“Dying of Status Quo” by Bruce Beattie
"Your $$$ At Work" by Matt Davies
“Your $$$ At Work” by Matt Davies
Effective comparative effectiveness research
Medicine in the dark
By Michael Hochman and Danny McCormick
Los Angeles Times
March 10, 2010
Some doctors treat patients with early-stage prostate cancer with radiation. Others favor surgery, while some advocate only close monitoring. Which approach is most successful? No one knows.
When it comes to diabetes management, doctors don’t have answers to key questions: At what point should insulin be started? Is it safe to lower the blood sugar to normal levels? What is the best way to monitor blood sugar control?
Similarly, endocrinologists don’t know what is the best way to treat patients with hyperactive thyroids. Doctors in Europe typically use medications, while those in the U.S. more frequently give radioactive iodine. Only limited evidence is available to guide the decision.
It may seem perplexing that there is so much uncertainty about these relatively simple questions. All of the above treatments have been around for decades. Shouldn’t we have definitive answers by now?
In this week’s issue of the Journal of the American Medical Assn., we report the results of a study that may help explain why we don’t. In the study, we analyzed 328 medication studies recently published in six top medical journals and found that just 32% were aimed at determining which available treatment is best. The rest were either aimed at bringing a new therapy to market or simply compared a medication with a placebo. Whether the therapy was better or worse than other treatments was simply not addressed.
Research involving new therapies is of course crucial for medical progress, but there is also a need for research that compares the effectiveness of the rapidly growing array of existing therapies and approaches.
So why, then, did only a third of medication studies focus on helping doctors use existing therapies more effectively? The answer lies in the fact that pharmaceutical companies fund nearly half of all medication research, including the lion’s share of large clinical trials. For obvious reasons, commercially funded research is primarily geared toward the development of new and marketable medications and technologies. Once these products have won approval for clinical use, companies no longer have incentives to study exactly how and when they should be used.
In support of this claim, we found that 87% of the comparative effectiveness studies we analyzed were funded entirely or in part by non-commercial sources, such as nonprofit foundations or government institutions. In addition, 91% of studies comparing medications with non-pharmacologic therapies (such as surgery or lifestyle changes) received non-commercial funding, as did 94% of studies comparing different medication strategies (such as different blood sugar targets in patients with diabetes) and 90% of studies comparing the safety profiles of medications. Non-commercial sources funded 100% of studies comparing the cost- effectiveness of different treatments, though only 2% of the studies we reviewed included such analysis.
Congress recently appropriated more than $1 billion in the American Recovery and Reinvestment Act to promote comparative effectiveness research. This is a good first step, but the money will need to be spent carefully. We believe studies that address fundamental clinical decisions — such as when to use medications versus surgery or how to use therapies more effectively — should be favored over those that simply compare two alternative medications. There is also clearly a need for more research on the comparative safety and costs of different treatments. And although many researchers are thankful for the new research funds, it may soon become apparent that $1 billion is far from sufficient.
Reform is also necessary to ensure that commercially funded research is designed in a way that is more helpful to doctors. Our study showed that two-thirds of commercially funded randomized trials compared medications with a placebo rather than with another active therapy. Though placebos are appropriate when no alternative therapies are available, in many of the trials we examined, we suspect alternative therapies could have been used instead. For this reason, we believe that regulatory agencies such as the Food and Drug Administration should only approve new therapies that have been shown to be at least as good as existing therapies whenever such alternatives exist. Alternatively, though more controversial, some experts have proposed that pharmaceutical companies should be allowed to fund — but not design — clinical studies.
As medical science advances, clinical decision-making will only become more complex. Only by expanding public funding for comparative effectiveness research can we hope to put existing medical treatments and healthcare services to their best use. Doing so would ensure that national research priorities are determined by patient needs rather than by corporate agendas.
Michael Hochman, MD, is an assistant professor of clinical medicine at USC’s Keck School of Medicine. Danny McCormick, MD, MPH, is an assistant professor of medicine at Harvard Medical School.
http://www.latimes.com/news/opinion/commentary/la-oe-hochman10-2010mar10,0,3812725.story
JAMA – Characteristics of Published Comparative Effectiveness Studies of Medications, by Michael Hochman, MD and Danny McCormick, MD, MPH:
http://jama.ama-assn.org/cgi/content/full/303/10/951
JAMA editorial – Charting a Path From Comparative Effectiveness Funding to Improved Patient-Centered Health Care, by Patrick H. Conway, MD, MSc and Carolyn Clancy, MD:
http://jama.ama-assn.org/cgi/content/full/303/10/985
Rather than using excerpts from the JAMA article by Hochman and McCormick as today’s qotd, their op-ed in today’s Los Angeles Times provides an even better summary of their findings along with their astute comments. Their op-ed obviates the need for me to provide any additional commentary.
David Cutler on ten ideas to bend the cost curve
Health Reform Passes the Cost Test
By David M. Cutler
The Wall Street Journal
March 9, 2010
Many people are worried that the health-care reform proposed by President Obama and congressional Democrats will fail to bend the “cost curve.” A number of commentators are urging no votes because of this, and Republicans have asked the president to start health reform over, focusing squarely on the issue of cost reduction.
These calls overlook the actual legislation. Over the past year of debate, 10 broad ideas have been offered for bending the health-care cost curve. The Democrats’ proposed legislation incorporates virtually every one of them. Here they are:
• Form insurance exchanges. These would help curb underwriting and inefficient marketing practices that raise costs in the small-group and individual insurance markets. This is addressed in all the House and Senate bills, and the president’s proposal. Grade: Full credit.
• Reduce excessive prices, including those of supplemental plans enrolling Medicare beneficiaries. The president’s proposal reduces these Medicare Advantage overpayments and others to different providers, even in the face of Republican claims that reducing such overpayments is tantamount to rationing care for seniors. Grade: Full credit.
• Moving to value-based payment in Medicare. Both Democrats and Republicans have called for moving from a system where volume drives reimbursement to one where value drives reimbursement. The president’s proposal includes virtually every idea offered for doing this. Grade: Full credit.
• Tax generous insurance plans. Health-insurance benefits are excluded from income taxation, providing incentives for excessively generous insurance. Many economists have proposed capping the tax exclusion to reduce these incentives. The president’s proposal taxes some of the most generous policies, though it has deferred the date by which these taxes take effect. Grade: Partial credit.
• Empower an independent Medicare advisory board. Interest-group politics intrudes too deeply within the mechanics of Medicare policy, raising program costs and hindering efforts to improve care. Despite powerful opposition, the president proposes this independent board and a process for fast-tracking such recommendations through Congress. Grade: Full credit.
• Combat Medicare fraud and abuse. The administration has started an active task force to combat these problems. Other ideas to reduce fraud and abuse were presented at the recent health-care summit, and were incorporated in the president’s proposal. Grade: Full credit.
• Malpractice reform. Defensive medicine is a small but important driver of medical spending. The reform proposal makes some headway, encouraging states to experiment with alternative mechanisms to reduce malpractice burdens. More could be done—for example, specialized malpractice courts and a safe harbor for physicians practicing evidence-based medicine—but the president’s proposal makes a start. Grade: Partial credit.
• Invest in information technology. Many studies suggest savings in the tens of billions of dollars from IT investment. The stimulus bill passed a year ago contains funds to wire the medical system over the next few years, and the administration is supplementing this with significant funds to analyze the comparative effectiveness of different treatments—even in the face of “death panel” claims. Grade: Full credit.
• Prevention. The president’s proposal includes significant public-health investments, provides new incentives for physicians to focus on preventive and chronic care, and opens Medicare to finding new ways of supporting prevention. The only area of weakness is the lack of a junk food tax or tax on sugar sweetened beverages. Grade: Partial credit.
• Create a public option. A public insurance option would provide competition for insurers in areas that are nearly a monopoly and provide a path for reforms in Medicare to expand readily in the under-65 population. The public option was eliminated because of Republican opposition, however. Grade: No credit.
So reform gets full credit on six of the 10 ideas, partial credit on three others, and no credit on one. The area of no credit (a public option) is because Republicans opposed the idea. One area receives only partial credit because of Democratic opposition (malpractice reform) and two other areas reflect general hesitancy to increase taxes (taxing Cadillac plans and taxing drivers of obesity).
Why is reform viewed so negatively? In part, it may reflect the perfect being the enemy of the good. If the only passing grade is 10 out of 10, then reform clearly fails. But given where the Republican Party is on a public option, no reform will get a passing grade. If both parties were willing to raise taxes and Republicans negotiated malpractice reform for their overall support, we could probably get a nine out of 10.
Reform is also viewed negatively because official scorekeepers do not believe anything on this list other than reducing prices will save much money. The Congressional Budget Office has consistently estimated that policies built around changing incentives and thus encouraging more efficient care will not have any effect on cost trends. My own calculations, mirrored by other observers and a host of business and provider groups, suggest that the reforms will save nearly $600 billion over the next decade and even more in the subsequent one.
Of course, no one knows precisely how much medical spending increases will moderate. But one cannot doubt the commitment to try. What is on the table is the most significant action on medical spending ever proposed in the United States. Should we really walk away from that?
Mr. Cutler is a professor of economics at Harvard University. He was senior health-care adviser to the Obama presidential campaign.
http://online.wsj.com/article/SB10001424052748703936804575108080266520738.html
Comment:
By Don McCanne, MD
There is an important debate taking place as to whether or not the Obama proposal, based on the Senate bill, will control health care costs. President Obama and his supporters contend that every idea on controlling costs is in this bill. The private insurance industry contends that premiums will continue to increase at unsustainable levels because this measure does very little to control rising costs. Who is right?
Harvard economics professor David Cutler served as a health care adviser to the Obama presidential campaign and is well situated to present the arguments in support of the position that the Obama proposal will “bend the cost curve,” slowing the rise in health care costs. Let’s look at the arguments that he presents in this WSJ article.
* Form insurance exchanges.
Private insurance plans to be offered through the exchanges will have higher premiums than plans currently in the individual market because the increased costs of the required benefits will more than offset any administrative efficiencies of these plans. Since the actuarial value of the exchange plans will be lower than the average of today’s employer-sponsored group plans, patients will have to bear a significant portion of the costs. The exchanges themselves create additional administrative costs which will reduce the savings from administrative efficiencies.
Although the administrative waste in our current fragmented financing system is profound, reform that would recover much of this waste was rejected before the process began. If there is any net savings at all from the exchanges, it will not qualify as even a footnote in the annual report on our national health expenditures (NHE).
* Reduce excessive prices, including th
ose of supplemental plans enrolling Medicare beneficiaries.
Studies have shown that one of the largest and most important contributors to our health care spending is the very high health care prices in the United States, when compared to other nations. In other nations, the government plays a significant role in pricing, but our legislators rejected any type of administered pricing that was not already in force in our public programs, instead leaving it to market competition of private plans. The fact that we have the highest prices is proof that the private plans have not been capable of controlling prices.
The proposal reduces the overpayments to private plans, but leaves in place their administrative excesses. Spending in Medicare actually could be reduced by eliminating both the Medicare Advantage plans and the Medigap plans. Medigap provides the very worst value of private health plans. It would be far less expensive to roll the extra benefits that are of value in these plans into the traditional Medicare program. That would enable modest savings while providing Medicare beneficiaries with a better program.
* Moving to value-based payment in Medicare.
Cutler says that the president’s proposal “includes virtually every idea offered” for “moving from a system where volume drives reimbursement to one where value drives reimbursement.” Nice rhetoric, but the plethora of health policy literature provides almost nothing on how to do this. Current measurements of value in health care are very primitive and would have very little impact on our total health care delivery system.
Much of health care is not particularly productive even if provided in large volumes, but it is exceedingly difficult to slash the volume without slashing the truly beneficial services blended into that volume. We should certainly make greater strides in trying to sort out beneficial and non-beneficial services, but that is not dependent on the passage of this bill.
Many of the financing experiments in the proposal are limited to Medicare and wouldn’t even apply to the remaining 85 percent of our population. When we do find out how to obtain greater value in health care, we need to apply those principles to our entire population and not simply to Medicare beneficiaries. To do that would require an improved Medicare-like financing structure that includes everyone, because the fragmented market of private insurance plans could never pull their act together.
* Tax generous insurance plans.
Employer-sponsored plans formerly provided an actuarial value of about 89 percent, leaving 11 percent of the costs as the responsibility of the employee. In an attempt to control premium increases – not cost increases – more of the costs have been shifted to employees, reducing the average actuarial value to about 80 percent. The exchanges will be offering plans at a 70 percent actuarial value.
In one of the great deceptions of the reform process, plans that actually protect patients from financial hardship are now called “generous insurance plans” which allegedly need to be taxed. The intent of the tax is to ratchet down the actuarial value of employer-sponsored plans to control the premiums, while reducing spending by increasing financial barriers through greater patient cost sharing. We need policies to help get patients the care that they need, not hinder access.
* Empower an independent Medicare advisory board.
As discussed in a recent Quote of the Day, we do need a greater government role in improving our health care financing, which can help to transform health care delivery into a high performance system, whether that is through an Independent Medicare Advisory Board – an empowered MedPAC – or some other appropriate institution. Again, this should not be a role limited to 15 percent of our population. To be effective it should be applied to an improved Medicare that covers everyone. The Obama plan, since it perpetuates our fragmented system, would not enable such an institution to provide the impact that it should have.
* Combat Medicare fraud and abuse.
Since the beginning of Medicare everyone knows that fraud and abuse are problems because of all of the reports of the government cracking down on these criminal activities. This legislation is not essential to perpetuate the government oversight that we need to reduce these losses. What we need instead is an expansion of this oversight to our entire health system and not limited to the government programs. The federal government formerly partnered with the private insurers in fraud prosecution, but it doesn’t anymore since the private insurers contributed very little but merely wanted a cut of the recovery. Can you imagine the insurers ever risking offending their network panels by conducting fraud investigations against them?
* Malpractice reform.
Our malpractice tort system fails to provide most individuals who experience medical injury with any compensation. It isn’t working and needs to be reformed. If we do provide compensation for all victims of medical injury, costs will increase. Although that is appropriate, we can’t pretend that costs will decrease merely because of the enactment of this legislation.
* Invest in information technology.
Electronic medical records and integrated information technology systems are expensive. Most studies indicate that they increase costs. One study demonstrated that they have enabled upcoding, resulting in higher prices for the same services. Well designed systems may provide some benefit, but don’t look for cost savings, and certainly don’t think that this legislation provides the key to unlock the IT world.
* Prevention.
Prevention is very important, but overall it does not save money, and it is certainly not dependent on the enactment of this legislation.
* Create a public option.
There is no public option in the Obama plan. Even if there were, it would not reduce the waste in our dysfunctional health care system, just as Medicare has been largely unable to do. In our fragmented system Medicare is merely an additional player, adding to the complexities and costs of health care financing and health care delivery. As a single entity covering everyone, an improved Medicare would provide the efficiencies that would recover hundreds of billions of dollars that could be used to fully cover the uninsured and underinsured.
Conclusion
The confusion in costs and “bending the curve” has resulted from the fact that the discussion primarily has been limited to consultations with the Congressional Budget Office on the federal budget and not on our national health expenditures. The very modest bending of the curve has related to federal budget projections. Much of that was accomplished by placing a greater financial burden on the people, especially moderate and upper-moderate income individuals and families. We need to fix the problem of our escalating total costs, and then adjust the federal budget to match the solution.
Now do like David Cutler and go back and score these “ten broad ideas that have been offered for bending the health-care cost curve.” Negative scores are not only permitted but should be used when appropriate.
Your final score? (Ouch!)
David Cutler on ten ideas to bend the cost curve
Health Reform Passes the Cost Test
By David M. Cutler
The Wall Street Journal
March 9, 2010
Many people are worried that the health-care reform proposed by President Obama and congressional Democrats will fail to bend the “cost curve.” A number of commentators are urging no votes because of this, and Republicans have asked the president to start health reform over, focusing squarely on the issue of cost reduction.
These calls overlook the actual legislation. Over the past year of debate, 10 broad ideas have been offered for bending the health-care cost curve. The Democrats’ proposed legislation incorporates virtually every one of them. Here they are:
• Form insurance exchanges. These would help curb underwriting and inefficient marketing practices that raise costs in the small-group and individual insurance markets. This is addressed in all the House and Senate bills, and the president’s proposal. Grade: Full credit.
• Reduce excessive prices, including those of supplemental plans enrolling Medicare beneficiaries. The president’s proposal reduces these Medicare Advantage overpayments and others to different providers, even in the face of Republican claims that reducing such overpayments is tantamount to rationing care for seniors. Grade: Full credit.
• Moving to value-based payment in Medicare. Both Democrats and Republicans have called for moving from a system where volume drives reimbursement to one where value drives reimbursement. The president’s proposal includes virtually every idea offered for doing this. Grade: Full credit.
• Tax generous insurance plans. Health-insurance benefits are excluded from income taxation, providing incentives for excessively generous insurance. Many economists have proposed capping the tax exclusion to reduce these incentives. The president’s proposal taxes some of the most generous policies, though it has deferred the date by which these taxes take effect. Grade: Partial credit.
• Empower an independent Medicare advisory board. Interest-group politics intrudes too deeply within the mechanics of Medicare policy, raising program costs and hindering efforts to improve care. Despite powerful opposition, the president proposes this independent board and a process for fast-tracking such recommendations through Congress. Grade: Full credit.
• Combat Medicare fraud and abuse. The administration has started an active task force to combat these problems. Other ideas to reduce fraud and abuse were presented at the recent health-care summit, and were incorporated in the president’s proposal. Grade: Full credit.
• Malpractice reform. Defensive medicine is a small but important driver of medical spending. The reform proposal makes some headway, encouraging states to experiment with alternative mechanisms to reduce malpractice burdens. More could be done—for example, specialized malpractice courts and a safe harbor for physicians practicing evidence-based medicine—but the president’s proposal makes a start. Grade: Partial credit.
• Invest in information technology. Many studies suggest savings in the tens of billions of dollars from IT investment. The stimulus bill passed a year ago contains funds to wire the medical system over the next few years, and the administration is supplementing this with significant funds to analyze the comparative effectiveness of different treatments—even in the face of “death panel” claims. Grade: Full credit.
• Prevention. The president’s proposal includes significant public-health investments, provides new incentives for physicians to focus on preventive and chronic care, and opens Medicare to finding new ways of supporting prevention. The only area of weakness is the lack of a junk food tax or tax on sugar sweetened beverages. Grade: Partial credit.
• Create a public option. A public insurance option would provide competition for insurers in areas that are nearly a monopoly and provide a path for reforms in Medicare to expand readily in the under-65 population. The public option was eliminated because of Republican opposition, however. Grade: No credit.
So reform gets full credit on six of the 10 ideas, partial credit on three others, and no credit on one. The area of no credit (a public option) is because Republicans opposed the idea. One area receives only partial credit because of Democratic opposition (malpractice reform) and two other areas reflect general hesitancy to increase taxes (taxing Cadillac plans and taxing drivers of obesity).
Why is reform viewed so negatively? In part, it may reflect the perfect being the enemy of the good. If the only passing grade is 10 out of 10, then reform clearly fails. But given where the Republican Party is on a public option, no reform will get a passing grade. If both parties were willing to raise taxes and Republicans negotiated malpractice reform for their overall support, we could probably get a nine out of 10.
Reform is also viewed negatively because official scorekeepers do not believe anything on this list other than reducing prices will save much money. The Congressional Budget Office has consistently estimated that policies built around changing incentives and thus encouraging more efficient care will not have any effect on cost trends. My own calculations, mirrored by other observers and a host of business and provider groups, suggest that the reforms will save nearly $600 billion over the next decade and even more in the subsequent one.
Of course, no one knows precisely how much medical spending increases will moderate. But one cannot doubt the commitment to try. What is on the table is the most significant action on medical spending ever proposed in the United States. Should we really walk away from that?
Mr. Cutler is a professor of economics at Harvard University. He was senior health-care adviser to the Obama presidential campaign.
http://online.wsj.com/article/SB10001424052748703936804575108080266520738.html
There is an important debate taking place as to whether or not the Obama proposal, based on the Senate bill, will control health care costs. President Obama and his supporters contend that every idea on controlling costs is in this bill. The private insurance industry contends that premiums will continue to increase at unsustainable levels because this measure does very little to control rising costs. Who is right?
Harvard economics professor David Cutler served as a health care adviser to the Obama presidential campaign and is well situated to present the arguments in support of the position that the Obama proposal will “bend the cost curve,” slowing the rise in health care costs. Let’s look at the arguments that he presents in this WSJ article.
* Form insurance exchanges.
Private insurance plans to be offered through the exchanges will have higher premiums than plans currently in the individual market because the increased costs of the required benefits will more than offset any administrative efficiencies of these plans. Since the actuarial value of the exchange plans will be lower than the average of today’s employer-sponsored group plans, patients will have to bear a significant portion of the costs. The exchanges themselves create additional administrative costs which will reduce the savings from administrative efficiencies.
Although the administrative waste in our current fragmented financing system is profound, reform that would recover much of this waste was rejected before the process began. If there is any net savings at all from the exchanges, it will not qualify as even a footnote in the annual report on our national health expenditures (NHE).
* Reduce excessive prices, including those of supplemental plans enrolling Medicare beneficiaries.
Studies have shown that one of the largest and most important contributors to our health care spending is the very high health care prices in the United States, when compared to other nations. In other nations, the government plays a significant role in pricing, but our legislators rejected any type of administered pricing that was not already in force in our public programs, instead leaving it to market competition of private plans. The fact that we have the highest prices is proof that the private plans have not been capable of controlling prices.
The proposal reduces the overpayments to private plans, but leaves in place their administrative excesses. Spending in Medicare actually could be reduced by eliminating both the Medicare Advantage plans and the Medigap plans. Medigap provides the very worst value of private health plans. It would be far less expensive to roll the extra benefits that are of value in these plans into the traditional Medicare program. That would enable modest savings while providing Medicare beneficiaries with a better program.
* Moving to value-based payment in Medicare.
Cutler says that the president’s proposal “includes virtually every idea offered” for “moving from a system where volume drives reimbursement to one where value drives reimbursement.” Nice rhetoric, but the plethora of health policy literature provides almost nothing on how to do this. Current measurements of value in health care are very primitive and would have very little impact on our total health care delivery system.
Much of health care is not particularly productive even if provided in large volumes, but it is exceedingly difficult to slash the volume without slashing the truly beneficial services blended into that volume. We should certainly make greater strides in trying to sort out beneficial and non-beneficial services, but that is not dependent on the passage of this bill.
Many of the financing experiments in the proposal are limited to Medicare and wouldn’t even apply to the remaining 85 percent of our population. When we do find out how to obtain greater value in health care, we need to apply those principles to our entire population and not simply to Medicare beneficiaries. To do that would require an improved Medicare-like financing structure that includes everyone, because the fragmented market of private insurance plans could never pull their act together.
* Tax generous insurance plans.
Employer-sponsored plans formerly provided an actuarial value of about 89 percent, leaving 11 percent of the costs as the responsibility of the employee. In an attempt to control premium increases – not cost increases – more of the costs have been shifted to employees, reducing the average actuarial value to about 80 percent. The exchanges will be offering plans at a 70 percent actuarial value.
In one of the great deceptions of the reform process, plans that actually protect patients from financial hardship are now called “generous insurance plans” which allegedly need to be taxed. The intent of the tax is to ratchet down the actuarial value of employer-sponsored plans to control the premiums, while reducing spending by increasing financial barriers through greater patient cost sharing. We need policies to help get patients the care that they need, not hinder access.
* Empower an independent Medicare advisory board.
As discussed in a recent Quote of the Day, we do need a greater government role in improving our health care financing, which can help to transform health care delivery into a high performance system, whether that is through an Independent Medicare Advisory Board – an empowered MedPAC – or some other appropriate institution. Again, this should not be a role limited to 15 percent of our population. To be effective it should be applied to an improved Medicare that covers everyone. The Obama plan, since it perpetuates our fragmented system, would not enable such an institution to provide the impact that it should have.
* Combat Medicare fraud and abuse.
Since the beginning of Medicare everyone knows that fraud and abuse are problems because of all of the reports of the government cracking down on these criminal activities. This legislation is not essential to perpetuate the government oversight that we need to reduce these losses. What we need instead is an expansion of this oversight to our entire health system and not limited to the government programs. The federal government formerly partnered with the private insurers in fraud prosecution, but it doesn’t anymore since the private insurers contributed very little but merely wanted a cut of the recovery. Can you imagine the insurers ever risking offending their network panels by conducting fraud investigations against them?
* Malpractice reform.
Our malpractice tort system fails to provide most individuals who experience medical injury with any compensation. It isn’t working and needs to be reformed. If we do provide compensation for all victims of medical injury, costs will increase. Although that is appropriate, we can’t pretend that costs will decrease merely because of the enactment of this legislation.
* Invest in information technology.
Electronic medical records and integrated information technology systems are expensive. Most studies indicate that they increase costs. One study demonstrated that they have enabled upcoding, resulting in higher prices for the same services. Well designed systems may provide some benefit, but don’t look for cost savings, and certainly don’t think that this legislation provides the key to unlock the IT world.
* Prevention.
Prevention is very important, but overall it does not save money, and it is certainly not dependent on the enactment of this legislation.
* Create a public option.
There is no public option in the Obama plan. Even if there were, it would not reduce the waste in our dysfunctional health care system, just as Medicare has been largely unable to do. In our fragmented system Medicare is merely an additional player, adding to the complexities and costs of health care financing and health care delivery. As a single entity covering everyone, an improved Medicare would provide the efficiencies that would recover hundreds of billions of dollars that could be used to fully cover the uninsured and underinsured.
Conclusion
The confusion in costs and “bending the curve” has resulted from the fact that the discussion primarily has been limited to consultations with the Congressional Budget Office on the federal budget and not on our national health expenditures. The very modest bending of the curve has related to federal budget projections. Much of that was accomplished by placing a greater financial burden on the people, especially moderate and upper-moderate income individuals and families. We need to fix the problem of our escalating total costs, and then adjust the federal budget to match the solution.
Now do like David Cutler and go back and score these “ten broad ideas that have been offered for bending the health-care cost curve.” Negative scores are not only permitted but should be used when appropriate.
Your final score? (Ouch!)
Individual health-care premiums to soar up to 60%
Minimum hike to be 3% -- Durbin slams move as boost to profits
BY SANDRA GUY
Chicago Sun-Times
March 8, 2010
Individual health-insurance rates in Illinois will rise this year up to 60 percent, according to Michael McRaith, director of insurance for Illinois.
McRaith said insurance companies have filed reports showing that the individual plans’ base rates will increase from 3 percent to more than 60 percent. The report, which lists each insurance company’s rate increase from Jan. 1, 2008, to the present, can be seen online at insurance.illinois.gov under “Insurance Latest News.”
Sunday, Sen. Dick Durbin responded to the report: “Emergency rooms are overflowing. Health centers are struggling to meet the increasing demand. Yet insurance companies continue to raise premiums for hardworking families and, consequently, their profit margins.”
The report shows that 500,000 to 600,000 Illinoisans have bought private health-care policies from legitimate, licensed insurance companies.
Insurance companies are not required to report what they charge for group plans, such as those offered by employers.
McRaith said his office deals with 15,000 formal complaints a year about individual health-insurance policies.
He said, “We need some kind of ability to understand why their premiums are increasing so dramatically.”
Last week, Health and Human Services Secretary Kathleen Sebelius told top U.S. health insurers to publicly justify a spate of double-digit premium hikes, mostly affecting individual policies.
http://www.suntimes.com/business/2089458,CST-NWS-insure08.article
Universal health care would cost U.S. less
Letter to the Editor
Portsmouth (N.H.) Herald
March 04, 2010
Like Sen. Judd Gregg, I also believe Congress needs to start over with its health care efforts — but for very different reasons.
The current Senate bill has many good features, including the elimination of pre-existing conditions as an excuse for denying insurance and the prohibition of denial of existing coverage when a patient becomes ill. But, as a member of the Physicians for a National Health Program, I feel the current reform efforts falls far short of the goals of PNHP — namely, providing universal health coverage for all Americans and eliminating the excessive waste of health insurance premiums. At present, more than 30 percent of health insurance premiums goes toward administrative expenses and profits. In contrast, administrative expenses under Medicare amount to 3 to 4 percent of expenses.
H.R. 676, which has been suppressed in the House of Representatives for several years, and was not even included in the discussions on health care reform, would provide universal coverage for all Americans under a single-payer health care system for less than what is currently being spent for health care in the United States.
It is a disgrace that the United States is the only developed country in the world that does not provide universal health care coverage, even though we currently spend 17 percent of our gross national product for health care. That is up to twice what other developed countries spend on health care, and they cover all of their citizens.
I would urge everyone to read T.R. Reid’s book, “The Healing of America.” In his book he describes how numerous developed countries provide high quality universal health care coverage. Mr. Reid describes a variety of systems, including single payer and private insurance-based systems.
All of these systems share these basic characteristics: Everyone is included in the health care system; they are all nonprofit; and they all have low administrative expenses.
After reviewing the facts (and ignoring the hyperbole), I urge everyone to contact their senators and representatives to push for true health care reform that provides universal coverage.
P.S. For more information, please visit www.pnhp.org.
H. Dixon Turner, M.D.
Portsmouth, N.H.
http://www.seacoastonline.com/articles/20100304-OPINION-3040392
The single-payer failure
By Rick Alterbaum
The Brandeis Hoot (Brandeis University’s Community Newspaper)
March 5, 2010
Last Thursday, President Obama and leaders from both parties deliberated for seven hours to espouse their talking points and delve into the intricacies of health care policy. They discussed a multitude of topics, ranging from health savings accounts to medical malpractice reform to the “Cornhusker Kickback.” What they did not mention, however, was the possibility of establishing a single-payer health care system. This failure of Congress to consider the plausibility of this policy has been the underlying tragedy of the health care debate.
Several months into the Obama presidency, the Democrats took on the challenge of fixing the broken and convoluted structure in which the American people acquire health insurance. Believing they possessed a mandate for change after their gigantic 2008 victory, the Democrats yearned for a major legislative victory. And, more importantly, they ultimately wished to make history where presidents from Theodore Roosevelt to Bill Clinton could not.
But right from the start of this initiative, the Democrats did not even entertain the thought of a single-payer option. They dismissed it as too radical and politically infeasible, viewing it as a fringe issue and a pet project of the far left.
This is foolhardy. The creation of a single-payer health care system would only extend Medicare coverage to every hard-working, tax-paying American citizen. Medicare is not a perfect institution. Indeed, the program contains its fair share of fraud, abuse and waste. However, its administrative costs are generally far lower than those associated with private health insurance companies, and seniors who are recipients of Medicare’s federally-mandated benefits overwhelmingly approve of the quality and treatment associated with the care they receive. This program is familiar, a household name from the political lexicon and popular.
So why can’t people younger than 65 be so fortunate? According to conservatives, single-payer is socialism, government takeover and communism, to name a few.
Despite the conservative histrionics, advocates of these views are at least partially right. Under a single-payer system, every person would receive coverage that is funded by the federal government. Consequently, the market for private health insurance would, if not dissipate, erode significantly.
But that shouldn’t be counted against the single-payer system. People like their doctors and the care they receive and don’t like the intermediaries they need to deal with as the beneficiaries of this care. This is especially the case when said-intermediaries escalate premiums by up to 39 percent, as Anthem Blue Cross in California did recently, when said-intermediaries deny people coverage based on previous medical conditions and preexisting conditions; when said-intermediaries haggle and squabble over nearly every single medical claim they get.
As long as for-profit insurers are dominant, the American people will suffer. Even if the current health care reform bill passes, this will still be the case. These companies will presumably find loopholes that they can exploit in order to elude the prospect of truly abiding by new regulations. At the same time, due to an individual mandate, millions of more Americans will be forced into the greedy clutches of these insurers via a virtual marketplace, or exchange. There will not even be an alternative for these individuals—no public option, no Medicare buy-in, no health care cooperatives, nothing besides a Medicaid expansion for the poor.
While the current proposal is better than nothing, the American people shouldn’t have to settle.
It is a shame that the Democrats did not take the single-payer, Medicare-for-all route. Quite simply, they do not have the guts to defend significantly expanding government, even when doing so is manifestly in the public interest. The irrational, paranoid stigma attached to big government looms over their every move.
A Fresh Approach to Health Care Reform
By MARK E. WILSON
Birmingham News
March 7, 2010
Recently in clinic at Cooper Green Mercy Hospital, I saw a man in his 50s who had a good relationship with his doctor until three years ago, when he lost his job and his health insurance. Before long, he could no longer afford health care from his doctor. He had a history of “borderline diabetes,” but he felt reasonably well, until last month, when his big toe turned black. He came to our emergency room and was admitted with uncontrolled diabetes, kidney disease and gangrene of his toe, which required an amputation.
This man was at least fortunate enough to live in Jefferson County, where an unusual law requires that a portion of the local sales tax revenue goes toward indigent care. But consider a patient I saw at a volunteer clinic in Shelby County, who injured his shoulder through no fault of his own and became unable work at his regular labor job which did not offer health insurance. He received emergency care, but he was unable to pay the money required upfront to see an orthopedic surgeon or have the operation required to restore his shoulder to a level of function necessary to resume his work.
I consider myself fortunate to be a physician who works at a public hospital dedicated to providing quality health care regardless of a person’s ability to pay. I get to be what I’ve wanted to be since I was a kid: a medical doctor who helps people in need, especially those who cannot find help elsewhere.
In the national health care reform debate, I’ve heard other doctors object to any system in which the government plays a major role in financing care. They say they don’t want government getting between them and their patients. These doctors do have some legitimate concerns, but part of me is perplexed. Several times a day, I see patients who had something come between them and their doctor, but it wasn’t the government. It was the loss of a job, loss of private insurance, new restrictions imposed by a private insurer or just a simple lack of money.
I see patients like these again and again, often with some really sad stories. They run out of medicines and get sick. Some end up with strokes, heart attacks, amputations, incurable cancers or premature death, all of which may have been prevented if their care had not been interrupted. Some may get to us before they get sick, but only after unnecessary anxiety, disruption and waste of resources, such as emergency room visits or unnecessary duplication of medical tests.
I have no trouble believing the study in the September 2009 American Journal of Public Health estimating that 45,000 people die in the United States each year due to lack of health insurance. That’s one death every 12 minutes. An American Journal of Medicine study published last year showed 62 percent of bankruptcies in 2007 were linked to medical bills. Three-quarters of these medical bankruptcies were for people who had health insurance when they first got sick. A report by Families USA showed that 73.6 percent of the medically uninsured in Alabama are members of working families.
The human tragedies buried in these grim statistics occur because our society has not found the will to ensure everyone has lifelong access to health care. The legislation currently being considered in Washington is not going to provide this or do much to control runaway costs.
Before Medicare was passed in 1965, millions of our nation’s elderly were without adequate health care and driven into poverty by high medical bills. Once signed into law, our seniors’ plights changed overnight. Medicare, even with its imperfections, has served this population relatively well ever since, and with relatively low administrative costs.
Physicians for a National Health Program, using research done by Steffie Woolhandler, M.D., and David Himmelstein, M.D., of Harvard Medical School, estimates that a publicly funded, single-payer system can save about $400 billion annually by eliminating the enormous administrative costs associated with a multi-payer system that includes for-profit, private insurance companies. This would be enough money to cover all of those who are currently uninsured. Additional savings could be attained through bulk purchasing of medicines. I suggest that we start with an overhaul of the Medicare program, which already has an infrastructure in place, and offer it to all citizens.
With this kind of true health care reform, I would be able to say to any patient in Alabama, “Welcome. We’re going to do our best to provide you with the care that you need.” Wouldn’t every doctor like to be able to say that?
Mark Wilson, M.D., practices general internal medicine and is chief of staff at Cooper Green Mercy Hospital. E-mail: wilsonm@jccal.org.
http://blog.al.com/birmingham-news-commentary/2010/03/viewpoints_a_fresh_approach_to.html
Massachusetts Senate election: A call to start over on healthcare reform
Dr. James C. Mitchiner
Ann Arbor (Mich.) News
March 7, 2010
Count me among those who were not terribly disappointed at the outcome of the recent Senate race in Massachusetts to fill the un-expired term of the late Sen. Edward Kennedy.
The election of Scott Brown, a conservative Republican who until recently was an obscure state senator, in a state well known for its liberal politics, should be construed as nothing less than a revealing denouement of the Democratic health reform agenda. Nor should the outcome of this election be seen as an unanticipated surprise; well before the historic Jan. 19 vote, there was indeed a sense that the Massachusetts voters were collectively acting as the nation’s proverbial “canary in the coal mine” for the Democrats’ ambitious social agenda.
Exit polls suggested that voters’ concerns over the scope and speed of health care reform provided the primary motivator for their electoral decision. Whether the reforms proposed by the Democratic congressional leadership were too radical, too costly, too confusing or too partisan for the taste of the average independent voter, one conclusion is certain: health care reform, in its current iteration, made people uncomfortable. Clearly, the proposed health bills are unnecessarily convoluted, bureaucratic and controversial. And if Brown’s election provides the 41st vote needed to scuttle health care reform in the Senate, perhaps he has done the country – and the Democrats – a big favor. It’s not that I want to wait the next 16 years for yet another attempt at overhauling our deplorable, inept and inequitable health care system. Rather, I join the chorus of those, particularly the Republican congressional leadership, who are demanding that we start over on health care reform. We can begin by recognizing what works: Medicare. Yes, Medicare has its faults. It underpays doctors and hospitals, is going broke, is subject to fraud (although perhaps not to the extent that some claim), and has its own bureaucracy. But it also has an established infrastructure, provides universal coverage and is highly popular among senior citizens.
In terms of reimbursement, its apparent pecuniary stinginess stems from doctors’ need to pay their office overhead, which of course can be traced to the extra costs and time spent dealing with our rapacious for-profit health insurance industry. And the way to “save” Medicare from its impending bankruptcy is to expand its risk pool by incorporating younger – and healthier (read: less costly) – beneficiaries, and pay for it through a more progressive tax structure than what now exists.
In other words, we need to extend the benefits of Medicare to all Americans by creating a universal, equitable, portable and more cost-effective single-payer Medicare-for-All health care system.
Single-payer’s mischaracterization as “socialized medicine” can be remedied by educating citizens to understand that a single-payer system will permit them to go to the physician and hospital of their choice, an option they lack now because they are limited to a provider within their health plan’s network.
Single-payer will permit them to have health insurance coverage independent of their job, and even if they are unemployed. Single-payer will stay with them as they switch jobs or move from state to state. A single-payer system will simplify billing, capture administrative economies of scale, and provide uniform benefits, including coverage for pre-existing conditions. And single-payer will reduce racial, gender, financial and geographic disparities of care.
In his State of the Union address last month, President Barack Obama asked rhetorically, “But if anyone from either party has a better approach that will bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare for seniors, and stop insurance company abuses, let me know…. I’m eager to see it.”
Well, Mr. President, I know of a solution that will meet all those goals: a universal, single-payer, Medicare-for-All program. I’m eager to see it, too.
Dr. James C. Mitchiner is an Ann Arbor emergency physician and the former president of the Washtenaw County Medical Society.