PNHP

Im memory of Nicholas Matthew Skala — Hon. Dennis J. Kucinich

Im memory of Nicholas Matthew Skala — Hon. Dennis J. Kucinich

(Extensions of Remarks – September 10, 2009)

[Page: E2229]

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HON. DENNIS J. KUCINICH OF OHIO IN THE HOUSE OF REPRESENTATIVES

Thursday, September 10, 2009

    * Mr. KUCINICH. Madam Speaker, I rise today in memory of Nicholas Matthew Skala for his extraordinary service to our country. He dedicated his short life to advocating for full health care coverage for every man, woman and child in the United States.

    * Nick wielded a sharp intellect in his pursuit of single payer health care. I first met him when he was working for Physicians for a National Health Program (PNHP), where he quickly became a trusted and valuable source of knowledge. He was always ready with an answer to the hardest, most arcane questions and he had the references to back his answers up.

    * When Nick spoke about single payer health care, he was lucid and persuasive. He wielded complete command of a steady stream of facts and figures. He earned the respect of health care advocates of all stripes not only by making a persuasive case that single payer was needed, but also by working tirelessly and strategically to make it a reality.

    * When it came to social justice, when it came to making sure everyone had the best health care possible, when it came to standing up to powers and pressures that keep America without guaranteed health care for all, Nick was admirably uncompromising.

    * Born in Libertyville, Illinois on September 16, 1981 and raised in Spring Grove, Nick graduated from Richmond Burton High School and Columbia College. While in Texas, he founded and became the President of the University of Houston Campus Greens Chapter. After graduation, he became a Research Associate for PNHP between 2004 and 2007. Then he enrolled in law school at Northwestern University. He became active in the American Constitution Society. In the summer of 2009, he completed an internship in the Constitution, Civil Rights, and Civil Liberties Subcommittee of the House Judiciary Committee. He would have graduated from law school in 2010.

    * Madam Speaker and colleagues, please join me in celebrating and honoring the life of Nicholas Matthew Skala and in recognizing his contribution toward making the world a better place. Thank you, Nick.

Twenty percent average premium increase

Recent Premium Increases Imposed by Insurers Averaged 20% for People Who Buy Their Own Health Insurance, Kaiser Survey Finds

Kaiser Family Foundation
June 21, 2010
People who buy their own insurance report that their insurers most recently requested premium increases averaging 20 percent, according to a new Kaiser survey examining the experiences and views of people who buy health coverage in the non-group or individual market.
Most say they paid the increase, but 16 percent of all policyholders say they switched plans, either buying a less expensive policy from their current insurer or switching companies altogether. After these so-called “buy downs” are taken into account, people who faced a premium increase ended up paying 13 percent more than before.
Many people report being in plans with high deductibles, including one in four (26 percent) with an annual deductible of $5,000 or more and 6 percent with a deductible of $10,000 or more.
Overall, the average deductible reported for single coverage is $2,498, almost four times the $634 deductible reported on average for employer-sponsored PPO coverage.  Those with family coverage whose deductibles must be met on a per-person basis report an average deductible of $2,959, while those with a family deductible (the total spending required across the entire family before coverage kicks in) report an average of $5,149.
More than one in five (22 percent) say over the past year they or a family member covered by their plan did not get needed medical care because of the cost, and a similar share (20 percent) say they skipped filling a prescription due to cost.
Nearly four in ten policyholders (38 percent) report at least one problem getting their insurer to pay a bill.
“With people in the individual market being hit with average increases of 20%, the survey shows that the steep increases we have been reading about over the last several months are not just extreme cases,” Kaiser Family Foundation President and CEO Drew Altman said.
http://www.kff.org/kaiserpolls/posr062110nr.cfm

This survey is very important because it shows that outrageous insurance premium increases are not limited to the anecdotes that we have been hearing, but rather are a pervasive problem, inflicting the nation with an average 20 percent premium increase in the individual insurance market. Those who say that the Patient Protection and Affordable Care Act (PPACA) will fix this had better take a closer look.
With these increases, it is not surprising that many looked for less expensive plans, usually opting for higher deductibles. But look at the numbers. The average deductible for a family is now over $5000, and for some, $10,000 or more. In spite of all of the buy-downs to higher deductible plans, people still ended up this year paying an average of 13 percent higher premiums – paying more and getting less.
Will PPACA provide relief from these high deductibles that are impairing access to needed medical care? No. The plans will be required to have an actuarial value of only 60 percent, or 70 percent for the exchange plans eligible for premium credits. When the patients’ share averages 30 to 40 percent of the costs (plus the premium), it is inevitable that the plans will have high deductibles.
Will the cost sharing subsidies of the exchange plans adequately ameliorate the impact of the deductibles? No. Lower income individuals do not have adequate disposable income to meet their portion of the cost sharing, even with the subsidies. For those with incomes over 250 percent of the federal poverty level ($55,125 for a family of four), there are no cost sharing subsidies beyond the equivalent of a 70 percent actuarial value. The portion of the subsidized insurance premium that this family would still have to pay is $4438 (8.05 percent of income), so with a $5000 deductible, they would have to pay over 17 percent of their income before coverage begins (except for limited preventive services), and even then they would still have coinsurance payments plus costs for non-covered or most out-of-network services. By any definition, that is underinsurance, which will become the norm for the United States.
The problem is not the total cost of health care for our nation. We can afford it, though we are nearing our collective tolerance. The problem is the fragmented, dysfunctional financing system that results in tremendous inequities and runaway cost increases. A single payer national health program would fix this.

Public health care as sustainable as we want it to be

Claim that medicare is too costly to maintain is based on economic and political myths

By Robert G. Evans
Toronto Star, June 1, 2010

“There are stark and unpalatable choices that we face with respect to health care, but there is no magic solution. We absolutely must have an adult debate about how we deal with this.” That’s what David Dodge, former governor of the Bank of Canada and former deputy finance minister, told the Liberal policy conference last March.

Dodge joined a list of economists and other pundits who predict that public health care will be financially unsustainable in coming years as Canada faces an aging population and escalating costs for scientific advances in care and treatment. But an “adult debate” on the sustainability of public health care must start from who and what drives health-care spending.

It’s true that total health-care spending in Canada has risen in recent years, taking larger shares of both government revenues and budget allocations. This has led to accusations of “crowding out” other public programs by those favouring further privatization of health care.

The data tell a much more nuanced story. The central fact is that, recession years apart, medicare spending — hospitals and physicians’ services — has fluctuated between 4 per cent and 5 per cent of gross domestic product since 1975. After the introduction of medicare in the late 1960s these costs stabilized because universal, comprehensive coverage consolidated expenditures in the hands of a single payer. The cost of health services not covered by medicare has risen from 3 per cent of GDP in 1975 to 7 per cent in 2009.

Today, Canada’s expenditures on health care match those by other OECD countries. The public share of overall health costs in Canada is relatively low for high-income OECD countries, around 70 per cent. Private insurance, primarily for prescription drugs and dentistry, now accounts for 12.7 per cent of Canadian health spending, 14th highest in the world. The OECD outlier is the United States, where extensive private finance supports uncontrollable cost escalation (now over 16 per cent of GDP). Getting these costs under control will be the major task facing Obama’s health-care reform.

Provincial governments’ spending on health care over the past 15 years has taken increasingly larger bites out of their expenditure budgets. But this is a simple consequence of large cuts in non-health programs, not of out-of-control medicare spending. These cuts in non-health spending are traceable to substantial cuts in personal and corporate income taxes by the federal and most provincial governments, particularly since 1997. Between 1997 and 2004, these tax cuts removed an estimated $170.8 billion from public sector revenues. Total provincial revenues are by now roughly $35 billion per year less, or about half provincial spending on medicare. Cumulative federal cuts are at least as large.

The provinces’ revenue shortfalls were not all self-inflicted. The federal government’s large cuts in financial transfers since the mid-1990s also left big holes in provincial budgets. Subsequent increases have not fully made up the loss.

What are the real motives behind the claims of financial unsustainability? Two, I think. First, under Canada’s universal tax-financed medicare, higher-income people contribute proportionately more to supporting the health-care system, without receiving preferred access or a higher standard of care. Any shift to more private financing would reduce the relative burden on those with higher incomes and offer (real or perceived) better or more timely care for those willing and able to pay.

Second, every dollar of health-care expenditures is also a dollar of someone’s income. The Ontario government’s recent change in reimbursement for generic drugs made this clear: the shares of Shoppers’ Drug Mart fell 10 per cent overnight. Privatization is a way to avoid cost containment, reopening greater income opportunities for providers of care (and private insurers) outside public control. Expenditures would accordingly rise, as in the United States, but public budgets might (in the short term) be contained. “Unsustainable” public spending magically becomes sustainable when shifted from taxpayers to patients.

It is time, long past time, for an “adult conversation” about these motivations, and for a clear identification of the winners and losers from eroding or dismantling medicare. (Economists who evade this issue should be shamed.)

But it is also time for an adult conversation about the real drivers of cost escalation. Researchers have known for decades that population aging is a real but a minor factor. Its impact will certainly increase, but it will remain secondary to increases in intensity and costliness of care. This is the real issue. Where is the money going, both public and private, and are we getting value? Again the Ontario generic drug initiative makes the point. Rising expenditures are not a law of nature; several hundred millions will be cut at a stroke. The real issue is political; those millions are also cut from pharmacy’s incomes.

Are there other opportunities? Yes. Medical imaging and laboratory testing are currently the major sources of cost escalation. What are the benefits? No one knows. Ultrasound for low-risk pregnancies is up 50 per cent in 10 years. Why? Patterns of medical practice and hospital use vary widely across the country, for no apparent reason. Toronto’s Institute for Clinical Evaluative Science, among others, has tracked some of these large unexplained variations, but they are largely ignored. These are what we need to discuss, not “stark choices” about relieving the burdens on and improving the benefits for high-income taxpayers — and, incidentally, opening new markets for private insurers. Panic-mongering about a “grey tsunami” is simply a distraction.

Canadians consistently show that they support public health care. In May, a national poll by Nanos Research confirmed that 90 per cent of Canadians feel that health care is the most important national issue, and almost 90 per cent support public solutions to problems in the health-care system. They are right. Canada’s health-care system is as sustainable as we want it to be.

Robert G. Evans is University Killam Professor in the Department of Economics at the University of British Columbia. He is a member of UBC’s university’s Centre for Health Services and Policy Research. He is an officer of the Order of Canada, and a fellow of the Royal Society of Canada and the Canadian Academy of Health Sciences.

http://www.thestar.com/opinion/editorialopinion/article/817249–public-health-care-as-sustainable-as-we-want-it-to-be

Sherif Emil – an American physician in Canada

Commencement Address

Sherif Emil, MD, CM
The University of California, Irvine
School of Medicine
June 5, 2010

It is a profound honor for me to be here today at UCI to partake in the commencement ceremonies of a group of individuals who are destined to become 104 of the best doctors in America. My presence at this podium today is the most significant event in my medical and surgical career spanning two decades. It is so significant because the invitation to join you today came from a very special group of medical students, students whom I admire immensely, students who are my pride and joy, students who give me true hope in the future of medicine in this great country of ours, hope that American medicine’s best days are still ahead, that its most lasting accomplishments are still to be realized, that one day the best health care in the world will be available to all our citizens without regard to financial means, personal circumstances, or status in society.

Although I left UCI in 2008 and moved to a distinctly less pleasant climate (Canada), UCI has never left me.  My career in pediatric surgery began and matured at this university. I had wonderful mentors, and superb colleagues.

****

Finally, please, please stay involved in issues of health care policy. If you think we have passed health care reform, and can now rest easy, think again. We have not passed health care reform. We have only passed some health care expansion. It is too early to judge the effects of what just occurred, but it is not too early to be certain that much work still lies ahead. Make your voice heard in the national debate that started in your senior year, and will almost certainly rage on. It was interesting for me, as an American physician practicing in Canada, to see the recent negative depictions of the Canadian system in TV ads and lay media, depictions that bore absolutely no resemblance to the actual environment in which I practice daily. My reality is very different. I can see any patient and any patient can see me – total freedom of practice. My patients’ parents have peace of mind regarding their children’s health. If they change jobs or lose their job altogether in a bad economy, their children will still get the same care and see the same physicians. Micromanagement of daily practice has become a thing of the past for me. There are no contracts, authorizations, denials, appeals, reviews, forms to complete, IPA’s, HMO’s, or PPO’s. Our Division’s billing overhead is 1 %. My relationship with the hospital administration is defined by professional, not financial, standards. I have no allegiance to any corporate or government entity, nor does one ever get in between me and the patient. This environment, which some denigrate as the ever so scary system of “socialized medicine” allows for more patient autonomy and choice than was available to most of my patients in California. That is not at all to say that I practice in a medical utopia. There is no perfect health care system. The Canadian system has its own set of difficulties, challenges, and shortcomings, and Canadians are also looking to significantly reform their system. But as physicians, we have to enter the debate and we have to enter it objectively, salvaging it from the bias, misrepresentation, and demagoguery that has characterized it. Health care should not be a liberal or conservative issue, for disease, disability, and death do not recognize political affiliations. As a socially conservative Christian myself, my belief that health care is a fundamental human right, and my efforts on behalf of single payer universal health coverage stem from my faith, and not despite it. My faith calls for personal morality, but also for societal morality – how do we treat the sick amongst us, the weak amongst us, the least amongst us? 

Sherif Emil, MD, CM
http://www.thechildren.com/documents/medias-emil-bio.pdf

Comment: 

By Don McCanne, Md

The students know. They brought Sherif Emil back from Canada to give them their commencement address. The future of health care in America is in good hands.

Fixing Medicare’s Physician Payment System

Bruce C. Vladeck, Ph.D.
New England Journal of Medicine
May 5th, 2010

Now that Congress has completed the epochal, exhausting, and contentious task of enacting comprehensive health care reform, it must confront another health care issue that is perhaps even more politically difficult: reform of Medicare’s physician payment system. On April 15, Congress voted to postpone a 21% reduction in Medicare fees that was to have gone into effect April 1, but a longer-term solution is not yet in sight.

The problems with the Medicare physician payment system are twofold, and each dimension poses complex political difficulties. First, Medicare is captive to an arbitrary, if elegantly conceived, formula for total payments to physicians — the sustainable growth rate (SGR). In the alternate reality of the Congressional budget process, the SGR will reduce Medicare’s physician payments, which already trail those from private insurers, as far into the future as the eye can see. Second, there is widespread consensus that the relative fees in the current system are a significant cause of the growing imbalance in supply and utilization between primary care and specialty services in the U.S. health care system. That imbalance, in turn, is widely perceived as a major cause of both excessive costs and inadequate quality of care. This is not just a Medicare problem: the Medicare Resource-Based Relative Value Scale is used by most private insurers to set relative prices for physicians.

In 1997, when Congress refined the formula by which the annual change in Medicare physician fees was determined, it decided that total physician payments per beneficiary should grow no faster than the economy as a whole, as measured by the gross domestic product (GDP). Policymakers were concerned about increases in the volume of services that beneficiaries received; since total spending equals price times volume, under an aggregate cap, if volume grew more quickly, fees would grow more slowly or be reduced.1 The expectation that total physician spending could be kept to such a level was probably unrealistic, since few countries have ever attained that target, and an increasing proportion of health care services were migrating from inpatient hospitals to the lower-cost settings of outpatient facilities and physicians’ offices, which many thought would improve outcomes and save money. But the economy was growing robustly, and the SGR’s framers were pursuing a broader agenda of trying to drive the entire Medicare system away from fee for service toward private, capitated plans.

Moreover, the excessively ambitious growth target is only the beginning of the problem. The SGR is a cumulative, prospective formula; if actual spending in a given year exceeds that year’s target, the following year’s spending is supposed to be reduced proportionately, but if that reduction is insufficient, then additional reductions must come in the future. Every time Congress postpones a formula-determined fee reduction, it compounds the difference between actual and expected fees, making the (theoretical) eventual adjustment that much more severe. Thus, since the SGR was implemented in 1998, total Medicare physician expenditures have exceeded the allowed amounts by only $20 billion (on a total of almost $1 trillion), but to recoup that all in 1 year would require a 21% reduction in 1 year’s fees. And those reduced fees would then become the base for payment levels in all subsequent years.2

In a rational world, Congress would write off the $20 billion as a relatively small policy error and establish a more realistic prospective formula. But under Congressional budget rules, the cost of doing so is not $20 billion, but $20 billion per year, compounded by inflation, times 10 years. The Congressional Budget Office and the Office of Management and Budget are required to assume that someday Medicare’s physician fees will be permanently lowered to SGR levels and that anything above that amount is “extra spending.”

Of course, even $250 billion over 10 years is a rounding error relative to an annual deficit of $7 trillion, but elected officials, while steering every nickel they can to their constituents or contributors, like to pose as sworn opponents of deficit spending. Out of context, $250 billion certainly seems like a lot of money, and in today’s U.S. Senate, it takes only a handful of politicians to bring the legislative gears to a halt. In fact, early last year, the House of Representatives passed legislation that would have changed the budget rules to permit a more sensible fix for the SGR, but the proposal died in committee in the Senate.

The country’s long-term budgetary status is a serious problem, and budget discipline has to begin somewhere. But everyone seems to agree that reducing Medicare’s physician fees by 21%, in perpetuity, while private fees continue to increase might create access problems for at least some beneficiaries and might harm providers whose high volume of service to Medicare beneficiaries leaves them especially dependent on Medicare revenues.

As if that weren’t problematic enough, the basic mechanics of the Medicare Physician Fee Schedule, which was supposed to change physician payment to increase rewards for primary care services at the expense of procedural and interventional services, appears to have gone totally off track. For various reasons, the fee schedule, which originally did increase the prices of evaluation and management services relative to those of surgery or invasive procedures, turned in the other direction through the process of annual updating of relative value units.3 Surgeons, radiologists, and some medical specialists are now paid two to three times as much per hour as providers of cognitive services, which is about where we began 20 years ago; this was the situation that the fee schedule was supposed to fix.

The question of the relative virtues of primary versus specialty care can be debated ad nauseam, but in other wealthy countries that serve their populations at least as well as we do, the ratio of primary care physicians to specialists is much higher than in the United States, and the gap in compensation is much smaller or the poles even reversed.4 Young physicians, burdened by increasing educational debts, may well choose a career path on the basis of a major difference in compensation, especially when the better-compensated positions require less ongoing responsibility for patients and offer better working hours.

Under a budget constraint, however, changes to the relative fees paid to various categories of physicians give rise to zero-sum “distributional politics”; there may be a theoretically correct way to determine relative fees, but that is larg
ely irrelevant to a legislative process in which various groups are free to pursue their self-interests. The only general solution to such a political free-for-all is to increase the total pot available for distribution — as is customarily done, for instance, in the realm of agricultural policy. Last year’s House-passed health care reform bill took this approach, and the final reform law does add a modest amount of money to primary care fees.

But here the two dimensions of the problem intersect. The way to redress the imbalance between primary care and specialty compensation while shrinking the disparity between Medicare and private insurance is to add more money to primary care while leaving specialists’ fees unchanged, on average. But doing so worsens the federal deficit, providing fodder for those who pose, at least, as opponents of deficit spending. And then the pundits argue that fixing the current system isn’t really worth the bother — that fee-for-service payments are so intrinsically counterproductive that we should just scrap them in favor of something better.5 Except that no one knows what that something is.

The enactment of health care reform after many considered it irreversibly derailed by the Senate election in Massachusetts has suggested to some that perhaps the U.S. political system is not so hopelessly gridlocked after all. Health care reform, some believe, might be a harbinger of a more sensible and productive approach to solving serious policy problems. Untying the political knots enmeshing Medicare physician payment will test that optimism.

Disclosure forms provided by the author are available with the full text of this article at NEJM.org.


Source Information

From Nexera (a health care consulting business), New York.

This article (10.1056/NEJMp1004709) was published on May 5, 2010, at NEJM.org.

References

  1. The sustainable growth rate system. In: Report to the Congress: assessing alternatives to the sustainable growth rate system. Washington, DC: Medicare Payment Advisory Commission, March 2007:11-27.
  2. Centers for Medicare & Medicaid Services. Estimated sustainable growth rate and conversion factor for Medicare payments to physicians in 2010. November 2009. (Accessed April 26, 2010, at http://www.cms.gov/SustainableGRatesConFact/Downloads/sgr2010f.pdf.)
  3. Ginsburg PB, Berenson RA. Revising Medicare’s physician fee schedule — much activity, little change. N Engl J Med 2007;356:1201-1203. [Free Full Text]
  4. Lee TH. The need for reinvention. N Engl J Med 2008;359:2085-2086. [Free Full Text]
  5. Wilensky GR. Reforming Medicare’s physician payment sys

Sherif Emil – an American physician in Canada

Commencement Address

Sherif Emil, MD, CM
The University of California, Irvine
School of Medicine
June 5, 2010
It is a profound honor for me to be here today at UCI to partake in the commencement ceremonies of a group of individuals who are destined to become 104 of the best doctors in America. My presence at this podium today is the most significant event in my medical and surgical career spanning two decades. It is so significant because the invitation to join you today came from a very special group of medical students, students whom I admire immensely, students who are my pride and joy, students who give me true hope in the future of medicine in this great country of ours, hope that American medicine’s best days are still ahead, that its most lasting accomplishments are still to be realized, that one day the best health care in the world will be available to all our citizens without regard to financial means, personal circumstances, or status in society.
Although I left UCI in 2008 and moved to a distinctly less pleasant climate (Canada), UCI has never left me.  My career in pediatric surgery began and matured at this university. I had wonderful mentors, and superb colleagues.
****
Finally, please, please stay involved in issues of health care policy. If you think we have passed health care reform, and can now rest easy, think again. We have not passed health care reform. We have only passed some health care expansion. It is too early to judge the effects of what just occurred, but it is not too early to be certain that much work still lies ahead. Make your voice heard in the national debate that started in your senior year, and will almost certainly rage on. It was interesting for me, as an American physician practicing in Canada, to see the recent negative depictions of the Canadian system in TV ads and lay media, depictions that bore absolutely no resemblance to the actual environment in which I practice daily. My reality is very different. I can see any patient and any patient can see me – total freedom of practice. My patients’ parents have peace of mind regarding their children’s health. If they change jobs or lose their job altogether in a bad economy, their children will still get the same care and see the same physicians. Micromanagement of daily practice has become a thing of the past for me. There are no contracts, authorizations, denials, appeals, reviews, forms to complete, IPA’s, HMO’s, or PPO’s. Our Division’s billing overhead is 1 %. My relationship with the hospital administration is defined by professional, not financial, standards. I have no allegiance to any corporate or government entity, nor does one ever get in between me and the patient. This environment, which some denigrate as the ever so scary system of “socialized medicine” allows for more patient autonomy and choice than was available to most of my patients in California. That is not at all to say that I practice in a medical utopia. There is no perfect health care system. The Canadian system has its own set of difficulties, challenges, and shortcomings, and Canadians are also looking to significantly reform their system. But as physicians, we have to enter the debate and we have to enter it objectively, salvaging it from the bias, misrepresentation, and demagoguery that has characterized it. Health care should not be a liberal or conservative issue, for disease, disability, and death do not recognize political affiliations. As a socially conservative Christian myself, my belief that health care is a fundamental human right, and my efforts on behalf of single payer universal health coverage stem from my faith, and not despite it. My faith calls for personal morality, but also for societal morality – how do we treat the sick amongst us, the weak amongst us, the least amongst us?
Sherif Emil, MD, CM
http://www.thechildren.com/documents/medias-emil-bio.pdf

The students know. They brought Sherif Emil back from Canada to give them their commencement address. The future of health care in America is in good hands.

NHIS uninsured report portends underinsurance for most

Health Insurance Coverage: Early Release of Estimates From the National Health Interview Survey, 2009

By Robin A. Cohen, Ph.D., Michael E. Martinez, M.P.H., M.H.S.A., and Brian W. Ward, Ph.D.
Centers for Disease Control and Prevention (CDC)
National Center for Health Statistics
June 16, 2010

In 2009:

46.3 million (15.4%) were uninsured at the time of the interview

58.5 million (19.4%) had been uninsured for at least part of the year

32.8 million (10.9%) had been uninsured for more than a year

Estimates of enrollment in HDHPs, CDHPs, and FSAs:

Based on data from the 2009 NHIS, 22.4% of persons under age 65 years with private health insurance were enrolled in a HDHP (high deductible health plan), including 6.3% who were enrolled in a CDHP (consumer-directed health plan) and 16.1% who were enrolled in a HDHP without a health savings account (HSA). Enrollment in HDHPs increased from 17.5% in 2007 to 22.4% in 2009. There was a significant increase in enrollment in HDHPs without HSAs and in CDHPs.

Based on data for 2009, among persons under age 65 with private health insurance, 20.2% with employment-based coverage were enrolled in a HDHP, compared with 46.9% of those with a private plan that was directly purchased or obtained through means other than employment. The percentage of persons covered by employment-based private plans that are HDHPs increased from 15.6% in 2007 to 20.2% in 2009. The percentage of persons covered by directly purchased private health plans that are HDHPs increased from 39.2% in 2007 to 46.9% in 2009. For persons under age 65, approximately 8% of private health plans are directly purchased. HDHPs constitute a growing share of both employment-based and directly purchased health plans.

In 2009, among persons under age 65 with private health insurance, 20.4% were in a family that had a FSA for medical expenses. This is an increase from 2007, when 16.7% of persons under age 65 with private insurance were in a family with a FSA.

http://www.cdc.gov/nchs/data/nhis/earlyrelease/insur201006.htm

Comment: 

By Don McCane, MD

Although the net loss in insurance coverage for 2009 left another 3 million individuals without coverage, the media response is tempered by the anticipated expansions in health care coverage under the Patient Protection and Affordable Care Act (PPACA). What is being missed in the media reports is a new trend revealed in this survey that will result in an exponential increase in the rates of underinsurance.

A few facts:

* 20.2% of individuals with employer-sponsored plans have high deductible health plans (HDHP)

* 46.9% of individuals with private plans purchased outside of employment have HDHPs

* 72% of those with HDHPs do not have health savings accounts

* PPACA will require plans to have an actuarial value of only 60 percent

Much has been written about how high deductible health plans (HDHPs) result in underinsurance for the majority of Americans, so little will be said here other than to point out that those with medical needs do not receive all of the care that they should have when faced with the financial barrier of a high deductible before they can access the benefits of their health plan. Insurance should improve access to necessary care rather than impair it.

Although the right-wingers in the policy community tout health savings accounts (HSAs) as the solution for making deductibles affordable, there are several flaws. First, close to three-fourths of HDHPs don’t even have an HSA component. For those that do, excess expensive and burdensome administration is being wasted on managing the HSAs which are really no different from the patient paying the expenses out of personal savings, except for the very modest tax advantage of the HSA. Whether in an HSA or in a personal savings account, it is still the patient’s own money that is being spent. If the HSA or the personal savings account were empty, as might be expected for individuals with medical problems, then the high deductible remains as a barrier to care.

Another approach is to set up a flexible spending account (FSA) instead of an HSA. One-fifth of individuals are in families that already have FSAs through their employment. These are even less rational than HSAs since it is the employee’s own pre-tax money that is deposited into the FSA, yet any funds remaining at the end of the year are forfeited. How smart is that?

There is a coalescence of trends that makes it likely that HDHPs will become the standard for most of us with private coverage. To slow the increase in insurance premiums, employers are starting to convert to HDHPs, and one-fifth of them have already done so. Plans in the individual market are much less affordable except for HDHPs. Almost half of those purchasing plans in the individual market have now switched to HDHPs. Because of concerns about high insurance premiums, the drafters of PPACA decided on an actuarial value of only 60 percent for private insurance plans (the patient pays 40 percent of the costs of care). Large deductibles and high coinsurance are used to keep the actuarial value down. Adverse selection of plans will low deductibles will cause a premium spiral that will make those plans unaffordable, forcing even more individuals to choose HDHPs. With these trends it seems that the future will hold little option for most of us not eligible for government programs, other than to enroll in HDHPs.

Since PPACA provides subsidies for both the premiums and out-of-pocket spending, does it even matter if the plans have high deductibles? Since the alleged purpose of high deductibles is to decrease the use of health care by making patients sensitive to health care prices, then it makes no sense to add the administrative excesses and expenses of removing a benefit in the form of the deductible and adding it back in in the form of administered subsidies if the patient ends up bearing only a negligible portion of the costs, thereby jettisoning price sensitivity. As the means- tested subsidies diminish, the deductibles may have more significance, but not for those who are responsible for most of our health care costs – the 20 percent who use 80 percent of our health care.

Will the insurance exchanges obviate the need for HDHPs? When they crafted the PPACA model, it was clear that premiums for comprehensive plans were already too high. That is why they decided on reducing the actuarial values of the plans – 60 percent for the least coverage, though premium subsidies will apply to silver plans with a 70 percent actuarial value. Silver plans will still require high deductibles since they fall short of the typical employer-sponsored plan with an actuarial value of 80 percent or more.

Since the cost sharing would still be excessive for most individuals and families, PPACA provides for cost sharing credits that would have the effect of increasing the actuarial value on a sliding scale based on income – 70 percent for those at 250-400% of the federal poverty level (FPL) and up to 94 percent for those with incomes at 100-150% FPL.

There is concern that the combined premium plus the cost sharing for the exchange plans is still too high for most families, but these are the levels that Congress decided would be necessary because of their arbitrary decision to limit how much of the costs would pass through the federal budget.

But what is really ridiculous is that merely to avoid an efficient system with a single, publicly financed universal risk pool, they designed an administratively complex system of variable actuarial values, with variable premium subsidies, with variable cost sharing credits, which will drive the plans to introduce high deductibles as the national standard, when high deductibles have already
been demonstrated to be a perverse policy for controlling costs.

Remember, by continuing on our current PPACA course, we are going to see an explosion in high deductible health plans, to the detriment of people who need health care. Of course, we could change course and enact an improved Medicare for all without any deductibles. We wouldn’t need price sensitivity if we had our own public health care monopsony.

NHIS uninsured report portends underinsurance for most

Health Insurance Coverage: Early Release of Estimates From the National Health Interview Survey, 2009

By Robin A. Cohen, Ph.D., Michael E. Martinez, M.P.H., M.H.S.A., and Brian W. Ward, Ph.D.
Centers for Disease Control and Prevention (CDC)
National Center for Health Statistics
June 16, 2010
In 2009:
46.3 million (15.4%) were uninsured at the time of the interview
58.5 million (19.4%) had been uninsured for at least part of the year
32.8 million (10.9%) had been uninsured for more than a year
Estimates of enrollment in HDHPs, CDHPs, and FSAs:
Based on data from the 2009 NHIS, 22.4% of persons under age 65 years with private health insurance were enrolled in a HDHP (high deductible health plan), including 6.3% who were enrolled in a CDHP (consumer-directed health plan) and 16.1% who were enrolled in a HDHP without a health savings account (HSA). Enrollment in HDHPs increased from 17.5% in 2007 to 22.4% in 2009. There was a significant increase in enrollment in HDHPs without HSAs and in CDHPs.
Based on data for 2009, among persons under age 65 with private health insurance, 20.2% with employment-based coverage were enrolled in a HDHP, compared with 46.9% of those with a private plan that was directly purchased or obtained through means other than employment. The percentage of persons covered by employment-based private plans that are HDHPs increased from 15.6% in 2007 to 20.2% in 2009. The percentage of persons covered by directly purchased private health plans that are HDHPs increased from 39.2% in 2007 to 46.9% in 2009. For persons under age 65, approximately 8% of private health plans are directly purchased. HDHPs constitute a growing share of both employment-based and directly purchased health plans.
In 2009, among persons under age 65 with private health insurance, 20.4% were in a family that had a FSA for medical expenses. This is an increase from 2007, when 16.7% of persons under age 65 with private insurance were in a family with a FSA.
http://www.cdc.gov/nchs/data/nhis/earlyrelease/insur201006.htm

Although the net loss in insurance coverage for 2009 left another 3 million individuals without coverage, the media response is tempered by the anticipated expansions in health care coverage under the Patient Protection and Affordable Care Act (PPACA). What is being missed in the media reports is a new trend revealed in this survey that will result in an exponential increase in the rates of underinsurance.
A few facts:
* 20.2% of individuals with employer-sponsored plans have high deductible health plans (HDHP)
* 46.9% of individuals with private plans purchased outside of employment have HDHPs
* 72% of those with HDHPs do not have health savings accounts
* PPACA will require plans to have an actuarial value of only 60 percent
Much has been written about how high deductible health plans (HDHPs) result in underinsurance for the majority of Americans, so little will be said here other than to point out that those with medical needs do not receive all of the care that they should have when faced with the financial barrier of a high deductible before they can access the benefits of their health plan. Insurance should improve access to necessary care rather than impair it.
Although the right-wingers in the policy community tout health savings accounts (HSAs) as the solution for making deductibles affordable, there are several flaws. First, close to three-fourths of HDHPs don’t even have an HSA component. For those that do, excess expensive and burdensome administration is being wasted on managing the HSAs which are really no different from the patient paying the expenses out of personal savings, except for the very modest tax advantage of the HSA. Whether in an HSA or in a personal savings account, it is still the patient’s own money that is being spent. If the HSA or the personal savings account were empty, as might be expected for individuals with medical problems, then the high deductible remains as a barrier to care.
Another approach is to set up a flexible spending account (FSA) instead of an HSA. One-fifth of individuals are in families that already have FSAs through their employment. These are even less rational than HSAs since it is the employee’s own pre-tax money that is deposited into the FSA, yet any funds remaining at the end of the year are forfeited. How smart is that?
There is a coalescence of trends that makes it likely that HDHPs will become the standard for most of us with private coverage. To slow the increase in insurance premiums, employers are starting to convert to HDHPs, and one-fifth of them have already done so. Plans in the individual market are much less affordable except for HDHPs. Almost half of those purchasing plans in the individual market have now switched to HDHPs. Because of concerns about high insurance premiums, the drafters of PPACA decided on an actuarial value of only 60 percent for private insurance plans (the patient pays 40 percent of the costs of care). Large deductibles and high coinsurance are used to keep the actuarial value down. Adverse selection of plans will low deductibles will cause a premium spiral that will make those plans unaffordable, forcing even more individuals to choose HDHPs. With these trends it seems that the future will hold little option for most of us not eligible for government programs, other than to enroll in HDHPs.
Since PPACA provides subsidies for both the premiums and out-of-pocket spending, does it even matter if the plans have high deductibles? Since the alleged purpose of high deductibles is to decrease the use of health care by making patients sensitive to health care prices, then it makes no sense to add the administrative excesses and expenses of removing a benefit in the form of the deductible and adding it back in in the form of administered subsidies if the patient ends up bearing only a negligible portion of the costs, thereby jettisoning price sensitivity. As the means- tested subsidies diminish, the deductibles may have more significance, but not for those who are responsible for most of our health care costs – the 20 percent who use 80 percent of our health care.
Will the insurance exchanges obviate the need for HDHPs? When they crafted the PPACA model, it was clear that premiums for comprehensive plans were already too high. That is why they decided on reducing the actuarial values of the plans – 60 percent for the least coverage, though premium subsidies will apply to silver plans with a 70 percent actuarial value. Silver plans will still require high deductibles since they fall short of the typical employer-sponsored plan with an actuarial value of 80 percent or more.
Since the cost sharing would still be excessive for most individuals and families, PPACA provides for cost sharing credits that would have the effect of increasing the actuarial value on a sliding scale based on income – 70 percent for those at 250-400% of the federal poverty level (FPL) and up to 94 percent for those with incomes at 100-150% FPL.
There is concern that the combined premium plus the cost sharing for the exchange plans is still too high for most families, but these are the levels that Congress decided would be necessary because of their arbitrary decision to limit how much of the costs would pass through the federal budget.
But what is really ridiculous is that merely to avoid an efficient system with a single, publicly financed universal risk pool, they designed an administratively complex system of variable actuarial values, with variable premium subsidies, with variable cost sharing credits, which will drive the plans to introduce high deductibles as the national standard, when high deductibles have already been demonstrated to be a perverse policy for controlling costs.
Remember, by continuing on our current PPACA course, we are going to see an explosion in high deductible health plans, to the detriment of people who need health care. Of course, we could change course and enact an improved Medicare for all without any deductibles. We wouldn’t need price sensitivity if we had our own public health care monopsony.

Groups protest health care cuts outside Pawlenty's office

By Elizabeth Dunbar
Minnesota Public Radio, June 15, 2010

ST. PAUL, Minn. — A coalition of groups offered blood pressure, cholesterol and blood sugar screenings outside Gov. Tim Pawlenty’s office on Tuesday as part of a protest against cuts to a state health care program for the poor.

The Universal Health Care Action Network of Minnesota and other groups have set up free or low-cost clinics elsewhere before, but organizers said they came to the State Capitol to urge Pawlenty and others to see health care as a human right.

“Health care is a human right based on need. If you need care, you get care. It’s an entitlement and it’s a public good,” said Joel Albers, a pharmacist who is part of the Universal Health Care Action Network.

Four hospitals have agreed to participate in a scaled-back version of General Assistance Medical Care, but all of them are in the Twin Cities. The program uses a coordinated care delivery system, meaning hospitals would get a lump sum of money to care for a certain number of patients.

The new GAMC program was the result of negotiations between Pawlenty and the DFL-controlled Legislature to solve the state’s budget deficit. The changes took effect June 1.

Albers said the cuts will mean the program won’t meet the needs of the 30,000 or so low-income adults without children who are in the program.

“We do know that over time, when you make drastic cuts like this and people don’t have access,” he said, “Eventually that will lead to greater hospitalizations, greater emergency room visits and, frankly, increase morbidity and mortality.”

Dr. Elizabeth Frost, a family practice physician and a member of Physicians for a National Health Program, said the groups would like to see all Minnesotans covered by a plan paid for by state government.

That way, the state could eliminate many of the administrative costs for programs like GAMC and MinnesotaCare and focus on caring for everyone, she said.

“All this stress about signing people up, finding out who gets covered, who isn’t covered … all that waste would be eliminated,” Frost said. “We want to lead the nation and show that you can do government-funded health insurance and it can work and it can be very successful.”

http://minnesota.publicradio.org/display/web/2010/06/15/groups-protest-healthcare-cuts/

Groups protest health care cuts outside Pawlenty’s office

By Elizabeth Dunbar
Minnesota Public Radio, June 15, 2010

ST. PAUL, Minn. — A coalition of groups offered blood pressure, cholesterol and blood sugar screenings outside Gov. Tim Pawlenty’s office on Tuesday as part of a protest against cuts to a state health care program for the poor.

The Universal Health Care Action Network of Minnesota and other groups have set up free or low-cost clinics elsewhere before, but organizers said they came to the State Capitol to urge Pawlenty and others to see health care as a human right.

“Health care is a human right based on need. If you need care, you get care. It’s an entitlement and it’s a public good,” said Joel Albers, a pharmacist who is part of the Universal Health Care Action Network.

Four hospitals have agreed to participate in a scaled-back version of General Assistance Medical Care, but all of them are in the Twin Cities. The program uses a coordinated care delivery system, meaning hospitals would get a lump sum of money to care for a certain number of patients.

The new GAMC program was the result of negotiations between Pawlenty and the DFL-controlled Legislature to solve the state’s budget deficit. The changes took effect June 1.

Albers said the cuts will mean the program won’t meet the needs of the 30,000 or so low-income adults without children who are in the program.

“We do know that over time, when you make drastic cuts like this and people don’t have access,” he said, “Eventually that will lead to greater hospitalizations, greater emergency room visits and, frankly, increase morbidity and mortality.”

Dr. Elizabeth Frost, a family practice physician and a member of Physicians for a National Health Program, said the groups would like to see all Minnesotans covered by a plan paid for by state government.

That way, the state could eliminate many of the administrative costs for programs like GAMC and MinnesotaCare and focus on caring for everyone, she said.

“All this stress about signing people up, finding out who gets covered, who isn’t covered … all that waste would be eliminated,” Frost said. “We want to lead the nation and show that you can do government-funded health insurance and it can work and it can be very successful.”

http://minnesota.publicradio.org/display/web/2010/06/15/groups-protest-healthcare-cuts/

Arizona's immigration law and health care

By Paul T. Cheung
Denver Post, 06/16/2010

Even though the impact of Governor Brewer of Arizona signing S.B. 1070 into law may appear distant, the law has far reaching implications for the general public including here in Colorado.

Amid all the discussions of the legislation – including the marginalization of the Latino culture and society – few have noted its impact on health. Arizona S.B. 1070 will decrease health care usage, leading to increase public medical care spending, worse health outcomes, and lower immunization rates.

Take for example Juan, the owner of a local taqueria restaurant in Aurora, whom I met last month. He is a legal citizen facing a number of challenges in obtaining health care. For many years, he did not have regular access to a primary care physician and has relied on cultural remedies as his main source of care. Juan told me a common story. Care is difficult to come by for a multitude of reasons: time, money, lack of transportation, language barriers, and the complexity of navigating the maze that is the U.S. health system.

When Juan learned I was a medical student, he told me about his health. Several weeks ago, he was stricken with severe heart palpitations, night sweats, and chest pain. He waited three weeks before he decided to go see a doctor. Ultimately, the doctor that saw Juan diagnosed his high blood pressure and gave him a prescription to control it. Untreated, he was at significant risk for strokes and heart attacks. Juan waited to seek help because he does not have insurance and had no idea how to get an appointment with a Spanish-speaking physician.

To the long list of barriers Latinos face in getting care in this country, the Arizona immigration law adds another. Our health care system works best when chronic conditions such as high blood pressure, diabetes, and asthma are controlled. Had Juan suffered a stroke or heart attack from uncontrolled blood pressure, his medical costs would rise dramatically and ultimately be passed on to the community through taxes and higher insurance premiums. More importantly, Juan likely would have suffered long term health effects impacting the quality of his daily life.

On a broader level, the law will strain the relationship between the Latino community and health care providers. Important public health goals such as immunizations will be compromised. High immunization rates are important for children who are in close contact in school to prevent spread of disease. This law will prevent Latino families from bringing their children in to see the doctor and these unimmunized children will increase the presence of diseases like flu, measles, and mumps in the community. Fear and uncertainty about the health care providers’ role in enforcing the documentation requirement will foster distrust of physicians by Latino patients.

The Latino community already is facing numerous challenges in obtaining optimal care. Routine medical attention consistently leads to better control and treatment of chronic conditions like high blood pressure. Barriers to health care need to be removed.

As a medical student, I am concerned about how this new law will affect health in the community. As I progress into my clinical training, I am worried about meeting more patients like Juan – who nearly missed more serious health consequences from his untreated high blood pressure – because of barriers to care. Ultimately, such delays will lead to even more expensive health care for all.

Paul Cheung is a first year medical student at the University of Colorado School of Medicine and a resident of Aurora. EDITOR’S NOTE: This is an online-only column and has not been edited.

http://www.denverpost.com/commented/ci_15302543

Arizona’s immigration law and health care

By Paul T. Cheung
Denver Post, 06/16/2010

Even though the impact of Governor Brewer of Arizona signing S.B. 1070 into law may appear distant, the law has far reaching implications for the general public including here in Colorado.

Amid all the discussions of the legislation – including the marginalization of the Latino culture and society – few have noted its impact on health. Arizona S.B. 1070 will decrease health care usage, leading to increase public medical care spending, worse health outcomes, and lower immunization rates.

Take for example Juan, the owner of a local taqueria restaurant in Aurora, whom I met last month. He is a legal citizen facing a number of challenges in obtaining health care. For many years, he did not have regular access to a primary care physician and has relied on cultural remedies as his main source of care. Juan told me a common story. Care is difficult to come by for a multitude of reasons: time, money, lack of transportation, language barriers, and the complexity of navigating the maze that is the U.S. health system.

When Juan learned I was a medical student, he told me about his health. Several weeks ago, he was stricken with severe heart palpitations, night sweats, and chest pain. He waited three weeks before he decided to go see a doctor. Ultimately, the doctor that saw Juan diagnosed his high blood pressure and gave him a prescription to control it. Untreated, he was at significant risk for strokes and heart attacks. Juan waited to seek help because he does not have insurance and had no idea how to get an appointment with a Spanish-speaking physician.

To the long list of barriers Latinos face in getting care in this country, the Arizona immigration law adds another. Our health care system works best when chronic conditions such as high blood pressure, diabetes, and asthma are controlled. Had Juan suffered a stroke or heart attack from uncontrolled blood pressure, his medical costs would rise dramatically and ultimately be passed on to the community through taxes and higher insurance premiums. More importantly, Juan likely would have suffered long term health effects impacting the quality of his daily life.

On a broader level, the law will strain the relationship between the Latino community and health care providers. Important public health goals such as immunizations will be compromised. High immunization rates are important for children who are in close contact in school to prevent spread of disease. This law will prevent Latino families from bringing their children in to see the doctor and these unimmunized children will increase the presence of diseases like flu, measles, and mumps in the community. Fear and uncertainty about the health care providers’ role in enforcing the documentation requirement will foster distrust of physicians by Latino patients.

The Latino community already is facing numerous challenges in obtaining optimal care. Routine medical attention consistently leads to better control and treatment of chronic conditions like high blood pressure. Barriers to health care need to be removed.

As a medical student, I am concerned about how this new law will affect health in the community. As I progress into my clinical training, I am worried about meeting more patients like Juan – who nearly missed more serious health consequences from his untreated high blood pressure – because of barriers to care. Ultimately, such delays will lead to even more expensive health care for all.

Paul Cheung is a first year medical student at the University of Colorado School of Medicine and a resident of Aurora. EDITOR’S NOTE: This is an online-only column and has not been edited.

http://www.denverpost.com/commented/ci_15302543