March 27, 2009

A Time for Reform:

…several widely diverse, national organizations began a series of unique discussions six months ago to exchange ideas and see where their agreements and differences lay.

This health reform dialogue was never intended to cover every issue likely to arise as health reform is considered in the ensuing months. Some issues currently elude consensus.

Increasing coverage and access:

Regarding coverage, reform should build upon the key pillars of health care coverage today — employer-sponsored insurance and public safety-net programs for low-income people and families.

* Improve Medicaid and Children’s Health Insurance Program (CHIP) outreach and enrollment.

* Establish a nationwide floor for Medicaid eligibility for all adults no lower than 100 percent of the federal poverty level.

* Give individuals eligible for Medicaid and CHIP the option to utilize those dollars to purchase employer-sponsored insurance…

* Provide advanceable, refundable tax credits or other subsidies on a sliding scale for individuals and families to purchase adequate and affordable coverage…

* Provide subsidies for small businesses to provide health insurance for their employees.

* Enact reforms necessary so that all individuals will purchase or obtain quality, affordable health insurance.

Strengthening wellness and prevention:

The Centers for Disease Control and Prevention estimate that eliminating three risk factors — poor diet, inactivity, and tobacco use — would prevent 80 percent of heart disease and stroke, 80 percent of Type 2 diabetes, and 40 percent of cancer.

* Identify effective clinical preventive services.

* Encourage clinicians and providers to deliver effective clinical preventive services and follow-up treatment, as indicated.

* Ensure a sufficient primary care workforce through an ongoing, dynamic, national planning and development process.

* Continue to invest in health information technology (HIT) that supports wellness and prevention, both on the individual and community levels.

* Further encourage businesses to support healthy behaviors.

* Encourage communities to be healthy.

* Eliminate disparities in health.

* Help individuals improve their health.

Ensuring quality and value:

* Conduct comparative clinical effectiveness research (CER) studies via a public-private partnership to provide additional information that can help improve care decisions.

* Expand and accelerate the development of meaningful quality measures.

* Fund state demonstrations of alternative medical liability reform models.

* Improve billing efficiencies to reduce confusion and duplication for patients, clinicians, and providers.

* Reduce administrative costs.

* Work to reduce geographic, racial, ethnic, and gender disparities in health care delivery.

* Ensure an adequate health care delivery workforce, including funding for training and loan forgiveness programs and payment reforms directed at primary care, public health and nursing, and other high-priority areas facing imminent shortages.

Context for Financing Health Care:

* Cost efficiencies can be gained by improving health care delivery.

* Methodologies for quantifying long-term cost savings can be improved.

* To jumpstart health reform, additional investments in U.S. health care will be needed.

Enacting meaningful health reform requires a careful and balanced approach of fiscal prudence, accompanied by efforts to contain costs, increase savings, and enhance efficiencies. Such investments will enable transformational changes to be achieved — and those transformational changes will ultimately place the United States on a path toward greater financial and health care security.

Organizations endorsing this document include:

AARP
Advanced Medical Technology Association
America’s Health Insurance Plans
American Cancer Society Cancer Action Network
American College of Physicians
American Hospital Association
American Medical Association
American Nurses Association
American Public Health Association
Blue Cross and Blue Shield Association
Business Roundtable
Catholic Health Association of the United States
Families USA
Federation of American Hospitals
Healthcare Leadership Council
National Federation of Independent Business
Pharmaceutical Research and Manufacturers of America
U.S. Chamber of Commerce

http://www.advamed.org/NR/rdonlyres/42134469-D897-4AE8-B48E-DBB46B84255F/0/HRDCommonGroundFINALEMBARGOED32709.pdf

Comment:

By Don McCanne, MD

This report, “Health Reform Dialogue,” contains a few modest but obvious recommendations that any reasonable reform effort must include. Much more important is that the primary theme of this report, as exemplified by the sampling of recommendations listed above, is that we should continue with the status quo, dumping more of our dollars into our dysfunctional, wasteful, inefficient, fragmented system of financing health care.

So why should we pay any attention at all to this worthless contribution to the national dialogue on health care reform? It is because it exposes the blatant lie that we are close to agreeing on reform that would bring affordable, high quality care to all residents of the United States.

This highly touted, closed door process has been taking place over the past half year. Theoretically all important stakeholders were included (except patients). They agreed that we have finally come to the time that reform is an absolute imperative. Through intensive negotiations behind closed doors in a (symbolically) smoke-filled room, they finally agreed… that smoking is bad for your health (and a couple of other points of less significance).

There is absolutely no mention of a single payer national health program, or Medicare for All. That option was discarded before anyone walked into the room.

The compromise position to which the progressives had agreed would be to offer a public, Medicare-like insurance program to compete in the market of private plans. “Health Reform Dialogue” remains silent on such an option.

In a decision to exclude the progressive community from playing any serious role in reform, moderates are now proposing a government-sponsored, managed care PPO program, insulated by a double firewall from the government, so that it must compete on a “fair playing field” with the private plans. “Health Reform Dialogue” even remains silent on the possibility of offering a government PPO that would be required to include the same perverse policies that are inherent features of the private health plan models.

Look again at the organizations that signed on to this report. Two organizations that participated in the process are conspicuously absent: American Federation of State, County and Municipal Employees (AFSCME) and the Service Employees International Union (SEIU). At the end of this process, they refused to sign on to a document that would have even less impact than a no smoking pledge.

Look again at the list and decide which organizations actually controlled the process. Yes, those are the same organizations that have an ownership position in the Congress of the United States.

Unless Americans are ready to march on Washington, both literally and figuratively, the reform process is dead. Yes, dead!

Single-payer health reform bill introduced in Senate

PNHP
Press release
March 26, 2009
Challenging head-on the powerful private insurance and pharmaceutical industries, Vermont’s Sen. Bernie Sanders introduced a single-payer health reform bill, the American Health Security Act of 2009, in the U.S. Senate Wednesday.
The single-payer approach embodied in Sanders’ new bill stands in sharp contrast to the reform models being offered by the White House and by key lawmakers like Senators Max Baucus (D-Mont.) and Edward Kennedy (D-Mass.). Their plans would preserve a central role for the private insurance industry, sacrificing both universal coverage and cost containment during the worst economic crisis since the Depression.
In contrast, Sanders’ new legislation would cover all of the 46 million Americans who currently lack coverage and improve benefits for all Americans by eliminating co-pays and deductibles and restoring free choice of physician. The most fiscally conservative option for reform, single payer slashes private insurance overhead and bureaucracy in medical settings, saving over $400 billion annually that can be redirected into clinical care.
Highlights of the bill include the following:

• Patients go to any doctor or hospital of their choice.
• The program is paid for by combining current sources of government health spending into a single fund with modest new taxes amounting to less than what people now pay for insurance premiums and out-of-pocket expenses.
• Comprehensive benefits, including coverage for dental, mental health, and prescription drugs.
• While federally funded, the program is to be administered by the states.
• By eliminating the high overhead and profits of the private, investor-owned insurance industry, along with the burdensome paperwork imposed on physicians, hospitals and other providers, the plan saves at least $400 billion annually – enough money to provide comprehensive, quality care to all.
• Community health centers are fully funded, giving the 60 million Americans now living in rural and underserved areas access to care.
• To address the critical shortage of primary care physicians and dentists, the bill provides resources for the National Health Service Corps to train an additional 24,000 health professionals.

Sanders, who serves on the Senate Committee on Health, Education, Labor, and Pensions, is a longtime advocate of fundamental health care reform. His new bill draws heavily upon the single-payer legislation introduced by the late Sen. Paul Wellstone (D-Minn.) in 1993, S. 491, and closely parallels similar legislation pending before the House, H.R. 1200, introduced by Rep. Jim McDermott (D-Wash.).
https://pnhp.org/news/2009/march/singlepayer_health_.php
S.703 – American Health Security Act of 2009 – full text:
https://pnhp.org/PDF_files/American-Health-Security-Act-single-payer.pdf
Thomas (S.703 is listed but the text has not yet been received from GPO):
http://thomas.loc.gov/

At a rare time in our history when comprehensive reform may become a reality, it is important that the single payer model be represented in the legislative process. The House already has Rep. John Conyers’ H.R.676 and Rep. Jim McDermott’s H.R.1200, and now the Senate has Sen. Bernie Sanders’ S.703.
S.703 is very similar to H.R.1200, with two important additions regarding budgeting. Specified funds are budgeted for community health centers, and other specified funds are budgeted for the support of the National Health Service Corps, health professions education, and nursing education, including education of clinical nurse practitioners, certified registered nurse anesthetists, certified nurse midwives, and physician assistants.
These additions in budgeting are not simple tweaks to the bill. They provide a remedy for both the deterioration in our primary care infrastructure and the impaired access to care in underserved regions. There is an urgent need to provide the professionals and the facilities that can help fill the most serious voids in our health care delivery system today.
S.703 has been referred to the Senate Finance Committee, chaired by Sen. Max Baucus, who is determined to join with Senators Ted Kennedy, Charles Grassley and Mike Enzi to enact reform this year. Sen. Sanders will have some input as a member of the Budget Committee and a member of Sen. Kennedy’s HELP Committee.
What happens now? Will Senators Baucus and Kennedy take a fresh look at single payer as a model that addresses many of the policy problems that they currently face with their model based on private plans? Or will they accept Sen. Sanders’ contribution emphasizing the importance of health centers and primary care professionals? Or will they look at his budgeted numbers and decide that they can’t add those to the deficits they already face with their unnecessarily over-priced model of reform? Will they simply say that they’ll have to deal with that later, after they fix the insurance problem (the later that never comes)?
It’s great that there is a single payer bill in the Senate, but now is not the time to sit back and watch the process unfold. We certainly support the emphasis on improving primary care access, but we need to support that within a financing framework that will make it happen – a single payer national health program.

Public Plan Option in a Market of Private Plans

By David Himmelstein, M.D. and Steffie Woolhandler, M.D., M.P.H.:
The “public plan option” won’t work to fix the health care system for two reasons.
1. It forgoes at least 84 percent of the administrative savings available through single payer. The public plan option would do nothing to streamline the administrative tasks (and costs) of hospitals, physicians offices, and nursing homes, which would still contend with multiple payers, and hence still need the complex cost tracking and billing apparatus that drives administrative costs. These unnecessary provider administrative costs account for the vast majority of bureaucratic waste. Hence, even if 95 percent of Americans who are currently privately insured were to join the public plan (and it had overhead costs at current Medicare levels), the savings on insurance overhead would amount to only 16 percent of the roughly $400 billion annually achievable through single payer — not enough to make reform affordable.
2. A quarter century of experience with public/private competition in the Medicare program demonstrates that the private plans will not allow a level playing field. Despite strict regulation, private insurers have successfully cherry picked healthier seniors, and have exploited regional health spending differences to their advantage. They have progressively undermined the public plan — which started as the single payer for seniors and has now become a funding mechanism for HMOs — and a place to dump the unprofitably ill. A public plan option does not lead toward single payer, but toward the segregation of patients, with profitable ones in private plans and unprofitable ones in the public plan.
www.pnhp.org

The option to purchase a public plan within a market of private health insurance plans would merely provide one more player in our inefficient, dysfunctional, fragmented, multi-payer system of financing health care, that is if the public option even survives the political process. It would leave in place the deficiencies that have resulted in very high costs with the poorest health care value of all nations (i.e., overpriced mediocrity in health care).
Those who believe that the people of this nation would have the wisdom to drop their private plans and join the government program are ignoring history. When Congress authorized private plans to compete with our existing public program, Medicare, many enrollees did just the opposite. One-fifth have left the traditional Medicare program and joined the private plans.
So why should we care? Why shouldn’t they have the right to choose private plans if they want them? We know that those private plans are wasting money, both in their own costs and the administrative burden they place on the delivery system, but what all too many don’t realize is that we are all paying for that waste because of the inherent structural deficiencies in our financing system. Plus we are being deprived of the reforms needed in our health care delivery system that our own single payer monopsony would bring us.
Single payer activists, don’t give up. As President Obama said in his press conference this week, “persistence!”

By David Himmelstein, M.D. and Steffie Woolhandler, M.D., M.P.H.:

The “public plan option” won’t work to fix the health care system for two reasons.

1. It forgoes at least 84 percent of the administrative savings available through single payer. The public plan option would do nothing to streamline the administrative tasks (and costs) of hospitals, physicians offices, and nursing homes, which would still contend with multiple payers, and hence still need the complex cost tracking and billing apparatus that drives administrative costs. These unnecessary provider administrative costs account for the vast majority of bureaucratic waste. Hence, even if 95 percent of Americans who are currently privately insured were to join the public plan (and it had overhead costs at current Medicare levels), the savings on insurance overhead would amount to only 16 percent of the roughly $400 billion annually achievable through single payer — not enough to make reform affordable.

2. A quarter century of experience with public/private competition in the Medicare program demonstrates that the private plans will not allow a level playing field. Despite strict regulation, private insurers have successfully cherry picked healthier seniors, and have exploited regional health spending differences to their advantage. They have progressively undermined the public plan — which started as the single payer for seniors and has now become a funding mechanism for HMOs — and a place to dump the unprofitably ill. A public plan option does not lead toward single payer, but toward the segregation of patients, with profitable ones in private plans and unprofitable ones in the public plan.

www.pnhp.org

Comment:

By Don McCanne, MD

The option to purchase a public plan within a market of private health insurance plans would merely provide one more player in our inefficient, dysfunctional, fragmented, multi-payer system of financing health care, that is if the public option even survives the political process. It would leave in place the deficiencies that have resulted in very high costs with the poorest health care value of all nations (i.e., overpriced mediocrity in health care).

Those who believe that the people of this nation would have the wisdom to drop their private plans and join the government program are ignoring history. When Congress authorized private plans to compete with our existing public program, Medicare, many enrollees did just the opposite. One-fifth have left the traditional Medicare program and joined the private plans.

So why should we care? Why shouldn’t they have the right to choose private plans if they want them? We know that those private plans are wasting money, both in their own costs and the administrative burden they place on the delivery system, but what all too many don’t realize is that we are all paying for that waste because of the inherent structural deficiencies in our financing system. Plus we are being deprived of the reforms needed in our health care delivery system that our own single payer monopsony would bring us.

Single payer activists, don’t give up. As President Obama said in his press conference this week, “persistence!”

Employers getting more strict on health-care eligibility

By Steve Twedt
Pittsburgh Post-Gazette
March 25, 2009
Facing a difficult economy and running short of ways to reduce health-care costs, employers are becoming more aggressive about checking the eligibility of their workers’ dependents.
A Watson Wyatt survey of 489 employers this month for the National Business Group on Health found that audit reviews are the fastest growing change that companies are making to their health-care programs, well ahead of health risk appraisals or improving case management.
During an eligibility audit, employees are asked to document that family members on their health plans are eligible for coverage. They may be required to produce marriage certificates, proof of college enrollment or tax forms. Ex-spouses are not eligible. Nor are sickly uncles who live with the family. Stepchildren may not be eligible either, depending on the plan.
The appeal of eligibility audits is that they almost guarantee hard-dollar savings — with estimates of ineligible dependents typically in the 5 to 12 percent range — and they often can pay for themselves within a year.
“We have completed dependent eligibility audits for over 50 employers and we have yet to have a case where the employer did not receive a return on investment of over 300 percent within one year. Many times it is well over 1,000 percent,” said Michael Browning of Chapman Kelly, Inc., consultants in Jeffersonville, Ind.
Pittsburgh-based Daniel Priga, a principal with Mercer consulting, said the firm “conservatively” estimates a $1,900 savings per year for every ineligible dependent taken off the books. Such a return “is hard to find in today’s environment.”
http://www.post-gazette.com/pg/09084/957986-28.stm

Doing eligibility audits of dependents covered by employer-sponsored plans is yet one more example wherein our current dysfunctional system of financing health care actually promotes administrative waste. A rational system uses administrative services efficiently to pay for the health care that patients need. In the United States, much of the administrative cost of health care financing is due to efforts to avoid paying for health care.
Only in the United States do we consider that taking health insurance away from individuals to be a “return on investment.”

By Steve Twedt
Pittsburgh Post-Gazette
March 25, 2009

Facing a difficult economy and running short of ways to reduce health-care costs, employers are becoming more aggressive about checking the eligibility of their workers’ dependents.

A Watson Wyatt survey of 489 employers this month for the National Business Group on Health found that audit reviews are the fastest growing change that companies are making to their health-care programs, well ahead of health risk appraisals or improving case management.

During an eligibility audit, employees are asked to document that family members on their health plans are eligible for coverage. They may be required to produce marriage certificates, proof of college enrollment or tax forms. Ex-spouses are not eligible. Nor are sickly uncles who live with the family. Stepchildren may not be eligible either, depending on the plan.

The appeal of eligibility audits is that they almost guarantee hard-dollar savings — with estimates of ineligible dependents typically in the 5 to 12 percent range — and they often can pay for themselves within a year.

“We have completed dependent eligibility audits for over 50 employers and we have yet to have a case where the employer did not receive a return on investment of over 300 percent within one year. Many times it is well over 1,000 percent,” said Michael Browning of Chapman Kelly, Inc., consultants in Jeffersonville, Ind.

Pittsburgh-based Daniel Priga, a principal with Mercer consulting, said the firm “conservatively” estimates a $1,900 savings per year for every ineligible dependent taken off the books. Such a return “is hard to find in today’s environment.”

http://www.post-gazette.com/pg/09084/957986-28.stm

Comment:

By Don McCanne, MD

Doing eligibility audits of dependents covered by employer-sponsored plans is yet one more example wherein our current dysfunctional system of financing health care actually promotes administrative waste. A rational system uses administrative services efficiently to pay for the health care that patients need. In the United States, much of the administrative cost of health care financing is due to efforts to avoid paying for health care.

Only in the United States do we consider that taking health insurance away from individuals to be a “return on investment.”