PNHP

Medical bill problems will persist

Medical bill problems will persist

Medical Bill Problems Steady for U.S. Families, 2007-2010

By Anna Sommers, Peter J. Cunningham
Center for Studying Health System Change, December 2011

While problems paying medical bills stabilized in recent years, the proportion of Americans in families with medical bill problems remained significantly higher in 2010 compared with 2003 – 20.9 percent vs. 15.1 percent. And, in 2010, many people in families with problems paying medical bills continued to experience severe financial consequences, with about two-thirds reporting problems paying for other necessities and a quarter considering bankruptcy.

Underscoring uninsured people’s lack of financial protection from health care expenses, uninsured children and working-age adults in 2010 were more likely to have medical bill problems (31.5%) than their insured counterparts (20.2%).

http://www.hschange.org/CONTENT/1268/

Although the uninsured would be expected to have problems paying medical bills, we should be very concerned that one-fifth of insured individuals under age 65 also face significant medical debt.

Most of these individuals are insured through their work. Since the state insurance exchange subsidies for purchase of insurance and for out-of-pocket expenses will not apply to employer-sponsored plans, it can be anticipated that the Affordable Care Act will not reduce medical bill problems for a majority of our workforce.

When we know that the Affordable Care Act will fall far short of what we need to ensure financial security in the face of medical need, why aren’t we as a nation busy with efforts to enact a program that actually would work?

New York's Local 6 gets it right

A Model of Health

By Robert Kuttner
The American Prospect, November 7, 2011

The New York hotel workers’ plan provides comprehensive coverage at its own health centers, including full dental and optical care, with no deductibles or co-pays and a core philosophy that emphasizes primary care, wellness, and prevention.

In the office of Dr. Robert Greenspan, who has headed the plan for 12 years, hangs the official charter signed by New York Governor Thomas E. Dewey in 1949 authorizing Local 6 to operate the nation’s first medical practice run by a union.

The plan may well be the best in the nation at providing so much coverage while effectively constraining costs. All doctors are salaried, with general practitioners being paid slightly more than specialists, in order to reward primary care.

From a small clinic on Manhattan’s West Side, the plan has grown into five comprehensive health centers, serving approximately 88,000 hotel workers, their family members, and union retirees. Even those who’ve been laid off keep their health coverage. The plan boasts New York’s highest rate of patient satisfaction.

The plan’s sole out-of-pocket charge is for drugs. While ordinary prescriptions require a modest co-pay of $5 or $15 for non-generics, the charge is eliminated for patients on long-term treatments, such as for high blood pressure. “Bob [Greenspan] experimented with free drugs for patients who are chronically ill,” says union president Peter Ward. “He found that this dramatically reduced visits to the ER; there were fewer catastrophic events. So now, we waive all co-pays for patients on long-term drug therapy.”

“The difference isn’t just financial – it’s philosophical,” Greenspan says. “We want you to come in. We want unlimited access to primary care. It pays off over the long term. All of the co-pays and deductibles do the opposite of what is claimed. They don’t assure that scarce medical resources are used as efficiently as possible or deter excessive use. They are simply barriers to care. People say, ‘Maybe it will clear up by itself, so I won’t see the doctor,’ or ‘I’ll stretch out the medicine supply by taking less than the prescribed dose.’ All you are doing is inducing people not to be compliant with the medical program. Then you wonder why costs keep going up – it’s because people get sicker, and their eventual treatment is more expensive. We do just the opposite.”

Last year, the hotel workers’ health plan cost $411.24 a month for an individual and $1,027.56 for an average family. By comparison, Healthfirst, the cheapest HMO in New York City, cost roughly three times as much – $1,116 a month for an individual and $3,316 for a family – while it excluded many services offered by the union such as dental and optical care and piled on deductibles and co-pays. Factoring in benefits not provided by other plans, the typical commercial insurance package costs about four times as much as the hotel workers’ plan.

So why is the plan virtually unknown in the health-policy debate? For one thing, the union has emphasized publicizing the plan among New York hotel workers, and Greenspan has focused on improving care for members, not crusading for national reform.

Except for single-payer advocates, reformers have pursued cost-effective care within the context of an insurance-dominated system – something of a fool’s errand – whereas the hotel workers’ plan begins by dispensing with third-party insurers. To review all the ways that the hotel workers’ plan delivers better care more cost-effectively is to appreciate the vast inefficiency in the rest of America’s health system – and to see that cost-containment gurus are mostly looking in the wrong places for efficiencies.

For starters, by dispensing with insurance-company middlemen, the plan eliminates a whole layer of costs. A doctor treats the patient according to his or her best medical judgment. There is no army of staffers dealing with patient billing, claims, and insurance reimbursement; no arguing with insurance-company case reviewers.

Second, doctors are all on salary. So there is no incentive to undertreat or overtreat.

Further, the plan’s core principle is unlimited access to primary care, with all of the prevention and early-detection benefits that approach brings. In most systems, specialists drive costs. “We don’t waste specialists on routine cases,” Greenspan says. “We do want specialists to see appropriate cases, which is both more cost effective and more professionally challenging to the physician.”

The union, which knows something about negotiating, engages in hard bargaining with all of its vendors, from drug manufacturers to hospitals, and is relentless about eliminating middlemen. Most conventional health plans use “pharmacy benefit managers” who negotiate with drug companies on the plan’s behalf and, of course, take a cut for themselves. The union negotiates directly. It also dispenses with cadres of consultants, from human-resource departments to utilization reviewers and behavioral-health companies, all of which add costs under the guise of shaving costs.

In New York, some medical specialists in high demand have market power to raise prices. “Have you heard the term, RAPER?” Greenspan asks. “It stands for Radiologists, Anesthesiologists, Pathologists, and ER doctors.” Most New York hospitals now contract out these services to specialists’ groups who charge whatever the market will bear. In recent bargaining with one of its hospitals over a proposed rate increase, the hotel workers were told that the increase partly reflected higher charges billed by anesthesiologists. Greenspan requested the hospital to push back. Not our problem, the hospital contended; we don’t control these costs. “We told them, OK, next week our members stop using your hospital,” Greenspan says. The costs came down.

At some point, the public must realize that the choice is drastic reform or drastic cuts. More than any other in America, the hotel workers’ plan points the way to an efficient and humane system of health care.

http://prospect.org/article/model-health

Comment:

By Don McCanne, MD

New York’s Local 6 has achieved many of the goals of single payer reform by working from the bottom up. They are providing very comprehensive health care services at only about one-third of the costs of other New York plans, and with the highest patient satisfaction ratings.

The key is that they have been able to to create a health care delivery infrastructure dedicated to optimal patient care that is removed from our current dysfunctional system dominated by insurer middlemen. This was all about patients, not insurers.

One important example of the difference is that they recognized that co-pays and deductibles were barriers to care. As Dr. Greenspan says, “They do the opposite of what is claimed.” People should have unlimited access to primary care. To show how wrong the policy community is in their support of cost sharing, Dr. Greenspan’s group has eliminated these barriers, yet their costs are far less than New York’s least expensive HMO. You do not need deductibles and co-pays to control health care spending.

Although this was a bottom up success, it is improbable that it could be used as an insurance model for the rest of the nation. Their success was dependent on the unique efforts of a local union. Also their members have no coverage outside of their system. Our health care delivery systems and our health care financing systems are too fragmented to permit the creation of a nation of Local 6-type institutions, especially when the solidarity characteristic of unions is lacking in most other environments.

Although a top down approach contrasts sharply with what Local 6 has done, nevertheless, a well designed single payer model can accompli
sh the same results, with the added benefit of ensuring patient choice of their health care professionals and institutions. But we’ll have to get the private insurers out of the way. They would never accept a system with so little money in it.

Awards for health care reform wimpery and obfuscation

By Wendell Potter
iWatch News, Dec. 22, 2011

I’m sitting by the hospital bed of a grateful Medicare beneficiary — my mother. She seems to be making progress in her battle against pneumonia, and she doesn’t have the worry that many other patients here have about how they are going to pay their medical bills. Because private insurance companies and employers have shifted so many Americans into high-deductible plans, many of the younger patients here will soon find out that they are terribly underinsured and thus will be on the hook for thousands of dollars not covered by their policies.

Earlier today I went to the gift shop to buy Mom a brush. Amid the Christmas candy, cards and cheap do-dads near the cash register was a basketful of something that brought back a painful holiday memory: little lacquered lumps of coal.

Several years ago, a friend who had been in the habit of giving me a biography of some long-dead politician or literary figure surprised me by giving me instead a Christmas stocking with nothing but a lump of coal in it. In her opinion, I had been such a jerk during the year I didn’t deserve anything else.

That lump of coal was probably the best present I’ve ever received. I was so wounded I resolved to be a better, more thoughtful person. I’m still working on that.

So knowing from personal experience how beneficial lumps of coal can be at the holidays, I have decided to give out a few lumps of my own to folks whose recent actions make them deserving recipients.

The first one goes to President Obama and his health care team for wimping out on one of the most important provisions of health care reform. The law specifies that starting in 2014, all private health insurance plans must cover a set of “essential benefits,” ranging from doctor, hospital and prescription drug coverage to mental health and rehabilitative services. Congress instructed the executive branch to work out the details. Insurance companies and other special interests immediately began lobbying the administration to make the essential benefits package as limited as possible. To do otherwise, they claimed, would make insurance unaffordable for many people — as if it isn’t already, thanks largely to them.

Consumer advocates warned the administration that if it took such a bare bones approach, more and more Americans would find themselves in plans that would not come close to meeting their coverage needs.

So what did Obama’s Department of Health and Human Services do? It abdicated its responsibility by punting the decision to the states, which, for all practical purposes, means it caved to the pressure from insurers and employers. What we had thought was a federal health care reform law is increasingly looking like something that lets the states continue do whatever they want to do. That might seem like the safest course for the White House politically, but it represents a squandered opportunity for the administration to show some backbone.

The second lump of coal goes to Sen. Ron Wyden, the Oregon Democrat, who also deserves a “dupe of the year” award for teaming up with Republican Rep. Paul Ryan in trying to pretty much hand the Medicare program over to private insurance companies.

When Ryan unveiled his plan to privatize Medicare earlier this year, it was so unpopular even his GOP colleagues were hesitant to embrace it. That’s because it would replace the program as it has existed since its inception with a voucher program. Instead of continuing to operate the program, the federal government instead would dispense vouchers worth a few thousand dollars to Medicare-eligible Americans who would use them to pay private insurance companies for coverage. This has been a dream of the insurance industry for decades.

Ryan’s plan was panned in part because the vouchers over a few years would become increasingly inadequate to buy decent insurance. It was a surefire way for elderly Americans, most of them retired and on fixed incomes, to be forced into the ranks of the underinsured.

When Wyden and Ryan announced their so-called “bipartisan” plan, they said it would contain some safeguards Ryan’s original plan didn’t, and would allow people to stay in traditional Medicare plan if they wanted. But it would still be a voucher plan, and it most certainly would lead to the destruction of the Medicare program as we know it, despite their claims.

Wyden and Ryan said their plan of encouraging more involvement by private insurers in Medicare would make the program more nimble and efficient and that the additional choices would lead to lower costs.

What have these guys been smoking? Are they not aware that the government has been paying private insurers 13 percent more to cover Medicare beneficiaries in the Medicare Advantage plans (operated by private insurers) than the government spends to cover people enrolled in traditional Medicare? And have they failed to notice that private insurance premiums have skyrocketed over the past several years because insurers have done such a dismal job of controlling medical costs and have administrative expenses that are far higher than traditional Medicare?

Here’s a suggestion for Sen. Wyden: put a big lump of coal in the stocking of the aide who talked you into your unholy alliance with Rep. Ryan.

My last lump of coal goes not to a politician but to the folks at the St. Petersburg Times whose PolitiFact website has been, until now, a highly respected fact checker. It routinely monitors what politicians are saying and alerts us when they’ve been less than honest with us. The worst liars get a “Pants on Fire” rating.

At this time every year, PolitiFact chooses a “Lie of the Year.” Two years ago it was the lie that reform would be a “government takeover of health care.” Last year it was that the reform law would create “death panels” in the Medicare program. Both were indeed whoppers.

This year, though, apparently feeling they needed to appear more bipartisan or, even better, nonpartisan, the PolitiFact folks decided that the assertion by most Democrats and liberals that Ryan’s privatization plan would mean the end of Medicare deserved this year’s Lie of the Year award.

There undoubtedly were plenty of lies told by Democrats in Washington during the year, but that wasn’t one of them. Ryan and his colleagues would not get rid of the word Medicare, but they would get rid of the program that has been a lifeline for millions of people since it was created in 1965.

Shakespeare had Juliet utter the immortal truth that a rose by any other name would smell as sweet. He did not, for good reason, have her say that calling stinkweed a rose would make it smell better.

The truth is that Ryan and Wyden would indeed end Medicare by turning it over to greedy private insurers. Keeping the name Medicare would not make that less true. Medicare can be fixed–and there are provisions of the health care reform law that begin to do that. But Ryan and Wyden’s stinky plan would take us in the worst possible direction.

Come to think of it, PolitiFact deserves two lumps of coal. 

http://www.iwatchnews.org/2011/12/22/7754/analysis-awards-health-care-reform-wimpery-and-obfuscation

New York’s Local 6 gets it right

A Model of Health

By Robert Kuttner
The American Prospect, November 7, 2011

The New York hotel workers’ plan provides comprehensive coverage at its own health centers, including full dental and optical care, with no deductibles or co-pays and a core philosophy that emphasizes primary care, wellness, and prevention.

In the office of Dr. Robert Greenspan, who has headed the plan for 12 years, hangs the official charter signed by New York Governor Thomas E. Dewey in 1949 authorizing Local 6 to operate the nation’s first medical practice run by a union.

The plan may well be the best in the nation at providing so much coverage while effectively constraining costs. All doctors are salaried, with general practitioners being paid slightly more than specialists, in order to reward primary care.

From a small clinic on Manhattan’s West Side, the plan has grown into five comprehensive health centers, serving approximately 88,000 hotel workers, their family members, and union retirees. Even those who’ve been laid off keep their health coverage. The plan boasts New York’s highest rate of patient satisfaction.

The plan’s sole out-of-pocket charge is for drugs. While ordinary prescriptions require a modest co-pay of $5 or $15 for non-generics, the charge is eliminated for patients on long-term treatments, such as for high blood pressure. “Bob [Greenspan] experimented with free drugs for patients who are chronically ill,” says union president Peter Ward. “He found that this dramatically reduced visits to the ER; there were fewer catastrophic events. So now, we waive all co-pays for patients on long-term drug therapy.”

“The difference isn’t just financial – it’s philosophical,” Greenspan says. “We want you to come in. We want unlimited access to primary care. It pays off over the long term. All of the co-pays and deductibles do the opposite of what is claimed. They don’t assure that scarce medical resources are used as efficiently as possible or deter excessive use. They are simply barriers to care. People say, ‘Maybe it will clear up by itself, so I won’t see the doctor,’ or ‘I’ll stretch out the medicine supply by taking less than the prescribed dose.’ All you are doing is inducing people not to be compliant with the medical program. Then you wonder why costs keep going up – it’s because people get sicker, and their eventual treatment is more expensive. We do just the opposite.”

Last year, the hotel workers’ health plan cost $411.24 a month for an individual and $1,027.56 for an average family. By comparison, Healthfirst, the cheapest HMO in New York City, cost roughly three times as much – $1,116 a month for an individual and $3,316 for a family – while it excluded many services offered by the union such as dental and optical care and piled on deductibles and co-pays. Factoring in benefits not provided by other plans, the typical commercial insurance package costs about four times as much as the hotel workers’ plan.

So why is the plan virtually unknown in the health-policy debate? For one thing, the union has emphasized publicizing the plan among New York hotel workers, and Greenspan has focused on improving care for members, not crusading for national reform.

Except for single-payer advocates, reformers have pursued cost-effective care within the context of an insurance-dominated system – something of a fool’s errand – whereas the hotel workers’ plan begins by dispensing with third-party insurers. To review all the ways that the hotel workers’ plan delivers better care more cost-effectively is to appreciate the vast inefficiency in the rest of America’s health system – and to see that cost-containment gurus are mostly looking in the wrong places for efficiencies.

For starters, by dispensing with insurance-company middlemen, the plan eliminates a whole layer of costs. A doctor treats the patient according to his or her best medical judgment. There is no army of staffers dealing with patient billing, claims, and insurance reimbursement; no arguing with insurance-company case reviewers.

Second, doctors are all on salary. So there is no incentive to undertreat or overtreat.

Further, the plan’s core principle is unlimited access to primary care, with all of the prevention and early-detection benefits that approach brings. In most systems, specialists drive costs. “We don’t waste specialists on routine cases,” Greenspan says. “We do want specialists to see appropriate cases, which is both more cost effective and more professionally challenging to the physician.”

The union, which knows something about negotiating, engages in hard bargaining with all of its vendors, from drug manufacturers to hospitals, and is relentless about eliminating middlemen. Most conventional health plans use “pharmacy benefit managers” who negotiate with drug companies on the plan’s behalf and, of course, take a cut for themselves. The union negotiates directly. It also dispenses with cadres of consultants, from human-resource departments to utilization reviewers and behavioral-health companies, all of which add costs under the guise of shaving costs.

In New York, some medical specialists in high demand have market power to raise prices. “Have you heard the term, RAPER?” Greenspan asks. “It stands for Radiologists, Anesthesiologists, Pathologists, and ER doctors.” Most New York hospitals now contract out these services to specialists’ groups who charge whatever the market will bear. In recent bargaining with one of its hospitals over a proposed rate increase, the hotel workers were told that the increase partly reflected higher charges billed by anesthesiologists. Greenspan requested the hospital to push back. Not our problem, the hospital contended; we don’t control these costs. “We told them, OK, next week our members stop using your hospital,” Greenspan says. The costs came down.

At some point, the public must realize that the choice is drastic reform or drastic cuts. More than any other in America, the hotel workers’ plan points the way to an efficient and humane system of health care.

http://prospect.org/article/model-health

New York’s Local 6 has achieved many of the goals of single payer reform by working from the bottom up. They are providing very comprehensive health care services at only about one-third of the costs of other New York plans, and with the highest patient satisfaction ratings.

The key is that they have been able to to create a health care delivery infrastructure dedicated to optimal patient care that is removed from our current dysfunctional system dominated by insurer middlemen. This was all about patients, not insurers.

One important example of the difference is that they recognized that co-pays and deductibles were barriers to care. As Dr. Greenspan says, “They do the opposite of what is claimed.” People should have unlimited access to primary care. To show how wrong the policy community is in their support of cost sharing, Dr. Greenspan’s group has eliminated these barriers, yet their costs are far less than New York’s least expensive HMO. You do not need deductibles and co-pays to control health care spending.

Although this was a bottom up success, it is improbable that it could be used as an insurance model for the rest of the nation. Their success was dependent on the unique efforts of a local union. Also their members have no coverage outside of their system. Our health care delivery systems and our health care financing systems are too fragmented to permit the creation of a nation of Local 6-type institutions, especially when the solidarity characteristic of unions is lacking in most other environments.

Although a top down approach contrasts sharply with what Local 6 has done, nevertheless, a well designed single payer model can accomplish the same results, with the added benefit of ensuring patient choice of their health care professionals and institutions. But we’ll have to get the private insurers out of the way. They would never accept a system with so little money in it.

Insurer Highmark becoming a health care provider

Highmark looks to expand hospital and physician ownership

By Emily Berry
amednews.com, December 26, 2011

Faced with a future where its home region’s largest health system could be outside of its network, Pittsburgh-based Highmark plans to buy and affiliate with more hospitals and physician practices.

Highmark’s June announcement that it would purchase West Penn Allegheny Health System established its first large-scale foray in the clinical side of the health care business. It also contributed to the deterioration of contract negotiations with the University of Pittsburgh Medical Center, which sees West Penn as a competitor.

Highmark’s new direction is similar to what other insurers are trying to do. Insurers, hospitals and physicians are merging, affiliating and contracting in new ways as they seek alternatives to fee-for-service payment arrangements and look ahead to a post-reform health system, said Kevin Ryan, a Chicago-based attorney.

During a conference call with reporters Dec. 8, Highmark Executive Vice President David O’Brien said the West Penn deal “is only a small part of our strategy going forward.”

“We are in discussions with physicians and hospitals,” O’Brien said. “We’re looking to expand our footprint in the provider world. We think the future for us strategically is being able to work closely with providers, to be in the provider space.”

UPMC sees Highmark’s strategy as aimed primarily at undercutting UPMC’s standing in the market so that Highmark can drive members of its health plan to cheaper care settings, UPMC spokesman Paul Wood said.

“What Highmark is doing is essentially transforming from a neutral insurer where every subscriber could go to any hospital, to a competing integrated delivery and financing system. That puts them in direct competition with UPMC,” he said. UPMC and Highmark are fighting in federal court over issues arising during contentious contract negotiations. UPMC’s contract with Highmark expires on June 30, 2012.

http://www.ama-assn.org/amednews/2011/12/26/bisb1226.htm

Comment: 

By Don McCanne, MD

Highmark, a Blue Cross Blue Shield licensee in Pennsylvania and West Virginia, is “transforming from a neutral insurer where every subscriber could go to any hospital, to a competing integrated delivery and financing system,” according to spokesman Paul Wood of the University of Pittsburgh Medical Center (UPMC). Or as Highmark’s David O’Brien says, they are moving into “the provider space.” This is yet one more example of the insurers trying to take over the health care delivery system.

Besides providing a management that places it own business interests before all else, it also locks in the exorbitantly high administrative costs characteristic of these organizations. Even worse, patients already had lost provider choice when plans such as Blue Cross and Blue Shield switched from indemnity plans to preferred provider organizations with their restrictive provider networks, but now, by now becoming the actual providers, the plans will no doubt establish severe penalties (zero coverage?) for obtaining care outside of their own intrinsic health care delivery systems. How does that benefit patients?

Many do recognize that the private insurance model is no longer sustainable, and that it is only a matter of time before the switch to a single payer system becomes inevitable. The question is, what will we do with the private insurers once they are the health care delivery system? Scary thought.

Insurer Highmark becoming a health care provider

Highmark looks to expand hospital and physician ownership

By Emily Berry
amednews.com, December 26, 2011

Faced with a future where its home region’s largest health system could be outside of its network, Pittsburgh-based Highmark plans to buy and affiliate with more hospitals and physician practices.

Highmark’s June announcement that it would purchase West Penn Allegheny Health System established its first large-scale foray in the clinical side of the health care business. It also contributed to the deterioration of contract negotiations with the University of Pittsburgh Medical Center, which sees West Penn as a competitor.

Highmark’s new direction is similar to what other insurers are trying to do. Insurers, hospitals and physicians are merging, affiliating and contracting in new ways as they seek alternatives to fee-for-service payment arrangements and look ahead to a post-reform health system, said Kevin Ryan, a Chicago-based attorney.

During a conference call with reporters Dec. 8, Highmark Executive Vice President David O’Brien said the West Penn deal “is only a small part of our strategy going forward.”

“We are in discussions with physicians and hospitals,” O’Brien said. “We’re looking to expand our footprint in the provider world. We think the future for us strategically is being able to work closely with providers, to be in the provider space.”

UPMC sees Highmark’s strategy as aimed primarily at undercutting UPMC’s standing in the market so that Highmark can drive members of its health plan to cheaper care settings, UPMC spokesman Paul Wood said.

“What Highmark is doing is essentially transforming from a neutral insurer where every subscriber could go to any hospital, to a competing integrated delivery and financing system. That puts them in direct competition with UPMC,” he said. UPMC and Highmark are fighting in federal court over issues arising during contentious contract negotiations. UPMC’s contract with Highmark expires on June 30, 2012.

http://www.ama-assn.org/amednews/2011/12/26/bisb1226.htm

Highmark, a Blue Cross Blue Shield licensee in Pennsylvania and West Virginia, is “transforming from a neutral insurer where every subscriber could go to any hospital, to a competing integrated delivery and financing system,” according to spokesman Paul Wood of the University of Pittsburgh Medical Center (UPMC). Or as Highmark’s David O’Brien says, they are moving into “the provider space.” This is yet one more example of the insurers trying to take over the health care delivery system.

Besides providing a management that places it own business interests before all else, it also locks in the exorbitantly high administrative costs characteristic of these organizations. Even worse, patients already had lost provider choice when plans such as Blue Cross and Blue Shield switched from indemnity plans to preferred provider organizations with their restrictive provider networks, but now, by now becoming the actual providers, the plans will no doubt establish severe penalties (zero coverage?) for obtaining care outside of their own intrinsic health care delivery systems. How does that benefit patients?

Many do recognize that the private insurance model is no longer sustainable, and that it is only a matter of time before the switch to a single payer system becomes inevitable. The question is, what will we do with the private insurers once they are the health care delivery system? Scary thought.

Patient complicity through insurer kickback

Insurer to reward patients for finding cheaper care

By Robert Weisman
The Boston Globe, December 20, 2011

Told they need a routine medical test, such as a colonoscopy or a mammogram, most patients go wherever the doctor recommends. But under a program being rolled out next month by Harvard Pilgrim Health Care, they could be paid to seek care somewhere else.

The health insurer plans to introduce a rewards program through which its Massachusetts members who have been given referrals will be asked to call a “clinical concierge” service that can direct them to hospitals or medical facilities that charge less for the same tests.

In return, they will receive a check from Harvard Pilgrim, ranging from $10 to $75.

The program, called SaveOn, is intended to help patients make smarter health care choices, according to Harvard Pilgrim, and to rein in the runaway prices of imaging tests and other procedures that have contributed to steadily rising premiums.

On the customer side, health insurers have been selling employer groups limited-network plans, which restrict which providers patients can see, and tiered-network plans, which require them to pay more to visit higher-priced physicians or medical centers.

But SaveOn, which has already been introduced as a pilot on a limited scale in New Hampshire, will be the first in Massachusetts structured as a rewards program, similar to those offered by online retailers for shopping at their stores.

The role of employers in educating their workers will be key to the adoption of SaveOn because employers typically pick up the largest share of health insurance costs.

But if the program succeeds in moderating reimbursements for everything from MRIs and CT scans to ultrasounds and sleep studies, employers will probably want their own financial reward.

Harvard Pilgrim’s (chief executive Eric H.) Schultz said he hopes SaveOn will help the insurer sell products and gain market share while driving down health care costs, one procedure at a time.

“This becomes a conversation at the watering hole – ‘I just got a check for $75,'” he said.

http://bostonglobe.com/business/2011/12/20/insurer-reward-patients-for-finding-cheaper-care/a6ajBBBu2hpHZ1IyiRPmLP/story.html

Comment:

By Don McCanne, MD

Harvard Pilgrim Health Care will be offering cash rewards to patients who ignore their physicians’ recommendations and instead consult with the insurer’s “clinical concierge service” on where to obtain their imaging tests and other procedures. When there has been a big push to further integrate health care services, is it wise to establish a policy that disrupts usual referral patterns that have at least some minimal semblance of integration?

Harvard Pilgrim’s chief executive visualizes the conversation at the watering hole wherein one worker tells his fellow worker that he just got a $75 kickback from the insurance company. What is the fellow worker to think? “Since I don’t need care, I don’t get a kickback. Yet I have to pay a higher insurance premium so this jerk can get a cash reward using my premium dollars?”

This is yet another scheme to make patients informed shoppers in the health care market by making them sensitive to the costs – or cash rewards! – for the health care they choose. It doesn’t seem to matter that this may be an illegal kickback, especially if Medicare or Medicaid funds are involved. The cash rewards are inevitably passed onto whomever is paying the bills.

Instead of making patients complicit participants in this devious scheme, wouldn’t it be better to establish policies that gets the prices right in the first place, so that there is no extra $75 available to use as a cash reward?

We do know how to do that. Government administered pricing, such as with the Medicare program, does a much better job than the private insurers at setting prices at appropriate levels. This is not merely an opinion, but has been confirmed through extensive policy research.

In our current fragmented system of financing health care, some may disagree that Medicare pricing is appropriate, but if Medicare were the only payer, pricing decisions would be even more precise and appropriate. The public administrators have to pay enough to maintain the financial viability of the health care delivery system, yet not so much that those paying into the system are not receiving a fair value.

Addendum:

PNHP co-founder, David Himmelstein, M.D., provided this response:

I’m a Harvard Pilgrim enrollee (as a Harvard retiree). This week my long-time physician at Beth Israel hospital in Boston referred me for a test and dolefully informed me that I would be charged extra if I chose to have it done at Beth Israel rather than at a no-name place with which he has no association, and no established lines of communication. I declined to go brand X for the test.

Drug sales reps now pushing hospitals

Hospitals Adopt Drug Industry Sales Strategy

By Phil Galewitz
Kaiser Health News, December 13, 2011

The University of Chicago Medical Center is one of a growing number of hospitals nationwide hiring former drug and device sales representatives to visit doctors’ offices to persuade them to use their services over competing facilities.

In visits that can last five to 20 minutes, the reps may try to win doctors’ loyalty by helping them get better times on operating room schedules or easier patient referrals to hospital-based specialists. The sales reps can also carry messages back to the hospital, like a doctor’s request for a new medical device to be available in surgery.

While hospitals have always tried to woo doctors to refer patients to them, the institutions are growing more direct in their efforts. The hospitals mine data to see which doctors have the most profitable, well-insured patients, and then they assign those doctors to a sales rep.

HCA Inc., the nation’s largest for-profit hospital chain, has at least 150 employees who make physician visits – or about one per hospital, said spokesman Ed Fishbough.

Convinced the sales-call strategy is fueling higher admissions, Tenet Healthcare Corp., the nation’s third largest for-profit hospital chain, has doubled its sales force in the past two years. The company now has 152 “physician liaisons” at its 49 hospitals, most of which are in California, Texas and Florida.

About two-thirds of Tenet’s liaisons are former drug and device sales reps, and they can make tens of thousands of dollars in bonuses if doctors increase their referrals to the hospitals. “These people are really good and really assertive and very sophisticated,” said Stephen Newman, Tenet’s chief operating officer.

http://www.kaiserhealthnews.org/stories/2011/december/14/hospitals-adopt-drug-industry-sales-strategy.aspx?referrer=search

Comment: 

By Don McCanne, MD

The for-profit hospital chains – HCA and Tenet – both infamous for prior ethical lapses, have instituted tarnished sales programs that are now being adopted by others, including the not-for-profit University of Chicago Medical Center. They are using “assertive” former pharmaceutical and medical device sales reps to siphon off the most profitable and best insured patients, by convincing physicians to change their hospital referral patterns.

This is not about making the best use of a region’s health care resources. This is about hospitals cherry picking the most lucrative physicians and their patients, while making other competing hospitals, which are often safety-net institutions, the victims of adverse selection. We are already witnessing the closure of some of these institutions because of the inability to meet their costs.

This strategy is working. Sales calls are fueling higher admissions. What does this say about the physicians who are complicit in this activity? Can we really expect them to support altruistic policies in support of more equitable health care in the community at large, when they are being offered lucrative opportunities to practice in a more physician-friendly environment?

Under a well designed single payer system, capital improvements would be based on regional planning and budgeted separately, providing the facilities and equipment appropriate for the needs of the community. Hospitals would be placed on global budgets, providing enough financial resources to fulfill their mission of health care. Passive investors would be removed by eliminating for-profit ownership of hospitals. This would change the hospitals’ primary mission of making the greatest profit that the market will bear, to one of simply serving the health care needs of the community.

A comment from a recent Quote of the Day on the social consequences of segregation of the affluent (Nov. 25) seems to be very appropriate here. I wrote, “As the more affluent members of our society continue to concentrate themselves in their upscale neighborhoods, they take our resources with them, including some of the best of our health care services. Not only do they leave behind fewer resources for low- and moderate-income families, they also leave behind the political will to do something about it.”

Drug sales reps now pushing hospitals

Hospitals Adopt Drug Industry Sales Strategy

By Phil Galewitz
Kaiser Health News, December 13, 2011

The University of Chicago Medical Center is one of a growing number of hospitals nationwide hiring former drug and device sales representatives to visit doctors’ offices to persuade them to use their services over competing facilities.

In visits that can last five to 20 minutes, the reps may try to win doctors’ loyalty by helping them get better times on operating room schedules or easier patient referrals to hospital-based specialists. The sales reps can also carry messages back to the hospital, like a doctor’s request for a new medical device to be available in surgery.

While hospitals have always tried to woo doctors to refer patients to them, the institutions are growing more direct in their efforts. The hospitals mine data to see which doctors have the most profitable, well-insured patients, and then they assign those doctors to a sales rep.

HCA Inc., the nation’s largest for-profit hospital chain, has at least 150 employees who make physician visits – or about one per hospital, said spokesman Ed Fishbough.

Convinced the sales-call strategy is fueling higher admissions, Tenet Healthcare Corp., the nation’s third largest for-profit hospital chain, has doubled its sales force in the past two years. The company now has 152 “physician liaisons” at its 49 hospitals, most of which are in California, Texas and Florida.

About two-thirds of Tenet’s liaisons are former drug and device sales reps, and they can make tens of thousands of dollars in bonuses if doctors increase their referrals to the hospitals. “These people are really good and really assertive and very sophisticated,” said Stephen Newman, Tenet’s chief operating officer.

http://www.kaiserhealthnews.org/stories/2011/december/14/hospitals-adopt-drug-industry-sales-strategy.aspx?referrer=search

The for-profit hospital chains – HCA and Tenet – both infamous for prior ethical lapses, have instituted tarnished sales programs that are now being adopted by others, including the not-for-profit University of Chicago Medical Center. They are using “assertive” former pharmaceutical and medical device sales reps to siphon off the most profitable and best insured patients, by convincing physicians to change their hospital referral patterns.

This is not about making the best use of a region’s health care resources. This is about hospitals cherry picking the most lucrative physicians and their patients, while making other competing hospitals, which are often safety-net institutions, the victims of adverse selection. We are already witnessing the closure of some of these institutions because of the inability to meet their costs.

This strategy is working. Sales calls are fueling higher admissions. What does this say about the physicians who are complicit in this activity? Can we really expect them to support altruistic policies in support of more equitable health care in the community at large, when they are being offered lucrative opportunities to practice in a more physician-friendly environment?

Under a well designed single payer system, capital improvements would be based on regional planning and budgeted separately, providing the facilities and equipment appropriate for the needs of the community. Hospitals would be placed on global budgets, providing enough financial resources to fulfill their mission of health care. Passive investors would be removed by eliminating for-profit ownership of hospitals. This would change the hospitals’ primary mission of making the greatest profit that the market will bear, to one of simply serving the health care needs of the community.

A comment from a recent Quote of the Day on the social consequences of segregation of the affluent (Nov. 25) seems to be very appropriate here. I wrote, “As the more affluent members of our society continue to concentrate themselves in their upscale neighborhoods, they take our resources with them, including some of the best of our health care services. Not only do they leave behind fewer resources for low- and moderate-income families, they also leave behind the political will to do something about it.”

PolitiFact's 2011 Lie of the Year

Dems' 'Mediscare' a dubious winner

By Angie Drobnic Holan and Bill Adair
Politico, December 20, 2011

Republicans muscled a budget through the House of Representatives in April that they said would take an important step toward reducing the federal deficit. Introduced by Rep. Paul Ryan of Wisconsin, the plan kept Medicare intact for people 55 or older, but dramatically changed the program for everyone else by privatizing it and providing government subsidies. Democrats pounced.

• Just four days after the party-line vote, the Democratic Congressional Campaign Committee released a Web ad, saying seniors will have to pay $12,500 more for health care “because Republicans voted to end Medicare.”

• Rep. Steve Israel of New York, chairman of the DCCC, appeared on cable news shows and declared that Republicans voted to “terminate Medicare.”

• A Web video from the Agenda Project, a liberal group, said the Ryan plan would leave the country “without Medicare” and showed a Ryan look-alike pushing an old woman in a wheelchair off a cliff.

• And just last month, House Minority Leader Nancy Pelosi sent a fundraising appeal that read, “House Republicans’ vote to end Medicare is a shameful act of betrayal.”

PolitiFact debunked the Medicare charge in nine separate fact-checks rated False or Pants on Fire, most often in attacks leveled against Republican House members.

Now, PolitiFact has chosen the Democrats’ claim as the 2011 Lie of the Year.

At times, Democrats and liberal groups were careful to characterize the Republican plan more accurately. Another claim in the ad from the Agenda Project said the plan would “privatize” Medicare, which received a Mostly True rating from PolitiFact. President Barack Obama also was more precise with his words, saying the Medicare proposal “would voucherize the program, and you potentially have senior citizens paying $6,000 more.”

With a few small tweaks to their attack lines, Democrats could have been factually correct, said Norman Ornstein, a resident scholar at the American Enterprise Institute, a conservative think tank. “I actually think there is no need to cut out the qualifiers and exaggerate,” he said.

http://www.politico.com/news/stories/1211/70705.html

And…

Long-Term Analysis of a Budget Proposal by Chairman Ryan

Congressional Budget Office
April 5, 2011

Among other changes, the proposal would convert the current Medicare program to a system under which beneficiaries received premium support payments – payments that would be used to help pay the premiums for a private health insurance policy and would grow over time with overall consumer prices. The change would apply to people turning 65 beginning in 2022; beneficiaries who turn 65 before then would remain in the traditional Medicare program, with the option of converting to the new system.

Under the proposal, most elderly people would pay more for their health care than they would pay under the current Medicare system. For a typical 65-year-old with average health spending enrolled in a plan with benefits similar to those currently provided by Medicare, CBO estimated the beneficiary’s spending on premiums and out-of-pocket expenditures as a share of a benchmark: what total health care spending would be if a private insurer covered the beneficiary. By 2030, the beneficiary’s spending would be 68 percent of that benchmark under the proposal.

http://www.cbo.gov/ftpdocs/121xx/doc12128/04-05-ryan_letter.pdf

Comment: 

By Don McCanne, MD

PolitiFact has chosen the Democrats’ claim that “Republicans voted to end Medicare” as 2011 Lie of the Year. The facts that led the Democrats to attack the Ryan Medicare plan that the House Republicans passed are not in dispute. PolitiFact’s lie accusation stemmed simply from the imprecision of the Democrats’ political rhetoric, and not from a dispute about the actual facts that Democrats were attempting to publicize through simple sound bites.

Under the Republican-approved proposal, the traditional Medicare program would be phased out totally and replaced with private insurance plans. Much of the financing responsibility would gradually shift to the Medicare beneficiaries. According to the Congressional Budget Office, by 2030 two-thirds of the costs would be paid by the beneficiary, and only one-third paid by the government. In almost no way does this resemble the Medicare program that we know.

Nevertheless this almost entirely new program would still carry the Medicare label. Thus PolitiFact can argue that, technically, Republicans did not vote to end Medicare. But substantively, the infrastructure of the traditional Medicare program would be ended with not much more than the label surviving.

Norman Ornstein makes the important point that the Democrats would have been factually correct had they made a few small tweaks to their attack lines (e.g., “end Medicare as we know it,” which was used effectively). That is a lesson that we all should learn.

Unfortunately, PolitiFact did knock its credibility down a notch on this one. Poorly crafted sounds bites are worthy of a demerit, but the shocking truth behind the crucial message that the Democrats were trying to convey certainly did not warrant the “Pants on Fire” 2011 Lie of the Year award. That award should have been bestowed instead upon the Republicans who claimed that they voted to save Medicare.

PolitiFact’s 2011 Lie of the Year

Dems’ ‘Mediscare’ a dubious winner

By Angie Drobnic Holan and Bill Adair
Politico, December 20, 2011

Republicans muscled a budget through the House of Representatives in April that they said would take an important step toward reducing the federal deficit. Introduced by Rep. Paul Ryan of Wisconsin, the plan kept Medicare intact for people 55 or older, but dramatically changed the program for everyone else by privatizing it and providing government subsidies. Democrats pounced.

• Just four days after the party-line vote, the Democratic Congressional Campaign Committee released a Web ad, saying seniors will have to pay $12,500 more for health care “because Republicans voted to end Medicare.”

• Rep. Steve Israel of New York, chairman of the DCCC, appeared on cable news shows and declared that Republicans voted to “terminate Medicare.”

• A Web video from the Agenda Project, a liberal group, said the Ryan plan would leave the country “without Medicare” and showed a Ryan look-alike pushing an old woman in a wheelchair off a cliff.

• And just last month, House Minority Leader Nancy Pelosi sent a fundraising appeal that read, “House Republicans’ vote to end Medicare is a shameful act of betrayal.”

PolitiFact debunked the Medicare charge in nine separate fact-checks rated False or Pants on Fire, most often in attacks leveled against Republican House members.

Now, PolitiFact has chosen the Democrats’ claim as the 2011 Lie of the Year.

At times, Democrats and liberal groups were careful to characterize the Republican plan more accurately. Another claim in the ad from the Agenda Project said the plan would “privatize” Medicare, which received a Mostly True rating from PolitiFact. President Barack Obama also was more precise with his words, saying the Medicare proposal “would voucherize the program, and you potentially have senior citizens paying $6,000 more.”

With a few small tweaks to their attack lines, Democrats could have been factually correct, said Norman Ornstein, a resident scholar at the American Enterprise Institute, a conservative think tank. “I actually think there is no need to cut out the qualifiers and exaggerate,” he said.

http://www.politico.com/news/stories/1211/70705.html

And…

Long-Term Analysis of a Budget Proposal by Chairman Ryan

Congressional Budget Office
April 5, 2011

Among other changes, the proposal would convert the current Medicare program to a system under which beneficiaries received premium support payments – payments that would be used to help pay the premiums for a private health insurance policy and would grow over time with overall consumer prices. The change would apply to people turning 65 beginning in 2022; beneficiaries who turn 65 before then would remain in the traditional Medicare program, with the option of converting to the new system.

Under the proposal, most elderly people would pay more for their health care than they would pay under the current Medicare system. For a typical 65-year-old with average health spending enrolled in a plan with benefits similar to those currently provided by Medicare, CBO estimated the beneficiary’s spending on premiums and out-of-pocket expenditures as a share of a benchmark: what total health care spending would be if a private insurer covered the beneficiary. By 2030, the beneficiary’s spending would be 68 percent of that benchmark under the proposal.

http://www.cbo.gov/ftpdocs/121xx/doc12128/04-05-ryan_letter.pdf

PolitiFact has chosen the Democrats’ claim that “Republicans voted to end Medicare” as 2011 Lie of the Year. The facts that led the Democrats to attack the Ryan Medicare plan that the House Republicans passed are not in dispute. PolitiFact’s lie accusation stemmed simply from the imprecision of the Democrats’ political rhetoric, and not from a dispute about the actual facts that Democrats were attempting to publicize through simple sound bites.

Under the Republican-approved proposal, the traditional Medicare program would be phased out totally and replaced with private insurance plans. Much of the financing responsibility would gradually shift to the Medicare beneficiaries. According to the Congressional Budget Office, by 2030 two-thirds of the costs would be paid by the beneficiary, and only one-third paid by the government. In almost no way does this resemble the Medicare program that we know.

Nevertheless this almost entirely new program would still carry the Medicare label. Thus PolitiFact can argue that, technically, Republicans did not vote to end Medicare. But substantively, the infrastructure of the traditional Medicare program would be ended with not much more than the label surviving.

Norman Ornstein makes the important point that the Democrats would have been factually correct had they made a few small tweaks to their attack lines (e.g., “end Medicare as we know it,” which was used effectively). That is a lesson that we all should learn.

Unfortunately, PolitiFact did knock its credibility down a notch on this one. Poorly crafted sounds bites are worthy of a demerit, but the shocking truth behind the crucial message that the Democrats were trying to convey certainly did not warrant the “Pants on Fire” 2011 Lie of the Year award. That award should have been bestowed instead upon the Republicans who claimed that they voted to save Medicare.

Theresa BrownGold: Painter of the under-insured

This article on unaffordable under-insurance was covered in a previous Quote of the Day (Dec. 8), but a new response posted on the In These Times website follows:

Health Reform Devolves Into ‘Unaffordable Under-Insurance’

By Roger Bybee
In These Times, December 7, 2011

Response by “Art As Social Inquiry”
19 Dec 2011

Thank you for this piece.  I draw similar conclusions from my informal research.  I am looking at how we access healthcare in the US by painting portraits and telling the stories of those who are using the system.  More recently, the portraits are of people who actually HAVE insurance but because they are under-insured, they are suffering great financial and physical hardships.  The great secret in the US is that millions of us are under-insured and don’t know it unless we suffer a medical catastrophe.  This secret will be exposed if the essential benefits package of the ACA is too skimpy. People will get sick, think they are insured and find that even with insurance medical bills will eat up their savings. And they will be very angry. I don’t know…this next difficult phase may be the crucial first step toward a single-payer system? The ACA will help many millions, but is it enough? The question will always be “Can a for-profit system for delivering medical care really see to the needs of a country’s greatest asset – it’s people?”

http://inthesetimes.com/working/entry/12348/health_reform_runs_into_unaffordable_under-insurance

“Art As Social Inquiry” is actually portrait painter Theresa BrownGold.

From her website:

Health Care in the United States

Art As Social Inquiry

This is a series of what will be 100-plus paintings depicting a cross-section of Americans. The titles of the paintings designate the kind of health insurance coverage or lack of coverage the sitters have. The goal is to paint a picture of the American health care system in the faces of our country’s citizens from the very best health coverage to the most horrific of circumstances resulting from a person’s lack of coverage. Who are we when it comes to health care? Let’s not be afraid to look at real people and be touched by their experiences – from the best to the worst – as we navigate this very big issue. There is no agenda but to ask, “What’s your experience? What are your thoughts on the subject?”

http://artassocialinquiry.org/projects/healthcare/

Comment: 

By Don McCanne, MD

We have long heard tragic stories of the uninsured, but now the under-insured are joining them with their sad tales. Theresa BrownGold’s series of portraits on Health Care in the United States tells us stories of a cross section of Americans, while relating them to their insurance status.

You might take a moment to look at two extremes in her series. First click on the third portrait in the eighth row – painted in a style that indicates that the person is no longer with us. Those of us who have been in the trenches certainly recognize the description as being all too typical of when the U.S. health care system fails us miserably.

The other portrait to click on is the politician in the seventh row on the left, with blue eyes and wearing a blue sweater pulled over an open-collar white shirt. Again, many of us will recognize his description as being one of those power players who seem to be oblivious to the plight of those not well served by our health care system.

Everyone has a story, whether good or bad. We can thank Theresa BrownGold for giving us so many pictures, each worth a thousand words and more, motivating us to continue to do our best to see that all stories become good ones.