National Partisan Debate Elbows in on California

By David Gorn
California Healthline
April 5, 2011

A Field Poll on attitudes toward health care reform in California had some interesting results — including a much more positive feeling about reform among Californians than is found in national polls.

One of the main results this year and last, according to Field pollster Mark DiCamillo, is that opinions on health care are highly partisan.

“The data were very partisan last year, and the reality of the data is, we haven’t had that much of a change since then. The amount of knowledge people have about reform is not greater than last year, but there’s so much heat on this issue, so much of a partisan divide — it’s here, it has been here and I don’t expect it to go away anytime soon.”

That partisan element has not only influenced opinions, he said, but has reinforced factual misconceptions, as well. “The dissonance that’s going on is just amazing to me,” DiCamillo said. “The predispositions people have about health care are coloring what’s going on in reality.”

For instance, he said, 36% of Californians believe that undocumented residents will be better off from the health care reform law, despite the fact that the law specifically excludes undocumented residents from participating.

“We actually see the highest degree of confusion among people who say they have more knowledge [about health care reform issues],” DiCamillo said. “That’s consistent with Tea Party voters and Republicans,” he said, “and they’re also more likely to believe that illegal immigrants will benefit. So that self-reported knowledge, you have to take it with a grain of salt.”

http://www.californiahealthline.org/capitol-desk/2011/4/secretary-dooley-on-partisan-politics-poll.aspx

And…

California Voters Remain Supportive of Health Care Law

By Mark DiCamillo and Mervin Field
The Field Poll
April 4, 2011

Table 2b
Opinions of the health care law by stated level of knowledge about the law

Oppose
57% – Very knowledgeable
39% – Somewhat knowledgeable
29% – Not too/not at all knowledgeable

Support
41% – Very Knowledgeable
56% – Somewhat knowledgeable
50% – Not too/not at all knowledgeable

Table 3b
Opinions of the health care law by media source
TV news source

Oppose
35% – CNN
73% – Fox News
37% – NBC
33% – ABC
31% – MSNBC
36% – CBS
14% – Univision/Telemundo
34% – Other TV/Local news

Support
56% – CNN
22% – Fox News
52% – NBC
55% – ABC
63% – MSNBC
51% – CBS
66% – Univision/Telemundo
52% – Other TV/Local News

http://www.field.com/fieldpollonline/subscribers/Rls2374.pdf

Those of us who are quite knowledgeable about health policy are often astounded by not only the amount of misinformation about health reform, but also by the self-confidence of those who are often the least well informed. This new California Field Poll provides some interesting observations in this regard.

As Field pollster Mark DiCamillo explains, 36% of Californians believe that undocumented residents will be better off from the health care reform law even though that is untrue and is spelled out in the law, and yet, “We actually see the highest degree of confusion among people who say they have more knowledge [about health care reform issues],” and “That’s consistent with Tea Party voters and Republicans.” The poll numbers confirm that those who oppose the Affordable Care Act claim to be more knowledgeable about the law whereas those who support it do not have the same level of confidence in their knowledge.

Look at the sources of their information. For those who oppose the law, many more rely on Fox News and not on the other television news sources. In contrast, those who support the law do not rely on Fox News but are fairly evenly distributed amongst the networks and CNN, with greater dependency on MSNBC and Univision/Telemundo. Considering the large Hispanic population in California, the last observation is particularly relevant.

In a land that values free speech so highly and has an abundance of information resources, how did we end up with such a large sector of our population so heavily reliant on a source so lacking in credibility? Even more perplexing, why do they rigidly insist that they are highly knowledgeable and that our very credible, well documented facts are wrong even when all of the objective data is presented to them? Is it just that these people are incapable of critical thinking, or is it that Fox News has discovered the secret of mass mesmerization? Either way, it’s scary.

The Path to Prosperity

Fiscal Year 2012 Budget Resolution
Chairman Paul Ryan of Wisconsin
House Committee on the Budget

Premium support – a better way to deliver secure benefits

Starting in 2022, new Medicare beneficiaries will be enrolled in the same kind of health care program that members of Congress enjoy. Future Medicare recipients will be able to choose from a list of guaranteed coverage options, and they will be given the ability to choose a plan that works best for them. This is not a voucher program, but rather a premium-support model. A Medicare premium-support payment would be paid, by Medicare, to the plan chosen by the beneficiary, subsidizing its cost.

The premium-support model would operate similar to the way the Medicare prescription-drug benefit program works today. The Medicare premium-support payment would be adjusted so that wealthier beneficiaries would receive a lower subsidy, the sick would receive a higher payment if their conditions worsened, and lower-income seniors would receive additional assistance to cover out-of-pocket costs.

This approach to strengthen the Medicare program ensures security and affordability for seniors now and into the future. First, it ensures security by setting up a tightly regulated exchange for Medicare plans. Health plans that choose to participate in the Medicare exchange must agree to offer insurance to all Medicare beneficiaries, to avoid cherry-picking and ensure that Medicare’s sickest and highest-cost beneficiaries receive coverage.

While there would be no disruptions in the current Medicare fee-for-service program for those currently enrolled or becoming eligible in the next ten years, all seniors would have the choice to opt into the new Medicare program once it begins in 2022. No senior would be forced to stay in the old program. This budget gives seniors the freedom to choose a plan that works best for them and guarantees health security throughout their retirement years.

http://budget.house.gov/UploadedFiles/PathToProsperityFY2012.pdf

Under Republican control, the House Budget Committee proposes phasing out the traditional Medicare program and replacing it with an insurance exchange offering a variety of private plans with the government’s role limited to offering a premium support (same mechanism as a voucher) to apply toward the purchase of a plan. This converts Medicare from a defined benefit (specified benefits are covered) to a defined contribution (the premium support being a specified dollar amount contributed toward the purchase of a private plan).

This proposal treats the budget as the patient, curing the budget problems with the trade off of further burdening the Medicare beneficiaries who are already paying too much out of pocket. It shifts future increases in health care costs from the government to the beneficiaries. It is much easier for Congress to control federal spending by limiting the value of the premium support rather than trying to reduce the benefit package.

The proposal would adjust the premium support for those with greater health care needs, but that is very difficult to do in a timely manner in that an adjustment next year doesn’t help to relieve this year’s increased costs. Also risk adjusting is very difficult in that it requires having a precise assessment of each individual’s health status and anticipated needs. It is a profound change from the current Medicare program in which equitable funding through the tax system is divorced from the uniform benefit package which everyone shares.

The proposal also would reduce premium support for wealthier Medicare beneficiaries, requiring them to pay more for exchange plans. Actually this principle of progressive financing already exists. Although the current standard premium for Medicare Part B is $96.40 for most individuals ($115.40 for new beneficiaries), it is indexed to income. Those with an income of $214,000 pay $438.20 (including an added Part D premium only for higher-income individuals).

Although progressive financing is an equitable concept, it belongs over on the tax revenue side for funding of the entire Medicare risk pool. By having it as a progressive premium on the benefit side, it fractures solidarity by creating a desire for the wealthy to obtain their own coverage and care independently of Medicare, since they are paying higher premiums anyway. Once they are on their own, they would look upon Medicare as a welfare program, not unlike Medicaid except with much fewer benefits, and chronic underfunding would be inevitable.

The debate that we should be having is over an improved Medicare for everyone. The sad state of politics today is certainly exemplified by the fact that those supporting the transfer of wealth from the masses to our plutocracy have been able to reframe the debate as a need to save our federal budget by cutting back on our social programs, especially Medicare and Medicaid (while reducing the tax rate on the wealthy from 35% down to 25%). What ever happened to common decency?

Department of Health and Human Services
Centers for Medicare and Medicaid Services

For the reasons set forth in the preamble, the Centers for Medicare & Medicaid Services proposes to amend 42 CFR Chapter IV by adding part 425 to read as follows:

SUBCHAPTER B–MEDICARE PROGRAM

PART 425–MEDICARE SHARED SAVINGS PROGRAM

Subpart A–General Provisions

§425.2 Basis and scope.

(a) Basis. This part implements section 1899 of the Act by establishing a shared savings program that promotes accountability for a patient population, coordinates items and services under parts A and B, and encourages investment in infrastructure and redesigned care processes for high quality and efficient services. Under this program, groups of providers of services and suppliers meeting criteria specified by the Secretary may work to together to manage and coordinate care for Medicare fee-for-service beneficiaries through an accountable care organization (ACO). ACOs that meet quality performance standards established by the Secretary are eligible to receive payments for shared savings. During years in which the ACO is participating in a two-sided model, the ACO may be required to share losses.

(b) Scope. This part sets forth the following:
(1) The eligibility requirements for an ACO to participate in the Medicare Shared Savings Program (Shared Savings Program).
(2) Program requirements, including quality and other reporting requirements.
(3) The method for assigning Medicare fee-for-service beneficiaries to ACOs.
(4) Payment criteria and methodologies (one-sided model and two-sided model).
(5) Compliance monitoring and sanctions for noncompliance.
(6) Reconsideration of adverse determinations.

Proposed rule (429 pages):
http://www.ofr.gov/OFRUpload/OFRData/2011-07880_PI.pdf

Comment: 

By Don McCanne, MD

Accountable care organization (ACO) is a concept that grew out of concerns over excessive levels of spending for health care that is often only mediocre. It was thought that health care professionals and facilities could organize themselves into integrated organizations through which they would become accountable for both the cost and the quality of health care.

The Affordable Care Act established the Medicare Shared Savings Program which would use ACOs to achieve savings in the Medicare fee-for-service program, and the savings would be split between the ACOs and the government. The proposed rule for ACOs has now been released. I’ll try to reduce the 429 pages down into a few salient comments.

* The ACO would be composed of professionals arranged in networks or in group practices, and may partner with or be employed by hospitals.

* The ACO is accountable for the quality, cost, and overall care of the Medicare fee-for-service (FFS) beneficiaries assigned to it.

* The ACO shall include primary care ACO professionals that are sufficient for the Medicare FFS beneficiaries assigned to the ACO (minimum 5000 beneficiaries).

* The ACO shall have in place a leadership and management structure that includes clinical and administrative systems.

* The ACO shall define processes to promote evidence-based medicine and patient engagement, report on quality and cost measures, and coordinate care, such as through the use of telehealth, remote patient monitoring, and other such enabling technologies.

* A benchmark will be established based on recent spending in the fee-for-service Medicare program.

* If spending for patients assigned to the ACO falls below the benchmark, the ACO will be rewarded with a portion of the amount saved, and the government keeps the rest.

* If spending for patients assigned to the ACO is more than the benchmark, then the ACO must pay a penalty of a portion of the excess (with a maximum two-year exemption for ACOs participating as a “one-sided” model with lower rewards but no penalty).

* The ACO must meet detailed quality requirements to qualify for the shared savings, but also may be terminated for failure to meet minimum standards.

* Patients will have free choice of any physician at all times, but will be assigned to an ACO based on plurality use of primary care services, for the purpose of assigning accountability for savings and quality. The ACO, which theoretically controls cost and quality for the patient assigned to it and will be rewarded or punished for the results, will have no control of the cost and quality of care delivered outside of the ACO.

* And over 400 pages of etc., etc.

Under the proposed rules, ACOs are not simple organizations formed on just a handshake. They require a formal legal structure with management, a specified governance board, a medical director, a quality assurance program, and more. They must implement evidence-based clinical guidelines.  The required documentation of quality is particularly onerous. They must have an infrastructure, such as information technology, to collect and evaluate data, and provide feedback. They must comply with extensive legal, business, and clinical documentation requirements. Since ACOs often involve consolidation within the health care delivery system, they must coordinate with antitrust agencies.

Obviously, considerable time, effort and expense is involved, so the reward must be worthwhile. And what is that reward? If they can improve their productivity while meeting quality standards, the financial benefit accrues to the government, but the reward is that the government lets them have a fraction of their productivity gains, providing that they are compliant with the complex set of rules. Since it’s almost impossible to continue to improve productivity in health care year after year, the reward would dry up soon.

With the trend of increasing frequency and intensity of services, there is a risk that the ACO may exceed the benchmark and have to pay back to the government a portion of the higher spending as a penalty.

What would happen if a group of professionals who were considering forming an ACO decided not to? First, they wouldn’t have all of the extra expenses and effort that establishing an ACO would require. They certainly would not have an incentive to reduce Medicare’s spending (i.e., reduce their income) since they would keep all revenues and not have to share them with the government. And if their spending for Medicare exceeded the benchmark? They would still keep it all, and wouldn’t have to pay a penalty.

Since most people with any business sense would never participate in such a scheme, why is it that there seems to be such a rush to form ACOs? In my opinion, they are not looking for the Medicare fee-for-service business. They are forming commercial ACOs in the private sector, looking for the private insurance business that will expand greatly in the new insurance exchanges. They are taking advantage of the prevailing attitude that we must back off on enforcing antitrust regulations in order to provide flexibility for the ACOs. They are consolidating to gain greater market control. Many are using “accountable care organization” as a deceptive label for expanded managed care oligopolies and monopolies.

The notion of accountable care organization was originated as a well meaning, altruistic, aspirational concept by individuals who really care about the health care that all of us receive. To be successful in improving quality and reducing costs the concept would have to be dependent on patients and health care professionals and administrators who were determined to do the right thing regardless of pecuniary or other self-interests. Yet health care, as the business that it is – like it or not – cannot afford to embrace altruism, for it would fail in its business responsibilities to maximize market
opportunities.

Does it have to be this way? Do we really need to depend upon private stewards devoted to the amoral business ethic to administer the financing of health care? Well, when you think about it, a single payer system is an automated system of financing health care that does not depend on the altruism of its players. That’s because the single payer model is structured as an altruistic, aspirational system that, quite automatically, actually does, in itself, improve quality and control costs. It just works.

Department of Health and Human Services
Centers for Medicare and Medicaid Services

For the reasons set forth in the preamble, the Centers for Medicare & Medicaid Services proposes to amend 42 CFR Chapter IV by adding part 425 to read as follows:

SUBCHAPTER B–MEDICARE PROGRAM

PART 425–MEDICARE SHARED SAVINGS PROGRAM

Subpart A–General Provisions

§425.2 Basis and scope.

(a) Basis. This part implements section 1899 of the Act by establishing a shared savings program that promotes accountability for a patient population, coordinates items and services under parts A and B, and encourages investment in infrastructure and redesigned care processes for high quality and efficient services. Under this program, groups of providers of services and suppliers meeting criteria specified by the Secretary may work to together to manage and coordinate care for Medicare fee-for-service beneficiaries through an accountable care organization (ACO). ACOs that meet quality performance standards established by the Secretary are eligible to receive payments for shared savings. During years in which the ACO is participating in a two-sided model, the ACO may be required to share losses.

(b) Scope. This part sets forth the following:
(1) The eligibility requirements for an ACO to participate in the Medicare Shared Savings Program (Shared Savings Program).
(2) Program requirements, including quality and other reporting requirements.
(3) The method for assigning Medicare fee-for-service beneficiaries to ACOs.
(4) Payment criteria and methodologies (one-sided model and two-sided model).
(5) Compliance monitoring and sanctions for noncompliance.
(6) Reconsideration of adverse determinations.

Proposed rule (429 pages):
http://www.ofr.gov/OFRUpload/OFRData/2011-07880_PI.pdf

Accountable care organization (ACO) is a concept that grew out of concerns over excessive levels of spending for health care that is often only mediocre. It was thought that health care professionals and facilities could organize themselves into integrated organizations through which they would become accountable for both the cost and the quality of health care.

The Affordable Care Act established the Medicare Shared Savings Program which would use ACOs to achieve savings in the Medicare fee-for-service program, and the savings would be split between the ACOs and the government. The proposed rule for ACOs has now been released. I’ll try to reduce the 429 pages down into a few salient comments.

* The ACO would be composed of professionals arranged in networks or in group practices, and may partner with or be employed by hospitals.

* The ACO is accountable for the quality, cost, and overall care of the Medicare fee-for-service (FFS) beneficiaries assigned to it.

* The ACO shall include primary care ACO professionals that are sufficient for the Medicare FFS beneficiaries assigned to the ACO (minimum 5000 beneficiaries).

* The ACO shall have in place a leadership and management structure that includes clinical and administrative systems.

* The ACO shall define processes to promote evidence-based medicine and patient engagement, report on quality and cost measures, and coordinate care, such as through the use of telehealth, remote patient monitoring, and other such enabling technologies.

* A benchmark will be established based on recent spending in the fee-for-service Medicare program.

* If spending for patients assigned to the ACO falls below the benchmark, the ACO will be rewarded with a portion of the amount saved, and the government keeps the rest.

* If spending for patients assigned to the ACO is more than the benchmark, then the ACO must pay a penalty of a portion of the excess (with a maximum two-year exemption for ACOs participating as a “one-sided” model with lower rewards but no penalty).

* The ACO must meet detailed quality requirements to qualify for the shared savings, but also may be terminated for failure to meet minimum standards.

* Patients will have free choice of any physician at all times, but will be assigned to an ACO based on plurality use of primary care services, for the purpose of assigning accountability for savings and quality. The ACO, which theoretically controls cost and quality for the patient assigned to it and will be rewarded or punished for the results, will have no control of the cost and quality of care delivered outside of the ACO.

* And over 400 pages of etc., etc.

Under the proposed rules, ACOs are not simple organizations formed on just a handshake. They require a formal legal structure with management, a specified governance board, a medical director, a quality assurance program, and more. They must implement evidence-based clinical guidelines.  The required documentation of quality is particularly onerous. They must have an infrastructure, such as information technology, to collect and evaluate data, and provide feedback. They must comply with extensive legal, business, and clinical documentation requirements. Since ACOs often involve consolidation within the health care delivery system, they must coordinate with antitrust agencies.

Obviously, considerable time, effort and expense is involved, so the reward must be worthwhile. And what is that reward? If they can improve their productivity while meeting quality standards, the financial benefit accrues to the government, but the reward is that the government lets them have a fraction of their productivity gains, providing that they are compliant with the complex set of rules. Since it’s almost impossible to continue to improve productivity in health care year after year, the reward would dry up soon.

With the trend of increasing frequency and intensity of services, there is a risk that the ACO may exceed the benchmark and have to pay back to the government a portion of the higher spending as a penalty.

What would happen if a group of professionals who were considering forming an ACO decided not to? First, they wouldn’t have all of the extra expenses and effort that establishing an ACO would require. They certainly would not have an incentive to reduce Medicare’s spending (i.e., reduce their income) since they would keep all revenues and not have to share them with the government. And if their spending for Medicare exceeded the benchmark? They would still keep it all, and wouldn’t have to pay a penalty.

Since most people with any business sense would never participate in such a scheme, why is it that there seems to be such a rush to form ACOs? In my opinion, they are not looking for the Medicare fee-for-service business. They are forming commercial ACOs in the private sector, looking for the private insurance business that will expand greatly in the new insurance exchanges. They are taking advantage of the prevailing attitude that we must back off on enforcing antitrust regulations in order to provide flexibility for the ACOs. They are consolidating to gain greater market control. Many are using “accountable care organization” as a deceptive label for expanded managed care oligopolies and monopolies.

The notion of accountable care organization was originated as a well meaning, altruistic, aspirational concept by individuals who really care about the health care that all of us receive. To be successful in improving quality and reducing costs the concept would have to be dependent on patients and health care professionals and administrators who were determined to do the right thing regardless of pecuniary or other self-interests. Yet health care, as the business that it is – like it or not – cannot afford to embrace altruism, for it would fail in its business responsibilities to maximize market opportunities.

Does it have to be this way? Do we really need to depend upon private stewards devoted to the amoral business ethic to administer the financing of health care? Well, when you think about it, a single payer system is an automated system of financing health care that does not depend on the altruism of its players. That’s because the single payer model is structured as an altruistic, aspirational system that, quite automatically, actually does, in itself, improve quality and control costs. It just works.