PNHP

Lowering mortality by adding more diagnoses (a game)

Lowering mortality by adding more diagnoses (a game)

Geographic Variation in Diagnosis Frequency and Risk of Death Among Medicare Beneficiaries

By H. Gilbert Welch, MD, MPH, Sandra M. Sharp, SM, Dan J. Gottlieb, MS, Jonathan S. Skinner, PhD, John E. Wennberg, MD, MPH
JAMA
March 16, 2011

Context: Because diagnosis is typically thought of as purely a patient attribute, it is considered a critical factor in risk-adjustment policies designed to reward efficient and high-quality care.

Objective: To determine the association between frequency of diagnoses for chronic conditions in geographic areas and case-fatality rate among Medicare beneficiaries.

Design, Setting, and Participants: Cross-sectional analysis of the mean number of 9 serious chronic conditions (cancer, chronic obstructive pulmonary disease, coronary artery disease, congestive heart failure, peripheral artery disease, severe liver disease, diabetes with end-organ disease, chronic renal failure, and dementia) diagnosed in 306 hospital referral regions (HRRs) in the United States; HRRs were divided into quintiles of diagnosis frequency. Participants were 5 153 877 fee-for-service Medicare beneficiaries in 2007.

Main Outcome Measures: Age/sex/race–adjusted case-fatality rates.

Results: Diagnosis frequency ranged across HRRs from 0.58 chronic conditions in Grand Junction, Colorado, to 1.23 in Miami, Florida (mean, 0.90 [95% confidence interval {CI}, 0.89-0.91]; median, 0.87 [interquartile range, 0.80-0.96]). The number of conditions diagnosed was related to risk of death: among patients diagnosed with 0, 1, 2, and 3 conditions the case-fatality rate was 16, 45, 93, and 154 per 1000, respectively. As regional diagnosis frequency increased, however, the case fatality associated with a chronic condition became progressively less. Among patients diagnosed with 1 condition, the case-fatality rate decreased in a stepwise fashion across quintiles of diagnosis frequency, from 51 per 1000 in the lowest quintile to 38 per 1000 in the highest quintile (relative rate, 0.74 [95% CI, 0.72-0.76]). For patients diagnosed with 3 conditions, the corresponding case-fatality rates were 168 and 137 per 1000 (relative rate, 0.81 [95% CI, 0.79-0.84]).

Conclusion: Among fee-for-service Medicare beneficiaries, there is an inverse relationship between the regional frequency of diagnoses and the case-fatality rate for chronic conditions.

http://jama.ama-assn.org/content/305/11/1113.abstract

This study from the Dartmouth Institute confirms the intuitive observation that the number of diagnoses of serious chronic conditions in Medicare beneficiaries has a positive correlation with case-fatality rates. The greater number of serious problems a person has, the greater the risk of death. But observation of the regional distribution of these serious diagnoses provides troubling results.

In this study, hospital referral regions varied in the average number of diagnoses per patient of these serious chronic conditions. There is an inverse relationship between the regional frequency of diagnoses and the case-fatality rate. As an example, if you had multiple serious diagnoses, your chances of dying are less if your diagnoses were made in a region where more people have a greater number of diagnoses than if the same diagnoses were made in a region where not as many people received multiple diagnoses.

The authors discuss possible explanations, but I’ll go out on a limb, and a very solid one at that, and give my opinion.  Assigning a greater number of serious diagnoses to a patient permits greater remuneration from upcoding, and it provides rewards for favorable quality and outcomes results since the patient is not as ill as the list of diagnoses would otherwise imply.

It is very difficult to differentiate a list of well documented diagnoses from an embellished list that may include some poorly substantiated notations in the record allegedly supporting the diagnoses. It would be very difficult to ferret out the claims that do not warrant additional consideration based on complexity or quality outcomes.

Reform was supposed to bring us higher quality at a lower cost, but it appears that continued gaming of the system will bring us higher costs with spurious results on quality and outcome assessments.

Much more work needs to be done before we could rely on these observations to improve quality and reduce costs. In the meantime, we could certainly tackle the issue of costs head on by the well proven method of enacting a single payer national health program. Quality and efficiency will be a continual work in progress.

Vermonters urge lawmakers to pass single-payer health care

By Anne Galloway
VtDigger.com, March 15, 2011

What happened to Sabra Ewing, could have happened, as she put it, to anyone. She had a high deductible ($20,000) health insurance plan for her family. For years, doctors had told Ewing she was healthy, and she stopped going in for annual checkups to avoid the expense. Then one day she found a dark spot on the side of her heel. It took her three weeks to get an appointment with a dermatologist. By the time Ewing was diagnosed, she had stage three melanoma.

Ewing, of Vershire, said if she had kept up with regular checkups it’s likely the spot would have been detected early and her cancer would have been more readily curable. As it stands now, she said she is receiving treatment from top experts.

“I may not survive,” Ewing said. “I’m not thinking about cost containment. I’m thinking about my 19-month-old grandchild.

Cost containment has become one of Heather Lochlin’s main preoccupations – but not by choice. Lochlin, of Ludlow, who is insured by BlueCross BlueShield of Vermont through Catamount Health, says she has been denied coverage “every step of the way.” Though she has been fully insured throughout her illness, she said there has been “repeated systemic pressure” to limit her care through loopholes in the guidelines and vague information about coverage.

“Denials shouldn’t be based on cost-cutting,” Lochlin said. “The idea that any of us has insurance is a mirage.”

Lochlin and Ewing were two of the more than 70 Vermonters who spoke at a public hearing about H.202, the health care reform bill that would fundamentally alter the existing system, which is now based on a commercial insurance system and fee-for-service reimbursements to doctors and hospitals. Under H.202, the state would be the first in the nation to attempt a conversion to a single payer health care system in which state government would manage the provider payment system and essentially cut commercial insurers out of the loop. All Vermonters, regardless of pre-existing conditions or ability to pay would be covered under the plan.

Advocates for H.202 outnumbered opponents 4-to-1 in the virtual hearing via Vermont Interactive Television at 15 locations around the state. About 70 Vermonters spoke; many more watched the proceedings.

Lawmakers from the Senate and House health care committees attended most of the regional meetings. The hearing was held as a precursor to sure movement on H.202; the bill is slated to be voted out of committee this week.

In two-minute blocks of time, participants shared war stories about run-ins with the insurance industry, opined about the inefficiencies and “inhumanity” of the existing system or expressed reservations about the financial cost of a single payer health care plan.

Battle lines were drawn from the beginning: Advocates and citizens involved with the Vermont Workers’ Center’s Health Care is a Human Right campaign packed the Montpelier VIT site, wearing red T-shirts and the by-now familiar campaign buttons, which feature Rosie the Riveter. About 14 people in the anti-single payer camp spoke up.

The single-payer proponents sounded familiar themes: They called for equitable, universal coverage and an end to medical industry profits at the expense of human health.

A young woman named Rebecca from Johnson told the audience that her brother was in a bicycle accident last year in Winooski and injured both legs, knees and arms. He couldn’t move his legs at first, she said, but he refused to go to the hospital because he didn’t have health insurance. A year later, his pain hasn’t dissipated.

“Insurance companies must get out of the way,” Rebecca said. “People don’t need the middle man. If my brother had health insurance, he wouldn’t be feeling pain he’s feeling today. Make health care affordable to everyone so we can all get the health care we need.”

Many of the speakers talked about the rising cost of health care — even for people who have insurance. Several participants said they had gone without coverage at one point or another.

Detractors questioned the quality of a health care system that would be based on a uniform payment system. Several doctors expressed concern about the impact of low Medicaid reimbursements – should the administration of Peter Shumlin succeed in folding the Catamount Health Plan into the Vermont Health Access Plan.

Patricia Leahy Meriam said specialty doctors are afraid they will lose income if they stay in Vermont and they’re looking at “exit strategies.” She warned that special treatment of diseases will be harder to access in the new system because it will place too much emphasis on primary care physicians – at the expense of specialty docs.

Dianna Scholl, a hospital chaplain at Porter Medical Center in Middlebury, said health care workers are put in an immoral and unethical position because of the inequities of the system.

“The problem is the current system doesn’t cover everyone equally at a price we can afford,” Scholl said. “I have seen people with Cadillac insurance get the care they need. The private pay folks and (people with) limited insurance are not able to get care they need. It’s a very basic inequity that is hard to deal with.”

Scholl said she has seen insurance companies override physician’s treatment recommendations. “It was all about the money, it had nothing to do (with whether) we had the right equipment or drugs. It was just about the money. How can we provide compassionate care when we are sending people away or because people don’t have the deductibe or copays.”

http://vtdigger.org/2011/03/15/vermonters-urge-lawmakers-to-pass-single-payer-health-care/

Vermont forum leans toward single-payer health care

By NEAL P. GOSWAMI
Bennington Banner, March 14, 2011

BENNINGTON, Vt. — Dozens of Vermonters offered thoughts on health care reform in Vermont to members of the House and Senate Health Care Committees during a statewide interactive hearing Monday.

The meeting, held at 15 Vermont Interactive Television sites across the state, was largely dominated by supporters of a single-payer health care system that would provide coverage to all Vermonters. Many wore the customary red shirts of the Health Care is a Human Rights Campaign. Many people visible on the television screens held signs that read “Single-Payer NOW.”

In Bennington, Dr. Richard Dundas, a Bennington doctor who founded a free health care clinic, said the current system is broken and asked for a single-payer system.

“I wanted to implore the committee … to change our system because our current one is failing. I’ve been in practice for 30 years. It’s getting worse instead of better. We need universal health care,” Dundas said.

Dundas said a single-payer health care system would help lower costs for medical providers by, in part, eliminating private insurance companies.

“My concept of a single payer is that it has to seriously decrease the overhead that providers and hospitals … have to pay for overhead. This would include burdensome documentation that doctors are required to submit in order to get paid. It also includes severing our ties with the insurance industry,” he said.

Jane Norrie, who also testified in Bennington, said the current system requires tremendous paperwork and overhead. “I heartily agree with Dr. Dundas that we could save a huge amount of money just by not having to make reams of copies,” Norrie said.

Lawmakers are currently considering H.202, a plan submitted by the administration of Democratic Gov. Peter Shumlin. The legislation seeks to lay the groundwork for single-payer health care in Vermont.

It calls for a five-member board to help implement a system in which the state is the only health provider of health care coverage by 2014. Shumlin’s plan does not yet specify a funding mechanism, however. Nor does it provide information about benefits. That is expected to be included in a later phase, according to Shumlin. A payroll tax has been mentioned as a potential primary funding source, however.

Dr. William Hsiao, a Harvard professor and health care expert hired as a consultant by the state, delivered a report to state lawmakers earlier this year detailing where the state would see savings if it implements a single-payer plan. His report is expected to serve as the blueprint for a hybrid single-payer system run by the state but administered by a private insurance company.

With Democrats holding large majorities in both the House and Senate the plan is likely to move forward, despite GOP opposition. Not everyone was in favor of a single-payer system. “In Canada many have died because of their rationing,” said one man in Montpelier.

Others asked for more details on costs and what kind of benefits the plan would provide.

A woman testifying in Burlington decried “left-wing pressure groups” that she said were pushing a single-payer health care system. “These are groups that are loud, they’re outside funding groups using Vermont as a petrie dish,” she said. “Not only is government health care not wanted, there’s no money for it.”

But many of those that testified Monday said they are seeking the universal coverage a single-payer system would provide. Many shared stories of their own struggles with the current system.

A young woman in Brattleboro said her mother was recently laid off, causing a loss of health care covered. As a volunteer receiving a living stipend, the woman said she has only a supplemental plan, which does not cover necessary appointments for a medical condition. “Each appointment would cost me over $600, money I don’t have,” she said. The possibility of a life in pain scares me.”

Another woman in Springfield said she isn’t receiving the care her doctor wants to deliver because of interference from the insurance company. “Currently my care is being influenced by my insurance company. My doctor and I should make those decisions,” the woman said through tears.

The House Health Care Committee is scheduled to focus on H.202 this week and expected to advance it.

http://www.benningtonbanner.com/ci_17614241

Vermont: A Model for Health Care Reform?

By Carl Berdahl
Atrium Magazine, Friday, February 11th, 2011

In the wake of ineffective national health reform, Vermont is poised to try again: Legislators are considering guaranteeing—rather than mandating—health insurance for all Vermonters through a single-payer system.

Lack of health insurance is this era’s major social issue. There are 50 million uninsured Americans by the latest count, and about 45,000 people die each year as a result. Americans love to say that we have the best health care system in the world, but this is statement is false by almost any account. The United States trails other developed countries in most indicators of health: infant mortality, maternal mortality, and life expectancy, for example. We spend more money than any other country on health care, and we really cannot claim to be better off.
 
During his inaugural address, Governor Shumlin of Vermont proposed guaranteeing health insurance to all Vermonters. Current health care costs, he says, “[represent] an enormous hidden tax on families and small businesses across our state. If left untethered, the rising cost of health insurance will cripple us.” Shumlin’s wants to create a single-payer system for Vermont, in which private delivery of healthcare would continue but the government would act as everyone’s health insurer. Such a system, which was systematically barred from the national health reform debate by special interest groups, can be thought of as “Expanded and Improved Medicare-for-all”. By choosing a single-payer system, Vermonters would (1) cleanse themselves of administrative waste that private insurance companies create and (2) unlink health insurance coverage from employment, thereby significantly easing stress that the recession has caused. The people of Vermont would save money, and bureaucracy in the medical system would shrink dramatically.
 
Some people fear that a single-payer system would mean “rationing” of health care resources. The reality is that our current system rations care by ability to pay—and paying is increasingly difficult even for the middle class. A single-payer system, on the other hand, would guarantee Vermonters access to all medically-necessary care.

National health reform under the so-called Affordable Care Act makes half-hearted attempts to control health care costs. It does chip away at the number of uninsured Americans, but it does so by mandating that individuals purchase insurance from a flawed industry, thereby crippling Americans with high copayments and deductibles.

Why waste time bracing a system that is failing?

The nation needs full-fledged health care reform, and Vermont can lead the way. A single-payer universal health care system would save Vermont money and give its people security that the Affordable Care Act simply does not offer. The amount of bureaucracy built into the system would decrease, allowing patients and health professionals to focus one thing—health.
 
But perhaps most importantly, it is time to take care of our friends, family, and neighbors who are uninsured. It is time to put an end to death by uninsurance. It is time to pass guaranteed single-payer universal healthcare. America deserves it, and Vermont will start it.

For more information about single-payer, visit www.pnhp.org. Health professional students and other interested parties will be holding a rally for single-payer in Montpelier, VT on March 26, 2010. Please sign the petition at http://tinyurl.com/studentsforvermont to join the mailing list for this event.

Carl Berdahl, columnist of “Reform”, taking a year off from clinical studies to compare resource utilization and clinical decision-making in American and Canadian emergency departments. He is also working with Physicians for a National Health Program to revitalize the Connecticut chapter through the development of local events and the creation of a statewide speakers’ bureau. Carl has provided care at free clinics in Connecticut, California, and Peru. He welcomes your thoughts and questions via email.

http://www.atrium-magazine.com/2011/02/vermont-a-model-for-health-care-reform/

Vt. Gov. Shumlin Pushes For Single-Payer Health Care

By Anthony Brooks
WBUR Boston Radio, March 10, 2011

As many states, and Republicans in Congress, are looking for ways to roll back President Obama’s signature health care law, Vermont is moving in a different direction.

Most lawmakers there have concerns about the federal overhaul — but not because they oppose reform. Their concern is that the law doesn’t go far enough, and that the cost of health care is crippling the country’s economy.

“It’s killing business, it’s killing job creation and it’s killing working families,” Vt. Gov. Peter Shumlin told Radio Boston’s Anthony Brooks Thursday.

Vermont is moving full-steam ahead with a plan to become the first state in the nation to adopt a European-style single-payer health care plan. Shumlin, a Democrat, campaigned on the issue.

“We want to do three things,” Shumlin said. “The first is to treat health care as a right and not a privilege. The second is to create the first system in the country where health insurance follows the individual and is not a requirement of the employer, which we think is a huge jobs creator. And the third is to contain costs by moving to a system that spends money more wisely.”

Many see the single-payer system as a cost-saving solution, but Shumlin himself admits savings are not something achieved easily.

“No one in health care reform has figured out how to contain costs and our goal in Vermont is to contain costs,” Shumlin said.

Shumlin’s plan is dependent upon changing how health care is paid for.

“We want to be the first state that actually moves from a fee-for-service system to a payment based upon health care outcomes,” Shumlin said. “In other words: reward our providers for keeping people healthy, not the current system where we reward them for the number of procedures that they might do.”

A majority of state lawmakers supports Shumlin’s plan, and this week a key health care committee will vote on a bill that will start moving the state toward single-payer health care. Still, the overhaul of Vermont’s health care system faces hurdles. The state will need a change in Obama’s federal bill to allow Vermont to begin its single-payer push in 2014.

For more, including audio link:
http://radioboston.wbur.org/2011/03/10/vermont-single-payer-2

'Deficit gurus' launch assault on women's health

By Dr. Claudia Chaufan
Santa Cruz (Calif.) Sentinel, March 13, 2011

March is Women’s History Month. But this year, for the vast majority of women in America, there is little to celebrate.

Over the past months, “deficit gurus” in the U.S. House of Representatives have unleashed the most devastating assault on women’s health in our nation’s history. If legislation already passed in the House is approved by the Senate and signed into law by President Obama, women’s rights and health will be set back by decades.

Many critical programs are on the chopping block, such as the Public Health Service Act or Title X, providing basic health services, including Pap smears, family planning services, and cancer screenings to more than 5 million low-income people, mainly women.

Slashing Title X will lead to thousands of unnecessary deaths. Maternal and Child Health Block Grants, chiefly benefitting poor women and children, will be cut by $210 million. The Centers for Disease Control and Prevention will be reduced by some $755 million, undermining many public health efforts such as confronting HIV/AIDS. Community health centers providing essential services to millions of women and families across the country will face a brutal $1.3 billion cut.

This onslaught against women joins that against U.S. working people. Look, for example, at the assault on Medicaid, or the drive to cut wages, benefits and collective bargaining rights. Wisconsin is only the most flagrant example of a nationwide phenomenon.

Or consider the chorus that, both from the right and from sectors of the “liberal” left, is calling for “saving” Social Security by reducing benefits, increasing eligibility age or privatizing the program. Yet Social Security is financially sound for at least another 27 years. Whatever problems it may have could be easily fixed by simply raising the cap on the taxable income of the very wealthy. And Medicare and other publicly financed health care programs, favorite targets of the budget cutters, pose a problem only because the U.S. health care system, pre- and post- the federal health law, is built upon a rotten foundation: for-profit health insurance.

Despite subtle differences, both sides of the political aisle convey the same message: “We” must pay for “our excesses” that caused “the deficit” by giving up on our “generous benefits.”

Notably, Wall Street excesses figure nowhere in these arguments, even if its benefits are clear. As President Obama noted candidly in his State of the Union address, “the stock market has come roaring back and corporate profits are up.”

Meanwhile, our “benefits” don’t even include guaranteed access to basic health care, as is the norm in every other wealthy nation. The new federal law has “reformed” the system essentially by mandating us to purchase for-profit insurance increasingly under-insurance under penalty of a fine, and expanding coverage, not necessarily care, through an underfunded Medicaid program. Finally, it leaves at least 23 million people uninsured annually a decade from now.

If this scenario is allowed to stand, women will suffer disproportionately. But in the spirit of International Women’s Day, women’s groups and others are fighting back, and championing the most just and cost-effective solution to our health care woes — single-payer national health insurance, an improved Medicare for All.

As we commemorate those 15,000 brave women who back in 1908 marched through New York City demanding shorter hours, better pay and voting rights, American women and working Americans generally must demand no less.

Claudia Chaufan, M.D., is an assistant professor at the Institute for Health and Aging at UC San Francisco. She is also vice president of Physicians for a National Health Program — California http://pnhpcalifornia.org/.

http://www.santacruzsentinel.com/ci_17604643

Employer-sponsored health plans under the Affordable Care Act

Health Policy Brief: Employers and Health Care Reform

Health Affairs/Robert Wood Johnson Foundation
March 9, 2011

To expand access and strengthen the employment-based health system, the Affordable Care Act of 2010 will require midsize and large companies to make payments to the federal government if they do not offer health insurance to their employees and dependents starting in 2014.

What’s in the law?

Under the Affordable Care Act, beginning in 2014 employers with at least 50 full-time employees (or equivalent full- and part-time workers) will have to provide “qualified” health insurance coverage to their full-time employees and their dependents. Qualified coverage means that plans are comprehensive (pay at least 60 percent of health care expenses) and affordable (cost less than 9.5 percent of employees’ household incomes).

If employers don’t offer qualified coverage, and if their employees purchase coverage instead through a new state insurance exchange with the assistance of federal subsidies, companies will have to make an “assessable payment” of up to $2,000 for every full-time employee beyond the first 30 employees. The amount of the assessment will be adjusted annually to reflect the growth in national insurance premium costs.

If employers do offer coverage, but the coverage does not meet certain parameters, they may still have to pay assessments. First, employers will be assessed if a plan is judged not to be comprehensive. This means the coverage must have an “actuarial value” of at least 60 percent. In other words, the employer pays on average at least 60 percent of health care expenses and the employee pays on average 40 percent of these expenses through deductibles and copayments.

Second, employers will be assessed if the employees’ premiums are considered unaffordable relative to their household incomes. Specifically, the employee’s share of the premium must not exceed 9.5 percent of his or her annual household income.

Starting in 2014, if either of these two conditions is not met, the employer must pay a $3,000 annual assessment for each employee who declines his or her employment-based insurance and obtains government-subsidized coverage through an exchange.

Small businesses with fewer than 50 full-time employees (or equivalent full- and part-time workers) don’t have to meet the requirement and are exempt from having to offer health insurance.

Many companies face payments:

A study by the Mercer consulting firm found that 38 percent of US employers may face paying assessments starting in 2014, because their coverage might not be considered affordable for at least some of their employees.

“Free-choice vouchers”:

Employees who earn less than four times the federal poverty level (in 2011, $43,560 for an individual and $89,400 for a family of four) and whose share of the premium is between 8 percent and 9.5 percent of his or her household income, can choose to enroll in an exchange instead of the employer plan. The employer must issue the employee a “free-choice voucher” equal to the amount the employer would have paid under the employer’s plan.

Tax on high-value health plans:

Beginning in 2018, “Cadillac” or high-value health plans will be subject to a 40 percent excise tax on premium amounts exceeding $10,200 for single coverage and $27,500 for families.

What’s the likely impact?

The Congressional Budget Office (CBO) and the Joint Committee on Taxation estimated that provisions of the Affordable Care Act, including the employer requirement, will result in 3 million fewer people having employer-provided coverage in 2019. This would be the net result of a series of big changes.

First, the CBO estimates that 6–7 million people would acquire employer coverage for the first time because the requirement would increase workers’ demand for coverage through their jobs. Second, another 1–2 million who currently have employment-based coverage would instead move to the exchanges because the coverage would be more affordable. Third, about 8–9 million others covered under an employer plan under current law would lose employer coverage because firms would choose to no longer offer coverage. These firms are likely to be smaller companies employing lower-wage workers who would be eligible for exchange subsidies.

In addition, according to the CBO, employers will pay about $52 billion in additional assessments between 2014 and 2019. Under the law, that money will be put toward the new subsidies for millions of workers and their families to defray the cost of purchasing health coverage through the exchanges.

“Pay and walk away”:

Among companies of all sizes currently offering benefits, 76 percent reported they would continue to do so in January 2014. Of the rest, 15 percent reported they would offer coverage to at least some full-time employees, and 9 percent said they would stop offering coverage altogether. Among firms with 200 or more full- and part-time equivalent employees, 7 percent planned to drop coverage. “For some large firms, in particular, there is a desire to pay and walk away,” said Susan McIntyre, senior vice president of Market Strategies International’s health care division, in a statement.

Tempted to drop coverage:

The math could make the idea to drop coverage tempting. In 2010, the average annual premium cost for employer-based coverage was $5,049 for a single person and $13,770 for a family, although employers generally do not pay the entire cost. Many employers might consider paying $2,000 or $3,000 in assessments to be more cost-effective. On the other hand, many large employers say they view offering health coverage to be an important part of their overall compensation strategy, and necessary to attract the best workers.

It is possible that employers will watch closely to see how their peer companies respond. In a July 2010 survey by Fidelity Investments, 65 percent of large employers said they were not seriously considering eliminating health care benefits because of the new law. But when asked what they would do if others dropped coverage, 36 percent said they too would consider eliminating coverage. Another 36 percent said they would not drop coverage and the remaining employers were unsure.

http://www.healthaffairs.org/healthpolicybriefs/brief_pdfs/healthpolicybrief_42.pdf

Comment: 

By Don McCanne, MD

What will happen to employer-sponsored coverage under the Affordable Care Act? Perhaps one of the most alarming provisions of the Act is that plans with a 60 percent actuarial value (patients pay an average of 40 percent of their health care bills) qualify to fulfill the employers’ obligations to provide coverage or pay an assessment. Thus the Act is establishing under-insurance as the new standard.

Premiums on more generous plans are approaching a level that will trigger a a 40 percent excise tax. One way to avoid that tax would be to reduce the actuarial value of the plans to the minimum requirement. With employers’ aversion to taxes, many will surely consider that.

With these low actuarial value plans, employees will surely complain about the high out-of-pocket costs they will face when they need health care. Since employers won’t want to make their employees unhappy, they will be motivated to drop their plans altogether and pay t
he much lower assessments required by the Act. We already know that most employers may not want to lead on this, but a great many will certainly follow once a few do it, and they have said so.

It is frequently stated that employers will want to continue to offer plans in order to attract more qualified employees, but this argument seems rather disingenuous. Employers now have an out.

When employers drop their health plans, there is no assessment on the first 30 employees, and then only $2000 for each beyond the 30. Employers can use some of the savings for pay raises, and then the employees, most of whom will be eligible for government subsidies, can select their own plans in the exchanges. Why would employers use health plans as an enticement – plans that are otherwise readily available in the exchanges – when they can use higher wages to compete in the labor markets?

Our experience shows that plans with low actuarial values – usually high-deductible plans – still frequently have premiums that are unaffordable for many. Combining unaffordable premiums with low actuarial values, it won’t be long before middle-income Americans realize that the private insurers have foisted off on us a highly defective product: UNAFFORDABLE UNDER-INSURANCE. You go broke if you buy it, and you go broke if you need to use it!

Single payer, anyone?

Employer-sponsored health plans under the Affordable Care Act

Health Policy Brief: Employers and Health Care Reform

Health Affairs/Robert Wood Johnson Foundation
March 9, 2011

To expand access and strengthen the employment-based health system, the Affordable Care Act of 2010 will require midsize and large companies to make payments to the federal government if they do not offer health insurance to their employees and dependents starting in 2014.

What’s in the law?

Under the Affordable Care Act, beginning in 2014 employers with at least 50 full-time employees (or equivalent full- and part-time workers) will have to provide “qualified” health insurance coverage to their full-time employees and their dependents. Qualified coverage means that plans are comprehensive (pay at least 60 percent of health care expenses) and affordable (cost less than 9.5 percent of employees’ household incomes).

If employers don’t offer qualified coverage, and if their employees purchase coverage instead through a new state insurance exchange with the assistance of federal subsidies, companies will have to make an “assessable payment” of up to $2,000 for every full-time employee beyond the first 30 employees. The amount of the assessment will be adjusted annually to reflect the growth in national insurance premium costs.

If employers do offer coverage, but the coverage does not meet certain parameters, they may still have to pay assessments. First, employers will be assessed if a plan is judged not to be comprehensive. This means the coverage must have an “actuarial value” of at least 60 percent. In other words, the employer pays on average at least 60 percent of health care expenses and the employee pays on average 40 percent of these expenses through deductibles and copayments.

Second, employers will be assessed if the employees’ premiums are considered unaffordable relative to their household incomes. Specifically, the employee’s share of the premium must not exceed 9.5 percent of his or her annual household income.

Starting in 2014, if either of these two conditions is not met, the employer must pay a $3,000 annual assessment for each employee who declines his or her employment-based insurance and obtains government-subsidized coverage through an exchange.

Small businesses with fewer than 50 full-time employees (or equivalent full- and part-time workers) don’t have to meet the requirement and are exempt from having to offer health insurance.

Many companies face payments:

A study by the Mercer consulting firm found that 38 percent of US employers may face paying assessments starting in 2014, because their coverage might not be considered affordable for at least some of their employees.

“Free-choice vouchers”:

Employees who earn less than four times the federal poverty level (in 2011, $43,560 for an individual and $89,400 for a family of four) and whose share of the premium is between 8 percent and 9.5 percent of his or her household income, can choose to enroll in an exchange instead of the employer plan. The employer must issue the employee a “free-choice voucher” equal to the amount the employer would have paid under the employer’s plan.

Tax on high-value health plans:

Beginning in 2018, “Cadillac” or high-value health plans will be subject to a 40 percent excise tax on premium amounts exceeding $10,200 for single coverage and $27,500 for families.

What’s the likely impact?

The Congressional Budget Office (CBO) and the Joint Committee on Taxation estimated that provisions of the Affordable Care Act, including the employer requirement, will result in 3 million fewer people having employer-provided coverage in 2019. This would be the net result of a series of big changes.

First, the CBO estimates that 6–7 million people would acquire employer coverage for the first time because the requirement would increase workers’ demand for coverage through their jobs. Second, another 1–2 million who currently have employment-based coverage would instead move to the exchanges because the coverage would be more affordable. Third, about 8–9 million others covered under an employer plan under current law would lose employer coverage because firms would choose to no longer offer coverage. These firms are likely to be smaller companies employing lower-wage workers who would be eligible for exchange subsidies.

In addition, according to the CBO, employers will pay about $52 billion in additional assessments between 2014 and 2019. Under the law, that money will be put toward the new subsidies for millions of workers and their families to defray the cost of purchasing health coverage through the exchanges.

“Pay and walk away”:

Among companies of all sizes currently offering benefits, 76 percent reported they would continue to do so in January 2014. Of the rest, 15 percent reported they would offer coverage to at least some full-time employees, and 9 percent said they would stop offering coverage altogether. Among firms with 200 or more full- and part-time equivalent employees, 7 percent planned to drop coverage. “For some large firms, in particular, there is a desire to pay and walk away,” said Susan McIntyre, senior vice president of Market Strategies International’s health care division, in a statement.

Tempted to drop coverage:

The math could make the idea to drop coverage tempting. In 2010, the average annual premium cost for employer-based coverage was $5,049 for a single person and $13,770 for a family, although employers generally do not pay the entire cost. Many employers might consider paying $2,000 or $3,000 in assessments to be more cost-effective. On the other hand, many large employers say they view offering health coverage to be an important part of their overall compensation strategy, and necessary to attract the best workers.

It is possible that employers will watch closely to see how their peer companies respond. In a July 2010 survey by Fidelity Investments, 65 percent of large employers said they were not seriously considering eliminating health care benefits because of the new law. But when asked what they would do if others dropped coverage, 36 percent said they too would consider eliminating coverage. Another 36 percent said they would not drop coverage and the remaining employers were unsure.

http://www.healthaffairs.org/healthpolicybriefs/brief_pdfs/healthpolicybrief_42.pdf

What will happen to employer-sponsored coverage under the Affordable Care Act? Perhaps one of the most alarming provisions of the Act is that plans with a 60 percent actuarial value (patients pay an average of 40 percent of their health care bills) qualify to fulfill the employers’ obligations to provide coverage or pay an assessment. Thus the Act is establishing under-insurance as the new standard.

Premiums on more generous plans are approaching a level that will trigger a a 40 percent excise tax. One way to avoid that tax would be to reduce the actuarial value of the plans to the minimum requirement. With employers’ aversion to taxes, many will surely consider that.

With these low actuarial value plans, employees will surely complain about the high out-of-pocket costs they will face when they need health care. Since employers won’t want to make their employees unhappy, they will be motivated to drop their plans altogether and pay the much lower assessments required by the Act. We already know that most employers may not want to lead on this, but a great many will certainly follow once a few do it, and they have said so.

It is frequently stated that employers will want to continue to offer plans in order to attract more qualified employees, but this argument seems rather disingenuous. Employers now have an out.

When employers drop their health plans, there is no assessment on the first 30 employees, and then only $2000 for each beyond the 30. Employers can use some of the savings for pay raises, and then the employees, most of whom will be eligible for government subsidies, can select their own plans in the exchanges. Why would employers use health plans as an enticement – plans that are otherwise readily available in the exchanges – when they can use higher wages to compete in the labor markets?

Our experience shows that plans with low actuarial values – usually high-deductible plans – still frequently have premiums that are unaffordable for many. Combining unaffordable premiums with low actuarial values, it won’t be long before middle-income Americans realize that the private insurers have foisted off on us a highly defective product: UNAFFORDABLE UNDER-INSURANCE. You go broke if you buy it, and you go broke if you need to use it!

Single payer, anyone?

Single-Payer Supporters Stand Strong in Salem

A rally and emotional hearing for House Bill 3510 put spotlight on single-payer system

By Rebecca Robinson
The Lund Report (Portland, Ore.), March 11, 2011

SALEM, Ore. — Supporters of single-payer healthcare legislation had their day in Salem Friday, with a well-attended hearing on the Capitol steps and an emotional hearing for the single-payer bill, House Bill 3510, before the House Health Care Committee.

“This is not all about the bill,” Rep. Mike Dembrow (D-Portland), the sponsor of House Bill 3510, told supporters at Friday’s noontime rally. “Single-payer is a movement.”
 
Dembrow and other supporters of a single-payer system point to existing programs such as Medicare, Medicaid and the Veterans Administration, as current examples of single-payer healthcare in America: government-run systems with no copays, deductibles or cost-sharing that allow patients to choose their healthcare provider.
 
Dembrow’s sentiment was echoed by all in attendance, including his fellow Representative, Jules Bailey (D-Portland), and Dr. Paul Gorman, a physician at Oregon Health and Science University.
 
“All of us are one illness away from bankruptcy in the current system,” said Gorman, who likened the U.S. insurance industry to Big Tobacco.
 
“They [the insurance industry] are selling us a product that’s harmful to all of us, for a profit,” Gorman said.
 
Legislators heard more about House Bill 3510, also known as the Affordable Health Care for All Oregon Act, from both supporters and opponents at a hearing Friday afternoon. Dembrow and Gorman reiterated their endorsement of the bill, and many more came forward to testify in support of a single-payer system.
 
“Payment with a single-payer system will be simpler for everyone to understand, and much less expensive to negotiate,” said Dr. Doug Bigelow, a professor emeritus of psychiatry at OHSU. He spoke of his eight years practicing in British Columbia, Canada, in a single-payer system with universal coverage, no deductibles and free choice of doctors for patients.
 
“I can say that this system works very well, it’s comparatively inexpensive, and very popular,” said Bigelow. “What stymies us here is the deep structural transformation” required to change the current system – work, he argued, that is both necessary and would lead to long-term savings.
 
An independent insurance agent Paco Maribona, said that even though a single-payer system could cost him and other agents their jobs, he still supported the bill, because “the advantage of all Oregonians getting coverage is worth it.”
 
“I asked my [Portland Community College] students if they didn’t have insurance, and two-thirds of them raised their hands,” said Terri Mills, a longtime nurse educator. “It’s so ironic; they don’t have access to the care they themselves will someday be providing.” She called for “evidence-based policy” that would stem the “growing crisis that continues to erode our living standards.”
 
Opponents of the bill pulled no punches.
 
“We shouldn’t rely on top-down solutions” like House Bill 3510, said Steve Buckstein of the Cascade Policy Institute, “but instead bottom-up liberations.” To reduce costs and improve access, Buckstein argued, use the profit motive.
 
“Walmart started offering $4 generic prescription drugs, and Fred [Meyer] matched those prices,” said Buckstein. “Prices dropped quickly, and [the companies] did it for profit.”
 
Eric Fruits, an economist for the state, likened the single-payer system to an “All-you-can-eat health care buffet” with no cost controls.
 
“It’s impossible to simultaneously provide universal insurance coverage, control costs, and maintain provider participation,” Fruits asserted.
 
Individual consumers also expressed their concerns about government-mandated healthcare.
 
“I’m standing today on my fundamental, constitutional right to choose,” said Kate Jaudes of Salem. “I don’t want the government to force me to go to an MD or punish me if I don’t.”
 
No matter the outcome, both sides will continue to work on either side of the issue to, in Rep. Bailey’s words, “get this done.”

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

Oregon House Health Care Committee draws testimony on bill to create single-payer universal health care

By Bill Graves
The Oregonian, Friday, March 11, 2011

A House hearing Friday on a bill to establish a single-payer universal health care plan in Oregon drew testimony from about two dozen people, most in favor of the proposal.

One supporter, Wes Brain of Southern Oregon, held up a wedding photo of his daughter before the House Health Care Committee and described her nine-year battle with her insurance company before she died from leukemia.

“They made her life miserable,” he told the House health committee. “Every step of the way.”

After her teeth fell out from radiation therapy, he said, she was denied help from insurers who said that she needed dental care, not medical care.

“Please remember my daughter,” he said. “I’m going to work on this the rest of my life. We can do better than this.”

Supporters of House Bill 3510, a single-payer health care proposal entitled the Affordable Health Care for All Oregon Act, argued the bill would cut administrative costs, promote efficient primary care and create jobs. But opponents said the plan would foster overuse and underpay, driving away doctors and limiting services.

The bill would create a system that directs all public and private money now spent on health care into a single fund that covers everyone, a single Oregon self-insurance plan. Rep. Michael Dembrow, D-Portland, author of the bill, said it would essentially extend Medicare, the federal health insurance for people 65 and older, to all Oregonians.

The single–payer proposal faces stiff political opposition, particularly in a House that is evenly divided between Republicans and Democrats.

But Dembrow, doctors, nurses and other health professionals argued that a single-payer system would dramatically cut administrative costs and paperwork that arise from health care that depends on a complex private insurance industry. Medicare, by contrast, has low administrative fees, he said.

Oregon could use the money it spends now on health care to extend Medicare to all Oregonians in a system that would contain costs, offer choice and create jobs, supporters said.

Dr. Paul Gorman, a physician and university instructor, said 45,000 people die a year for lack of health insurance.

“We’re all one serious illness away from bankruptcy,” he said.

Dr. Samuel Metz, a Portland anesthesiologist, and Dr. Joseph Eusterman, a retired physician, also testified. They belong to a group of Oregon physicians who campaigned across the country in 2009 for single-payer health care and call themselves the Mad as Hell Doctors.

Dembrow’s bill “is fiscally conservative, socially responsible, morally correct and an urgently needed solution,” said Eusterman.

Opponents argued a government-run health care system would raise taxes and lower the quality and accessibility of health care services.

Two members of the conservative Americans for Prosperity said the plan would lead to a bloated, inefficient bureaucracy that would drive up taxes and create only government jobs. The House Health Care Committee received 280 emails in opposition to the bill from Americans for Prosperity.

 Eric Fruits, an economist and consultant to the Cascade Policy Institute, a Portland market-oriented think tank, said the bill offers Oregonians an “all-you-can-eat” buffet.

“This is a recipe for over consumption of health care,” he said. Create this buffet, he added, and “you’ll find the chef has quit, and the kitchen is out of food.”

http://www.oregonlive.com/politics/index.ssf/2011/03/oregon_house_health_care_commi.html

'Single payer' still their goal

By BENNETT HALL
Corvallis Gazette-Times,  March 12, 2011

Shortly after noon on Friday, state Rep. Michael Dembrow stepped to the microphone and addressed a crowd of about 150 people gathered on the steps of the Oregon Capitol in Salem.

“You look so healthy,” he told his audience. “You must all have good health insurance.”

The line got a big laugh for the Portland Democrat, as he must have known it would. Dembrow is the chief sponsor of House Bill 3510, the Affordable Health Care for All Oregon Act, which would all but eliminate private health insurance in Oregon and replace it with a taxpayer-funded system covering everyone in the state: single-payer health care.

Dembrow’s bill was scheduled for a hearing before the House Health Care Committee on Friday afternoon, and the lunchtime rally on the Capitol steps was a bit of political theater calculated to show support.

Toting signs with slogans such as “Patients Not Profits,” “Single Payer Now!” and “Everybody In, Nobody Out,” the crowd chanted and cheered for more than an hour as speaker after speaker slammed the insurance industry, shared horror stories of Americans bankrupted by medical expenses and called on the legislature to enact Dembrow’s proposal.

The really funny thing was, none of them seemed to think it has a ghost of a chance.

Rep. Jules Bailey, one of the bill’s co-sponsors, exhorted the crowd to settle in for a long fight.

“Don’t stop,” Bailey said. “If we don’t get there right away, we will get there eventually. We will get there.”

As Dembrow himself put it, “It’s not all about the bill. Single payer is a movement.”

‘A long-term effort’

For hardcore health care reformers, single payer is the holy grail, a system that would rein in out-of-control medical costs while extending coverage to everyone. But they face determined and well-financed opposition from insurers, pharmaceutical companies and tea party Republicans, who deride the idea as socialized medicine.

HB 3510 is not the first attempt to create a single-payer health care system in Oregon. That distinction belongs to Senate Bill 1066, which was introduced in 1995 — and promptly faded into obscurity.

The issue was resuscitated in 2002, when Health Care for All-Oregon mounted a statewide signature-gathering campaign that succeeded in placing Measure 23 before the voters — who shot it down by a 700,000-vote margin.

Now it’s back, and while Dembrow has no illusions that his bill will pass, he’s crossing his fingers that it will stay alive long enough to generate some genuine discussion in the legislature. He has two co-sponsors on the Senate side, where he’s hoping the proposal could get additional hearings.

If he can get enough lawmakers interested in the concept, they might be willing to commission an in-depth cost analysis, a step that could build additional support. And even if 3510 dies this session, as expected, he’ll push to send it to Oregon voters again as a referendum, possibly in 2013.

“The likelihood of this bill passing and us having a single-payer system in the next year or two is remote,” Dembrow acknowledged in an interview last week.

“I see the effort for single payer as being a long-term effort,” he added. “There is still a lot of education that has to happen and a lot of organizing that has to happen, and this bill is a vehicle for that.”

Coalition-building

As health care costs continue to rise faster than American incomes, more and more people are flocking to the single-payer banner. In Oregon as in other states, the coalition that has formed around the issue includes labor unions, doctors and nurses, churches and social justice organizations, all of which were well represented at Friday’s rally in Salem.

Peter Shapiro was the master of ceremonies, introducing the speakers and setting the tone for the event with his rabble-rousing commentary.

A retired mailman who now works as an organizer for Portland Jobs With Justice, Shapiro urged the audience to fight back against the attacks on public employee unions around the country.

“I have one of those gold-plated plans,” he told the crowd. “I’m one of those people you’re supposed to hate. And 25 percent of my federal annuity goes to insurance premiums.”

In an interview, Shapiro talked about organized labor’s shift toward single payer after years of fighting to protect hard-won insurance benefits — often achieved at the cost of significant concessions on wages.

“It’s a difficult transition for union members to make. It’s a mark of how badly our health care system has deteriorated,” he said.

“More and more unions are realizing we’re living on borrowed time as far as benefits are concerned, and they’re paying a greater and greater price to keep those benefits at the bargaining table.”

Portland Jobs With Justice has thrown itself into the campaign for single payer, reaching out to other labor organizations to broaden the coalition supporting HB 3510. So far, nine Oregon unions have officially endorsed the measure — including two that represent teachers, often targeted for having Cadillac health benefits.

In January, Shapiro helped organize a highly successful conference on single payer in Portland. More than 400 people turned out for the event, which featured keynoters such as Dr. Margaret Flowers of Physicians for a National Health Program and Michigan Rep. John Conyers, one of the champions of single payer in Congress.

And on Friday, Shapiro brought a dose of fiery union rhetoric to the rally for HB 3510.

“We have the most profit-driven health care system in the world, and you see where that gets us,” he reminded the crowd as the event came to a close.

“The fact of the matter is, health care is not a commodity, it is a human right. And we are not consumers of health care, we are human beings!”

Mad as hell

Radiation oncologist Mike Huntington of Corvallis has devoted himself to health care reform since retiring in 2006. He became convinced of the need for change after seeing too many of his patients delay treatment because they lacked insurance coverage, with disastrous results.

“I saw it happen so often that it made me sick and then sad and then mad,” Huntington said.

In 2009 Huntington and fellow Corvallis physician Paul Hochfeld helped launch the Mad as Hell Doctors, an Oregon offshoot of Physicians for a National Health Program. The group mounted a cross-country tour, holding raucous single-payer rallies in more than two dozen cities en route to a demonstration on the White House lawn in a bid to influence the congressional debate on health care reform.

No trace of single payer made it into the federal health care reform law, which failed to include even the “public option” initially promoted by President Barack Obama.

But the Mad as Hell Doctors are still on the case. Last year they staged a California road trip to promote a single-payer measure in that state, and they’ve been touring Oregon for several weeks in support of the Dembrow bill.

On Friday, a white-coated contingent of Mad Docs was on hand for the Capitol rally, including Huntington.

The way he sees it, the financial logic of single payer is simply inescapable.

“Even health insurance CEOs privately say it. How can health care expenses keep increasing 25 percent a year? Eventually they’ll run out of customers,” Huntington said in an interview before the rally.

“It’s a false reality, and I’m going to stick around until the real reality is too hard to ignore.”

In it for the long haul

Betty Johnson is a battle-scarred veteran of the fight for sin
gle-payer health care in Oregon. She got involved in health care reform in 1991 through her church, and her faith continues to inform her work for the cause.

“It is a moral imperative to ensure that everyone has the health care they need,” she said.

The Corvallis resident, a widely respected leader in the state’s Health Care for All chapter, was a key player in the campaigns for SB 1066 and Measure 23 and now is pushing hard for HB 3510. In fact, she had a hand in writing all three proposals.

Johnson attended the rally, too, but before that she led a small cadre of Corvallis and Albany health care activists through the Capitol corridors on a mission to lobby as many lawmakers as possible to support HB 3510.

The group started on the House side of the building, stopping by the offices of Sara Gelser, Jim Thompson and Andy Olson before crossing over to the Senate wing in search of Frank Morse.

None of the legislators was in, so the mid-valley activists spent their time chatting up secretaries and aides, passing out copies of testimony to be given in the afternoon hearing and laying the groundwork for future meetings.

At Olson’s office, Johnson and Edie Orner, a retired schoolteacher who heads the Albany chapter of the Archimedes Movement, won a small victory: the promise of a breakfast meeting early next month.

Olson, an Albany Republican, is not known as a supporter of single payer, but he is willing to listen. Orner considers it progress.

“Everything that you do is building momentum,” she said, “and you just have to keep doing what you’re doing and hope that eventually there will be a tipping point.”

Johnson agrees. Like Dembrow, she has no expectations that 3510 will actually pass this session. And like him, she takes the long view of the fight for single payer.

The campaigns for SB 1066 in 1995 and Measure 23 in 2002, she said, started the conversation about single payer in Oregon, and Dembrow’s bill has created the opportunity to take the discussion one step further.

“The world is a different place than it was in 2002 — and I can’t help but think that it’s a different place, at least here in Oregon, in part because of what we did in 2002. We informed a lot of people,” Johnson said.

“That was a building block. This is a building block. And this campaign is not going to die.”

http://www.democratherald.com/news/local/article_38a88e7a-4d46-11e0-9f0e-001cc4c002e0.html