PNHP

Provider clout driving up private insurance prices

Provider clout driving up private insurance prices

The Growing Power Of Some Providers To Win Steep Payment Increases From Insurers Suggests Policy Remedies May Be Needed

By Robert A. Berenson, Paul B. Ginsburg, Jon B. Christianson and Tracy Yee
Health Affairs, May 2012
Abstract
In the constant attention paid to what drives health care costs, only recently has scrutiny been applied to the power that some health care providers, particularly dominant hospital systems, wield to negotiate higher payment rates from insurers. Interviews in twelve US communities indicated that so-called must-have hospital systems and large physician groups — providers that health plans must include in their networks so that they are attractive to employers and consumers — can exert considerable market power to obtain steep payment rates from insurers. Other factors, such as offering an important, unique service or access in a particular geographic area, can contribute to provider leverage as well. Even in markets with dominant health plans, insurers generally have not been aggressive in constraining rate increases, perhaps because the insurers can simply pass along the costs to employers and their workers. Although government intervention — through rate setting or antitrust enforcement — has its place, our findings suggest a range of market and regulatory approaches should be examined in any attempt to address the consequences of growing provider market clout.
From the Discussion
More concretely, increased recognition of the role of provider pricing in rising health spending could stimulate both market-oriented and regulatory responses. Market-oriented approaches are generally based on benefit designs that make consumers more aware of costs and give them direct incentives to select low-cost options. However, these approaches, such as tiered networks, have been discussed for many years and are proceeding slowly. Nevertheless, renewed employer willingness to support choice-limiting networks with few providers could help balance negotiating leverage between providers and health plans.
Alternatively, in the face of rising premiums, employers unwilling to adopt more restrictive benefit designs might support more direct regulation of provider rates, perhaps setting upper bounds on permissible rates negotiated between health plans and providers in relation to Medicare rates.
http://content.healthaffairs.org/content/31/5/973.abstract

And…

Further Acceleration in US Healthcare Costs in February 2012 According to the S&P Healthcare Economic Indices

S&P Indices
April 19, 2012
The S&P Healthcare Economic Composite Index indicates that the average per capita cost of healthcare services covered by commercial insurance and Medicare programs increased by 5.75% over the 12-months ending February 2012.
Specific S&P Healthcare Economic Indices:
7.73% – S&P Healthcare Economic Commercial Index
6.78% – S&P Professional Services Commercial Index
8.41% – S&P Hospital Commercial Index
2.72% – S&P Healthcare Economic Medicare Index
3.55% – S&P Professional Services Medicare Index
1.94% – S&P Hospital Medicare Index
http://www.standardandpoors.com/indices/sp-healthcare-economic-indices/en/us/?indexId=sp-healthcare-economic-indices

This Health Affairs article explains how health care providers – particularly dominant hospital systems – through consolidation and other market manipulations, have been able to position themselves as “must-have” hospital and physician group systems that health plans must include in their networks so that they are attractive to employers and consumers. This “must-have” status allows these providers to demand steep payment increases from the private insurers.
Note that this leverage is applied through private insurers. Government programs such as Medicare are not intimidated by the market clout of these provider systems. Medicare simply pays rates that are enough to keep the provider systems from dropping out of the government program.
How much difference is there between the administered rates of Medicare and the market negotiated rates of the private insurers? Look at the most recent S&P Healthcare Economic Indices.
The latest twelve month per capita increase in the S&P Hospital Medicare Index was 1.94%. For the same twelve months, the per capita increase in the S&P Hospital Commercial Index – the rate increase for private insurers – was an astonishing 8.41% – more than four times the increase in the Medicare Index!
The highly respected authors of the Health Affairs article state that “a range of market and regulatory approaches should be examined in any attempt to address the consequences of growing provider market clout.” Fine. The health policy literature is replete with data that will explain why Medicare is so much more effective than the private insurers in controlling health care costs. Have another look at the literature. Then let’s reject the private insurers and their market manipulations, and move forward with adopting an improved Medicare for all.

Access deteriorating not just for uninsured but also for Medicaid and privately insured

A Decade Of Health Care Access Declines For Adults Holds Implications For Changes In The Affordable Care Act

By Genevieve M. Kenney, Stacey McMorrow, Stephen Zuckerman and Dana E. Goin
Health Affairs, May 2012

Over the past decade, access to health care deteriorated among nonelderly adults. The likelihood of having a usual source of care, having seen a dentist, and having had an office visit all declined. In addition, the likelihood of having had an emergency department visit rose slightly.

Consistent with other sources, the National Health Interview Survey data pointed to significant increases in rates of Medicaid coverage and uninsurance and decreases in rates of private coverage for adults between 2000 and 2010.

The declines in access found among all adults are also reflected within each coverage category. Among the privately insured, significant declines occurred for half of the access measures. There was improvement in one measure — a 1.6-percentage-point increase in the likelihood of having an office visit. However, privately insured adults were more likely to have unmet medical and unmet dental needs in 2010 compared to 2000, and they were more likely to have delayed needed care because of cost and noncost reasons.

Similarly, adults with public coverage experienced reductions in receiving an office visit and increases in unmet medical needs from 2000 to 2010. Especially striking were the increases in unmet dental need and delayed care for noncost reasons (increases of 9.1 and 4.7 percentage points, respectively) among adults with public coverage.

We also found that people with public coverage were less likely to have a usual source of care, to have received an office visit, and to have received a dental visit in 2010 compared to 2000.

Although the above indicates that the deterioration in access was not limited to uninsured adults, it was particularly pronounced for this population. Access to care worsened for uninsured adults for all eight access measures.

From the Discussion

This analysis revealed a noticeable deterioration in access to care among nonelderly US adults during the first decade of the twenty-first century. Access declined for adults in every category, but the most dramatic declines occurred among the uninsured.

More fundamental systemic problems may be reflected in the increased likelihood of delays in care for noncost reasons that we observed among both children and adults. These increases were particularly large among publicly insured adults during the past decade — a time of substantial increases in Medicaid enrollment. This may have strained providers’ capacity or willingness to serve Medicaid patients in some areas of the country.

In addition, despite increased funding for community health centers and continued supplemental payments through Medicare and Medicaid, the safety net has not been able to fully meet the increased need for care among the nation’s growing uninsured and publicly insured population.

Experience also indicates that there is no guarantee providers could adapt quickly to meet the needs of an influx of a large number of newly insured adults. When reforms similar to the Affordable Care Act were implemented in Massachusetts, overall access to care improved; however, some measures of unmet need for care also increased as more people sought care.

The US health care system could respond similarly under the Affordable Care Act, meaning that both the newly insured and those who already have coverage could have problems getting timely appointments or could experience long waits at the doctor’s office. This could be especially true in areas that experience large increases in coverage relative to provider capacity. If these problems with access emerge, they could dampen the potential benefits of the Affordable Care Act.

http://content.healthaffairs.org/content/31/5/899.abstract

Comment: 

By Don McCanne, MD

This study from the Urban Institute provides further confirmation of what we already knew. Uninsured individuals have impaired access to health care. What should be particularly alarming to us about this report is that the two coverage expansions in the Affordable Care Act – private insurance and Medicaid – have also been associated with further impaired access over the past decade.

Medicaid’s problem is that it is chronically underfunded. As it expands, health care professionals and institutions are finding that they are less able to serve this population as their losses escalate.

Private insurance also has been associated with a decline in access resulting in greater unmet medical needs. This is most likely due to the unique nature of private insurers competing in the marketplace. To slow the increases in premiums, insurers have shifted more costs to patients, especially through high deductibles, which impairs access because of lack of affordability. They also have reduced access to providers through the use of network contracting. The actuarial values of their plans are declining, leaving greater financial exposure to patients in need of health care. The business model of private insurance works better for the insurers when barriers are erected to care.

This study is receiving wide coverage in the press today, with headlines to the effect that health care access will decline if the Affordable Care Act is overturned. What needs to be emphasized is that health care access has been declining under the two programs to be expanded by the Affordable Care Act – private insurance and Medicaid.

What should be covered in these articles is that if we want to improve access, we can do it by removing financial barriers for everyone, simply by adopting a single payer national health program – an improved Medicare for all.

Why emergency rooms don't close the health care gap

By Aaron Carroll, M.D., Special to CNN
CNN, May 7, 2012

For decades, the attempts at health care reform have aimed to increase access. The United States is one of the few industrialized nations in the world that does not provide universal health care to its citizens. And repeatedly, those who oppose it have been forced to argue that access isn’t the problem some make it out to be. Why?

The emergency department, they say. After all, it is a commonly held belief that no one can be denied care there. So — in essence — everyone can get free health care if they need it. We have a universal system after all.

That, of course, is not true.

It’s not even close. Let’s start with the idea that emergency rooms must provide you care.

What’s important to remember is that you can’t be refused emergency care. That’s because the Emergency Medical Treatment and Active Labor Act (EMTALA) requires that any hospital that takes Medicare or Medicaid must check you for emergent conditions and treat them if they exist. Since nearly every hospital in the country takes federal funds from one of these programs, nearly all hospitals are subject to EMTALA.

But “emergency medical condition” has a pretty narrow definition. It includes active labor for women and acute conditions that would cause death, serious bodily organ harm or serious bodily function impairment if they were not treated right away.

If politicians are meaning to say that women have universal access to delivery care, then I suppose there’s an element of truth to that. But there’s no guarantee of prenatal care in the emergency department.

If they are saying that we have universal access if we’re acutely having a heart attack, then I suppose there’s truth to that as well. But there’s no such access for lipid panels, stress tests or prescriptions for cholesterol medications that might help you avoid the heart attack in the first place.

If you’re acutely obstructed by massively advanced colon cancer, it’s likely you can get emergency surgery to end the blockage. But your cancer is likely too far advanced to cure at that point. Moreover, you’re not going to get chemotherapy in the emergency department nor could you have gotten the colonoscopy that might have detected the cancer far earlier.

You can’t get preventive care in the emergency department. You can’t get screened for a host of disorders. You can’t get treatment for your depression there or really for any chronic mental disorders. You can’t get help with your child’s autism, ADHD or developmental delay.

And even if you could, it wouldn’t be free.

That’s the second and perhaps more misunderstood part of this emergency department misconception. The costs of treatment in the emergency room are not quickly dismissed or written off. You’ll get that emergent care, but you’ll also be charged for it.

And hospitals aren’t going to let that go easily. A recent article in the New York Times detailed how Accretive Health, a medical debt collector, is using aggressive tactics such as confronting patients in their hospital beds to collect the money owed for even emergent care. The article also describes how collection agencies have long been used to go after patients after they’ve left the treatment facility. In some cases, patients were even confronted and stalled by debt collectors as they entered the emergency department on some later occasion so that the company could collect on old bills before more care was offered.

An even more recent story covered by Kaiser Health News and NPR reported on a family of four sued by its local nonprofit hospital. The family earned about $25,000 a year — below the poverty line — but the parents did not qualify for Medicaid in Ohio. It seems that the hospital had sued almost 1,600 people for unpaid medical bills from 2009 to 2011. Further, the piece reported, “[w]hile Ohio has a law that prevents foreclosures based on medical debt alone, it is legal for hospitals to garnish patient wages, attach bank accounts and get a lien on any future earnings, including from the sale of a house.”

It might even be worse in North Carolina, where a group of nonprofit hospitals sued 40,000 patients from 2005 to 2010. This is problematic because nonprofit hospitals are supposed to provide a certain level of charity care in exchange for their tax-exempt status. A recent review found that three hospitals in Illinois were providing a very small amount of care for free or at discounted rates. This has led to a number of facilities losing their nonprofit status and legislators to try to pass new laws requiring specify charity care minimums for nonprofit status.

Before you get all riled up, I understand that hospitals need money to run. The American Hospital Association reports that hospitals lost upward of $40 billion in unpaid bills in 2010 alone. I’m not suggesting care should be given out freely or that hospitals should be forced to operate at a loss. But let’s acknowledge that patients will be held accountable for the costs of their care, even in the emergency room. If they can’t pay those bills, their credit can be ruined. Medical bills are a very significant cause of bankruptcy in this country.

So it’s true that an emergency room won’t let you die if you show up at the door, but short of that, you can’t get care for a host of medical issues. And, while they will provide that lifesaving care to you even if you have no insurance and no money, they will send you a bill. And if you can’t pay, it may cause you, and your family, financial ruin.

That’s a far cry from universal health care, and nothing to brag about.

Editor’s note: Dr. Aaron E. Carroll is an associate professor and vice chair of health policy and outcomes research in the department of pediatrics at the Indiana University School of Medicine. He blogs about health policy at The Incidental Economist and tweets at @aaronecarroll.

http://www.cnn.com/2012/05/07/opinion/carroll-emergency-rooms/index.html

Why emergency rooms don’t close the health care gap

By Aaron Carroll, M.D., Special to CNN
CNN, May 7, 2012

For decades, the attempts at health care reform have aimed to increase access. The United States is one of the few industrialized nations in the world that does not provide universal health care to its citizens. And repeatedly, those who oppose it have been forced to argue that access isn’t the problem some make it out to be. Why?

The emergency department, they say. After all, it is a commonly held belief that no one can be denied care there. So — in essence — everyone can get free health care if they need it. We have a universal system after all.

That, of course, is not true.

It’s not even close. Let’s start with the idea that emergency rooms must provide you care.

What’s important to remember is that you can’t be refused emergency care. That’s because the Emergency Medical Treatment and Active Labor Act (EMTALA) requires that any hospital that takes Medicare or Medicaid must check you for emergent conditions and treat them if they exist. Since nearly every hospital in the country takes federal funds from one of these programs, nearly all hospitals are subject to EMTALA.

But “emergency medical condition” has a pretty narrow definition. It includes active labor for women and acute conditions that would cause death, serious bodily organ harm or serious bodily function impairment if they were not treated right away.

If politicians are meaning to say that women have universal access to delivery care, then I suppose there’s an element of truth to that. But there’s no guarantee of prenatal care in the emergency department.

If they are saying that we have universal access if we’re acutely having a heart attack, then I suppose there’s truth to that as well. But there’s no such access for lipid panels, stress tests or prescriptions for cholesterol medications that might help you avoid the heart attack in the first place.

If you’re acutely obstructed by massively advanced colon cancer, it’s likely you can get emergency surgery to end the blockage. But your cancer is likely too far advanced to cure at that point. Moreover, you’re not going to get chemotherapy in the emergency department nor could you have gotten the colonoscopy that might have detected the cancer far earlier.

You can’t get preventive care in the emergency department. You can’t get screened for a host of disorders. You can’t get treatment for your depression there or really for any chronic mental disorders. You can’t get help with your child’s autism, ADHD or developmental delay.

And even if you could, it wouldn’t be free.

That’s the second and perhaps more misunderstood part of this emergency department misconception. The costs of treatment in the emergency room are not quickly dismissed or written off. You’ll get that emergent care, but you’ll also be charged for it.

And hospitals aren’t going to let that go easily. A recent article in the New York Times detailed how Accretive Health, a medical debt collector, is using aggressive tactics such as confronting patients in their hospital beds to collect the money owed for even emergent care. The article also describes how collection agencies have long been used to go after patients after they’ve left the treatment facility. In some cases, patients were even confronted and stalled by debt collectors as they entered the emergency department on some later occasion so that the company could collect on old bills before more care was offered.

An even more recent story covered by Kaiser Health News and NPR reported on a family of four sued by its local nonprofit hospital. The family earned about $25,000 a year — below the poverty line — but the parents did not qualify for Medicaid in Ohio. It seems that the hospital had sued almost 1,600 people for unpaid medical bills from 2009 to 2011. Further, the piece reported, “[w]hile Ohio has a law that prevents foreclosures based on medical debt alone, it is legal for hospitals to garnish patient wages, attach bank accounts and get a lien on any future earnings, including from the sale of a house.”

It might even be worse in North Carolina, where a group of nonprofit hospitals sued 40,000 patients from 2005 to 2010. This is problematic because nonprofit hospitals are supposed to provide a certain level of charity care in exchange for their tax-exempt status. A recent review found that three hospitals in Illinois were providing a very small amount of care for free or at discounted rates. This has led to a number of facilities losing their nonprofit status and legislators to try to pass new laws requiring specify charity care minimums for nonprofit status.

Before you get all riled up, I understand that hospitals need money to run. The American Hospital Association reports that hospitals lost upward of $40 billion in unpaid bills in 2010 alone. I’m not suggesting care should be given out freely or that hospitals should be forced to operate at a loss. But let’s acknowledge that patients will be held accountable for the costs of their care, even in the emergency room. If they can’t pay those bills, their credit can be ruined. Medical bills are a very significant cause of bankruptcy in this country.

So it’s true that an emergency room won’t let you die if you show up at the door, but short of that, you can’t get care for a host of medical issues. And, while they will provide that lifesaving care to you even if you have no insurance and no money, they will send you a bill. And if you can’t pay, it may cause you, and your family, financial ruin.

That’s a far cry from universal health care, and nothing to brag about.

Editor’s note: Dr. Aaron E. Carroll is an associate professor and vice chair of health policy and outcomes research in the department of pediatrics at the Indiana University School of Medicine. He blogs about health policy at The Incidental Economist and tweets at @aaronecarroll.

http://www.cnn.com/2012/05/07/opinion/carroll-emergency-rooms/index.html

Access deteriorating not just for uninsured but also for Medicaid and privately insured

A Decade Of Health Care Access Declines For Adults Holds Implications For Changes In The Affordable Care Act

By Genevieve M. Kenney, Stacey McMorrow, Stephen Zuckerman and Dana E. Goin
Health Affairs, May 2012
Over the past decade, access to health care deteriorated among nonelderly adults. The likelihood of having a usual source of care, having seen a dentist, and having had an office visit all declined. In addition, the likelihood of having had an emergency department visit rose slightly.
Consistent with other sources, the National Health Interview Survey data pointed to significant increases in rates of Medicaid coverage and uninsurance and decreases in rates of private coverage for adults between 2000 and 2010.
The declines in access found among all adults are also reflected within each coverage category. Among the privately insured, significant declines occurred for half of the access measures. There was improvement in one measure — a 1.6-percentage-point increase in the likelihood of having an office visit. However, privately insured adults were more likely to have unmet medical and unmet dental needs in 2010 compared to 2000, and they were more likely to have delayed needed care because of cost and noncost reasons.
Similarly, adults with public coverage experienced reductions in receiving an office visit and increases in unmet medical needs from 2000 to 2010. Especially striking were the increases in unmet dental need and delayed care for noncost reasons (increases of 9.1 and 4.7 percentage points, respectively) among adults with public coverage.
We also found that people with public coverage were less likely to have a usual source of care, to have received an office visit, and to have received a dental visit in 2010 compared to 2000.
Although the above indicates that the deterioration in access was not limited to uninsured adults, it was particularly pronounced for this population. Access to care worsened for uninsured adults for all eight access measures.
From the Discussion
This analysis revealed a noticeable deterioration in access to care among nonelderly US adults during the first decade of the twenty-first century. Access declined for adults in every category, but the most dramatic declines occurred among the uninsured.
More fundamental systemic problems may be reflected in the increased likelihood of delays in care for noncost reasons that we observed among both children and adults. These increases were particularly large among publicly insured adults during the past decade — a time of substantial increases in Medicaid enrollment. This may have strained providers’ capacity or willingness to serve Medicaid patients in some areas of the country.
In addition, despite increased funding for community health centers and continued supplemental payments through Medicare and Medicaid, the safety net has not been able to fully meet the increased need for care among the nation’s growing uninsured and publicly insured population.
Experience also indicates that there is no guarantee providers could adapt quickly to meet the needs of an influx of a large number of newly insured adults. When reforms similar to the Affordable Care Act were implemented in Massachusetts, overall access to care improved; however, some measures of unmet need for care also increased as more people sought care.
The US health care system could respond similarly under the Affordable Care Act, meaning that both the newly insured and those who already have coverage could have problems getting timely appointments or could experience long waits at the doctor’s office. This could be especially true in areas that experience large increases in coverage relative to provider capacity. If these problems with access emerge, they could dampen the potential benefits of the Affordable Care Act.
http://content.healthaffairs.org/content/31/5/899.abstract

This study from the Urban Institute provides further confirmation of what we already knew. Uninsured individuals have impaired access to health care. What should be particularly alarming to us about this report is that the two coverage expansions in the Affordable Care Act – private insurance and Medicaid – have also been associated with further impaired access over the past decade.
Medicaid’s problem is that it is chronically underfunded. As it expands, health care professionals and institutions are finding that they are less able to serve this population as their losses escalate.
Private insurance also has been associated with a decline in access resulting in greater unmet medical needs. This is most likely due to the unique nature of private insurers competing in the marketplace. To slow the increases in premiums, insurers have shifted more costs to patients, especially through high deductibles, which impairs access because of lack of affordability. They also have reduced access to providers through the use of network contracting. The actuarial values of their plans are declining, leaving greater financial exposure to patients in need of health care. The business model of private insurance works better for the insurers when barriers are erected to care.
This study is receiving wide coverage in the press today, with headlines to the effect that health care access will decline if the Affordable Care Act is overturned. What needs to be emphasized is that health care access has been declining under the two programs to be expanded by the Affordable Care Act – private insurance and Medicaid.
What should be covered in these articles is that if we want to improve access, we can do it by removing financial barriers for everyone, simply by adopting a single payer national health program – an improved Medicare for all.

Now Massachusetts addresses the costs, but not really

A New Approach To Cutting MA’s Health Costs: Throw Spaghetti

By Rachel Zimmerman
WBUR, May 4, 2012

When Massachusetts passed sweeping health insurance reform in 2006, a crucial piece was missing from the landmark legislation: how to control rising medical costs.

Today, state lawmakers unveiled an ambitious new proposal to do just that.

Here are some details of the House bill, officially the Health Care Quality Improvement and Cost Reduction Act of 2012, presented today by lawmakers. The state Senate is expected to introduce its own version of the plan next week.

1. Oversight: A new, quasi-governmental agency called the Division of Health Care Cost and Quality would oversee the transition to the new payment and delivery system with a board including consumer, government and industry representatives.

2. Cost-Cutting: To curb the increase in medical spending, the plan establishes a cap for health-care spending linked to the local economy, the Gross State Product, minus one-half a percent (years 2016 through 2026, then plus 1 percent).

3. Leveling The Field: The state could impose a 10 percent “luxury tax” on pricey hospitals that charge more than 20 percent of the state median price for a given service without being able to justify that higher price. (Two earlier reports by Attorney General Martha Coakley found that certain hospitals exploited their market clout and charged higher prices without offering better quality care.) Hospitals would pay this penalty into a “distressed hospital” fund for institutions that serve a high proportion of poor and vulnerable patients.

4. Accountable Care Organizations would take on greater prominence, though the bill stresses that joining an ACO would be voluntary for patients and providers. The bill defines the size of an ACO as bigger than 15,000 people and no larger than 400,000. Patients would have the right to appeal decisions made by their ACO doctors, and have the right to a second opinion.

5. Shifting Payments: The state’s medical establishment would continue its shift toward global payments and away from fee-for-service systems. The measure would “transition the industry to adopt alternative payment methodologies such as global payments and bundled payments for acute and chronic conditions.”

6. Technology: Electronic health records would be required for all providers by 2017.

7. Greater transparency would be attained through detailed pricing available to consumers on the Web, as well as greater disclosure of out-of-pocket costs to patients up front.

8. Streamlining Care: The measure stresses greater coordination of care through primary care, and the establishment of “patient-centered medical homes” so that patients could have a single point of coordination for all types of care.

9. MedMal: New rules on medical malpractice would create a 180-day cooling off period while both side try to negotiate a settlement. Also, the measure would allow providers to freely offer an apology to a patient.

10. Tiering: Under a provision called “smart tiering” patients might pay more for more expensive services.

11. Upping The Rates: The bill would make several changes to Medicaid, including increasing MassHealth rates paid to providers.

12. Training: Funding for workforce training and development are included in the measure, and a provision would forgive loans to primary care doctors who practice in rural or underserved areas.

MIT economics professor Jonathan Gruber, an architect of the state’s 2006 health law and an advisor to President Barack Obama on the national Affordable Care Act calls the new House proposal “aggressive, broad and visionary.”

“This is an incredibly hard problem,” said Gruber, speaking on WBUR’s Radio Boston today. “What I like about this…is that it’s really taking the spaghetti approach to cost control; let’s throw a bunch of things against the wall and see what sticks. They’re doing a bunch of different things all of which might work.”

http://commonhealth.wbur.org/2012/05/massachusetts-health-reform-cost

Health Care Quality Improvement and Cost Reduction Act of 2012:
http://www.malegislature.gov/Bills/187/House/H04070

Comment: 

By Don McCanne, MD

When the Massachusetts reform act was about to be enacted in 2006, MIT economist and Romney consultant Jonathan Gruber acknowledged that the issue of rising costs was not adequately addressed in the legislation, saying that the bill should be passed to get people covered and then the cost problem could be fixed later. So now, the cost fix, he says, is to throw spaghetti against the wall and see what sticks.

If you look at the spaghetti in the new bill being introduced, you will see that there is not much there to stick, as far as costs are concerned. The measures summarized above, and described in detail in the bill available at the link, really do very little to control costs. Several of them are simply reiterations of some of the measures in the Affordable Care Act.

Massachusetts desperately needs reinforcement of its primary care infrastructure (as does the entire nation), and this legislation takes strides in that direction. But most of the rest of the bill is a diversion from what Massachusetts really needs to do – replace their antiquated, fragmented financing system with an efficient and equitable single payer program. Once in place, it would be much easier and less costly to make the necessary improvements in the infrastructure of their health care delivery system.

How single payer can improve the access to cancer care

By Aldebra Schroll, M.D.
KevinMD blog, May 4, 2012

The call came in the middle of a busy office day; the radiologist had found a suspicious area on the mammogram. I had received similar calls many times in my primary care practice. This time was different; the patient was me.

My first thought “thank God I’m insured.” My second thought was for all those who are not. It was hard enough waiting the week, until further testing could be performed; I can’t imagine the stress of not knowing how or if I would be able to get treatment should I learn I had cancer. For many of our patients that is a real concern. An estimated fifty million Americans do not have health insurance; another twenty five million are underinsured. In the event of a serious diagnosis such as cancer, they face the high cost of out of pocket expenses. For women with breast cancer, the uninsured are more than twice as likely to have their cancer diagnosed in an advanced stage than those with coverage. An estimated fifty thousand deaths a year are attributed to the lack of health insurance.

One in four families impacted by cancer finds themselves in financial straits. A Kaiser Family Foundation and Harvard Public Health study found half of cancer patients use up most or all of their life savings. Studies have found that over half of bankruptcies in the United States resulted from medical bills.

These troubling trends have led the American Cancer Society (ACS) to launch a campaign Access to Care to raise awareness to how the lack of health insurance leads to delays in detection and survival for cancer. John Seffrin, chief executive of ACS, has noted that lack of access could hinder our ability to move forward in the fight against cancer. ACS is calling for a health policy that is adequate, affordable, available and administratively simple.

A single payer system would meet these criteria. Physicians for a National Health Health Program has been working on behalf of a universal health plan that would cover all Americans. A single-payer system would simplify and streamline the process of getting health care.

Under the single-payer model, patients would no longer need to fear the egregious practice of rescission in which insurers drop a patient from their plan when they are diagnosed with a serious condition, such as cancer. The insurers defend the practice as a way to guard against fraud; however for patients it means that failing to mention even a trivial bit of history on the application could mean they are facing cancer with no health insurance. Indeed, a Reuter’s investigation revealed that WellPoint used a computer algorithm to initiate fraud investigation for women newly diagnosed with breast cancer; many of whom last their insurance, just when they needed it most.

A study from the journal Health Affairs found that those enrolled in Medicare, the national single-payer plan, had fewer problems obtaining needed medical care, less financial hardship and higher satisfaction scores than those in private plans. They were less likely to file bankruptcy due to medical expenses. There are also less socioeconomic disparities in health for the population on Medicare. Overall, Medicare patients report greater satisfaction and security than those enrolled in private plans. A single-payer plan could guarantee these benefits to all.

I was lucky to have a quick evaluation and reassuring results. My experience only increased my resolve to work harder on behalf of a single-payer plan so that everyone can receive comprehensive and universal coverage.

Aldebra Schroll is a family physician who resides in Chico, California.

http://www.kevinmd.com/blog/2012/05/single-payer-improve-access-cancer-care.html

Panel on Health Reform Focuses on Ditching the Insurance Industry

Prominent health care critics speaking in Portland staunchly support and defend a single-payer system

By Amanda Waldroupe
The Lund Report (Portland, Ore.), April 27, 2012

PORTLAND, Ore. — Three prominent critics of the country’s current health care system and ardent reform advocates appeared in Portland today to discuss their views on health reform, President Obama’s Patient Protection and Affordable Care Act, and what ought to be done to ensure that everyone has access to quality health care.

Cathy Schoen, senior vice president of the Commonwealth Fund, spoke, as well as Drs. Arnold Relman and Marcia Angell, former editors of the New England Journal of Medicine. Dr. Bruce Goldberg, director of the Oregon Health Authority, also participated. The event was sponsored by the advocacy group, Mad As Hell Doctors and Physicians for a National Health Program.

Schoen put the United State’s health care system in the context of other Western, developed countries. “We are the most expensive country in the world in what we spend per person, and in our share of the economy,” she said. “And we don’t get the outcomes that you expect.”

The United States, she said, spends 18 percent of its gross domestic product (GDP) on health care.

“A very complicated system,” she said, and that complication requires time and resources to deal with certain parts, particularly the insurance system.

The insurance system was what Relman pointed his finger directly at as the sole reason for why the country’s health care system has become a “fragmented” “shambles.”

“We run our health care system as if it’s a business in the free market … and not like the social service it ought to be,” he said. “In no other country do they make that terrible mistake.”

He also said that “we believe in the myth that the private market – private Capitalism – can work as well in health care as it is reputed to work in other areas [of the economy].”

His impassioned lecture, which one of the moderators joked had as much “fire and brimstone” as a Sunday sermon, asked what good does a private insurance do?

“Nothing,” he said. “They pass money from one pocket to another and keep part of it for themselves. They are simply middlemen who have intruded as parasites onto the health care system.”

Relman is an advocate of a non-profit single payer system were everyone would pay a “fair, graduated” tax, and the government would heavily regulate the system, including setting monthly premiums and determining the benefit package, which would be the same for everyone. Such a system, he said, would not create any “inappropriate economic incentives.”

The idea of a implementing a single-payer system in Oregon has persisted for years, but it hasn’t gone anywhere. A bill introduced in the 2011 session died in committee.

John DiLorenzo, an attorney and lobbyist, advocated for legislation during the 2011 session that would have created a sales tax, using the revenue to pay for a state-sponsored health care system. That bill also died in committee.

Since then, an advocacy coalition has been organized to spread awareness about a single-payer system in Oregon. And Rep. Michael Dembrow (D-Portland) has publically stated that he intends to reintroduce legislation during the 2013 session to create a single-payer system.

Dr. Marcia Angell, Relman’s wife, gave an overview of President Obama’s Patient Protection and Affordable Care Act, which she argued is a “step in the wrong direction,” because it’s financially unsustainable.

Dr. Bruce Goldberg, the director of the Oregon Health Authority, who spoke last, agreed with the previous speakers, and didn’t discuss health care financing, but focused on how Oregon’s Medicaid system is about to change with the creation of coordinated care organizations.

He told four stories – the first about an elderly woman with congestive heart failure, who lived in a hot apartment and had to go to the hospital after she had a heart attack. All that she needed to be healthy, Goldberg said, was an air conditioner. “Our health care system doesn’t recognize that as medicine,” he said. “There’s no billing code for an air conditioner.”

The second story was about a rural hospital that began to lose money because people were visiting the emergency room less often after three doctors decided to provide care between 7 a.m. and 11 p.m. “The incentives were wrong,” he said.

The third story recounted how a 10-year-old with asthma, who had visited the emergency room multiple times, improved after a community health worker visited his home and worked with his family to remove some toxic household cleaners and other factors that exacerbated his asthma. “That should the vision of our health care system in a lot of ways,” he said.

The fourth story told how an elderly man with congestive heart failure was able to live a healthy and independent life at home after he began participating in a pilot program that provided coordinated care through patient teams.

The first two stories, Goldberg said, represented problems that he expects coordinated care organizations to solve. Coordinated care organizations, or CCOs, are expected to begin serving the state’s 650,000 Oregon Health Plan patients this August, and integrate their physical, mental and dental health.

“If this works with Medicaid, and our most vulnerable citizens, that’s going to be a model for all the rest of us,” Goldberg said. “All of us want an easier health care system.”

http://www.thelundreport.org/resource/panel_on_health_reform_focuses_on_ditching_the_insurance_industry

Now Massachusetts addresses the costs, but not really

A New Approach To Cutting MA’s Health Costs: Throw Spaghetti

By Rachel Zimmerman
WBUR, May 4, 2012
When Massachusetts passed sweeping health insurance reform in 2006, a crucial piece was missing from the landmark legislation: how to control rising medical costs.
Today, state lawmakers unveiled an ambitious new proposal to do just that.
Here are some details of the House bill, officially the Health Care Quality Improvement and Cost Reduction Act of 2012, presented today by lawmakers. The state Senate is expected to introduce its own version of the plan next week.
1. Oversight: A new, quasi-governmental agency called the Division of Health Care Cost and Quality would oversee the transition to the new payment and delivery system with a board including consumer, government and industry representatives.
2. Cost-Cutting: To curb the increase in medical spending, the plan establishes a cap for health-care spending linked to the local economy, the Gross State Product, minus one-half a percent (years 2016 through 2026, then plus 1 percent).
3. Leveling The Field: The state could impose a 10 percent “luxury tax” on pricey hospitals that charge more than 20 percent of the state median price for a given service without being able to justify that higher price. (Two earlier reports by Attorney General Martha Coakley found that certain hospitals exploited their market clout and charged higher prices without offering better quality care.) Hospitals would pay this penalty into a “distressed hospital” fund for institutions that serve a high proportion of poor and vulnerable patients.
4. Accountable Care Organizations would take on greater prominence, though the bill stresses that joining an ACO would be voluntary for patients and providers. The bill defines the size of an ACO as bigger than 15,000 people and no larger than 400,000. Patients would have the right to appeal decisions made by their ACO doctors, and have the right to a second opinion.
5. Shifting Payments: The state’s medical establishment would continue its shift toward global payments and away from fee-for-service systems. The measure would “transition the industry to adopt alternative payment methodologies such as global payments and bundled payments for acute and chronic conditions.”
6. Technology: Electronic health records would be required for all providers by 2017.
7. Greater transparency would be attained through detailed pricing available to consumers on the Web, as well as greater disclosure of out-of-pocket costs to patients up front.
8. Streamlining Care: The measure stresses greater coordination of care through primary care, and the establishment of “patient-centered medical homes” so that patients could have a single point of coordination for all types of care.
9. MedMal: New rules on medical malpractice would create a 180-day cooling off period while both side try to negotiate a settlement. Also, the measure would allow providers to freely offer an apology to a patient.
10. Tiering: Under a provision called “smart tiering” patients might pay more for more expensive services.
11. Upping The Rates: The bill would make several changes to Medicaid, including increasing MassHealth rates paid to providers.
12. Training: Funding for workforce training and development are included in the measure, and a provision would forgive loans to primary care doctors who practice in rural or underserved areas.
MIT economics professor Jonathan Gruber, an architect of the state’s 2006 health law and an advisor to President Barack Obama on the national Affordable Care Act calls the new House proposal “aggressive, broad and visionary.”
“This is an incredibly hard problem,” said Gruber, speaking on WBUR’s Radio Boston today. “What I like about this…is that it’s really taking the spaghetti approach to cost control; let’s throw a bunch of things against the wall and see what sticks. They’re doing a bunch of different things all of which might work.”
http://commonhealth.wbur.org/2012/05/massachusetts-health-reform-cost
Health Care Quality Improvement and Cost Reduction Act of 2012:
http://www.malegislature.gov/Bills/187/House/H04070

When the Massachusetts reform act was about to be enacted in 2006, MIT economist and Romney consultant Jonathan Gruber acknowledged that the issue of rising costs was not adequately addressed in the legislation, saying that the bill should be passed to get people covered and then the cost problem could be fixed later. So now, the cost fix, he says, is to throw spaghetti against the wall and see what sticks.
If you look at the spaghetti in the new bill being introduced, you will see that there is not much there to stick, as far as costs are concerned. The measures summarized above, and described in detail in the bill available at the link, really do very little to control costs. Several of them are simply reiterations of some of the measures in the Affordable Care Act.
Massachusetts desperately needs reinforcement of its primary care infrastructure (as does the entire nation), and this legislation takes strides in that direction. But most of the rest of the bill is a diversion from what Massachusetts really needs to do – replace their antiquated, fragmented financing system with an efficient and equitable single payer program. Once in place, it would be much easier and less costly to make the necessary improvements in the infrastructure of their health care delivery system.

Can't hold tongues on Obama's health law

By David U. Himmelstein, M.D., and Steffie Woolhandler, M.D., M.P.H.
The Nation, March 26, 2012

PNHP note: In February The Nation magazine published an article titled “A spoonful of sugar” by Bernard Avishai. The article was a review of Paul Starr’s book “Remedy and Reaction,” and included the following comments: “Obamacare, in short, was health care reform’s best — and last — shot, and it would be unconscionable for liberals to remain cavalier about its defense, or Obama’s, for that matter. It’s past time to discard the misguided assumption that in a better economy, or with more of ‘a fighter’ in the White House, something like a Canadian-style single-payer system might have been (or might sometime fairly soon be) enacted.” On March 26, The Nation published four rejoinders to Avishai’s piece, three of them by physicians. The reply of PNHP’s co-founders appears below.

A bowlful of vinegar

Bernard Avishai (“A spoonful of sugar,” Feb. 13) portrays progressive critics of Obama’s health care bill as hopelessly naïve and out of touch with political reality. But intimate acquaintance with medical reality drove the criticism from us and our 18,000 colleagues in Physicians for a National Health Program who advocate single payer. As doctors, we’re too cognizant that the plan will leave 23 million uninsured and thousands dying each year from lack of coverage; do nothing for our insured patients with coverage so skimpy that serious illness would lead to bankruptcy; strip tens of billions from safety net hospitals; and let medical costs continue to skyrocket, leaving Medicare and public workers’ coverage open to savage cuts. Whatever its political merits, the bill is a failure in medical terms.

If anything’s naïve, it’s Avishai’s faith in cost savings from generalizing the Mayo Clinic model (Mayo shuns uninsured and Medicaid patients — and Medicare at some clinics — and was dropped from two big insurers’ networks because of its high costs) and from standardized and computerized billing. Computer firms have been promising paperwork savings for forty-six years (see the 1966 video at youtube.com/watch?v=t-aiKlIc6uk), but they haven’t materialized. He also seems unaware that hospital billing has been standardized and computerized for years (they all use the same ICD coding system, the UB82 billing form). As our studies in The New England Journal of Medicine have shown, single-payer reform could eliminate about $400 billion wasted annually on insurance overhead and billing paperwork; the reforms Avishai lauds will save bupkis.

Obama’s reform, closely patterned on a Heritage Foundation proposal, will deliver billions to insurance and drug firms and paltry benefit to Americans. Yet Avishai would have progressives hold their tongues. Should we also hold our tongues about the administration’s missteps on civil liberties, education “reform” and the environment?

David U. Himmelstein, M.D., and Steffie Woolhandler, M.D., M.P.H., reside in New York City.

Can’t hold tongues on Obama’s health law

By David U. Himmelstein, M.D., and Steffie Woolhandler, M.D., M.P.H.
The Nation, March 26, 2012

PNHP note: In February The Nation magazine published an article titled “A spoonful of sugar” by Bernard Avishai. The article was a review of Paul Starr’s book “Remedy and Reaction,” and included the following comments: “Obamacare, in short, was health care reform’s best — and last — shot, and it would be unconscionable for liberals to remain cavalier about its defense, or Obama’s, for that matter. It’s past time to discard the misguided assumption that in a better economy, or with more of ‘a fighter’ in the White House, something like a Canadian-style single-payer system might have been (or might sometime fairly soon be) enacted.” On March 26, The Nation published four rejoinders to Avishai’s piece, three of them by physicians. The reply of PNHP’s co-founders appears below.

A bowlful of vinegar

Bernard Avishai (“A spoonful of sugar,” Feb. 13) portrays progressive critics of Obama’s health care bill as hopelessly naïve and out of touch with political reality. But intimate acquaintance with medical reality drove the criticism from us and our 18,000 colleagues in Physicians for a National Health Program who advocate single payer. As doctors, we’re too cognizant that the plan will leave 23 million uninsured and thousands dying each year from lack of coverage; do nothing for our insured patients with coverage so skimpy that serious illness would lead to bankruptcy; strip tens of billions from safety net hospitals; and let medical costs continue to skyrocket, leaving Medicare and public workers’ coverage open to savage cuts. Whatever its political merits, the bill is a failure in medical terms.

If anything’s naïve, it’s Avishai’s faith in cost savings from generalizing the Mayo Clinic model (Mayo shuns uninsured and Medicaid patients — and Medicare at some clinics — and was dropped from two big insurers’ networks because of its high costs) and from standardized and computerized billing. Computer firms have been promising paperwork savings for forty-six years (see the 1966 video at youtube.com/watch?v=t-aiKlIc6uk), but they haven’t materialized. He also seems unaware that hospital billing has been standardized and computerized for years (they all use the same ICD coding system, the UB82 billing form). As our studies in The New England Journal of Medicine have shown, single-payer reform could eliminate about $400 billion wasted annually on insurance overhead and billing paperwork; the reforms Avishai lauds will save bupkis.

Obama’s reform, closely patterned on a Heritage Foundation proposal, will deliver billions to insurance and drug firms and paltry benefit to Americans. Yet Avishai would have progressives hold their tongues. Should we also hold our tongues about the administration’s missteps on civil liberties, education “reform” and the environment?

David U. Himmelstein, M.D., and Steffie Woolhandler, M.D., M.P.H., reside in New York City.

Martha Livingston responds on CAM

The topic of yesterday’s Quote of the Day message: “Should a single payer system include complementary and alternative therapies?”

Martha Livingston, Ph.D., Professor of Health and Society, SUNY College at Old Westbury, responds:

Email
May 4, 2012

Dear Don,

I am deeply troubled both by the JAMA piece you cite here and by your comment.  The author – and you – have lumped together a world of different treatment modalities and individual treatments, and you have further characterized them all as “quackery.”  Not all CAM treatments are the equivalent of “drugs.”  And there is good science demonstrating the efficacy of many treatments referred to as CAM.  The JAMA author has chosen to cite only studies that did not show a therapeutic effect of a particular single treatment, and you have apparently decided that there are therefore no rigorous scientific studies showing the efficacy of any alternative treatment.

The term CAM itself is problematic, suggesting that all such treatments complement “regular” medicine.  Lumped under the heading of CAM are not only various herbal and other non-PhRMA-manufactured products, but “alternative,” that is, “non-M.D.” practitioners, and entire methods of treatment.  So the issues really must be distinguished and analyzed, e.g.,

1. Who gets to research various treatments? 
2. Who gets to practice medicine or, more broadly, healing? 
3. Who gets to decide who’s right?

Briefly, there is a long, convoluted history inextricably tied to issues of power, class and racism, e.g., the suppression of midwifery and continuing suppression of the superior woman-centered model of childbirth; the dismissal of traditional healing systems, e.g., the 4000 years of Traditional Chinese Medicine (TCM).

Further, proponents of (some) “alternative” modalities argue that a huge proportion of what is practiced in “regular” or “scientific” medicine has no scientific basis whatever, and only the weight of generations of apprenticeship behind it. 

I doubt that you are prepared to defend that all that is practiced in “regular” medicine is supported by good science, yet you aren’t dismissive of all regular doctors as quacks.  If you’d like to learn more about the science of other-than-standard medical practice, I refer you to the terrific body of work by Dr. Adriane Fugh-Berman of Georgetown, a longtime PNHP member.

Finally, I think it’s really important not to toss grenades into our coalition, Don.  Many PNHP members, both physicians and non-physicians, are supportive of some of the practices lumped together under the umbrella of CAM.  We need each other, and must agree to disagree about many issues, this one included.

Best,

Martha Livingston

qotd: Should a single payer system include complementary and alternative therapies?
https://pnhp.org/news/2012/may/should-a-single-payer-system-include-complementary-and-alternative-therapies

Comment: 

By Don McCanne, MD

Martha Livingston’s message reflects the tenor of many of the anticipated responses to my biased opinions expressed in yesterday’s Quote of the Day – views that I made clear were my own and did not represent the policy position of PNHP.

When the views are expressed as support or opposition to complementary and alternative medicine (CAM), passions run high and conflict is inevitable. That is the way I framed the message – quite deliberately to carry my point. But the real issue is not CAM. It is where do we draw the line on where our collective tax funds in a single payer national health program should be distributed?

There should be very little disagreement with a framing that all reasonable, beneficial, affordable, effective, preventive, diagnostic and therapeutic health care services should be covered under a single payer system. There should also be agreement that blatant quackery such as the Hoxsey cancer treatment should not be covered, though some still disagree with this.

Merriam-Webster defines “medicine” as “the science and art dealing with the maintenance of health and the prevention, alleviation, or cure of disease.” “Science” is defined as “the state of knowing; knowledge as distinguished from ignorance or misunderstanding.” “Art” is defined as “skill acquired by experience, study, or observation.”

Medicine is science combined with art, but it is not not art alone. If we are going to pay for the health care of other people, this is the standard that we should meet.

As you read the following quote from my comment yesterday, dismiss from your mind the arbitrary categories of “traditional medicine” and “complementary and alternative medicine.” Simply read carefully what I wrote:

“The application of science to medicine is a dynamic. Many older approaches prove to be ineffective or even harmful. As we gain new evidence, those approaches should be denied payment from our collective health funds, whether private or government. Beneficial new approaches should be added. These decisions should continue to be based on science.”

In medicine, we need to dump the bad and bring in the good – some of which may arise from CAM. CAM was chosen for discussion yesterday because it is a rich resource of unscientific and sometimes artless interventions of the type that we should not be asking our fellow countrymen to fund. If we want those services, we should pay for them ourselves.

For those who insist that the art of medicine is all we need and that we do not need the science, I can only say that our health care financing system cannot bear paying for extravagances such as the $120 million paid for “The Scream,” or $120 billion to be allocated for “scream therapy.”