PNHP

Medical students weigh in on health care reform

Medical students weigh in on health care reform

Oregon Health & Science University Medical School News, Sept. 22, 2011

PORTLAND, Ore. — Allen Andrews, MS3, and Richard Bruno, MS3, recently contributed to a paper on health care reform titled, “Healthcare Reform and the Next Generation: United States Medical Student Attitudes toward the Patient Protection and Affordable Care Act.” The paper was published in the online journal PLOS One. The senior author of the paper was Paul Gorman, M.D., M.P.H., associate professor, Department of Medical Informatics & Clinical Epidemiology.

More than a year and a half after the passage of the Patient Protection and Affordable Care Act (PPACA), physician and public opinion have been very well documented; however, those who will be most affected by health care reform, namely physicians-in-training, have yet to be heard.

“Fundamentally, the purpose of our research was to shed some light on what future physicians thought of both the passage of PPACA and whether our current health care system needs to be reformed,” said Allen Andrews, MS3.

Over 1,200 medical students from 10 U.S. medical schools were surveyed between October and December 2010 to determine their attitudes toward reform and specifically the PPACA.

“This is the first of three national surveys of medical students aimed at investigating their attitudes toward the underserved, health reform, and advocacy work — all pointing to a need for medical school curricula changes to support stronger health policy and advocacy training,” said Richard Bruno, MS3, and class president.

Overwhelmingly, the study showed that a remarkable 95 percent of medical students believe the current health care system needs to be changed. Possibly even more surprising was the fact that 80 percent believe that PPACA’s reforms did not go far enough.

Undoubtedly, PPACA will have a significant impact on patients and providers alike, but it will be up to us along with the spirit of Hippocrates, as the next generation of physicians, to continue working to ensure all Americans have access to quality, affordable health care.

http://www.ohsu.edu/xd/education/schools/school-of-medicine/about/school-of-medicine-news/education-news/reform-students-92711.cfm

Ida Hellander blogs on Lessons from an English GP

Lessons from an English GP visiting Chicago

Posted by Ida Hellander MD
Physicians for a National Health Program
PNHP Blog, September 22, 2011

Dr. Clare Gerada, president of the Royal College of General Practitioners, visited Chicago recently on a study tour to see how a market-based system works for society’s most vulnerable first hand. I was fortunate to be able to accompany her on several of her stops.

https://pnhp.org/blog/2011/09/22/lessons-from-an-english-gp-visiting-chicago/

Comment: 

By Don McCanne, MD

Today’s message is a twofer. First is the great news that Ida Hellander will be a regular contributor to the PNHP blog. Second is that her blog today on lessons from an English GP is well worth reading, and to free up your time so you can read it, no complicated policy qotd message will be posted today.

Don't turn your back on Ryan's Medicare plan

Health insurers likely to push privatized Medicare for their own benefit

By Wendell Potter
iWatchNews, September 22, 2011

If you think Rep. Paul Ryan’s plan to privatize Medicare is dead, think again. After Ryan unveiled his plan earlier this year, there was such widespread criticism that it briefly became a political liability for the Republicans.

The GOP-controlled House of Representatives approved the plan, which would replace the existing Medicare program with vouchers that beneficiaries could use to buy coverage from private insurance. But Ryan’s blueprint never made it out of the Senate.  It’s not hard to figure out why; the vouchers would have required most Medicare recipients—many of them on fixed incomes— would be paying more out of their own pockets for coverage than in the existing program.

I wrote at the time that the Ryan plan had the strong support of private health insurers, who would like nothing more than to have the federal government hand the Medicare program over to them.  The program would represent a vast new revenue stream guaranteeing profits forever.

Last week, the insurance industry and its allies began what I predict will be a massive campaign to sell the public and policymakers on the idea of moving forward with the Ryan plan—albeit with a few tweaks to make it seem more consumer-friendly.

An outfit called the Healthcare Leadership Council (HLC) issued a press release with the headline: “Health Industry Leaders Recommend Over $410 Billion in Healthcare Savings to Congressional ‘Super Committee.’ ”

At the core the HLC’s scheme is what might be called Ryan-lite, but don’t be fooled: the plan would—to use a favorite industry term—take us down the “slippery slope” toward a complete corporate takeover of the Medicare program.  (Insurers and their allies for years have warned Americans that enacting sweeping health care reforms they don’t like would lead us down the slippery slope toward socialism.)

While Ryan’s plan would move all Medicare beneficiaries into a privatized system in one fell swoop, the HLC’s plan would do it more gradually. It would, in the words of the press release, “create a new ‘Medicare Exchange’ in which private plans would compete on the basis of cost, quality and value.”

Sounds great, doesn’t it? The HLC—which comprises the CEOs of the country’s biggest insurers, drug companies, hospital chains and medical device manufacturers and some powerful industry trade associations—knows from years of research that if you can work in the words “compete,” “quality,” and “value” into the same sentence, you will persuade people to believe what they are peddling is what you should obviously want to buy.

But buyer beware. Rest assured that the HLC is far more interested in the special interests of its member companies and organizations than in what is in your best interests. And the very existence of the HLC shows why it has been so difficult to get Congress to enact comprehensive health care reform. The executives who fund the HLC want first and foremost to preserve their profits and protect their incomes.

I know all this from personal experience from my days as an insurance industry executive, going back to the early days of the Clinton administration.

The HLC actually came into existence during the last part of the administration of the first Bush in the White House. The CEOs that formed the leadership council  were hoping a Republican president would help them eliminate some of the government regulations they didn’t like.

The HLC really came into its own, however, after Bill and Hillary Clinton unveiled their health care reform proposal in 1993. Just about every health care special interest didn’t like one thing or another about the Clinton plan, so they came together under the umbrella of the HLC to kill the whole initiative. I attended many HLC meetings in Washington during that time and came to see quickly just how influential this heavily bankrolled organization would be in doing exactly what the CEOs wanted.

As I wrote in my book, Deadly Spin , the HLC was behind a fear-mongering campaign against the Clinton plan that the individual companies it represented could not pull off on their own without appearing self-serving. The CEOs needed a front group to do it, and the HLC fit the bill.

The HLC office became a war room for the special interests. Over the subsequent months, the organization conducted a multi-pronged attack , including grassroots organizing, lobbying by corporate executives and PR events. It faxed statements  almost daily to Washington-based reporters and also to lawmakers,  and it ran ads raising the specter of health care rationing and warning of bureaucratic interference with patient rights if the Clinton plan were enacted.

It worked. Americans came to believe the HLC claims, and so did enough members of Congress that the Clinton plan died.

We can all now expect HLC to embark on the same kind of campaign to privatize Medicare and to get a few other things its members have long hoped for from Congress. One of the priorities is enacting tort reform at the federal level (a favorite of doctors’ groups as well as insurers). The HLC also wants Congress to raise the age of eligibility for Medicare benefits from 65 to 67.

To make its Medicare privatization proposal more palatable, the HLC would allow folks to continue enrolling in the traditional Medicare program. At least for a while. And the HLS calls for a more generous “inflation factor” for premium subsidies than Ryan proposed.

But make no mistake. What the CEOs really want is exactly what Ryan proposed. They are just putting different clothes and a few more accessories on to make it prettier. 

http://www.iwatchnews.org/2011/09/22/6694/analysis-dont-turn-your-back-ryans-medicare-plan/

Kentucky Presbyterian group urges scrutiny of big health insurers, with eye to possible divestment

By Johanna W.H.van Wijk-Bos

On Saturday, Sept. 17, 2011, the Mid-Kentucky Presbytery of the Presbyterian Church (USA) voted at its regular stated meeting, held in Glasgow, Ky., to send an overture to its 220th General Assembly. The overture requests of the General Assembly to instruct the committee on Mission Responsibility Through Investment (MRTI) to report on the corporate practices of Cigna, Aetna, Humana, WellPoint, and UnitedHealthcare insurance companies to the General Assembly Mission Council.

In addition, the overture asks the General Assembly Mission Council to act on this information and, as it deems appropriate, implement divestment procedures, as well as encourage individual Presbyterians and congregations to divest of holdings in the said companies; and, in view of the urgency of the ongoing health care crisis, to take action within six months of the adoption of the recommendation; and to report to the 221st General Assembly (2014) on divestment action.

The overture was authored primarily by the Rev. A. David Bos, who died early in February of 2011. It was then unanimously endorsed by the session of Central Presbyterian Church in Louisville, Ky., and brought before the Presbytery by the Church Administration committee with its endorsement. The overture was supported also by the session of Buechel Presbyterian Church.

Following supportive comments by the Rev. Mark Baridon, one of the ministers of Central Presbyterian Church, and the Rev. Dr. Johanna W.H.van Wijk-Bos of Louisville Presbyterian Seminary, widow of David Bos, one opposing statement, and supportive remarks from the Rev. Nancy Troy, of Briargate Presbyterian Church, the moderator put the question to the vote. The great majority of the Presbytery voted in favor.

After the vote took place, the Rev. Adam Fischer of Harvey Browne Presbyterian Church placed the name of Johanna Bos in nomination to serve as Overture Advocate at the meeting of the General Assembly. This motion was seconded and passed unanimously.

The Overture Advocate is charged with taking the overture to the meeting of the General Assembly of the Presbyterian Church (USA), to take place in early July 2012, in Pittsburgh, Pa., and presenting it to the appropriate committee, which will take it to the floor of the Assembly for a vote.

It is the hope of those who have advocated for this cause in our Presbytery that other Presbyteries of the Church will join Mid-Kentucky and pass the Overture, so the endorsement may come to the General Assembly from as large a number of Presbyteries as possible.

Johanna W.H.van Wijk-Bos is Teaching Elder member of the Mid-Kentucky Presbytery and Overture Advocate to the 220th General Assembly of the Presbyterian Church (USA) for the overture on practices of the health care industry in the U.S. and on divestment from holdings in said industry.

Cost still a barrier for the uninsured in Mass., study says

By Chelsea Conaboy
The Boston Globe, Sept. 21, 2011

A new study of Cambridge Health Alliance patients shows that many of the people who remain uninsured have jobs and don’t qualify for a state subsidy, but they cannot afford an insurance plan on their own or through their employers. For others, job loss and glitches in the enrollment process have caused them to lose coverage.

Dr. Rachel Nardin, a neurologist at Cambridge Health Alliance, said the study offers a reminder of the pitfalls of the Massachusetts system that could be inherited by the rest of the country as provisions of the federal Affordable Care Act, modeled after Massachusetts’s 2006 health law, take effect.

“When you have a system that tries to insure people through a patchwork of different mechanisms, it’s inherently unstable,’’ said Nardin, chairwoman of the Massachusetts chapter of Physicians for a National Health Program, which supports a single-payer health system. “You’re going to leave some people out.’’

The study, published online last week by the Journal of General Internal Medicine, surveyed 431 patients, ages 18 to 64, who visited a Cambridge Health Alliance emergency department from July 2009 to March 2010, and found 189 people who were uninsured.

About two-thirds of the uninsured were employed, and 49 percent said they were motivated by the 2006 law to buy insurance but could not find an affordable plan. One quarter of the uninsured who had jobs worked for a company that offered an insurance plan, which disqualified them from being eligible for state-subsidized coverage.

Though the majority of the uninsured had incomes low enough that they should have qualified for state-sponsored plans, about 30 percent reported not being able to afford coverage.

“For some working poor, even heavily subsidized insurance premiums may be unaffordable,’’ the authors said.

About 35 percent of the uninsured reported losing their insurance coverage, most because they lost a job or had their plans canceled because of lapsed paperwork or other reasons.

The state reports that 98 percent of Massachusetts residents are now enrolled in a plan, though some estimates put that figure closer to 95 percent or slightly lower.

“We have achieved the near-universal goals of the landmark 2006 legislation,’’ said Dick Powers, spokesman for the Massachusetts Health Connector, the agency that manages the marketplace for state-subsidized plans. “The majority of the few remaining uninsured are low-income people whom we’ll strive to help as we implement national reform and perfect the Massachusetts model.’’

Nardin said her group’s study points to how hard it is to reach the uninsured.

“Even with incredible hard work, in a state that started out with enormous resources, this is the best we have been able to do,’’ she said.

Short of implementing a national single-payer plan, Nardin said the state could look at making more people eligible for state-sponsored plans or reducing the paperwork that people must complete to remain enrolled in a plan once they qualify.

Powers said controls on eligibility are critical to the program’s integrity and taxpayer confidence.

http://www.boston.com/news/local/massachusetts/articles/2011/09/21/study_looks_at_who_remains_uninsured_in_mass/

Study looks at who remains uninsured in Massachusetts

By Chelsea Conaboy, Globe Staff
The Boston Globe, White Coat Notes blog, Sept. 19, 2011

Much of the discussion around the 2006 Massachusetts health law has focused on how far the state has come in providing coverage for the uninsured.

Dr. Rachel Nardin, a neurologist at Cambridge Health Alliance and chair of the Massachusetts chapter of Physicians for a National Health Program, said sometimes it is important to take a different look — to look at the glass as half empty and ask, why?

She and others at the Harvard-affiliated health system published a study online with the Journal of General Internal Medicine last week looking at why people remain uninsured in Massachusetts despite a law mandating that most residents have health insurance.

The reasons won’t be surprising to people who have followed this issue closely: Many of the uninsured are working poor who don’t qualify for a state subsidy but can’t afford an insurance plan on their own or through their employers. For others, job loss and glitches in the enrollment process have caused them to lose coverage.

Nardin, who supports a single-payer health system, said the study offers a reminder of the pitfalls of the Massachusetts system that could be inherited by the rest of the country as provisions of the federal Affordable Care Act, modelled after Massachusetts’s health law, take effect.

“When you have a system that tries to insure people through a patchwork of different mechanisms, it’s inherently unstable,” she said. “You’re going to leave some people out.”

The study surveyed 431 patients, ages 18 to 64, who visited a Cambridge Health Alliance emergency department from July 2009 to March 2010, and found 189 people who were uninsured.

About two-thirds of the uninsured were employed, and 49 percent said they were motivated by the 2006 law to buy insurance but could not find an affordable plan. One quarter of the uninsured who had jobs worked for a company that offered an insurance plan, which disqualified them from being eligible for state-subsidized coverage.

Though the majority of the uninsured had incomes low enough that they should have qualified for state-sponsored plans, about 30 percent reported not being able to afford coverage.

“For some working poor, even heavily subsidized insurance premiums may be unaffordable,“ the authors said.

About 35 percent of the uninsured reported losing their insurance coverage, most because they lost a job or had their plans cancelled because of lapsed paperwork or other reasons.

The state reports that about 98 percent of Massachusetts residents are now enrolled in a plan, though some estimates put that figure closer to 95 percent or slightly lower.

“We have achieved the near-universal goals of the landmark 2006 legislation,” said Dick Powers, spokesman for the Massachusetts Health Connector, the agency that manages the marketplace for state-subsidized plans. “The majority of the few remaining uninsured are low-income people whom we’ll strive to help as we implement national reform and perfect the Massachusetts model.”

Nardin said her group’s study points to how hard it is to reach the uninsured.

“Even with incredible hard work, in a state that started out with enormous resources, this is the best we have been able to do,” she said.

Short of implementing a national single-payer plan, Nardin said the state could look at making more people eligible for state-sponsored plans or reducing the paperwork that people must complete to remain enrolled in a plan once they qualify.

Powers said controls on eligibility are critical to the program’s integrity and taxpayer confidence.

http://www.boston.com/Boston/whitecoatnotes/2011/09/study-looks-who-remains-uninsured-mass/M5HkClG4OiIeCwZ3MgY1nJ/index.html

The Nation: The Devilish Detail of Obama's Speech

By John Nichols
The Nation, September 20, 2011

President Obama has erected what is likely to be the left flank in the debates of the Congressional Joint Select Committee on Deficit Reduction—the so-called “super-committee” that will define so much of this fall’s fiscal and economic discourse.

That flank is sturdier than some of the president’s critics on the left might feared it might be. But the flank is weak, very weak, in at least one key area: the defense of Medicare and Medicaid.

So what’s the balance that progressives should strike with regard to the speech? Let’s consider:

President Obama wants wealthy Americans to pay a little bit more.

That’s good.

President Obama rejects House Budget Committee chair Paul Ryan’s schemes to turn Medicare and Medicaid into voucher programs that shift money away from carrying for the needy and toward the accounts of private insurers.

That’s good.

President Obama rejects, at least for the time being, the prospect of increasing the Medicare eligibility age that he put on the table several months ago.

That’s good.

But President Obama was still compromising with the Tea Party right when he delivered his remarks on Monday. Indeed, he proposed $580 billion in cuts to health and welfare programs, with $248 billion coming from Medicare and $72 billion from Medicaid.

That’s bad.

Very bad.

The president would have us believe that the cuts can be made by addressing “waste, fraud and abuse.” The reality is that cutting a quarter-trillion dollars from Medicare will undermine the quality of care for seniors and the disabled. The Alliance for Quality Nursing Home Care estimates that Obama’s approach would lead to $42 billion in cuts for post-acute care providers “placing patients, our workforce and local facilities at risk.”

The proposed cuts to Medicare and Medicaid will put new stress on the economy by making it harder to maintain hiring levels at the skilled nursing facilities that have been some of the real job creators in a period of layoffs and rising unemployment rates.

The proposed Medicare and Medicaid cuts place new stresses on working families, many of which are already struggling to care for elderly and disabled relatives.

And the proposed Medicare and Medicaid cuts will cause aging workers to think twice about retiring, thus reducing the number of openings for young workers.

Medicare and Medicaid are efficient programs. They are not perfect, but they have been pressured on “waste, fraud and abuse” issues for years; meaning that there is no chance that the cuts Obama proposes will be painless.

They will, in fact, be painful, for retired people and the disabled, for families, for workers and their unions, for communities and for the broader economy.

It is for this reason that FamiliesUSA, the progressive health policy group, is warning that proposed changes to Medicaid “shifts the burden to states and ultimately onto the shoulders of seniors, people with disabilities and low-income families who depend on the program as their lifeline.”

Congressional Progressive Caucus co-chairs Raul M. Grijalva, D-Arizona, and Keith Ellison, D-Minnesota, are similarly concerned. “While we support cutting waste, fraud and abuse, we reject any proposal that cuts benefits in Medicare or Medicaid,” they say. “We reject false Republican assertions that the solution to our deficit is deep cuts to programs that millions of Americans rely on, and we would hope President Obama would as well.”

Instead of talking about cuts in Medicare and Medicaid, Obama and the Democrats should be talking up the expansion of Medicaid so that it can serve as at the basis for a true national healthcare program.

America does not need less Medicare and less Medicaid.

America needs “Medicare for All,” along the lines proposed by the Healthcare-Now! movement.

“The creation of the Super Committee makes three of our country’s most vital safety net programs—Medicare, Medicaid, and Social Security—targets for cuts,” explains Healthcare-Now!” But these programs are not the problem, they are the solution. Our social insurance programs keep people healthy and out of poverty, which is particularly important during times like these when so many people are experiencing economic hardship. Medicare, Medicaid and Social Security should be strengthened, not cut. Medicare should be improved and extended to all.”

That’s right. By talking of cuts to Medicare and Medicaid, the president takes the debate in the wrong direction and, unfortunately, the “super committee” is likely to follow him there.

That does not mean that Healthcare-Now! and its allies in organized labor should back off and go silent. Quite the opposite. The great debates about austerity are yet to come. Ultimately, two sides will emerge as the murky middle (which the president tries, too frequently, to occupy) collapses. There will be those who are willing to cut Medicare, Medicaid and Social Security to balance budgets. And there will be those who recognize that cuts hurt rather than heal a broken economy.

Obama has moved toward the side of those who would ask the wealthy to pay their fair share in order to balance budgets. That is progress. But he needs to move further if he wants to catch up with economic reality and the aspirations of the American people.

http://www.npr.org/2011/09/20/140623784/the-nation-the-devilish-detail-of-obamas-speech

Examining the arguments for competitive pricing in Medicare

Competitive Pricing and the Challenge of Cost Control in Medicare

By Robert F. Coulam, Roger D. Feldman and Bryan E. Dowd
Journal of Health Politics, Policy and Law, August 2011

Abstract

The Medicare program faces a serious challenge: it must find ways to control costs but must do so through a system of congressional oversight that necessarily limits its choices. We look at one approach to prudent purchasing – competitive pricing – that Medicare has attempted many times and in various ways since the beginning of the program, and in all but one case unsuccessfully due to the politics of provider opposition working through Congress and the courts. We look at some related efforts to change Medicare pricing to explore when the program has been successful in making dramatic changes in how it pays for health care. A set of recommendations emerges for ways to respond to the impediments of law and politics that have obstructed change to more efficient payment methods. Except in unusual cases, competitive pricing threatens too many stakeholders in too many ways for key political actors to support it. But an unusual case may arise in the coming Medicare fiscal crisis related in part to the prices Medicare pays. At that point, competitive pricing may look less like a problem and more like a solution coming at a time when the system badly needs one.

What is to be done?

*  Recognize that competitive pricing is one part of fixing Medicare’s urgent fiscal problems

*  Consider ways to divide provider opposition or buy it off

*  Be aware that some bidding models might face fewer legal and political problems than others

*  Cultivate political leaders to support competitive bidding as policy

*  Compensate losers, at least through a transition period

*  Give beneficiaries and providers time to adjust

*  Strengthen the administrative and legal resources available to CMS in competitive bidding struggles

*  Revise the legal framework to narrow the grounds for challenges

*  Combine competitive pricing with mechanisms to increase quality

http://jhppl.dukejournals.org/content/36/4/649.abstract

Comment: 

By Don McCanne, MD

The authors of this article supporting competitive pricing for Medicare were funded by a grant from the American Enterprise Institute, an organization “committed to expanding liberty, increasing individual opportunity, and strengthening free enterprise.” It is interesting to read why they believe that previous efforts to introduce competitive pricing failed, but what is even more interesting is their list of proposals for action that might accomplish their elusive goal.

Medicare uses administrative pricing to determine payments. Prices are set by performing analytic calculations, using historical claims data. The goal of conservatives has been to use competitive pricing instead, a competitive bidding process to obtain the lowest prices. Although conservatives contend that competition will always provide the lowest prices, in fact, the top-down administered pricing by Medicare has been much more effective in controlling health care prices than has competition of private insurance plans in the private sector.

Regardless of the evidence, the conservatives have a ideological belief that competition must be more effective, and we can prove that by displacing administrative pricing with competitive pricing – showing that it really works. So let’s look at their proposals for introducing competition as a means of expanding liberty and strengthening free enterprise. In examining their proposals listed above, the concepts are the same, only the rhetoric is changed:

*  The first and most important point (according to the authors) is that we must accept without question the ideology of competition as the means to fix Medicare’s urgent fiscal problems, while implicitly totally rejecting government administrative pricing. The political process is to be driven by ideology rather than policy science.

*  Using the finest principles of market competition, we must use devious methods to divide the opposition of health care providers, or, failing that, simply buy them off. Just don’t call it a bribe since that term is offensive to free market purists.

*  Make sure the bidding models are rigged to circumvent legal and political barriers.

*  Cultivating political leaders to support competitive pricing is now much easier since the Supreme Court decided that the transfer of massive amounts of cash is a protected form of free speech.

*  Compensating losers through a transition period is a euphemism for the “so-sorry-but-that’s-the-way-competition-works” gratuitous comment to the losers who face financial ruin. Market purists would never give cash rewards to the competition that they just beat out.

*  Giving beneficiaries and providers time to adjust need not be a separate policy since it is automatic – the time between when they are informed that they lost their insurance or their provider contract and the date of the actual termination.

*  Strengthening the administrative and legal resources available to CMS in competitive bidding struggles is just what markets are all about – swindle the patients and providers by diverting more health care dollars to yet more administrative waste.

*  Revising the legal framework to narrow the grounds for challenges will be a cinch since they already have a Supreme Court that will protect their marketplace excesses.

*  Combining competitive pricing with mechanisms to increase quality – the old measuring-and-monitoring-quality trick wherein they pretend that it is the middleman insurer that creates quality rather than the dedicated health care professionals.

In reading this long article, I could understand why these AEI-funded authors were making excuses for the previous failed experiments in competitive pricing, but I have to admit that I was astonished when they gave us this list of reasons why we should never even remotely consider adopting competitive pricing in the Medicare program. That was very thoughtful of them.

Examining the arguments for competitive pricing in Medicare

Competitive Pricing and the Challenge of Cost Control in Medicare

By Robert F. Coulam, Roger D. Feldman and Bryan E. Dowd
Journal of Health Politics, Policy and Law, August 2011

Abstract

The Medicare program faces a serious challenge: it must find ways to control costs but must do so through a system of congressional oversight that necessarily limits its choices. We look at one approach to prudent purchasing – competitive pricing – that Medicare has attempted many times and in various ways since the beginning of the program, and in all but one case unsuccessfully due to the politics of provider opposition working through Congress and the courts. We look at some related efforts to change Medicare pricing to explore when the program has been successful in making dramatic changes in how it pays for health care. A set of recommendations emerges for ways to respond to the impediments of law and politics that have obstructed change to more efficient payment methods. Except in unusual cases, competitive pricing threatens too many stakeholders in too many ways for key political actors to support it. But an unusual case may arise in the coming Medicare fiscal crisis related in part to the prices Medicare pays. At that point, competitive pricing may look less like a problem and more like a solution coming at a time when the system badly needs one.

What is to be done?

*  Recognize that competitive pricing is one part of fixing Medicare’s urgent fiscal problems

*  Consider ways to divide provider opposition or buy it off

*  Be aware that some bidding models might face fewer legal and political problems than others

*  Cultivate political leaders to support competitive bidding as policy

*  Compensate losers, at least through a transition period

*  Give beneficiaries and providers time to adjust

*  Strengthen the administrative and legal resources available to CMS in competitive bidding struggles

*  Revise the legal framework to narrow the grounds for challenges

*  Combine competitive pricing with mechanisms to increase quality

http://jhppl.dukejournals.org/content/36/4/649.abstract

The authors of this article supporting competitive pricing for Medicare were funded by a grant from the American Enterprise Institute, an organization “committed to expanding liberty, increasing individual opportunity, and strengthening free enterprise.” It is interesting to read why they believe that previous efforts to introduce competitive pricing failed, but what is even more interesting is their list of proposals for action that might accomplish their elusive goal.

Medicare uses administrative pricing to determine payments. Prices are set by performing analytic calculations, using historical claims data. The goal of conservatives has been to use competitive pricing instead, a competitive bidding process to obtain the lowest prices. Although conservatives contend that competition will always provide the lowest prices, in fact, the top-down administered pricing by Medicare has been much more effective in controlling health care prices than has competition of private insurance plans in the private sector.

Regardless of the evidence, the conservatives have a ideological belief that competition must be more effective, and we can prove that by displacing administrative pricing with competitive pricing – showing that it really works. So let’s look at their proposals for introducing competition as a means of expanding liberty and strengthening free enterprise. In examining their proposals listed above, the concepts are the same, only the rhetoric is changed:

*  The first and most important point (according to the authors) is that we must accept without question the ideology of competition as the means to fix Medicare’s urgent fiscal problems, while implicitly totally rejecting government administrative pricing. The political process is to be driven by ideology rather than policy science.

*  Using the finest principles of market competition, we must use devious methods to divide the opposition of health care providers, or, failing that, simply buy them off. Just don’t call it a bribe since that term is offensive to free market purists.

*  Make sure the bidding models are rigged to circumvent legal and political barriers.

*  Cultivating political leaders to support competitive pricing is now much easier since the Supreme Court decided that the transfer of massive amounts of cash is a protected form of free speech.

*  Compensating losers through a transition period is a euphemism for the “so-sorry-but-that’s-the-way-competition-works” gratuitous comment to the losers who face financial ruin. Market purists would never give cash rewards to the competition that they just beat out.

*  Giving beneficiaries and providers time to adjust need not be a separate policy since it is automatic – the time between when they are informed that they lost their insurance or their provider contract and the date of the actual termination.

*  Strengthening the administrative and legal resources available to CMS in competitive bidding struggles is just what markets are all about – swindle the patients and providers by diverting more health care dollars to yet more administrative waste.

*  Revising the legal framework to narrow the grounds for challenges will be a cinch since they already have a Supreme Court that will protect their marketplace excesses.

*  Combining competitive pricing with mechanisms to increase quality – the old measuring-and-monitoring-quality trick wherein they pretend that it is the middleman insurer that creates quality rather than the dedicated health care professionals.

In reading this long article, I could understand why these AEI-funded authors were making excuses for the previous failed experiments in competitive pricing, but I have to admit that I was astonished when they gave us this list of reasons why we should never even remotely consider adopting competitive pricing in the Medicare program. That was very thoughtful of them.

Medicare Is More Efficient Than Private Insurance

By Diane Archer
Health Affairs Blog, September 20th, 2011

Editor’s note: Robert B. Wohl, B.A., Wesleyan 2011, assisted Diane Archer in the preparation of this response to an earlier Health Affairs Blog “Contributing Voices” post by John Goodman and Thomas Saving. See also Austin Frakt’s post at the Incidental Economist and John Geyman’s post at the Physicians for a National Health Program blog for additional responses to the Goodman-Saving post.

Contrary to claims made by John Goodman and Thomas Saving in an earlier Health Affairs Blog post, non-partisan data from the Congressional Budget Office (CBO) and the Center for Medicare and Medicaid Services (CMS) demonstrate definitively that private insurance is increasingly less efficient than Medicare. The data show that Congress should examine and address the role that private insurance is playing in driving up overall health care costs.

Medicare Has Controlled Costs Better Than Private Insurance.

Medicare Has Lower Administrative Costs Than Private Plans.

So-called “competition” in the private health care market has driven costs up.

  • In most local markets, providers have monopoly power. Consequently, private insurers lack the bargaining power to contain prices.
  • In most areas, two or three dominant insurers dominate the regional market, limit competition and make it extremely difficult if not impossible for new insurers to enter the marketplace and stimulate price competition.
  • Medicare Advantage, which enrolls seniors in private health plans, has failed to deliver care more efficiently than traditional fee-for-service Medicare. Both the CBO and the Medicare Payment Advisory Commission (MedPAC), the commission which advises congress on Medicare’s finances, have calculated that Medicare Advantage plans covering the same care as traditional Medicare cost 12 percent more.
  • Karen Ignagni, who heads America’s Health Insurance Plans (AHIP), the insurance industry’s trade association, has admitted that private plans cannot bargain down provider costs and has asked Washington to intervene.

Medicare Is Publicly Accountable, Private Plans Are Not

When it comes to how much it costs private plans to deliver care, or individual insurer innovations that deliver value, the publicly available data are scarce. Goodman and Saving present only one study on the ways that insurers try to control costs, and this was published by AHIP. Because Medicare is publicly accountable, it allows us to study what works so that we can improve the health care system.

  • The authors cite a number of innovations that could lower the cost of care, but all of them have been introduced by doctors and clinics, not insurers. Because insurance companies treat their claims data as trade secrets, we do not know if they have adopted such innovations.
  • Even government-funded Medicare Advantage plans don’t release payment and coverage data.

A closer look at the data shows that, contrary to Goodman and Saving’s claims, Medicare delivers health care more efficiently than private insurers. Medicare’s public accountability and bargaining power give it the ability to drive system change and control skyrocketing health care costs, while profit-driven private insurers have offered no solution.

http://healthaffairs.org/blog/2011/09/20/medicare-is-more-efficient-than-private-insurance/

Who Remains Uninsured In Mass.? Mostly Working Poor. Why? Money.

By Carey Goldberg
CommonHealth, WBUR, September 19, 2011

You figure that when a press release comes in from Physicians for a National Health Program, it has an agenda. But that doesn’t negate the value of the research it highlights — which, in this case, was a paper from Harvard Medical School researchers just out in the Journal of General Internal Medicine.

It’s titled “Reasons why patients remain uninsured after Massachusetts’ health care reform: A survey of patients at a safety-net hospital.” And here’s its summary:

After full implementation of the Massachusetts health reform, those remaining without insurance are largely the working poor who do not have access to, or cannot afford, either employer sponsored insurance or state subsidized insurance.

The reasons why people lacked insurance varied, from having recently lost coverage through a job to fear of giving their personal data. From the Physicians For a National Health Program press release:

To understand why people remained uninsured after the reform, the study authors surveyed 431 patients, ages 18-64, who were visiting the emergency room of Massachusetts’ second largest safety-net hospital.

The researchers found that of the 189 patients without health insurance, two-thirds (65.9 percent) were employed, but only a quarter had access to employer-sponsored insurance. In addition, about one-third (35.2 percent) of uninsured patients reported having lost previous insurance coverage, with the majority of these (51.9 percent) having lost their coverage due to loss of a job or transition from one job to another.

“These findings illustrate that tying insurance to employment can be an unstable mechanism for providing coverage,” said the study’s lead author, Dr. Rachel Nardin, a neurologist at Cambridge Health Alliance. “We found that employer-based coverage failed the self-employed; those who worked for firms that did not offer insurance, especially small firms exempt from a requirement to offer insurance; and the poor who could not afford employer-sponsored insurance even when it was offered to them. The system of coverage also failed those who lost their job, which is particularly problematic with the current economic downturn.”

More than 85 percent of the uninsured patients interviewed had incomes low enough to qualify them for free or low-cost, state-subsidized private insurance. Nonetheless, one-third reported being uninsured because they could not find affordable insurance.

In fact, although the majority of the uninsured were aware of the new legal requirement that they carry health insurance, nearly half reported that it motivated them to try to find insurance but that they had been unable to find insurance they could afford.

Senior author Dr. Danny McCormick, an internist at Cambridge Health Alliance, said: “It appears that for people with very low incomes, even state plans with subsidized insurance premiums may be too costly. Also, under the reform law workers who are offered employer sponsored insurance but decline it due to cost are not eligible for state subsidized insurance, no matter how poor they are.”

And an interesting footnote: the study found few free riders.

The study also found that another common reason for losing previously held insurance was having had it cancelled without notice or because of lapsed paperwork. Only 5.6 percent of the interviewees were uninsured because they didn’t think they needed insurance, suggesting there were few seeking a so-called free ride.

http://commonhealth.wbur.org/2011/09/uninsured-massachusetts/

President Obama's political positioning on Medicare

Living Within Our Means and Investing in the Future: The President’s Plan for Economic Growth and Deficit Reduction

Office of Management and Budget
September 2011

Health Savings

Increase income-related premiums under Medicare Parts B and D.

Under Medicare Parts B and D, certain beneficiaries pay higher premiums as a result of their higher levels of income. Beginning in 2017, the Administration proposes to increase income-related premiums under Medicare Parts B and D by 15 percent and maintain the income thresholds associated with income-related premiums until 25 percent of beneficiaries under Parts B and D are subject to these premiums. This will help improve the financial stability of the Medicare program by reducing the Federal subsidy of Medicare costs for those beneficiaries who can most afford them.

Modify Part B deductible for new beneficiaries.

Beneficiaries who are enrolled in Medicare Part B are required to pay an annual deductible. This deductible helps to share responsibility for payment of Medicare services between Medicare and beneficiaries. To strengthen program financing and encourage beneficiaries to seek high-value health care services, the Administration proposes to apply a $25 increase in the Part B deductible in 2017, 2019, and 2021 for new beneficiaries. Current beneficiaries or near retirees would not be subject to the revised deductible.

Introduce home health co-payments for new beneficiaries.

Medicare beneficiaries currently do not make co-payments for Medicare home health services. This proposal would create a home health copayment of $100 per home health episode, applicable for episodes with five or more visits not preceded by a hospital or other inpatient post-acute care stay. This would apply to new beneficiaries beginning in 2017.

Introduce a Part B premium surcharge for new beneficiaries that purchase near first-dollar Medigap coverage.

Medigap policies sold by private insurance companies provide beneficiaries additional support for covering healthcare costs by covering most or all of the cost sharing Medicare requires. This protection, however, gives individuals less incentive to consider the costs of health care services and thus raises Medicare costs and Part B premiums. Of particular concern are Medigap plans that cover substantially all Medicare copayments, including even the modest co-payments for routine care that most beneficiaries can afford to pay out of pocket. To encourage more efficient health care choices, the Administration proposes a Part B premium surcharge equivalent to about 15 percent of the average Medigap premium (or about 30 percent of the Part B premium) for new beneficiaries that purchase Medigap policies with particularly low cost-sharing requirements, starting in 2017. Current beneficiaries and near-retirees would not be subject to the surcharge.

http://www.whitehouse.gov/system/assets/drupal/omb/budget/fy2012/assets/jointcommitteereport.pdf

Comment: 

By Don McCanne, MD

Having been burned repeatedly in negotiations with the Republicans, and fully aware of that the election season has already begun, President Obama stepped away from conducting negotiations over in their territory and has now released his own list of policies not tainted by compromise. Since there is no hope of passing this intact in the current Congress, releasing this proposal obviously was a political maneuver. Nevertheless, it is important to see where he stands on Medicare, if only he could have his way.

Although he had been in discussions on raising the Medicare eligibility age to 67, it is a relief to see that this is absent from his wish list. Also there is not even a hint that he might consider a privatization scheme such as the Republican premium support/voucher program. So what is in his proposal?

He would increase both Medicare Part B (physician) and Part D (drug) premiums for higher-income individuals and expand the number of beneficiaries who would be subject to these higher premiums. It is entirely appropriate for higher-income individuals to contribute more in taxes to the funding of Medicare, but once individuals are in the program they should all be treated the same. Requiring higher payments for higher-income individuals reduces their support for the traditional program and increases the political pressure to privatize. If more money is needed from higher-income Medicare beneficiaries then it should be collected through progressive income taxes and not through income-indexed premiums.

He would increase Part B deductibles for younger Medicare beneficiaries, but not for those already in the program. Just as assigning different premiums based on income decreases solidarity, the assignment of different deductibles based on age also takes a toll on solidarity.

Introducing co-payments for Medicare home health services shifts costs from the government to Medicare beneficiaries. In fact, new co-payments, higher premiums, and larger deductibles all expand the cost burden for beneficiaries, which can have the detrimental impact of impairing access.

Medicare already is a program with inadequate coverage that leaves patients with excessive out-of-pocket costs. The costs can be high enough such that Medicare beneficiaries have not been immune to personal bankruptcy associated with medical debt. Several previous Quote of the Day messages have shown that cost sharing has only a negligible impact in reducing our national health expenditures, yet it often does cause financial hardship and can impair access.

The proposal to introduce a Part B surcharge for individuals purchasing Medigap plans is yet another means of shifting more costs to the patient. It is designed to discourage patients from buying Medigap plans that would significantly reduce the burden of cost sharing. Instead of increasing cost sharing, the financial burden should be reduced by folding Medigap benefits into the traditional Medicare program.

Even though President Obama and his handlers are trying to create an image that he is standing firm for middle-income Americans and against the right wing anti-government extremists, on Medicare he is actually moving to the right! He has violated the first rule of negotiation. You never compromise any of your basic policy positions before you begin.

Where should he have begun? He should have eliminated all cost sharing in Medicare, converted the financing infrastructure into a single payer system, and then moved the eligibility age to birth. But no. Free of the bonds of the right wing extortion, he drifted to the right anyway.

President Obama’s political positioning on Medicare

Living Within Our Means and Investing in the Future: The President’s Plan for Economic Growth and Deficit Reduction

Office of Management and Budget
September 2011

Health Savings

Increase income-related premiums under Medicare Parts B and D.

Under Medicare Parts B and D, certain beneficiaries pay higher premiums as a result of their higher levels of income. Beginning in 2017, the Administration proposes to increase income-related premiums under Medicare Parts B and D by 15 percent and maintain the income thresholds associated with income-related premiums until 25 percent of beneficiaries under Parts B and D are subject to these premiums. This will help improve the financial stability of the Medicare program by reducing the Federal subsidy of Medicare costs for those beneficiaries who can most afford them.

Modify Part B deductible for new beneficiaries.

Beneficiaries who are enrolled in Medicare Part B are required to pay an annual deductible. This deductible helps to share responsibility for payment of Medicare services between Medicare and beneficiaries. To strengthen program financing and encourage beneficiaries to seek high-value health care services, the Administration proposes to apply a $25 increase in the Part B deductible in 2017, 2019, and 2021 for new beneficiaries. Current beneficiaries or near retirees would not be subject to the revised deductible.

Introduce home health co-payments for new beneficiaries.

Medicare beneficiaries currently do not make co-payments for Medicare home health services. This proposal would create a home health copayment of $100 per home health episode, applicable for episodes with five or more visits not preceded by a hospital or other inpatient post-acute care stay. This would apply to new beneficiaries beginning in 2017.

Introduce a Part B premium surcharge for new beneficiaries that purchase near first-dollar Medigap coverage.

Medigap policies sold by private insurance companies provide beneficiaries additional support for covering healthcare costs by covering most or all of the cost sharing Medicare requires. This protection, however, gives individuals less incentive to consider the costs of health care services and thus raises Medicare costs and Part B premiums. Of particular concern are Medigap plans that cover substantially all Medicare copayments, including even the modest co-payments for routine care that most beneficiaries can afford to pay out of pocket. To encourage more efficient health care choices, the Administration proposes a Part B premium surcharge equivalent to about 15 percent of the average Medigap premium (or about 30 percent of the Part B premium) for new beneficiaries that purchase Medigap policies with particularly low cost-sharing requirements, starting in 2017. Current beneficiaries and near-retirees would not be subject to the surcharge.

http://www.whitehouse.gov/system/assets/drupal/omb/budget/fy2012/assets/jointcommitteereport.pdf

Having been burned repeatedly in negotiations with the Republicans, and fully aware of that the election season has already begun, President Obama stepped away from conducting negotiations over in their territory and has now released his own list of policies not tainted by compromise. Since there is no hope of passing this intact in the current Congress, releasing this proposal obviously was a political maneuver. Nevertheless, it is important to see where he stands on Medicare, if only he could have his way.

Although he had been in discussions on raising the Medicare eligibility age to 67, it is a relief to see that this is absent from his wish list. Also there is not even a hint that he might consider a privatization scheme such as the Republican premium support/voucher program. So what is in his proposal?

He would increase both Medicare Part B (physician) and Part D (drug) premiums for higher-income individuals and expand the number of beneficiaries who would be subject to these higher premiums. It is entirely appropriate for higher-income individuals to contribute more in taxes to the funding of Medicare, but once individuals are in the program they should all be treated the same. Requiring higher payments for higher-income individuals reduces their support for the traditional program and increases the political pressure to privatize. If more money is needed from higher-income Medicare beneficiaries then it should be collected through progressive income taxes and not through income-indexed premiums.

He would increase Part B deductibles for younger Medicare beneficiaries, but not for those already in the program. Just as assigning different premiums based on income decreases solidarity, the assignment of different deductibles based on age also takes a toll on solidarity.

Introducing co-payments for Medicare home health services shifts costs from the government to Medicare beneficiaries. In fact, new co-payments, higher premiums, and larger deductibles all expand the cost burden for beneficiaries, which can have the detrimental impact of impairing access.

Medicare already is a program with inadequate coverage that leaves patients with excessive out-of-pocket costs. The costs can be high enough such that Medicare beneficiaries have not been immune to personal bankruptcy associated with medical debt. Several previous Quote of the Day messages have shown that cost sharing has only a negligible impact in reducing our national health expenditures, yet it often does cause financial hardship and can impair access.

The proposal to introduce a Part B surcharge for individuals purchasing Medigap plans is yet another means of shifting more costs to the patient. It is designed to discourage patients from buying Medigap plans that would significantly reduce the burden of cost sharing. Instead of increasing cost sharing, the financial burden should be reduced by folding Medigap benefits into the traditional Medicare program.

Even though President Obama and his handlers are trying to create an image that he is standing firm for middle-income Americans and against the right wing anti-government extremists, on Medicare he is actually moving to the right! He has violated the first rule of negotiation. You never compromise any of your basic policy positions before you begin.

Where should he have begun? He should have eliminated all cost sharing in Medicare, converted the financing infrastructure into a single payer system, and then moved the eligibility age to birth. But no. Free of the bonds of the right wing extortion, he drifted to the right anyway.