Primary Health Care – Now More Than Ever

World Health Organization
October 14, 2008

The World Health Report 2008 critically assesses the way that health care is organized, financed, and delivered in rich and poor countries around the world. The WHO report documents a number of failures and shortcomings that have left the health status of different populations, both within and between countries, dangerously out of balance.

Inequities in access to care and in health outcomes are usually greatest in cases where health is treated as a commodity and care is driven by profitability. The results are predictable: unnecessary tests and procedures, more frequent and longer hospital stays, higher overall costs, and exclusion of people who cannot pay.

To steer health systems towards better performance, the report calls for a return to primary health care (PHC), a holistic approach to health care formally launched 30 years ago. When countries at the same level of economic development are compared, those where health care is organized around the tenets of primary health care produce a higher level of heath for the same investment.

This report structures the PHC reforms in four groups that reflect the convergence between the evidence on what is needed for an effective response to the health challenges of today’s world, the values of equity, solidarity and social justice that drive the PHC movement, and the growing expectations of the population in modernizing societies: reforms that ensure

* that health systems contribute to health equity, social justice and the end of exclusion, primarily by moving towards universal access and social health protection — UNIVERSAL COVERAGE REFORMS;

* reforms that reorganize health services as primary care, i.e. around people’s needs and expectations, so as to make them more socially relevant and more responsive to the changing world while producing better outcomes — SERVICE DELIVERY REFORMS;

* reforms that secure healthier communities, by integrating public health actions with primary care and by pursuing healthy public policies across sectors — PUBLIC POLICY REFORMS;

* reforms that replace disproportionate reliance on command and control on one hand, and laissez-faire disengagement of the state on the other, by the inclusive, participatory, negotiation-based leadership required by the complexity of contemporary health systems — LEADERSHIP REFORMS.

In high-expenditure health economies, which is the case of most high-income countries, there is ample financial room to accelerate the shift from tertiary to primary care, create a healthier policy environment and complement a well-established universal coverage system with targeted measures to reduce exclusion.

Even in the United States, its exceptionalism stems not from lower public expenditure… but from its singularly high additional private expenditure. The persistent under-performance of the United States health sector across domains of health outcomes, quality, access, efficiency and equity, explains opinion polls that show increasing consensus of the notion of government intervention to secure more equitable access to essential health care.

http://www.who.int/mediacentre/news/releases/2008/pr38/en/index.html

Primary Health Care – Now More Than Ever (148 page PDF):
http://www.who.int/whr/2008/whr08_en.pdf

Comment:

By Don McCanne, MD

The World Health Report 2008 provides a critical assessment of health care systems throughout the world. It describes how all nations, regardless of national wealth, can benefit by enacting reforms organized around primary health care.

In reading the various experiences of other nations, it is almost shocking to see how infrequently the most expensive health system of all, that of the United States, is mentioned as an example of how reform can work. But then it is understandable when other nations single our system out for its exceptionalism – a system with “singularly high additional private expenditure” that persistently underperforms “across domains of health outcomes, quality, access, efficiency and equity.”

For a proper perspective of what we do have and what we could have, this report should be required reading.

California high-risk pool for medically uninsurable helps fewer residents

By Jordan Rau
Los Angeles Times
October 28, 2008
California… is one of 35 states that arranges health coverage for people rejected by commercial companies because they have blemished medical histories.
This group — known as “medically uninsurable” — accounts for about an eighth of the 5 million Californians who lack health insurance. Most are self-employed, work for companies that don’t provide insurance or don’t have a job.
But California’s publicly subsidized high-risk pool, long one of the least generous in the country, has atrophied over the tenure of Gov. Arnold Schwarzenegger — even as the governor put the plight of the uninsured at the top of his political agenda.
Rising premiums and limited subsidies have made the Major Risk Medical Insurance Program either unaffordable, unavailable or ineffective for many of those who most need health insurance.
The program now covers about 13,000 Californians — about 2% of the medically uninsurable.
Enrollment has dropped by almost a third since Schwarzenegger became governor.
Subscribers pay two-thirds of the pool’s cost and the state about one-third. The insurers that voluntarily participate — primarily Blue Cross of California and Kaiser Permanente — break even.
Unlike most other states, which finance their programs either directly with tax dollars or with assessments on insurers, California’s subsidies have come only from the state’s tobacco tax.
Lawmakers have kept annual financing at or below $40 million a year, requiring the pool’s administrators to cap its enrollment.
One of the major obstacles is the cost of premiums, which the law sets at 125% of commercial insurance rates. More than a third of pool participants who dropped out this year told the pool’s administrators that they couldn’t afford it anymore.
Despite its cost, California’s high-risk pool is of limited use for people needing extensive medical care, such as those with cancer or chronic diseases. That is because the pool’s benefits are capped at $75,000 a year, lower than the limits of any other state’s pool.
To fix California’s pool, the Legislature this year proposed placing a $1 monthly per customer fee on insurers that sell policies directly to customers.
But in his veto message, Schwarzenegger said the fee would be passed on to customers and thus “only exacerbates their burden.”
http://www.latimes.com/news/local/la-me-uninsured28-2008oct28,0,7559850,full.story

The concept of health insurance is quite simple. When everyone pays into an insurance risk pool, the many who are healthy are subsidizing the higher costs of those with greater health care needs. Thus everyone receives whatever medical care they need without facing financial barriers to care.
Then why do we have high-risk pools? The simple answer is that health care has become so expensive that premiums for universal pools would be so high that few could afford them. So we move higher cost individuals into high-risk pools in order to keep premiums more affordable for pools of healthy individuals.
Think about the premium for a family in an employer-sponsored pool composed of the healthy workforce and their young healthy families; it now averages $12,600. If we were to add into these pools many hundreds of thousands of individuals with high health care costs, you can only imagine how high the premiums would go.
Although California has set the high-risk pool premium at 125 percent of commercial rates, they have had to cap the benefits at $75,000 to avoid yet higher premiums. Sorry, but for this high cost group, that falls far short of the insurance function of preventing financial hardship in the face of medical need. For adequate benefits, the premiums for high-risk pools would be unaffordable for all but the very wealthiest of us, as if they weren’t too high already.
If we expect to cover high-risk individuals, we do need a transfer from the healthy to the sick. California attempted to take a very small step in this direction by assessing fees on insurance plans in the individual market that would be used to help fund the high-risk pool. But Gov. Schwarzenegger didn’t want to “exacerbate the burden” on the healthy by expecting them to help fund care for the sick. Then who funds the high-risk pool?
We really need to end this game of juggling unaffordable premiums amongst fragmented, inequitable risk pools. It’s time to establish one single risk pool for all of us, and fund it equitably through progressive taxes. The private plans get in our way. We need to dump them.

California high-risk pool for medically uninsurable helps fewer residents

By Jordan Rau
Los Angeles Times
October 28, 2008

California… is one of 35 states that arranges health coverage for people rejected by commercial companies because they have blemished medical histories.

This group — known as “medically uninsurable” — accounts for about an eighth of the 5 million Californians who lack health insurance. Most are self-employed, work for companies that don’t provide insurance or don’t have a job.

But California’s publicly subsidized high-risk pool, long one of the least generous in the country, has atrophied over the tenure of Gov. Arnold Schwarzenegger — even as the governor put the plight of the uninsured at the top of his political agenda.

Rising premiums and limited subsidies have made the Major Risk Medical Insurance Program either unaffordable, unavailable or ineffective for many of those who most need health insurance.

The program now covers about 13,000 Californians — about 2% of the medically uninsurable.

Enrollment has dropped by almost a third since Schwarzenegger became governor.

Subscribers pay two-thirds of the pool’s cost and the state about one-third. The insurers that voluntarily participate — primarily Blue Cross of California and Kaiser Permanente — break even.

Unlike most other states, which finance their programs either directly with tax dollars or with assessments on insurers, California’s subsidies have come only from the state’s tobacco tax.

Lawmakers have kept annual financing at or below $40 million a year, requiring the pool’s administrators to cap its enrollment.

One of the major obstacles is the cost of premiums, which the law sets at 125% of commercial insurance rates. More than a third of pool participants who dropped out this year told the pool’s administrators that they couldn’t afford it anymore.

Despite its cost, California’s high-risk pool is of limited use for people needing extensive medical care, such as those with cancer or chronic diseases. That is because the pool’s benefits are capped at $75,000 a year, lower than the limits of any other state’s pool.

To fix California’s pool, the Legislature this year proposed placing a $1 monthly per customer fee on insurers that sell policies directly to customers.

But in his veto message, Schwarzenegger said the fee would be passed on to customers and thus “only exacerbates their burden.”

http://www.latimes.com/news/local/la-me-uninsured28-2008oct28,0,7559850,full.story

Comment:

By Don McCanne, MD

The concept of health insurance is quite simple. When everyone pays into an insurance risk pool, the many who are healthy are subsidizing the higher costs of those with greater health care needs. Thus everyone receives whatever medical care they need without facing financial barriers to care.

Then why do we have high-risk pools? The simple answer is that health care has become so expensive that premiums for universal pools would be so high that few could afford them. So we move higher cost individuals into high-risk pools in order to keep premiums more affordable for pools of healthy individuals.

Think about the premium for a family in an employer-sponsored pool composed of the healthy workforce and their young healthy families; it now averages $12,600. If we were to add into these pools many hundreds of thousands of individuals with high health care costs, you can only imagine how high the premiums would go.

Although California has set the high-risk pool premium at 125 percent of commercial rates, they have had to cap the benefits at $75,000 to avoid yet higher premiums. Sorry, but for this high cost group, that falls far short of the insurance function of preventing financial hardship in the face of medical need. For adequate benefits, the premiums for high-risk pools would be unaffordable for all but the very wealthiest of us, as if they weren’t too high already.

If we expect to cover high-risk individuals, we do need a transfer from the healthy to the sick. California attempted to take a very small step in this direction by assessing fees on insurance plans in the individual market that would be used to help fund the high-risk pool. But Gov. Schwarzenegger didn’t want to “exacerbate the burden” on the healthy by expecting them to help fund care for the sick. Then who funds the high-risk pool?

We really need to end this game of juggling unaffordable premiums amongst fragmented, inequitable risk pools. It’s time to establish one single risk pool for all of us, and fund it equitably through progressive taxes. The private plans get in our way. We need to dump them.

‘Hallway medicine’ seen as a way to unclutter ERs

By Carla K. Johnson
Houston Chronicle/AP
October 26, 2008
It may not sound like ideal health care, but hospital officials nationwide are being urged to consider hallway medicine as a way to ease emergency department crowding, and some are trying it.
Leading the way is Stony Brook University Medical Center at Stony Brook, N.Y., where a study found that no harm was caused by moving emergency room patients to upper-floor hallways when they were ready for admission.
Holding patients in ERs can cause deaths, doctors say. In a 2007 survey of nearly 1,500 emergency doctors, 13 percent said they personally experienced a patient dying as a result of boarding in the emergency department. The survey was conducted by the American College of Emergency Physicians.
The new study found slightly fewer deaths and intensive care unit admissions in the hallway patients, compared with the standard bed patients. That was no surprise… because the protocol calls for giving the first available rooms to the sickest patients. Intensive care patients never go to hallways.
http://www.chron.com/disp/story.mpl/health/6079406.html

The United States has 2.9 hospital beds per 1000 individuals. The median number of beds for OECD nations is 3.7 (OECD, 2002). Not only do we have fewer beds, the distribution is less even than in other nations with their more egalitarian systems. The supply of beds tends to be quite adequate in affluent regions, but is inadequate in other areas, especially those served by safety-net institutions.
In many hospitals, emergency departments have had to accept queues in “holding” – patients who have been admitted but for whom there are no beds available on the hospital floors. When the holding area is full, it has been common practice to admit patients to the hallways of the various services, not as policy but as a temporary inconvenience. The significance of this study is that hallway admissions now are being recommended as explicit hospital policy.
Hospitals also need policies to provide surge capacity – the ability to admit much larger numbers of patients in the event of major epidemics or catastrophic events. Can you imagine how these hospitals would respond to such a surge in patients? Not very well.
How is it that we have lower capacity and worse distribution of our hospital beds than do other nations that spend much less on health care than we do? Quite simply, they use equitable, egalitarian systems for health care financing and health system planning. Of course, this is code language for stating that they depend on government involvement in their financing and health system planning.
Other nations do sometimes have queues, especially for less urgent problems, often labeled as rationing. So their systems are not perfect. Some merely need to spend more money, and others need to replace their public stewards with individuals who have more egalitarian values.
In the United States, we spend more than enough money, primarily on those with the means to pay, and they get good care (except for an excess of detrimental high-tech services).
In contrast, for less affluent individuals, we do not even supply them with enough beds. But at least we don’t ration. We merely hide them behind the curtains in the upstairs hallways.

By Carla K. Johnson
Houston Chronicle/AP
October 26, 2008

It may not sound like ideal health care, but hospital officials nationwide are being urged to consider hallway medicine as a way to ease emergency department crowding, and some are trying it.

Leading the way is Stony Brook University Medical Center at Stony Brook, N.Y., where a study found that no harm was caused by moving emergency room patients to upper-floor hallways when they were ready for admission.

Holding patients in ERs can cause deaths, doctors say. In a 2007 survey of nearly 1,500 emergency doctors, 13 percent said they personally experienced a patient dying as a result of boarding in the emergency department. The survey was conducted by the American College of Emergency Physicians.

The new study found slightly fewer deaths and intensive care unit admissions in the hallway patients, compared with the standard bed patients. That was no surprise… because the protocol calls for giving the first available rooms to the sickest patients. Intensive care patients never go to hallways.

http://www.chron.com/disp/story.mpl/health/6079406.html

Comment:

By Don McCanne, MD

The United States has 2.9 hospital beds per 1000 individuals. The median number of beds for OECD nations is 3.7 (OECD, 2002). Not only do we have fewer beds, the distribution is less even than in other nations with their more egalitarian systems. The supply of beds tends to be quite adequate in affluent regions, but is inadequate in other areas, especially those served by safety-net institutions.

In many hospitals, emergency departments have had to accept queues in “holding” – patients who have been admitted but for whom there are no beds available on the hospital floors. When the holding area is full, it has been common practice to admit patients to the hallways of the various services, not as policy but as a temporary inconvenience. The significance of this study is that hallway admissions now are being recommended as explicit hospital policy.

Hospitals also need policies to provide surge capacity – the ability to admit much larger numbers of patients in the event of major epidemics or catastrophic events. Can you imagine how these hospitals would respond to such a surge in patients? Not very well.

How is it that we have lower capacity and worse distribution of our hospital beds than do other nations that spend much less on health care than we do? Quite simply, they use equitable, egalitarian systems for health care financing and health system planning. Of course, this is code language for stating that they depend on government involvement in their financing and health system planning.

Other nations do sometimes have queues, especially for less urgent problems, often labeled as rationing. So their systems are not perfect. Some merely need to spend more money, and others need to replace their public stewards with individuals who have more egalitarian values.

In the United States, we spend more than enough money, primarily on those with the means to pay, and they get good care (except for an excess of detrimental high-tech services).

In contrast, for less affluent individuals, we do not even supply them with enough beds. But at least we don’t ration. We merely hide them behind the curtains in the upstairs hallways.

Kennedy secretly crafts health care plan

By Jeffrey H. Birnbaum
The Wilmington Times
October 24, 2008
From his sickbed, Sen. Edward M. Kennedy has secretly been orchestrating meetings with lobbyists and lawmakers from both parties to craft legislation that would greet the new president with a plan to provide affordable medical coverage to all Americans, a measure he has called “the cause of my life.”
Among those who are receptive to a bipartisan plan and who have participated in the initial talks is Sen. Michael B. Enzi of Wyoming, the ranking Republican on the Senate health committee, which Mr. Kennedy leads.
Mr. Kennedy’s goal, his aides say, is to introduce a universal health care bill as soon as the new Congress convenes next year and to push quickly for its passage – a much-accelerated timetable compared with the last time that a health care overhaul was on the agenda, at the start of the Clinton administration.
The wide-ranging talks have taken place behind closed doors on Capitol Hill and have been monitored by Mr. Kennedy through daily telephone updates from his staff, said his aides and several participants.
The discussions, which started in June, included 14 roundtable meetings in the Dirksen Senate Office Building. These were attended not only by Kennedy aides but also by staffers, both Republicans and Democrats, from the Senate committees with jurisdiction over health care. Those include the Budget Committee, the Finance Committee and the committee that Mr. Kennedy leads, the Committee on Health, Education, Labor and Pensions.
Also attending was the entire panoply of interest groups with stakes in the cost and availability of health coverage. These included the AFL-CIO, the Business Roundtable, the U.S. Chamber of Commerce, the National Federation of Independent Business, the National Retail Federation, the Federation of American Hospitals, the American Medical Association, America’s Health Insurance Plans, Families USA, AARP and the Consumers Union.
The talks have managed to put in the same room interests that rarely meet – let alone agree with one another. No one is under the illusion that finding a compromise will be easy. Indeed, it remains unclear that a long-elusive consensus can be found. Participants agree, however, that Mr. Kennedy’s active role – particularly during his convalescence – have increased the likelihood of a breakthrough.
http://www.washingtontimes.com/news/2008/oct/24/kennedy-secretly-crafts-health-care-plan/

Everyone has profound admiration for Sen. Edward Kennedy’s valiant effort to finally overcome the stubborn political barriers, and bring health care to everyone in the nation. At a time that the people are demanding reform, Sen. Kennedy is positioned to provide us with his grand finale – and what a great one that would be – health care for everyone.
But what a task he has. He is working with individuals and organizations that have rigid policy positions, which they demand be a part of any reform package. Many of these positions are absolutely incompatible with each other and could never be incorporated together in a legislative package. Most of these policy positions represent either special interests or simple ideology.
If this process is to work, all of these interests will have agree to policies that place the interests of patients above all else. The goal must be to establish a system in which everyone can receive all necessary health care without the necessity of facing financial hardship. We know how to do this. The policies are easy; the politics aren’t.
We pray that Sen. Kennedy can produce a grand finale in which all special interests realign themselves to support the only interest that really matters – the American patient.

Kennedy secretly crafts health care plan

By Jeffrey H. Birnbaum
The Wilmington Times
October 24, 2008

From his sickbed, Sen. Edward M. Kennedy has secretly been orchestrating meetings with lobbyists and lawmakers from both parties to craft legislation that would greet the new president with a plan to provide affordable medical coverage to all Americans, a measure he has called “the cause of my life.”

Among those who are receptive to a bipartisan plan and who have participated in the initial talks is Sen. Michael B. Enzi of Wyoming, the ranking Republican on the Senate health committee, which Mr. Kennedy leads.

Mr. Kennedy’s goal, his aides say, is to introduce a universal health care bill as soon as the new Congress convenes next year and to push quickly for its passage – a much-accelerated timetable compared with the last time that a health care overhaul was on the agenda, at the start of the Clinton administration.

The wide-ranging talks have taken place behind closed doors on Capitol Hill and have been monitored by Mr. Kennedy through daily telephone updates from his staff, said his aides and several participants.

The discussions, which started in June, included 14 roundtable meetings in the Dirksen Senate Office Building. These were attended not only by Kennedy aides but also by staffers, both Republicans and Democrats, from the Senate committees with jurisdiction over health care. Those include the Budget Committee, the Finance Committee and the committee that Mr. Kennedy leads, the Committee on Health, Education, Labor and Pensions.

Also attending was the entire panoply of interest groups with stakes in the cost and availability of health coverage. These included the AFL-CIO, the Business Roundtable, the U.S. Chamber of Commerce, the National Federation of Independent Business, the National Retail Federation, the Federation of American Hospitals, the American Medical Association, America’s Health Insurance Plans, Families USA, AARP and the Consumers Union.

The talks have managed to put in the same room interests that rarely meet – let alone agree with one another. No one is under the illusion that finding a compromise will be easy. Indeed, it remains unclear that a long-elusive consensus can be found. Participants agree, however, that Mr. Kennedy’s active role – particularly during his convalescence – have increased the likelihood of a breakthrough.

http://www.washingtontimes.com/news/2008/oct/24/kennedy-secretly-crafts-health-care-plan/

Comment:

By Don McCanne, MD

Everyone has profound admiration for Sen. Edward Kennedy’s valiant effort to finally overcome the stubborn political barriers, and bring health care to everyone in the nation. At a time that the people are demanding reform, Sen. Kennedy is positioned to provide us with his grand finale – and what a great one that would be – health care for everyone.

But what a task he has. He is working with individuals and organizations that have rigid policy positions, which they demand be a part of any reform package. Many of these positions are absolutely incompatible with each other and could never be incorporated together in a legislative package. Most of these policy positions represent either special interests or simple ideology.

If this process is to work, all of these interests will have agree to policies that place the interests of patients above all else. The goal must be to establish a system in which everyone can receive all necessary health care without the necessity of facing financial hardship. We know how to do this. The policies are easy; the politics aren’t.

We pray that Sen. Kennedy can produce a grand finale in which all special interests realign themselves to support the only interest that really matters – the American patient.

An eroding model for health insurance

By Lisa Girion and Michael A. Hiltzik
Los Angeles Times
First of three parts
October 21, 2008
The health insurance system has become increasingly expensive and inaccessible. It leaves patients responsible for bills they understood would be covered, squeezes doctors and hospitals, and tries to avoid even minuscule risks, such as providing coverage to a newborn with no serious illness.
At the heart of the problem is the clash between the cost of medical care and insurers’ need to turn a profit.
During her pregnancy, Jennifer Danylyshyn’s regular visits to her obstetrician were covered by her Blue Shield policy. So was the delivery of Ava on March 24. The couple expected that Ava would be covered as a matter of course.
When the company rejected the baby because of the hip misalignment, her parents appealed with the help of their pediatrician.
Blue Shield refused to budge.
http://www.latimes.com/business/la-fi-insure21-2008oct21,0,2292699,full.story

And…

Health insurers reinvent themselves as money managers

By Michael A. Hiltzik
Second of three parts
October 22, 2008
WellPoint Inc., the nation’s largest health insurance company, ran into a snag last year while pursuing an important new business initiative.
Federal banking regulators insisted on classifying WellPoint as a healthcare company. And that was interfering with its efforts to open a bank.
The Federal Reserve Board eventually agreed that the company’s core insurance business could be considered financial services.
That a medical insurer would agree to keep a lid on healthcare expenditures so it could get approval to open a bank illustrates a fundamental change in the industry: Insurers are moving away from their traditional role of pooling health risks and are reinventing themselves as money managers — providers of financial vehicles through which consumers pay for their own healthcare.
Because he has high blood pressure, (Alex Kipper, an engineer who lost his employer-provided health insurance during the dot-com bust) found himself virtually uninsurable. Fearing that he could be financially wiped out in a medical emergency, he signed up for a bare-bones policy that provides no coverage until his medical expenses exceed $8,000 in a year.
His health plan’s concession to preventive care was a $25 discount on a physical. Once diagnostic tests were included, the fee for the checkup came to more than $300, Kipper said — which the health plan declined to pay.
He hasn’t returned to a doctor’s office in three years.
Although the policy costs only $200 a month, “nothing is covered, absolutely nothing,” Kipper said.
http://www.latimes.com/business/la-fi-insure22-2008oct22,0,3603421,full.story

And…

The battle of the medical bills

By Daniel J. Costello, Lisa Girion and Michael A. Hiltzik
Third of three parts
October 23, 2008
“Insurers have found a very creative way of denying, delaying or slowing payments in a way that is having a real impact on patient care and some of our survival,” said Von Crockett, Centinela’s chief executive. “Every single doctor and hospital is writing off money they are legally owed but don’t collect. It’s an insane situation.”
In June, the American Medical Assn. released its first rating of insurers’ billing patterns. It found that United Healthcare paid physicians the contracted fee 62% of the time, Aetna paid 71% of the time and Medicare paid 98% of the time.
Dotti Smith, office manager for a group of surgeons affiliated with St. Mary’s Hospital in Long Beach, recently billed a major insurance company for a gallbladder operation. The insurer had preauthorized the surgery and the surgeon was a member of the insurer’s network of preferred physicians, Smith said. But the company refused to pay the $3,100 bill.
Why? The patient was enrolled in a subcategory of coverage with a smaller network of doctors that did not include the Long Beach surgeon.
http://www.latimes.com/business/la-fi-insure23-2008oct23,0,4914143,full.story

This important series of three articles published this week in the Los Angeles Times explains why the private insurance industry has neither the efficiency nor the moral authority to continue to manage our health care dollars. Each of the excerpts above provides an example of the management perversities of the industry, along with an example of the impact on a real-life patient. Much more can be found in the articles.
The private insurance industry has shifted from an amoral business model selling us administrative services to help manage our health care spending, to an immoral racketeering industry that is threatening the health and financial security of all of us.
We desperately need to reform health care financing in the United States, but not with a model that keeps these crooks in play.

By Lisa Girion and Michael A. Hiltzik
Los Angeles Times
First of three parts
October 21, 2008

The health insurance system has become increasingly expensive and inaccessible. It leaves patients responsible for bills they understood would be covered, squeezes doctors and hospitals, and tries to avoid even minuscule risks, such as providing coverage to a newborn with no serious illness.

At the heart of the problem is the clash between the cost of medical care and insurers’ need to turn a profit.

During her pregnancy, Jennifer Danylyshyn’s regular visits to her obstetrician were covered by her Blue Shield policy. So was the delivery of Ava on March 24. The couple expected that Ava would be covered as a matter of course.

When the company rejected the baby because of the hip misalignment, her parents appealed with the help of their pediatrician.

Blue Shield refused to budge.

http://www.latimes.com/business/la-fi-insure21-2008oct21,0,2292699,full.story

Health insurers reinvent themselves as money managers

By Michael A. Hiltzik
Second of three parts
October 22, 2008

WellPoint Inc., the nation’s largest health insurance company, ran into a snag last year while pursuing an important new business initiative.

Federal banking regulators insisted on classifying WellPoint as a healthcare company. And that was interfering with its efforts to open a bank.

The Federal Reserve Board eventually agreed that the company’s core insurance business could be considered financial services.

That a medical insurer would agree to keep a lid on healthcare expenditures so it could get approval to open a bank illustrates a fundamental change in the industry: Insurers are moving away from their traditional role of pooling health risks and are reinventing themselves as money managers — providers of financial vehicles through which consumers pay for their own healthcare.

Because he has high blood pressure, (Alex Kipper, an engineer who lost his employer-provided health insurance during the dot-com bust) found himself virtually uninsurable. Fearing that he could be financially wiped out in a medical emergency, he signed up for a bare-bones policy that provides no coverage until his medical expenses exceed $8,000 in a year.

His health plan’s concession to preventive care was a $25 discount on a physical. Once diagnostic tests were included, the fee for the checkup came to more than $300, Kipper said — which the health plan declined to pay.

He hasn’t returned to a doctor’s office in three years.

Although the policy costs only $200 a month, “nothing is covered, absolutely nothing,” Kipper said.

http://www.latimes.com/business/la-fi-insure22-2008oct22,0,3603421,full.story

And…

The battle of the medical bills

By Daniel J. Costello, Lisa Girion and Michael A. Hiltzik
Third of three parts
October 23, 2008

“Insurers have found a very creative way of denying, delaying or slowing payments in a way that is having a real impact on patient care and some of our survival,” said Von Crockett, Centinela’s chief executive. “Every single doctor and hospital is writing off money they are legally owed but don’t collect. It’s an insane situation.”

In June, the American Medical Assn. released its first rating of insurers’ billing patterns. It found that United Healthcare paid physicians the contracted fee 62% of the time, Aetna paid 71% of the time and Medicare paid 98% of the time.

Dotti Smith, office manager for a group of surgeons affiliated with St. Mary’s Hospital in Long Beach, recently billed a major insurance company for a gallbladder operation. The insurer had preauthorized the surgery and the surgeon was a member of the insurer’s network of preferred physicians, Smith said. But the company refused to pay the $3,100 bill.

Why? The patient was enrolled in a subcategory of coverage with a smaller network of doctors that did not include the Long Beach surgeon.

http://www.latimes.com/business/la-fi-insure23-2008oct23,0,4914143,full.story

Comment:

By Don McCanne, MD

This important series of three articles published this week in the Los Angeles Times explains why the private insurance industry has neither the efficiency nor the moral authority to continue to manage our health care dollars. Each of the excerpts above provides an example of the management perversities of the industry, along with an example of the impact on a real-life patient. Much more can be found in the articles.

The private insurance industry has shifted from an amoral business model selling us administrative services to help manage our health care spending, to an immoral racketeering industry that is threatening the health and financial security of all of us.

We desperately need to reform health care financing in the United States, but not with a model that keeps these crooks in play.

Uninsured Children and Adolescents With Insured Parents

By Jennifer E. DeVoe, MD, DPhil; Carrie Tillotson, MPH; Lorraine S. Wallace, PhD
JAMA
October 22/29, 2008
The association between coverage for parents and their children has been widely reported. When entire families have access to health insurance, children and adolescents not only benefit from more consistent insurance coverage but also have improved access to a regular source of care and higher rates of preventive services. If entire families cannot gain consistent coverage, it is most often their children who have insurance while the parents go uncovered, especially since the creation of the State Children’s Health Insurance Program (SCHIP). Less is known, however, about how commonly this pattern is reversed.
Although the weighted results of this survey indicated that the largest group of uninsured children and adolescents had uninsured parents, an estimated 27.9% of the uninsured children and adolescents had parents with health insurance. When weighted, these estimates represent 3 million children who had a coverage gap despite having at least 1 parent who had full-year coverage. More than a million of these children were without coverage for the entire year.
Evidence suggests that when family members are covered separately under different plans or when certain individuals have coverage and others do not, children’s health declines. Furthermore, if the assumption that insurance coverage is a “household good” is abandoned and the system shifts toward defining it as an “individual good,” we add layers of complexity for vulnerable families who must simultaneously learn different systems for enrollment and utilization of multiple insurance plans. Discordant patterns of family health insurance may become the norm rather than the exception; the current trend is certainly moving in that direction.
If families are better off covered under one plan but US society rejects a public health insurance program for all members of the family, the question of whether the employer-based model is sustainable may need to be revisited. In this study, the private system did not do a good job of providing coverage for entire families.
Incremental expansions in public insurance programs for children will continue to improve insurance rates in the short term. However, the longer-term solutions to keeping all children insured are likely to be more complicated. Unless health insurance coverage models are designed to keep entire families covered, some children will continue to get left behind.
http://jama.ama-assn.org/cgi/content/full/300/16/1904

It has long been recognized that one of the deficiencies of the children’s health insurance program (SCHIP) is that parents in these lower income families often remain uninsured. This study demonstrates that the reverse also occurs. Even though one or both parents may be insured, often through their employment, the children may be left without coverage, primarily due to eligibility and affordability issues.
This study also reinforces the principle that simply increasing the numbers of insured through patchwork programs is not an adequate goal. Our goal should be to ensure comprehensive, coordinated, continuous care for each individual and each family by establishing equitably-financed medical homes for everyone.
Stable, continuous, coordinated family care is almost impossible under the current system. Both employer-sponsored and individual private plans continue to change based on employment status, employer decisions on plans, variations in participation in provider networks, comprehensiveness of the benefits, employee ability to contribute to the premium, and other factors largely not under control of the individual. Public programs also have similar variations in networks and coverage, and, in addition, have changing eligibility requirements for enrollment sometimes related to legislative and administrative budget decisions.
Today almost no family has the same stable coverage for all family members from birth until the children leave the home (and for the parents after the children have left). Nor can they be assured that they will be able to continue their care with the same physicians, hospitals and other health care professionals.
The future looks bleak. Congressional leaders have promised to expand the SCHIP program, which will tend to perpetuate the instability and fragmentation of care. Then they will begin the effort to patch together the great multitude of private plans into some semblance of a social insurance program. They will fail miserably because the U.S. private plans, based on a business model, have no glue to hold them together. The private insurers will continue to fight to insure only the healthy – the eighty percent of people who use only twenty percent of health care – while selling us an excess of superfluous administrative services. They will dump on us most of the actual costs of health care – the eighty percent of health care spending – through taxes, cost shifting, or simply relying on our stretched-thin charity.
It is astounding that the policy community continues to pursue these fragmented, incremental reforms that pump up costs while leaving health care in a tattered, dysfunctional state. With a single payer national health program, at least the entire family would have affordable access to the professionals and hospitals of their choice. That would be a great start.