The last Quote of the Day message discussed Medicare’s national coverage determinations process (NCD), using as an example the decision to decline coverage for computed tomography colonography (CTC) when it is used as a screening test for colorectal cancer.

New York Assemblyman Richard Gottfried responds:
email
February 13, 2009
All insurance plans make decisions about what they will cover. With employer-sponsored insurance, insurance carriers know that their client is the employer, whose only interest is keeping costs down. There is only downward pressure.
The people who run public insurance have pressure to keep costs down, but it is balanced by pressure from the public (to whom they are ultimately accountable, especially with a program like Medicare that is not only for the poor) to keep quality and services up. So there is a balancing of downward and upward pressure.
Even if we move from employer-sponsored coverage to individuals buying their own insurance, the pressure would still be overwhelmingly downward. When making the choice among possible plans to buy, individuals are also under enormous pressure to focus exclusively on price. Hardly anyone would ask whether CTC is covered.
Since someone is going to make choices about what gets covered, we’re all better off if it is done by publicly-sponsored, publicly-funded and publicly-accountable coverage.
Richard N. Gottfried
Chair, Committee on Health
New York State Assembly
822 Legislative Office Building
Albany, NY 12248
250 Broadway, #2232
New York, NY 10007
(518) 455-4941
(212) 312-1492
GottfrR@assembly.state.ny.us

Richard Gottfried points out an extremely important distinction between the nature of coverage decisions in public health care financing systems, and in private insurance financing systems, whether employer-sponsored or individual coverage.
Whether it is the employer or the individual who is making a decision on the purchase of insurance (not the purchase of health care), with our current very high health care costs there is tremendous downward pressure on insurance premiums.
Slowing the the rise in premiums for private plans can be accomplished only by reducing coverage – by reducing benefits covered (e.g., maternity, mental health services, restricted list of contracted providers, prior authorization requirements, etc.), or by increasing the out-of-pocket costs for the patients (e.g., higher deductibles, higher copayments, higher coinsurance percentages, tiering of coverage, capping total amount of coverage, etc.)
This is precisely the recent history of private health coverage. Premiums continue to increase, and, though less and less affordable, the increases have been slowed enough to still maintain a market of private plans, even though that continues to decline as the rate of employer-sponsored coverage continues to fall. The perverse tradeoff is that this downward pressure slowing the rate of premium increases has caused an intense upward pressure in out-of-pocket spending, often making health care no longer affordable for those who do have private insurance.
Contrast this with public health care financing. As Richard Gottfried points out, the downward pressure to control government health care spending is balanced by an upward pressure from the public to demand health care quality and adequate services.
Medicare is a prime example. The public is opposed to any reduction in Medicare benefits. In fact, increasing coverage by adding prescription drug coverage was due to public demand. They are now demanding that it be improved further through measures such as eliminating the donut hole.
What could explain the apparent dilemma that people seem to be quite willing to purchase inadequate private plans that may not provide the financial protection that they need, yet they are not willing to accept inadequate coverage in a public health care financing program such as Medicare? Part of the answer may lie in the subliminally perceived relative inequity of premiums for private plans versus taxes for public programs.
The premiums for private plans are determined directly by the benefits covered by the plan, minus the cost sharing shifted to the patient. Costs are now so high that either premiums will be unaffordable, or out-of-pocket payments will be unaffordable, or, in actuality, downward pressures in the face of high costs are making them both unaffordable. More people are beginning to recognize that this is an obsolete method of financing health care.
The level of tax contribution for a publicly-financed health care system is not related to the benefits that are offered, but is determined by the ability of the individual or employer to pay the tax. Polls demonstrate that individuals are willing to pay more taxes that would be spent on publicly-financed health care. People seem to realize instinctively the fairness in this.
They also realize that Richard Gottfried is right. The downward pressure on private plans has caused most of us to look for relief from a health care financing system that is so badly broken. At the same time, the balanced pressure on Medicare has caused us to be very protective of that program. Now if we could just extrapolate our thinking to support Medicare for everyone, we’d have it made.

The last Quote of the Day message discussed Medicare’s national coverage determinations process (NCD), using as an example the decision to decline coverage for computed tomography colonography (CTC) when it is used as a screening test for colorectal cancer.

New York Assemblyman Richard Gottfried responds:

email
February 13, 2009

All insurance plans make decisions about what they will cover. With employer-sponsored insurance, insurance carriers know that their client is the employer, whose only interest is keeping costs down. There is only downward pressure.

The people who run public insurance have pressure to keep costs down, but it is balanced by pressure from the public (to whom they are ultimately accountable, especially with a program like Medicare that is not only for the poor) to keep quality and services up. So there is a balancing of downward and upward pressure.

Even if we move from employer-sponsored coverage to individuals buying their own insurance, the pressure would still be overwhelmingly downward. When making the choice among possible plans to buy, individuals are also under enormous pressure to focus exclusively on price. Hardly anyone would ask whether CTC is covered.

Since someone is going to make choices about what gets covered, we’re all better off if it is done by publicly-sponsored, publicly-funded and publicly-accountable coverage.

Richard N. Gottfried
Chair, Committee on Health
New York State Assembly
822 Legislative Office Building
Albany, NY 12248
250 Broadway, #2232
New York, NY 10007
(518) 455-4941
(212) 312-1492
GottfrR@assembly.state.ny.us

Comment:

By Don McCanne, MD

Richard Gottfried points out an extremely important distinction between the nature of coverage decisions in public health care financing systems, and in private insurance financing systems, whether employer-sponsored or individual coverage.

Whether it is the employer or the individual who is making a decision on the purchase of insurance (not the purchase of health care), with our current very high health care costs there is tremendous downward pressure on insurance premiums.

Slowing the the rise in premiums for private plans can be accomplished only by reducing coverage – by reducing benefits covered (e.g., maternity, mental health services, restricted list of contracted providers, prior authorization requirements, etc.), or by increasing the out-of-pocket costs for the patients (e.g., higher deductibles, higher copayments, higher coinsurance percentages, tiering of coverage, capping total amount of coverage, etc.)

This is precisely the recent history of private health coverage. Premiums continue to increase, and, though less and less affordable, the increases have been slowed enough to still maintain a market of private plans, even though that continues to decline as the rate of employer-sponsored coverage continues to fall. The perverse tradeoff is that this downward pressure slowing the rate of premium increases has caused an intense upward pressure in out-of-pocket spending, often making health care no longer affordable for those who do have private insurance.

Contrast this with public health care financing. As Richard Gottfried points out, the downward pressure to control government health care spending is balanced by an upward pressure from the public to demand health care quality and adequate services.

Medicare is a prime example. The public is opposed to any reduction in Medicare benefits. In fact, increasing coverage by adding prescription drug coverage was due to public demand. They are now demanding that it be improved further through measures such as eliminating the donut hole.

What could explain the apparent dilemma that people seem to be quite willing to purchase inadequate private plans that may not provide the financial protection that they need, yet they are not willing to accept inadequate coverage in a public health care financing program such as Medicare? Part of the answer may lie in the subliminally perceived relative inequity of premiums for private plans versus taxes for public programs.

The premiums for private plans are determined directly by the benefits covered by the plan, minus the cost sharing shifted to the patient. Costs are now so high that either premiums will be unaffordable, or out-of-pocket payments will be unaffordable, or, in actuality, downward pressures in the face of high costs are making them both unaffordable. More people are beginning to recognize that this is an obsolete method of financing health care.

The level of tax contribution for a publicly-financed health care system is not related to the benefits that are offered, but is determined by the ability of the individual or employer to pay the tax. Polls demonstrate that individuals are willing to pay more taxes that would be spent on publicly-financed health care. People seem to realize instinctively the fairness in this.

They also realize that Richard Gottfried is right. The downward pressure on private plans has caused most of us to look for relief from a health care financing system that is so badly broken. At the same time, the balanced pressure on Medicare has caused us to be very protective of that program. Now if we could just extrapolate our thinking to support Medicare for everyone, we’d have it made.

NCA (national coverage analyses) Tracking Sheet for Screening Computed Tomography Colonography (CTC) for Colorectal Cancer

Centers for Medicare and Medicaid Services (CMS)
Issue
CMS covers colorectal cancer screening for average risk individuals age 50 and older using fecal occult blood testing, sigmoidoscopy, colonoscopy, and barium enema (42 CFR 410.37). On March 5, 2008, the American Cancer Society, the US Multi Society Task Force on Colorectal Cancer, and the American College of Radiology issued new cancer screening guidelines, including a recommendation that computed tomography colonography (CTC) be considered an acceptable option for colorectal cancer screening for such individuals. CTC, also referred to as virtual colonoscopy, uses computed tomography (CT) to acquire images and advanced 2-dimensional (3D) -image display techniques for interpretation. Neither the Medicare law nor the regulations identify the CTC test as a possible coverage option under the colorectal cancer screening benefit. However, under 42 CFR 410.37(a)(1), CMS is allowed to use the NCD process to determine coverage of other types of colorectal cancer screening tests that are not specifically identified in the law or regulations as it determines to be appropriate, in consultation with appropriate organizations.
Actions Taken
February 11, 2009:
CMS posts a proposed decision memo indicating our intent not to expand the colorectal cancer screening benefit to include coverage of this test. We are also posting a technology assessment, including a cost effectiveness analysis for use of this test as a screening test which was requested from the Agency for Healthcare Research and Quality. As with all national coverage analyses, the public may submit comments or additional evidence that cause us to reassess our evidentiary review and arrive at different conclusions.
Tracking Sheet:
http://www.cms.hhs.gov/mcd/viewtrackingsheet.asp?id=220
Technology Assessment Report: Cost-Effectiveness of CT Colonography to Screen for Colorectal Cancer (92 pages):
http://www.cms.hhs.gov/determinationprocess/downloads/id58TA.pdf
Links to other documents:
http://www.cms.hhs.gov/mcd/viewnca.asp?where=whatsnew&nca_id=220&basket=nca:00396N:220:Screening+Computed+Tomography+Colonography+%28CTC%29+for+Colorectal+Cancer:Open:New:8

This CMS decision to not pay for computed tomography colonography (CTC or “virtual colonoscopy”) when used as a screening test for colorectal cancer has already caused considerable controversy even before the final public comment period has closed. Before we start deciding who is right and who is wrong, we should look at the issues. (What? Make decisions based on facts!?)
Medicare, as a public health insurance program, has an obligation to finance health care for which the benefit to patients more than offsets any potential risks. Also, as a steward of taxpayer funds, Medicare has an obligation to see that those funds, which are finite, are used optimally to benefit the public good. Ah ha! Rationing! But is it?
Rationing is generally defined as distributing restricted allotments of a scarce resource. Current debates on rationing stem from concerns about the escalating costs of health care, creating an excessive demand on our limited resource of… dollars! So are dollars becoming so scarce that we have to cut back on beneficial health care services?
Let’s look at how Medicare approaches this problem. Medicare does not make treatment decisions, but rather makes decisions about whether or not to pay for certain services. These decisions are important not only for Medicare patients, but for other patients as well, since the commercial insurance industry often follows Medicare’s lead on whether or not to pay for these selected services.
Virtual colonoscopy (CTC) used as a colorectal cancer screening test serves as a good proxy for this decision process.
First, does CTC screening benefit the patient? No attempt will be made to summarize the massive amount of studies and documentation that has been used to answer this question, but only a couple of points will be made here. If a CTC test is positive, it then is followed up with colonoscopy, which has already been approved as a screening test for colorectal cancer. Thus the patient has received two uncomfortable, expensive screening tests when only one has sufficient data to confirm its unquestionable value in screening. Further, over one out of one thousand patients receiving CTC screening at age 50 will likely develop cancer as a result of the radiation exposure from this test, resulting in a negative impact on the benefit/risk ratio.
Second, is CTC screening a responsible use of taxpayer funds? The Technology Assessment Report indicates that, based on cost effectiveness, it would not be in our interests, as taxpayers, for our public stewards to pay for CTC screening.
Consequently Medicare has made a decision to not pay for CTC screening for CRC, unless new important information is provided during the pubic comment period, or if new studies in the future would warrant readdressing this issue. It is likely that several commercial insurers will follow Medicare’s lead on this.
So what is the controversy? It comes from two sources: 1) dedicated professionals who have legitimate disputes over the interpretation and weighting of the evidence, and 2) right-wing ideologues who see this as a golden opportunity to attack “government medicine.”
Innumerable studies confirm that a significant portion of wasteful spending stems from non-beneficial, high-tech excesses. Defining those excesses will always be controversial, but the process used by Medicare is precisely what we need, especially with the inevitable improved refinements in the process that we will see in the future. Those dedicated professionals who will be denied payment by these decisions will always have doubts about the process, but they will always have the opportunity to provide more data that would warrant reconsideration of the payment decisions.
What will we see from the right-wing non-think tanks? The government rations care. Government medicine kills people over 65 who have colon cancer. Government deprives patients of their health care decisions. Patients should own their own health care and get the government out of their lives.
Refuting their position, it is important to understand that this is not rationing. The government is not declining to pay for CTC testing in individuals for whom it is clinically indicated. They have merely made a decision to not pay for CTC screening when the clinical data and costs have not demonstrated that it has advantages that would warrant it being included as a screening option. The conservatives/libertarians would substitute for rational decision making by our public stewards, a chaotic health-business marketplace that would prevent the majority of us from receiving the care that we need merely because it isn’t affordable.
Medicare has shown that we can address wasteful, excess costs. The easiest measure would be to recover the costs of the administrative excesses – a process that would be made possible by providing everyone with Medicare. Reducing the waste of high-tech excesses is more difficult, but the national coverage determinations process (NCD) has shown us that it is not only possible, but that we must expand this important government function since it will help to guarantee that high-quality, affordable care will always be there for all of us.

Centers for Medicare and Medicaid Services (CMS)

Issue

CMS covers colorectal cancer screening for average risk individuals age 50 and older using fecal occult blood testing, sigmoidoscopy, colonoscopy, and barium enema (42 CFR 410.37). On March 5, 2008, the American Cancer Society, the US Multi Society Task Force on Colorectal Cancer, and the American College of Radiology issued new cancer screening guidelines, including a recommendation that computed tomography colonography (CTC) be considered an acceptable option for colorectal cancer screening for such individuals. CTC, also referred to as virtual colonoscopy, uses computed tomography (CT) to acquire images and advanced 2-dimensional (3D) -image display techniques for interpretation. Neither the Medicare law nor the regulations identify the CTC test as a possible coverage option under the colorectal cancer screening benefit. However, under 42 CFR 410.37(a)(1), CMS is allowed to use the NCD process to determine coverage of other types of colorectal cancer screening tests that are not specifically identified in the law or regulations as it determines to be appropriate, in consultation with appropriate organizations.

Actions Taken

February 11, 2009:
CMS posts a proposed decision memo indicating our intent not to expand the colorectal cancer screening benefit to include coverage of this test. We are also posting a technology assessment, including a cost effectiveness analysis for use of this test as a screening test which was requested from the Agency for Healthcare Research and Quality. As with all national coverage analyses, the public may submit comments or additional evidence that cause us to reassess our evidentiary review and arrive at different conclusions.

Tracking Sheet:
http://www.cms.hhs.gov/mcd/viewtrackingsheet.asp?id=220

Technology Assessment Report: Cost-Effectiveness of CT Colonography to Screen for Colorectal Cancer (92 pages):
http://www.cms.hhs.gov/determinationprocess/downloads/id58TA.pdf

Links to other documents:
http://www.cms.hhs.gov/mcd/viewnca.asp?where=whatsnew&nca_id=220&basket=nca:00396N:220:Screening+Computed+Tomography+Colonography+%28CTC%29+for+Colorectal+Cancer:Open:New:8

Comment:

By Don McCanne, MD

This CMS decision to not pay for computed tomography colonography (CTC or “virtual colonoscopy”) when used as a screening test for colorectal cancer has already caused considerable controversy even before the final public comment period has closed. Before we start deciding who is right and who is wrong, we should look at the issues. (What? Make decisions based on facts!?)

Medicare, as a public health insurance program, has an obligation to finance health care for which the benefit to patients more than offsets any potential risks. Also, as a steward of taxpayer funds, Medicare has an obligation to see that those funds, which are finite, are used optimally to benefit the public good. Ah ha! Rationing! But is it?

Rationing is generally defined as distributing restricted allotments of a scarce resource. Current debates on rationing stem from concerns about the escalating costs of health care, creating an excessive demand on our limited resource of… dollars! So are dollars becoming so scarce that we have to cut back on beneficial health care services?

Let’s look at how Medicare approaches this problem. Medicare does not make treatment decisions, but rather makes decisions about whether or not to pay for certain services. These decisions are important not only for Medicare patients, but for other patients as well, since the commercial insurance industry often follows Medicare’s lead on whether or not to pay for these selected services.

Virtual colonoscopy (CTC) used as a colorectal cancer screening test serves as a good proxy for this decision process.

First, does CTC screening benefit the patient? No attempt will be made to summarize the massive amount of studies and documentation that has been used to answer this question, but only a couple of points will be made here. If a CTC test is positive, it then is followed up with colonoscopy, which has already been approved as a screening test for colorectal cancer. Thus the patient has received two uncomfortable, expensive screening tests when only one has sufficient data to confirm its unquestionable value in screening. Further, over one out of one thousand patients receiving CTC screening at age 50 will likely develop cancer as a result of the radiation exposure from this test, resulting in a negative impact on the benefit/risk ratio.

Second, is CTC screening a responsible use of taxpayer funds? The Technology Assessment Report indicates that, based on cost effectiveness, it would not be in our interests, as taxpayers, for our public stewards to pay for CTC screening.

Consequently Medicare has made a decision to not pay for CTC screening for CRC, unless new important information is provided during the pubic comment period, or if new studies in the future would warrant readdressing this issue. It is likely that several commercial insurers will follow Medicare’s lead on this.

So what is the controversy? It comes from two sources: 1) dedicated professionals who have legitimate disputes over the interpretation and weighting of the evidence, and 2) right-wing ideologues who see this as a golden opportunity to attack “government medicine.”

Innumerable studies confirm that a significant portion of wasteful spending stems from non-beneficial, high-tech excesses. Defining those excesses will always be controversial, but the process used by Medicare is precisely what we need, especially with the inevitable improved refinements in the process that we will see in the future. Those dedicated professionals who will be denied payment by these decisions will always have doubts about the process, but they will always have the opportunity to provide more data that would warrant reconsideration of the payment decisions.

What will we see from the right-wing non-think tanks? The government rations care. Government medicine kills people over 65 who have colon cancer. Government deprives patients of their health care decisions. Patients should own their own health care and get the government out of their lives.

Refuting their position, it is important to understand that this is not rationing. The government is not declining to pay for CTC testing in individuals for whom it is clinically indicated. They have merely made a decision to not pay for CTC screening when the clinical data and costs have not demonstrated that it has advantages that would warrant it being included as a screening option. The conservatives/libertarians would substitute for rational decision making by our public stewards, a chaotic health-business marketplace that would prevent the majority of us from receiving the care that we need merely because it isn’t affordable.

Medicare has shown that we can address wasteful, excess costs. The easiest measure would be to recover the costs of the administrative excesses – a process that would be made possible by providing everyone with Medicare. Reducing the waste of high-tech excesses is more difficult, but the national coverage determinations process (NCD) has shown us that it is not only possible, but that we must expand this important government function since it will help to guarantee that high-quality, affordable care will always be there for all of us.

On January 23, a Quote of the Day message discussed an article in The New Yorker by Atul Gawande, Getting There from Here: How Should Obama Reform Health Care? Unfortunately, my response to that article was cluttered with comments about framing, linear polarity and other extraneous concepts that detracted from my primary message.
His theme was that health care reform in any nation is inevitably “path dependent,” building on “its own history, however imperfect, unusual, and untidy.” He applies this concept to the United States stating that we must build on what we have, selecting out features of our current fragmented system of financing health care that he says should be expanded to achieve our goals. It just happens that the features he selects are those in the current leading Democratic proposal for reform.
His article is very well written, and is quite convincing to those who have not been intensively involved in reform activities and have only a limited understanding of health policy. Since it is such a impressive article it now is being circulated widely as a statement that (superficially) seems to make sense as a guideline for reform.
The problem is that Atul Gawande is flat out wrong. He implies that other nations merely made adjustments in their existing systems to expand coverage to everyone. In fact, these were not simple adjustments to systems that weren’t working; they were revolutionary transformations of their health care financing systems. Some residuals incorporated into their new financing systems might be called “path dependent,” but a more appropriate framing would be the antithesis that the thrust of each reform effort was to eliminate the deficiencies and inadequacies of the existing financing system or non-system. This inevitably required new financing systems. The fundamentals of these new financing systems were not based on path dependency, but they were based on path trailblazing.
Gawande dismisses single payer supporters as reformers “on the left” who “reserve special contempt for the pragmatists, who would build around the mess we have.” He explains later that the path dependent, pragmatic approach that we must follow will still be “exasperating, even disappointing,” while still failing to give single payer even short shrift.
In a Common Dreams article, Russell Mokhiber provided a comment by Atul Gawande in which he expanded on his views of single payer, along with a response by David Himmelstein. When you hear people praise Gawande’s New Yorker article, you should provide them with the following comments.

Et Tu, Atul?: Test-Case for a Single-Payer Hypothesis

by Russell Mokhiber
CommonDreams.org
February 10, 2009
As for (Gawande’s) opposition to single payer, he remains steadfast.
In a q/a with New Yorker readers last week, Gawande defended his opposition to single payer now.
“Replacing the entire health-financing system with Medicare would require most working-age people to leave their current insurance plans,” Gawande writes. “It would change the finances of every hospital and doctor in the country overnight. It would require replacing the premiums we pay with a tax, with massive numbers of both losers and winners. It seems simple in theory, but in practice it never is. This would be a whole new path for health care. No country has swept away their health system and simply replaced it like that. As I said in the article, one would have to be prepared for an overnight change in the way people get 3.5 billion prescriptions, 900 million office visits, 60 million operations – because how these are paid for is critical to whether and how they are provided. Doing away with private insurance coverage is no less sweeping than saying we’ll do away with public insurance programs or do away with employer-paid health care. No major country has simply swept away the way so many people’s care is paid for. And the reason is that people have legitimate fears about what will happen to them.”
Dr. David Himmelstein, a founder of Physicians for a National Health Program, calls this argument “bogus.”
“Patients do not care what their insurance plan is – just that it pays for the care they need. A transition from a system where virtually everyone has only partial coverage to one where they have full coverage is not a disruption for patients,” Himmelstein said when we asked him to respond to Gawande. “Several nations have made abrupt changes in the financing of care. The UK instituted the National Health Service – eliminating insurance and private payment for care at a stroke. Each Canadian province went from a private insurance system very like ours to its current system virtually overnight — though not all provinces underwent the change simultaneously. Taiwan changed to a single payer system about 10 years ago at a stroke.”
“Medicare replaced private coverage for the elderly — who account for about 30% of all hospital patients — about nine months after its passage. That occurred in an era before computers. The entire task of enrolling tens of millions of patients, inspecting virtually every hospital in the nation — to certify that they were desegregated, which was mandated by the Medicare law — and set up a new payment apparatus was carried out using paper records. Why is a shift of the other two-thirds of our system more difficult?”
“The new payment system would be far simpler than the current one — hospitals would receive a global budget, which initially would be based largely on their previous year’s revenues. Medicare currently collects all of the financial info needed to do such budgeting at the outset. Per-patient billing for hospital care would be eliminated. For doctors, Medicare already has a fee schedule, which should be modified somewhat, but already serves as the benchmark for most private plans. Expanding this payment system to cover all fee-for-service billings would be trivial. Paying for drugs is similarly pretty simple and straightforward, with most of the needed infrastructure already in place.”
“In sum, his arguments are bogus unless you assume that we are far less competent than people in other nations, and than we used to be,” Himmelstein said.
Mokhiber: Et Tu, Atul?: Test-Case for a Single-Payer Hypothesis
http://www.commondreams.org/view/2009/02/10-1
Gawande: Getting There from Here: How should Obama reform health care?
http://www.newyorker.com/reporting/2009/01/26/090126fa_fact_gawande
qotd: Gawande’s pseudo-pragmatism
https://pnhp.org/news/2009/january/gawandes_pseudopra.php

February 12, 2009

Comment:

By Don McCanne, MD

On January 23, a Quote of the Day message discussed an article in The New Yorker by Atul Gawande, Getting There from Here: How Should Obama Reform Health Care? Unfortunately, my response to that article was cluttered with comments about framing, linear polarity and other extraneous concepts that detracted from my primary message.

His theme was that health care reform in any nation is inevitably “path dependent,” building on “its own history, however imperfect, unusual, and untidy.” He applies this concept to the United States stating that we must build on what we have, selecting out features of our current fragmented system of financing health care that he says should be expanded to achieve our goals. It just happens that the features he selects are those in the current leading Democratic proposal for reform.

His article is very well written, and is quite convincing to those who have not been intensively involved in reform activities and have only a limited understanding of health policy. Since it is such a impressive article it now is being circulated widely as a statement that (superficially) seems to make sense as a guideline for reform.

The problem is that Atul Gawande is flat out wrong. He implies that other nations merely made adjustments in their existing systems to expand coverage to everyone. In fact, these were not simple adjustments to systems that weren’t working; they were revolutionary transformations of their health care financing systems. Some residuals incorporated into their new financing systems might be called “path dependent,” but a more appropriate framing would be the antithesis that the thrust of each reform effort was to eliminate the deficiencies and inadequacies of the existing financing system or non-system. This inevitably required new financing systems. The fundamentals of these new financing systems were not based on path dependency, but they were based on path trailblazing.

Gawande dismisses single payer supporters as reformers “on the left” who “reserve special contempt for the pragmatists, who would build around the mess we have.” He explains later that the path dependent, pragmatic approach that we must follow will still be “exasperating, even disappointing,” while still failing to give single payer even short shrift.

In a Common Dreams article, Russell Mokhiber provided a comment by Atul Gawande in which he expanded on his views of single payer, along with a response by David Himmelstein. When you hear people praise Gawande’s New Yorker article, you should provide them with the following comments.

Et Tu, Atul?: Test-Case for a Single-Payer Hypothesis

by Russell Mokhiber
CommonDreams.org
February 10, 2009

As for (Gawande’s) opposition to single payer, he remains steadfast.

In a q/a with New Yorker readers last week, Gawande defended his opposition to single payer now.

“Replacing the entire health-financing system with Medicare would require most working-age people to leave their current insurance plans,” Gawande writes. “It would change the finances of every hospital and doctor in the country overnight. It would require replacing the premiums we pay with a tax, with massive numbers of both losers and winners. It seems simple in theory, but in practice it never is. This would be a whole new path for health care. No country has swept away their health system and simply replaced it like that. As I said in the article, one would have to be prepared for an overnight change in the way people get 3.5 billion prescriptions, 900 million office visits, 60 million operations – because how these are paid for is critical to whether and how they are provided. Doing away with private insurance coverage is no less sweeping than saying we’ll do away with public insurance programs or do away with employer-paid health care. No major country has simply swept away the way so many people’s care is paid for. And the reason is that people have legitimate fears about what will happen to them.”

Dr. David Himmelstein, a founder of Physicians for a National Health Program, calls this argument “bogus.”

“Patients do not care what their insurance plan is – just that it pays for the care they need. A transition from a system where virtually everyone has only partial coverage to one where they have full coverage is not a disruption for patients,” Himmelstein said when we asked him to respond to Gawande. “Several nations have made abrupt changes in the financing of care. The UK instituted the National Health Service – eliminating insurance and private payment for care at a stroke. Each Canadian province went from a private insurance system very like ours to its current system virtually overnight — though not all provinces underwent the change simultaneously. Taiwan changed to a single payer system about 10 years ago at a stroke.”

“Medicare replaced private coverage for the elderly — who account for about 30% of all hospital patients — about nine months after its passage. That occurred in an era before computers. The entire task of enrolling tens of millions of patients, inspecting virtually every hospital in the nation — to certify that they were desegregated, which was mandated by the Medicare law — and set up a new payment apparatus was carried out using paper records. Why is a shift of the other two-thirds of our system more difficult?”

“The new payment system would be far simpler than the current one — hospitals would receive a global budget, which initially would be based largely on their previous year’s revenues. Medicare currently collects all of the financial info needed to do such budgeting at the outset. Per-patient billing for hospital care would be eliminated. For doctors, Medicare already has a fee schedule, which should be modified somewhat, but already serves as the benchmark for most private plans. Expanding this payment system to cover all fee-for-service billings would be trivial. Paying for drugs is similarly pretty simple and straightforward, with most of the needed infrastructure already in place.”

“In sum, his arguments are bogus unless you assume that we are far less competent than people in other nations, and than we used to be,” Himmelstein said.

Mokhiber: Et Tu, Atul?: Test-Case for a Single-Payer Hypothesis
http://www.commondreams.org/view/2009/02/10-1

Gawande: Getting There from Here: How should Obama reform health care?
http://www.newyorker.com/reporting/2009/01/26/090126fa_fact_gawande

qotd: Gawande’s pseudo-pragmatism
https://pnhp.org/news/2009/january/gawandes_pseudopra.php

Effects of Care Coordination on Hospitalization, Quality of Care, and Health Care Expenditures Among Medicare Beneficiaries

By Deborah Peikes, PhD; Arnold Chen, MD, MSc; Jennifer Schore, MS, MSW; Randall Brown, PhD
JAMA
February 11, 2009
Objective: To determine whether care coordination programs reduced hospitalizations and Medicare expenditures and improved quality of care for chronically ill Medicare beneficiaries.
Interventions: Nurses provided patient education and monitoring (mostly via telephone) to improve adherence and ability to communicate with physicians. Patients were contacted twice per month on average; frequency varied widely.
Main Outcome Measures: Hospitalizations, monthly Medicare expenditures, patient-reported and care process indicators.
Results: Thirteen of the 15 programs showed no significant (P<.05) differences in hospitalizations; however, (one program had fewer hospitalizations and another had more). None of the 15 programs generated net savings. These programs had favorable effects on none of the adherence measures and only a few of many quality of care indicators examined. Conclusions: Viable care coordination programs without a strong transitional care component are unlikely to yield net Medicare savings. Programs with substantial in-person contact that target moderate to severe patients can be cost-neutral and improve some aspects of care. http://jama.ama-assn.org/cgi/content/full/301/6/603

And…

The Elusive Quest for Quality and Cost Savings in the Medicare Program

John Z. Ayanian, MD, MPP
JAMA
Editorial (on the Peikes, et al study)
With voluntary enrollment of more than 18,000 participants from all US regions, these 15 programs implemented a varied set of approaches to improve care coordination. Common features of the programs included the use of nurses trained as care coordinators to interact on a regular basis with patients who had serious chronic health conditions. These nurses provided patients with health education and sent written reports to their physicians. Participants were substantially sicker than Medicare beneficiaries in general, with much higher rates of cardiovascular disease, diabetes, and chronic lung disease, and correspondingly greater monthly Medicare expenditures before enrollment ($1535 vs $551, respectively). The CMS paid each program a negotiated monthly fee that averaged $235 per participant to provide outreach, health education, and support to these chronically ill patients–and in some cases to their physicians. An independent evaluation of these programs was funded by CMS to assess their effects on quality of care, hospitalizations, and Medicare expenditures in a consistent and rigorous manner.
The financial and clinical results of this careful evaluation were sobering. Only 2 of the 12 largest programs had a statistically significant effect on the annual number of hospital admissions. A hospital-sponsored program in Iowa (Mercy Medical Center) significantly reduced hospitalizations by 17%, with a nonsignificant 9% reduction in Medicare expenditures. In contrast, a retirement center program in Maryland (Charlestown) significantly increased both hospitalizations and expenditures by 19%. When program fees were incorporated in the analysis, total expenditures were 8% to 41% higher (P < .10) in the intervention groups than the control groups for 9 of the 12 largest programs, and no programs reduced expenditures. In the clinical domain, the interventions had only sporadic effects on process measures of quality of care, such as vaccinations, cancer screening, or diabetes services, and had minimal or no effects on patients' functional status and health-related quality of life. Another ongoing Medicare project, the Care Management for High-Cost Beneficiaries Demonstration, is assessing the effectiveness of clinician-directed chronic care management programs. A variety of approaches focused on improving care coordination and home support through patients' own health care practitioners are being tested in 6 sites across the country. Many of these approaches are consistent with new models for patient-centered medical homes that have been endorsed by leading professional organizations in primary care. In addition, CMS is now developing plans to launch the Medicare Medical Homes Demonstration that will pay monthly fees of $40 to $100 per patient to 2000 physicians to coordinate the care of their chronically ill beneficiaries. By involving patients' own physicians in coordinating their care, these programs hold greater promise for achieving better quality of care and possibly cost savings. http://jama.ama-assn.org/cgi/content/full/301/6/668

Most of the leading proposals for health financing reform include magical (sleight-of-hand) concepts that purportedly would reduce health care costs. One of these is disease management, or chronic care coordination, or whatever label you want to give it.
This study adds to many others that confirm that these programs, as currently structured, do not work. A fee (average $235 per patient per month) paid to an entity that hires a nurse to coordinate care (most frequently through two telephone calls per month) does not reduce the rate of hospitalization, does not generate a net savings, and has only a negligible impact on quality.
This does not mean that there is no place for chronic disease management. Many studies have shown that systems with strong primary care infrastructures do provide higher quality care at lower costs. The concept of the patient-centered, clinician-directed medical home is the logical environment for management of chronic diseases. The important difference is that it is the patient’s medical condition that is being managed, rather than management of the funds in a third-party contract designed on a business model that enhances profits. This is not to say that there should be no profits, but the profits should be directed to the portion of the health care delivery system actually providing the care. Pay the medical home to provide the care, not third-party private administrators.
There is still a need to look beyond the sleight-of-hand magical proposals to find solutions to our escalating health care costs. That solution is on the table right in front of the D.C. policy makers, if they’ll only look up long enough to see that a monopsonistic, administratively-efficient, single payer national health program is precisely what would work – for all of us.