PNHP

U.S. doctors' administrative costs 4 times higher than in Canada

U.S. doctors' administrative costs 4 times higher than in Canada

By Mark Crane
Medscape Today, Aug. 4, 2011

American physicians spend almost four times as much in money and staff time on administrative costs as physicians under the single-payer system in Ontario, Canada, a study published online August 3 in Health Affairs has found.

Dealing with multiple health plans on claims, prior authorizations, and pharmaceutical formularies is estimated to cost at least $82,975 per physician annually in the United States, compared with $22,205 in Ontario, according to the study, partially supported by The Commonwealth Fund, which favors single-payer systems.

If American physician practices had administrative costs similar to those in Ontario, the total savings for US health spending would be about $27.6 billion per year, according to estimates by lead author Dante Morra, assistant professor in the Department of Medicine at the University of Toronto, and colleagues.

The authors surveyed 141 Canadian physicians, 45 Canadian practice administrators, 668 American physicians, and 194 US administrators.

US physician practices interact with multiple health plans with different insurance products, each of which may have its own formulary of approved drugs and its own rules for prior authorization, billing, submitting claims, and determining payment. Canadian physicians generally interact with a single payer with a single product.

“The U.S. spends nearly twice as much per person on health care as any other country, and high administrative costs due to our inefficient and fragmented insurance system are a contributing factor,” Commonwealth Fund President Karen Davis said in a statement. “Greater continuity of insurance coverage and insurance administrative simplification reforms in the Affordable Care Act can begin to streamline health care administration and reduce the time medical staff must spend on billing and authorization issues.”

The biggest single factor in the cost disparity is due to the single-payer system in Canada, the authors state, adding that “it would be incorrect to assume that all of the extra US costs represent waste.…Having multiple payers clearly generates more administrative costs than a single-payer system. These costs should be balanced against possible benefits generated by such a system — for example, benefits that may arise from competition, innovation, and choice among insurance products.

“Prior authorization requirements increase administrative costs for physicians and health plans but may reduce the amount of inappropriate care provided; savings and increased quality generated by reducing inappropriate care should be matched against the costs of prior authorization. To our knowledge, no reliable estimates of these savings exist,” the authors write.

There are many other differences between the Canadian and American healthcare systems. For example, Ontario introduced a capitation model for physician funding 10 years ago. Doctors are paid according to the number of patients on their roster, not how many times a patient is seen.

Waiting lists are common in Canada. The median waiting time between referral from a general practitioner to the receipt of elective treatment is 18.21 weeks in 2010, up from 16.1 weeks in 2009, notes a 2010 survey by the Fraser Institute, a Canadian think-tank that favors a free-market approach to healthcare issues. Canadians wait on average 4.2 weeks for computed tomography, 9.8 weeks for magnetic resonance imaging, and 4.5 weeks for ultrasonography, the survey found.

Other findings from the Health Affairs study include the following:

* Nurses and medical assistants spend 20.6 hours per physician per week on administrative tasks, nearly 10 times the time spent by Canadian practices. The main reason is obtaining prior authorization in the United States.

* US clerical staffs spend 53.1 hours per physician per week on administrative tasks related to insurance, compared with 15.9 hours in Ontario.

* Senior administrators of US physician practices spend 163.2 hours a year overseeing claims and billing, compared with 24.6 hours a year in Ontario.

* Very little time is spent submitting quality data to health plans in either the United States or Ontario.

How can administrative costs be reduced in the United States? The authors cite recommendations from the Institute of Medicine and others that include “creating common, possibly mandatory standards for billing, claims payment, prior authorization, etc.; making all standard interactions electronic; using a single credentialing process; using a single quality measurement process; and using automated verification at the point of care of patient eligibility for health insurance benefits.”

They also note that “Section 1104 of the Affordable Care Act of 2010 instructs the Secretary of Health and Human Services to take steps to simplify interactions between providers and health plans.”

In addition, the reform law’s emphasis on new payment methods, such as bundled payments and pay-for-performance, and new ways of organizing healthcare delivery, such as accountable care organizations, could move US health care away from fee-for-service payment, and “reduce the administrative costs involved in producing, reviewing, and processing claims for each service provided.”

[PNHP note: See Dr. Don McCanne’s “Quote of the Day” comment on the study described above. For a more extensive comparison of U.S. and Canadian administrative costs, see “Costs of Health Care Administration in the United States and Canada,” by Dr. Steffie Woolhandler, Terry Campbell and Dr. David Himmelstein in the New England Journal of Medicine.]

http://www.medscape.com/viewarticle/747566

In support of universal Medicare

By Bill Davidson, M.D.
Lebanon Daily News, July 25, 2011

In past letters I have advocated for the idea that America should acquire a universal, single-payer health care system — an improved, Medicare-for-all. As Medicare has been very much in the news in recent months it seems appropriate for me to explain why I would expand a program which some say is “broke,” contributing to our national debt, and non-sustainable.

It is true that the rising costs of health care are a major contributor to our economic malaise and do threaten our long term economic stability. This is just as true, however, for privately financed healthcare (Blue Cross, Aetna etc.) as it is for publicly financed programs such as Medicare.

To suggest that our economic problems are a result of publicly financed healthcare programs alone is simply a lie. Indeed, it is the publicly financed programs that run most efficiently and are the reason that countries such as Canada, Germany, Taiwan and France pay half as much for healthcare as we do.

Why do they save money? First, they eliminate the exploitive private insurance industry which in this country drains off $400 billion a year that could be spent on health care but instead goes for advertising, stockholder dividends and CEO salaries. Secondly, they group-negotiate with the pharmaceutical industry (like our VA) and get much lower prices on drugs. Third, by having one financing system in place, administrative costs of 15 percent are achievable.

Our present, dysfunctional, bureaucratic system based on private insurance has an administrative cost of 31 percent. It should be noted that two-thirds of all Canadian physicians are in private practice. That efficient and cost-effective model for delivering personalized healthcare is encouraged and stands in stark contrast to the present trend in the U.S., which finds doctors herded into large, less-efficient group practices controlled by hospitals and insurance companies. Unlike traditional Medicare, these practices limit the patient’s choice of providers and often leave decision-making to non-medical management.

Some would say that Americans are unwilling to adopt the strategies of other countries. I don’t believe that’s true. We had no trouble acquiring CAT scanners developed in England or laparoscopic surgical techniques developed in Europe. Despite the resistance of the oil and automotive industries, many Americans bought fuel-efficient, reliable Volkswagens and Hondas.

No. It isn’t the average American who is hesitant to adopt a system that guarantees quality healthcare to everyone at an affordable price. It is the exploiters of our healthcare system who stand to lose billions of dollars in profits who systematically influence the legislative process and keep us bemired in a wasteful system that serves their needs more than those of most Americans.

Expanding Medicare to include everyone has the potential to rein in the cost of health care — something the private insurance industry has failed to do over the past 30 years. Those who would malign and destroy Medicare are simply ignoring the facts and have political agendas that are not in the best interests of most Americans.

Dr. Bill Davidson is a cardiologist and resides in East Hanover, Pa.

http://www.ldnews.com/ci_18544947?IADID=Search-www.ldnews.com-www.ldnews.com

Medi-Cal's lesson for reform

Doctors say Medi-Cal reimbursement is too low

By Dustin Corcoran
San Francisco Chronicle, August 4, 2010

Medi-Cal covers essential health care services for the poorest and most vulnerable Californians, including seniors, pregnant women, children and people with disabilities. Despite the lifesaving care and preventive treatment that so many Medi-Cal patients have received, the state is planning drastic cutbacks to Medi-Cal that will irreparably harm patients and cost taxpayers more in expensive hospitalizations and emergency care.

The Legislature passed, and Gov. Jerry Brown signed, AB97, which includes a 10 percent reduction in Medi-Cal payment rates to physicians, hospitals, nursing homes and other providers, patient co-payments ($50 per emergency room visit, $5 per physician visit, $100 per day in the hospital), and a limit of seven physician office visits per year. If these cuts are allowed to take place, Medi-Cal would pay doctors just $11 per patient visit, just a fraction of what it would cost to take your dog to the veterinarian.

Cuts in reimbursement rates force physicians to reduce the number of Medi-Cal patients they can see, and now more than half of all Medi-Cal patients say they can’t find a doctor.

Currently, Medi-Cal is the source of health care for 1 in 5 Californians (about 7 million). With the implementation of health care reform right around the corner, 3 million more uninsured will soon be added to the state’s Medi-Cal program. But how can we adequately provide more care to more people with fewer resources? California already ranks last in Medicaid payment rates per enrollee.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/08/04/ED4T1KIL9C.DTL

Comment: 

By Don McCanne, MD

California has a Democratic governor and a Democratic legislature, yet look at what they just did. Although California already ranks last in Medicaid payment rates, they are reducing payments another 10 percent. Much worse, they are imposing unaffordable co-payments on these low-income patients, and are not allowing them more than an arbitrary seven office visits a year. Punishment of patients and their health care professionals is not the reform that we needed.

Whether or not California is successful in obtaining federal approval to impose these cuts, this action confirms that we cannot allow our government to condemn low-income patients to a bottom-tier welfare program, yet this is precisely what the Affordable Care Act calls for.

Let’s fix Medicare and expand it so that we can bring in everyone under an umbrella that isn’t riddled with leaks.

Medi-Cal’s lesson for reform

Doctors say Medi-Cal reimbursement is too low

By Dustin Corcoran
San Francisco Chronicle, August 4, 2010

Medi-Cal covers essential health care services for the poorest and most vulnerable Californians, including seniors, pregnant women, children and people with disabilities. Despite the lifesaving care and preventive treatment that so many Medi-Cal patients have received, the state is planning drastic cutbacks to Medi-Cal that will irreparably harm patients and cost taxpayers more in expensive hospitalizations and emergency care.

The Legislature passed, and Gov. Jerry Brown signed, AB97, which includes a 10 percent reduction in Medi-Cal payment rates to physicians, hospitals, nursing homes and other providers, patient co-payments ($50 per emergency room visit, $5 per physician visit, $100 per day in the hospital), and a limit of seven physician office visits per year. If these cuts are allowed to take place, Medi-Cal would pay doctors just $11 per patient visit, just a fraction of what it would cost to take your dog to the veterinarian.

Cuts in reimbursement rates force physicians to reduce the number of Medi-Cal patients they can see, and now more than half of all Medi-Cal patients say they can’t find a doctor.

Currently, Medi-Cal is the source of health care for 1 in 5 Californians (about 7 million). With the implementation of health care reform right around the corner, 3 million more uninsured will soon be added to the state’s Medi-Cal program. But how can we adequately provide more care to more people with fewer resources? California already ranks last in Medicaid payment rates per enrollee.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/08/04/ED4T1KIL9C.DTL

California has a Democratic governor and a Democratic legislature, yet look at what they just did. Although California already ranks last in Medicaid payment rates, they are reducing payments another 10 percent. Much worse, they are imposing unaffordable co-payments on these low-income patients, and are not allowing them more than an arbitrary seven office visits a year. Punishment of patients and their health care professionals is not the reform that we needed.

Whether or not California is successful in obtaining federal approval to impose these cuts, this action confirms that we cannot allow our government to condemn low-income patients to a bottom-tier welfare program, yet this is precisely what the Affordable Care Act calls for.

Let’s fix Medicare and expand it so that we can bring in everyone under an umbrella that isn’t riddled with leaks.

A single (payer) step to reduce U.S. physician overhead by $60,000

US Physician Practices Versus Canadians: Spending Nearly Four Times As Much Money Interacting With Payers

By Dante Morra, Sean Nicholson, Wendy Levinson, David N. Gans, Terry Hammons and Lawrence P. Casalino
Health Affairs, August 2011

Physician practices, especially the small practices with just one or two physicians that are common in the United States, incur substantial costs in time and labor interacting with multiple insurance plans about claims, coverage, and billing for patient care and prescription drugs. We surveyed physicians and administrators in the province of Ontario, Canada, about time spent interacting with payers and compared the results with a national companion survey in the United States. We estimated physician practices in Ontario spent $22,205 per physician per year interacting with Canada’s single-payer agency — just 27 percent of the $82,975 per physician per year spent in the United States. US nursing staff, including medical assistants, spent 20.6 hours per physician per week interacting with health plans — nearly ten times that of their Ontario counterparts. If US physicians had administrative costs similar to those of Ontario physicians, the total savings would be approximately $27.6 billion per year. The results support the opinion shared by many US health care leaders interviewed for this study that interactions between physician practices and health plans could be performed much more efficiently.

The price of inefficiencies is not only the cost measured in this study. When these inefficiencies result in frequent interruptions in the work of physicians and their staff, they are likely to interfere with patient care. Everyone — health plans, physicians and their staffs, and patients — will be better off if inefficiencies in transactions between physicians and health plans can be reduced.

http://content.healthaffairs.org/content/early/2011/08/03/hlthaff.2010.0893

Comment: 

By Don McCanne, MD

The U.S. spends over $60,000 more per physician per year than does Canada on the in-practice administrative costs of interacting with payers – four times as much in the U.S. as in the Canadian single payer system. That does not include the administrative costs of the U.S. private health insurers which will be 15 to 20 percent of premiums paid to plans in the exchanges being established by the Affordable Care Act.

A Health Affairs press release today stated, “Although the United States is not currently moving as a country toward a single-payer system, researchers offer ways to reduce administrative costs, including standardizing transactions as much as possible and conducting them electronically rather than by mail, fax, and phone.”

Unfortunately, the proposed use of standardized transactions conducted electronically hardly scratches the surface of this problem. Leaving in place a multitude of private and public plans with multiple benefit variations designed for the health care marketplace, with varying provider networks, and ever-changing patient eligibility can only perpetuate these administrative excesses.

What many in the policy community seem to forget is that it is not only the recovery of this administrative waste that would be of benefit, but we would all also benefit by the removal of the intrusive interference of the private insurers, the efficiencies of global budgeting and price negotiation, the assurance that everyone would be covered for life, benefits would be comprehensive, and financial barriers to care would be eliminated. Econometric models and the experience of other nations have demonstrated that we could have all of this without spending more than we already do.

Health Affairs and the sponsors of this study – The Commonwealth Fund and The Robert Wood Johnson Foundation – should not limit their recommendations to standardizing electronic transmissions. Instead of dismissing single payer with the passive observation that we are “not currently moving as a country toward a single-payer system,” they should be in the forefront of calling for a truly serious, in-depth look at the single payer model.

Instead of meekly submitting to the fact that we are hostages of the conservative revolution, we should break out and storm our centers of democracy, that is, if we still have a democracy.

Vladeck on the pernicious proposal of prohibiting first dollar coverage

Proposals To Forbid First-Dollar Coverage For Medicare Beneficiaries

By Bruce Vladeck, Ph.D
Kaiser Health News, August 2, 2011

The usual laundry lists of proposals for Medicare savings are already being circulated throughout official Washington. Most of these ideas have been around for years, and have never gotten past the talking stages because of political opposition or because they are simply bad ideas. But one especially pernicious proposal appears to have increasing traction among both politicians and policy analysts: the prohibition of first-dollar coverage in Medicare supplemental insurance, whether purchased in the individual markets or provided as a retiree benefit.

This proposal is based on a simple and seemingly self-evident syllogism. Medicare beneficiaries with supplemental insurance that provides them with first-dollar coverage by paying their deductibles and co-payments use more services than the small minority of beneficiaries without such coverage. Hence, forbidding such coverage would reduce use, thereby saving Medicare a pile of money.

American policymakers, and the health economists who enable them, are obsessed with issues of consumer demand, and the notion that health care is so expensive because Americans are so eager to consume it. In fact, insured Americans already have the highest out-of-pocket liabilities in the developed world, and use fewer services initiated by consumers. In the absence of supplemental coverage Medicare beneficiaries would have still higher out-of-pocket liabilities than other insured Americans, which is why essentially every beneficiary who can afford it seeks extra coverage. But while overuse of some services in some communities is inarguably a part of the Medicare cost problem, there is no compelling evidence that consumer-generated demand is a significant part of the problem. Whatever the political rhetoric, Medicare beneficiaries simply aren’t banging down the doors of physicians’ offices demanding extra MRIs and surgical procedures.

Quite the contrary: during the past decade, Congress has eliminated cost-sharing for most Medicare preventive services in response to concerns about the underuse of such services, and because of evidence that out-of-pocket costs were a significant deterrent, especially for less affluent and minority beneficiaries. More generally, while the evidence has been clear since the RAND experiments of the early 1970s that out-of-pocket costs reduce health care use, it’s also been clear that their effect is inversely related to disposable income: the less income a person has, the greater the effect of copayments and deductibles, not to mention the greater likelihood of poor health.

That’s why Medicaid historically forbade deductibles, and now permits them at only nominal levels. More importantly, the growth in out-of-pocket costs for health care consumers during the last decade or so has provided an abundance of illustrations of the basic fact that consumers deterred from seeking health care for economic reasons are just as likely to forego needed services as “discretionary” ones, and that that phenomenon is further correlated with income. Faced with higher out-of-pocket expenses, consumers may get fewer Botox treatments or buy fewer laxatives, but they also skip visits for management of their heart disease and diabetes, and don’t fill their prescriptions for hypertension medication.

The reason health insurance exists in the first place, after all, is to relieve individuals who are not medical experts of the need to figure out whether they can afford any particular medical service. In a rational world, policymakers worried about unnecessary or inappropriate use of specific services would just refuse to pay for those services. But in the contemporary American political environment, they might be accused of “rationing” or “death panels,” so they stay away. Instead, they appear to be willing, once again, to impose the consequences of their inability to control costs on those least able to bear them.

http://www.kaiserhealthnews.org/Stories/2011/August/02/different-takes-080211-vladeck.aspx

Comment: 

By Don McCanne, MD

Unreasonable consumer demand is not a significant source of our high health care spending. Measures that deprive patients of beneficial health care services by imposing penalties designed to suppress consumer demand are not only inappropriate, but are truly heartless.

Vladeck on the pernicious proposal of prohibiting first dollar coverage

Proposals To Forbid First-Dollar Coverage For Medicare Beneficiaries

By Bruce Vladeck, Ph.D
Kaiser Health News, August 2, 2011

The usual laundry lists of proposals for Medicare savings are already being circulated throughout official Washington. Most of these ideas have been around for years, and have never gotten past the talking stages because of political opposition or because they are simply bad ideas. But one especially pernicious proposal appears to have increasing traction among both politicians and policy analysts: the prohibition of first-dollar coverage in Medicare supplemental insurance, whether purchased in the individual markets or provided as a retiree benefit.

This proposal is based on a simple and seemingly self-evident syllogism. Medicare beneficiaries with supplemental insurance that provides them with first-dollar coverage by paying their deductibles and co-payments use more services than the small minority of beneficiaries without such coverage. Hence, forbidding such coverage would reduce use, thereby saving Medicare a pile of money.

American policymakers, and the health economists who enable them, are obsessed with issues of consumer demand, and the notion that health care is so expensive because Americans are so eager to consume it. In fact, insured Americans already have the highest out-of-pocket liabilities in the developed world, and use fewer services initiated by consumers. In the absence of supplemental coverage Medicare beneficiaries would have still higher out-of-pocket liabilities than other insured Americans, which is why essentially every beneficiary who can afford it seeks extra coverage. But while overuse of some services in some communities is inarguably a part of the Medicare cost problem, there is no compelling evidence that consumer-generated demand is a significant part of the problem. Whatever the political rhetoric, Medicare beneficiaries simply aren’t banging down the doors of physicians’ offices demanding extra MRIs and surgical procedures.

Quite the contrary: during the past decade, Congress has eliminated cost-sharing for most Medicare preventive services in response to concerns about the underuse of such services, and because of evidence that out-of-pocket costs were a significant deterrent, especially for less affluent and minority beneficiaries. More generally, while the evidence has been clear since the RAND experiments of the early 1970s that out-of-pocket costs reduce health care use, it’s also been clear that their effect is inversely related to disposable income: the less income a person has, the greater the effect of copayments and deductibles, not to mention the greater likelihood of poor health.

That’s why Medicaid historically forbade deductibles, and now permits them at only nominal levels. More importantly, the growth in out-of-pocket costs for health care consumers during the last decade or so has provided an abundance of illustrations of the basic fact that consumers deterred from seeking health care for economic reasons are just as likely to forego needed services as “discretionary” ones, and that that phenomenon is further correlated with income. Faced with higher out-of-pocket expenses, consumers may get fewer Botox treatments or buy fewer laxatives, but they also skip visits for management of their heart disease and diabetes, and don’t fill their prescriptions for hypertension medication.

The reason health insurance exists in the first place, after all, is to relieve individuals who are not medical experts of the need to figure out whether they can afford any particular medical service. In a rational world, policymakers worried about unnecessary or inappropriate use of specific services would just refuse to pay for those services. But in the contemporary American political environment, they might be accused of “rationing” or “death panels,” so they stay away. Instead, they appear to be willing, once again, to impose the consequences of their inability to control costs on those least able to bear them.

http://www.kaiserhealthnews.org/Stories/2011/August/02/different-takes-080211-vladeck.aspx

Unreasonable consumer demand is not a significant source of our high health care spending. Measures that deprive patients of beneficial health care services by imposing penalties designed to suppress consumer demand are not only inappropriate, but are truly heartless.

Health Insurers Sacrifice Americans for Profit

By Wendell Potter
PR Watch, Aug. 1, 2011

Three of the biggest health insurers have announced quarterly earnings in the past few days. If Americans were able to eavesdrop on what executives from those firms tell their Wall Street masters every three months, they would have a better understanding of why premiums keep going up while the number of people with medical coverage keeps going down.

It only takes three words, when you get right down to it, to describe the real of those folks: profits over people.

CIGNA and Humana are scheduled to report earnings this week. The three companies that have already spoken — UnitedHealth, WellPoint and Aetna — earned a combined $2.51 billion from April through the end of June, more than analysts expected. On a per share basis, their earnings were up more than 17 percent on average compared with the second quarter of 2010.

Those results were no anomaly. The big for-profit health insurers have been blowing analysts’ expectations out of the water for several quarters in a row, even as the country struggles to recover from the recession and the number of Americans without coverage — one out of every six of us — continues to rise.

Based on their strong performance during the first half of this year, UnitedHealth, WellPoint and Aetna have all have raised their profit forecast for 2011. In other words, they expect to earn far more this year than last year and far more than even the most hopeful investors and analysts had anticipated.

This has made Wall Street very happy indeed, as reflected in the breathtaking increase in the companies’ share prices over the past year. Since the end of July 2010, investors have bid up the stock by more than 50 percent at four of the big five. WellPoint, the laggard, saw its stock price increase by a still-impressive 35 percent.

One of the secrets to achieving these results is what the insurers euphemistically call “medical management.” That often translates into denied claims and denied coverage for doctor-ordered care. The fewer claims you pay and the more procedures you refuse to pay for, the more money is left over for investors to put in their pockets.

Another important way they’ve been able to sustain such a string of impressive earnings results is to shift more and more of the cost of care to their policyholders. An increasing percentage of these companies’ policyholders are enrolled in plans that require greater cost sharing. Those policyholders pay more for care out of their own pockets than ever before while their insurers are paying much less.

The insurers are loathe to admit this, and have been making up a host of incredible excuses to explain why they are paying so much less for care than investors and analysts had expected and so much less on a percentage basis than in previous years.

Unending Excuses to Duck the Truth

At the end of 2010, executives told Wall Street that the “utilization” of medical services was lower than in 2009 because the flu season last year was less severe. They assured investors utilization would return to more normal levels during the first quarter of 2011.

When it didn’t, the bad winter weather was to blame. Insurance executives wanted us to believe that people were not getting the care they needed because it was colder and snowier than usual.  They assured us that medical spending would jump again as soon as the weather improved and the ice and snow melted.

Surprise! It’s August and people are still not going to the doctor or picking up their prescriptions or checking into the hospital as much as they usually do.

And what’s the excuse this time? It’s the economy, they say — even though the recession officially ended more than a year ago.  At least UnitedHealth’s executives acknowledged that, as AP reported, “health plans that make patients more aware of the cost of care may be having an impact.”

May be? Give me a break. And stop the double-speak. What we’re so aware of is that we’re simply unable to get the care we need because of the often sky-high deductibles of today’s health plans, which insurers mislabel  “consumer-driven.”

Insurers’ Code Words

Insurance industry executives are experts at talking in code, which makes it difficult to understand just how much they value profits over people. Occasionally, though,  they slip up, as Aetna’s chief financial officer, Joseph Zubretsky, did last Wednesday during his company’s conference call with analysts.

Clearly concerned that investors might think Aetna was willing to grow by adding people to its rolls who might have substantial medical needs, Zubretsky disabused Wall Street of that notion.

“We would like to have both profit and growth, but if you have to choose between one or the other, you take margin and profit and you sacrifice the growth line,” Zubretsky said.

Whether he knew it or not, he was channeling WellPoint CEO Angela Braley. In a 2008 conference call with financial analysts, Braley had to acknowledge that her company had spent more on medical care during the previous three months than she and Wall Street had expected.

In the future, she promised, “We will not sacrifice profitability for membership.”

That was exactly what Wall Street wanted to hear.

WellPoint and Aetna and other insurers have demonstrated repeatedly that while they will do all they can to avoid sacrificing profitability for membership, they are quite willing to sacrifice their members — and the American public — for profits.

Wendell Potter is the former head of PR for CIGNA.

http://prwatch.org/news/2011/08/10929/health-insurers-sacrifice-americans-profit

What does Rick Scott mean by "choice"?

Florida submits Medicaid plan based on managed care to feds for approval

By John Kennedy
The Palm Beach Post, August 1, 2011

Florida officials sent a wide-ranging application Monday to the federal government for steering almost 3 million Medicaid patients into managed care, a major shift that has sparked heavy lobbying from critics who demand the Obama administration deny the move.

But Republican Gov. Rick Scott said he was confident the Centers for Medicare and Medicaid Services (CMS) would approve the request, which supporters say could save the state more than $1 billion when fully in place.

“I think that what we passed is going to be a model for Medicaid,” said Scott, a former health care executive. “A Medicaid recipient ought to have choice, just like all of us have choice for what insurance we want to buy. I think that’s positive.”

But he added, “We’ve got to make sure it’s a program we can afford as taxpayers. I think what we did will do those two things.”

http://www.palmbeachpost.com/news/state/florida-submits-medicaid-plan-based-on-managed-care-1681459.html

And…

State to limit HMOs in state employee insurance program

Health Beat
August 2, 2011

Florida is changing part of its state-employee health insurance program to offer only one HMO in each county.  The state Department of Management Services, which oversees employee insurance, said changes in the program would save an estimated $400 million over two years. The changes also would require thousands of state employees to switch to different HMOs, a process that would begin in late September.

Insurers UnitedHealthcare of Florida and Coventry Health Care of Florida filed formal protests Monday against the changes. United argued, for example, that the changes could actually increase costs. That is because United — which would be shut out of the program in much of the state — says it can negotiate better discounts than other HMOs.

But Gov. Rick Scott and DMS Secretary Jack Miles touted the savings from the plan.

“Saving taxpayer dollars wasn’t just a campaign gimmick,” Scott said in a news release. “I meant what I said when I ran for office, and I urge Secretary Miles and his team to keep pushing hard every day to deliver more savings and better results.”

http://health.nsfblogs.com/?p=220

Comment: 

By Don McCanne, MD

Although Rick Scott was certainly tarnished when his company, Columbia/HCA paid the largest fraud settlement in U.S. history, he has nevertheless been chosen by Florida Republicans to serve as their governor. One of his messages was to achieve savings in health care by promoting choice. Is he touting a fundamental economic principle, or is he using this rhetoric to masquerade his conservative ideology?

Look at what he is trying to do with Medicaid in his state. He wants to force Medicaid patients into managed care organizations claiming that giving them the right to choose insurers will reduce costs. If so, then why isn’t taking away from them their right to choose their health care professionals and institutions going to increase costs?

What about the state employee health insurance program? He is going to save money by taking away the employees’ choice of HMOs, limiting each county to only one HMO for government employees.

His use of the term “choice” is another fraud, but it is no worse than the fraud that progressives perpetrated when they campaigned for health reform using the slogan of “CHOICE.” Their proposal offered only choice of restrictive private health plans while preventing true choice of health care professionals and institutions that people could have had through a Medicare-like national health program.

Today’s final passage of the Budget Control Act doesn’t bode well for the future of placing policy above political rhetoric. In the name of “saving the economy,” the Democrats cooperated with the Republicans in slashing public programs while failing to tap important revenue sources in our nation that happens to have one of the lowest tax burdens of all industrialized nations.

Will we ever have the choice of truly responsible political leaders? It seems unlikely as long as Americans rely on billionaire disinformation campaigns for their understanding of public policy options.

Getting Up Close And Personal With Emergency Care, Canadian Style

By Michelle Andrews
Kaiser Health News, Aug. 2, 2011

It had been a gorgeous day of cycling the rolling hills of Quebec’s Eastern Townships. I wasn’t traveling very fast when I hit a patch of gravel on the trail, but I went flying, landing hard on my left side.

I sat up, holding my left arm. I couldn’t lift it, and it hurt much more than could be explained by the cuts and scrapes that were dripping blood all over my shorts. Meanwhile, the base of the thumb on my right hand, with which I’d apparently tried to break my fall, was misshapen and swollen. I’d also injured my left flank, as I discovered when I tried to walk.

As my two friends propped me up and tried to identify our location for the 911 dispatcher, I awaited my first real-life encounter with the mostly government-funded Canadian health-care system.

As a health care writer, I talk with people all the time about their experiences navigating the system, whether in the United States or elsewhere. Writing about health care is different from writing about the arts, say, or sports, in one crucial way: When you write about health care, you’re often left feeling profoundly grateful that you didn’t have to experience firsthand the event that you’re describing. But now my luck had turned, and I was about to get up close and personal with emergency care, Canadian style.

The ambulance arrived within 15 minutes, and I had a bumpy but uneventful ride to the hospital, a regional trauma center at one of the local universities. On arrival, we showed them my passport and American insurance card. Because I was a trauma patient, I was wheeled right in, just as would happen in a U.S. hospital. A nurse removed my clothes, cutting off my shirt since I couldn’t move my arm. Another nurse drew blood.

At the request of a very young-looking resident, I moved various body parts on command and answered questions about what hurt. The resident, who was my main contact throughout the visit, also looked over my injuries, including checking my ears and eyes. She was friendly and kind, and kept up a running commentary in mostly fluent English explaining what she and others were doing.

(One of my friends, a French-speaking Montreal resident, stayed with me and interpreted when the medical staff’s questions or my answers were complicated.)

One of the most striking things about the exam was how little high-technology equipment they employed. Until I had X-rays made of my hand, hip, shoulder and knee, a blood-pressure cuff was the most advanced equipment I encountered.

Emergency department technology use varies, of course, in Canada and elsewhere. Still, clinicians at a trauma center in the United States treating someone with injuries similar to mine would probably wheel a portable ultrasound machine to the bedside in the trauma bay to scan for internal injuries, says Sandra Schneider, president of the American College of Emergency Physicians. They would also probably do CT scans, perhaps of my neck, pelvis and back, to make sure there were no bone breaks that didn’t show up on the X-rays. Some of the tests might not be absolutely necessary, but “a lot of what [U.S. emergency physicians] do is because we are very frightened of getting sued, because we get sued so often,” says Schneider.

In an analysis of data from 2003 to 2008, researchers at Yale and in Canada found that Americans were nearly twice as likely to get a CT scan during an emergency department visit as were Canadians living in Quebec.

In Canada, residents who go to the emergency department pay nothing for the visit, not even for X-rays or other imaging tests or for lab work, says Michael Schull, an emergency physician who co-authored the study on CT use. Patients would be charged for specialist visits and if they were admitted to the hospital, however.

“Hospitals aren’t making any money off these tests,” Schull says. “There’s no incentive to do them, because they’re not going to get paid for them.”

After the X-rays were taken and I was wheeled back into the trauma bay (No. 13, but I figured I’d already had my bad luck for the day), the resident came to my bedside with a big smile on her face and said, “You really are in pain! You have three fractures!”

Validation is nice, but I wished the news were different.

I had two fractures at the top of the humerus, the long arm bone that attaches to the shoulder, and another break in a bone at the base of my thumb. The shoulder breaks could be expected to heal cleanly, she said, but the thumb was slightly out of alignment and might require surgery. There were no broken bones in my pelvis or hip; the pain and difficulty walking I was experiencing there was probably caused by torn or otherwise damaged muscles, tendons and ligaments.

The trauma team referred me to an orthopedist to examine my shoulder and a plastic surgeon with expertise in hands to look at my thumb. Unfortunately, an orthopedist wouldn’t be able to see me until two days later. (The chief orthopedic resident, however, stopped by that night and reassured me that it would be okay to wait.) I did get examined by a plastic surgeon that evening, but my friends had to drive me to a sister hospital several miles away to see him. Specialists, it seemed, were pretty thin on the ground.

According to a 2010 Commonwealth Fund survey of health care in 11 countries, 33 percent of Canadians waited six days or more to see a specialist when they were sick, compared with 19 percent of Americans.

My pelvis apparently did not warrant special attention. Since the injury seemed to be muscular rather than skeletal, the hospital staff would do nothing further to diagnose what was wrong, the resident said. Her recommendation for me — rest and exercise — would probably be the same no matter what I’d done to any tissue.

I couldn’t argue with her reasoning, and if she was right, it was the sensible course. But what a difference in approach from what I would be likely to experience in the United States, Schneider says, where clinicians would probably have worked hard to nail down a definite diagnosis. I left with prescriptions for morphine, naproxen (an anti-inflammatory) and Tylenol.

Puzzled by my U.S. private insurance card, the billing person estimated that my care that night would cost 700 Canadian dollars (about $740) and charged my credit card. If it turned out I had been overcharged, she said, they would send me a refund. Yes, you read that right: overcharged.

Although comparing costs and bills is tricky, by any measure my evening in the Canadian emergency department was a good deal.

http://www.kaiserhealthnews.org/Features/Insuring-Your-Health/Michelle-Andrews-on-ER-Care-Canadian-Style.aspx

Everybody likes Medicare — so why not try it for everybody?

By Elizabeth Frost, M.D.
Twin Cities Daily Planet, July 31, 2011

The other day Representative Michelle Bachmann was taking a hit at President Obama: She accused the national health reform law of trying to destroy Medicare and force the evils of Obamacare onto the elderly. That Obama. But really, isn’t it interesting that even Michelle Bachman jumps up to defend one of our nation’s largest “socialist” programs? Why is that? Why is it so popular that Paul Ryan may meet his political demise by trying to gut it? This weekend Medicare has its 46th birthday, and I want to write a little about why we should be celebrating.

First of all, Medicare saves money. Its overhead is between 1-3%, in contrast to the private insurance industry that has administrative and profit overheads of 10-25%. That is a savings of 10 – 20%. Also costs don’t increase as fast in Medicare as they do in private insurance. We are a nation with a lot of new health technology, we live longer and this does cost money. For example since 1970 the cost of medical care adjusted to inflation has gone up 400%. That is a big increase, but the same time period from 1970 to today the cost of private insurance adjusted for inflation has gone up 700%.

We also know that Medicare is a good deal for the tax payers by looking at Medicare Advantage Insurance programs. This was the attempt by the Bush Administration to create “competition” by privatizing some Medicare programs. They have shown to waste billions of dollars by charging more for healthier patients and then dropping those same patients once they become sick. It is called “picking the cherries and spitting out the core” and it is a real phenomena. The Obama’s Affordable Care Act is slowly shutting down the wasteful private health insurance options for Medicare.

So all we need to do to make Medicare financially solvent is to increase the payroll tax by a small fraction of a percent. The rate has only been increased once, in the mid-80s, and it is time to do it again.

Medicare is an efficient, effective way of health care financing. It is what we all want for our parents and ourselves as we get older and heck — it probably is a good idea for the entire nation. If we had Medicare-For-All maybe it would be so popular that Michelle Bachmann would be forced to defend it, too.

Elizabeth Frost is a family doctor practicing in Minneapolis. She co-chairs the Minnesota Chapter of Physicians for a National Health Program.

What does Rick Scott mean by “choice”?

Florida submits Medicaid plan based on managed care to feds for approval

By John Kennedy
The Palm Beach Post, August 1, 2011

Florida officials sent a wide-ranging application Monday to the federal government for steering almost 3 million Medicaid patients into managed care, a major shift that has sparked heavy lobbying from critics who demand the Obama administration deny the move.

But Republican Gov. Rick Scott said he was confident the Centers for Medicare and Medicaid Services (CMS) would approve the request, which supporters say could save the state more than $1 billion when fully in place.

“I think that what we passed is going to be a model for Medicaid,” said Scott, a former health care executive. “A Medicaid recipient ought to have choice, just like all of us have choice for what insurance we want to buy. I think that’s positive.”

But he added, “We’ve got to make sure it’s a program we can afford as taxpayers. I think what we did will do those two things.”

http://www.palmbeachpost.com/news/state/florida-submits-medicaid-plan-based-on-managed-care-1681459.html

And…

State to limit HMOs in state employee insurance program

Health Beat
August 2, 2011

Florida is changing part of its state-employee health insurance program to offer only one HMO in each county.  The state Department of Management Services, which oversees employee insurance, said changes in the program would save an estimated $400 million over two years. The changes also would require thousands of state employees to switch to different HMOs, a process that would begin in late September.

Insurers UnitedHealthcare of Florida and Coventry Health Care of Florida filed formal protests Monday against the changes. United argued, for example, that the changes could actually increase costs. That is because United — which would be shut out of the program in much of the state — says it can negotiate better discounts than other HMOs.

But Gov. Rick Scott and DMS Secretary Jack Miles touted the savings from the plan.

“Saving taxpayer dollars wasn’t just a campaign gimmick,” Scott said in a news release. “I meant what I said when I ran for office, and I urge Secretary Miles and his team to keep pushing hard every day to deliver more savings and better results.”

http://health.nsfblogs.com/?p=220

Although Rick Scott was certainly tarnished when his company, Columbia/HCA paid the largest fraud settlement in U.S. history, he has nevertheless been chosen by Florida Republicans to serve as their governor. One of his messages was to achieve savings in health care by promoting choice. Is he touting a fundamental economic principle, or is he using this rhetoric to masquerade his conservative ideology?

Look at what he is trying to do with Medicaid in his state. He wants to force Medicaid patients into managed care organizations claiming that giving them the right to choose insurers will reduce costs. If so, then why isn’t taking away from them their right to choose their health care professionals and institutions going to increase costs?

What about the state employee health insurance program? He is going to save money by taking away the employees’ choice of HMOs, limiting each county to only one HMO for government employees.

His use of the term “choice” is another fraud, but it is no worse than the fraud that progressives perpetrated when they campaigned for health reform using the slogan of “CHOICE.” Their proposal offered only choice of restrictive private health plans while preventing true choice of health care professionals and institutions that people could have had through a Medicare-like national health program.

Today’s final passage of the Budget Control Act doesn’t bode well for the future of placing policy above political rhetoric. In the name of “saving the economy,” the Democrats cooperated with the Republicans in slashing public programs while failing to tap important revenue sources in our nation that happens to have one of the lowest tax burdens of all industrialized nations.

Will we ever have the choice of truly responsible political leaders? It seems unlikely as long as Americans rely on billionaire disinformation campaigns for their understanding of public policy options.