Americans who may have no insurance or are underinsured. Some hospitals aren’t able to collect as much as 30% of their billings.
The earnings of some hospitals may increase by as much as 25%.
Our favorite stock in this sector is THC. Other hospital stocks on our list buy are Community Health Systems, HCA Holdings, LifePoint Hospitals, and Universal Health Services.
Medicaid HMOs
These HMOs focus on Medicaid and other government programs and will be big beneficiaries of Obamacare.
We own AGP but it is not suitable for those not in the stock. AGP is being bought by WellPoint.
Other names on our buy list are Centene Corp., Molina Healthcare, and WellCare Health Plans.
Medicare Part D
Medicare Part D is a private plan which provides prescription drug coverage for those eligible for Medicare. Government payments received by insurance companies for this program are likely to see reductions.
Humana is our top pick to short sell, but we will wait for this stock to meet all of our six screens before acting.
Branded pharmaceuticals
In the long run, branded pharmaceuticals will be hurt. Obama will be under intense pressure to reduce rising health care costs in Medicaid and Medicare. Branded drugs are a sitting duck simply because Big Pharma sells them for far less abroad than in the United States.
Large-cap pharmaceutical stocks are in favor these days. The market participants perceive them as safe. The reasoning goes that people will always be using drugs irrespective of what happens in Europe, China or to the U.S. economy.
It doesn’t hurt that these stocks also pay high dividends. Buying high dividend stocks is the rage. However Bush tax cuts expire at the end of this year; if there is no compromise in Washington, income-tax rate on dividends will jump and high dividend stocks will give up some of their recent gains.
Secret to making money by short selling is to sell short stocks that are popular and whose fundamentals are likely to deteriorate. We are short Market Vectors Pharmaceutical.
We have recently taken profits on Lilly, but we plan to short it again.
Two other stocks to short on our list are Merck and Pfizer.
Generic pharmaceuticals
In the short run, Obamacare is positive for generic pharmaceutical companies such as Teva, Mylan, and Dr. Reddy’s Labs. In the long run, these companies will suffer as there will be intense pressure on the prices they can charge. There is an opportunity here on the long side in the medium term, but it will become a short opportunity in due course.
Medical devices
Obamacare levies a tax on medical devices. Further pressure on medical device companies such as Medtronic, Stryker, St. Jude Medical, and Zimmer Holdings to reduce prices will increase.
We plan to short sell these companies when they meet our six screens.
Testing laboratories
There will be more medical tests as more patients are insured. In the short run, implementation of Obamacare is positive for testing companies such as Quest Diagnostics and Laboratory Corp. of America.
In the long run, Obamacare is very negative for these companies because they will come under heavy pressure to reduce rates. These are some of the best ways to profit from the short side in the long-term.
Drug distributors
As more pharmaceuticals are used, the ruling is positive for drug distributors such as McKesson, Cardinal Health, and AmerisourceBergen.
Obamacare will prove to be a gold mine for astute traders and investors on the long side and the short side. The key to making money will be the timing of entries and exits using a proven method such as ZYX Change Method. If you cannot short, consider the inverse ETF RXD.
http://www.marketwatch.com/story/26-ways-to-profit-from-obamacare-2012-1…

The SEC will affirm that shareholders of health care firms must always have priority over the patients that should benefit from their products and services. The Affordable Care Act has expanded investor ownership within our health care system. As this article states, “Obamacare will prove to be a gold mine for astute traders and investors.”
Is this what our health care system is all about?
It doesn’t have to be this way.

Dr. Weisbart writes on single payer in the AMA Journal of Ethics

A Single-Payer System Would Reduce U.S. Health Care Costs

By Ed Weisbart, MD, CPE
American Medical Association Journal of Ethics, Virtual Mentor, November 2012

Today’s fragmented system is akin to requiring each household in a community to anticipate their needs for the coming year and negotiate their own fees and scope of services with the local police and fire departments. Imagine instead how much of their budgets these life-saving community services would be obliged to devote to marketing to and negotiating with each household and the rampant disparities in service that would result. That is precisely what is happening today in health care, and it is absurdly wasteful. For police and fire departments, we have recognized that it is significantly less wasteful to give all citizens the same “coverage” for set prices and to administer it with regional coordination. Global budgeting is the only sensible strategy for such unpredictable yet universally needed services.

Conclusion

The ACA has begun the process of much needed change. Now we need to go further in reforming health care finance to enable all Americans to achieve their fundamental human right to comprehensive coverage. The rest of the modern world has run the laboratory studies for us; now is the time for us to adopt this well proven solution.

http://virtualmentor.ama-assn.org/2012/11/oped1-1211.html

Comment:

By Don McCanne, MD

Health care financing is a fundamental ethical issue, thus it is very appropriate that Ed Weisbart’s article on single payer be published in the AMA’s journal of ethics. Hopefully, the brief excerpt above will entice you to click on the link to read the entire article, and then share it with others to spread the word on the imperative of the single payer model – an improved Medicare for everyone.

Dr. Weisbart writes on single payer in the AMA Journal of Ethics

A Single-Payer System Would Reduce U.S. Health Care Costs

By Ed Weisbart, MD, CPE
American Medical Association Journal of Ethics, Virtual Mentor, November 2012
Today’s fragmented system is akin to requiring each household in a community to anticipate their needs for the coming year and negotiate their own fees and scope of services with the local police and fire departments. Imagine instead how much of their budgets these life-saving community services would be obliged to devote to marketing to and negotiating with each household and the rampant disparities in service that would result. That is precisely what is happening today in health care, and it is absurdly wasteful. For police and fire departments, we have recognized that it is significantly less wasteful to give all citizens the same “coverage” for set prices and to administer it with regional coordination. Global budgeting is the only sensible strategy for such unpredictable yet universally needed services.
Conclusion
The ACA has begun the process of much needed change. Now we need to go further in reforming health care finance to enable all Americans to achieve their fundamental human right to comprehensive coverage. The rest of the modern world has run the laboratory studies for us; now is the time for us to adopt this well proven solution.
http://virtualmentor.ama-assn.org/2012/11/oped1-1211.html

Health care financing is a fundamental ethical issue, thus it is very appropriate that Ed Weisbart’s article on single payer be published in the AMA’s journal of ethics. Hopefully, the brief excerpt above will entice you to click on the link to read the entire article, and then share it with others to spread the word on the imperative of the single payer model – an improved Medicare for everyone.