PNHP

Orszag and Emanuel do not seem to understand bundled payments

Orszag and Emanuel do not seem to understand bundled payments

Saving Money on Cardiac Care

By Peter R. Orszag
Bloomberg View, July 25, 2016

The federal government’s own actuaries are once again pessimistic that America’s health-care costs will continue their slow growth. Thankfully, their boss, Sylvia Burwell, the secretary of Health and Human Services, is working hard to prove them wrong.

A key driver of this Medicare spending deceleration has been the health-care market’s expectation that the payment system is shifting toward value-based payments — that is, paying doctors, hospitals and other providers based on how well they treat medical problems rather than on how many services they provide.

At this point, it’s crucial to fulfill the market’s expectations. If the system now fails to move quickly away from fee-for-service payments, many recent efficiency efforts are likely to be dropped.

A big question is how. The most promising, and practical, path forward is to set up a cascading array of “bundled payments” — that is, all-inclusive reimbursement for specific episodes of care.

The bundled payments must be mandatory, as is Medicare’s bundle for hip and knee surgery — itself an historic step. Making the shift voluntary for hospitals and doctors leads to watered-down incentives, in an attempt to encourage participation. And weak incentives lead to disappointing outcomes.

Which brings us to Secretary Burwell’s important announcement Monday. She is building on the hip and knee bundle, not only by expanding into other forms of orthopedics but, importantly, by introducing mandatory bundles in cardiac care.

Medicare will pay a set fee for coronary artery bypass grafts, a form of surgery that improves blood flow to the heart. The agency will also pay a set fee for the care involved in responding to a heart attack.

The Medicare actuaries may question whether these new bundles can save much money, but that’s not too surprising; they’ve been missing the boat on the changing dynamic in health-care payments for years.

The bundled payments illustrate how the system is changing for the good. Secretary Burwell has just made it vividly clear to everyone in health care that the days of paying for volume are ending.

http://www.bloomberg.com/view/articles/2016-07-25/saving-money-on-cardiac-care-ir2iwfit

***

Medicare doubles down on bundled payments

By Dan Diamond
Politico Pulse, July 26, 2016

With all eyes on the Democratic convention, CMS on Monday made a key move to secure the party’s signature health reform: It introduced its second bundled mandatory payment program, this one focused on cardiac care.

The bundled payment program is the latest big initiative in the Obamacare effort to bend the health cost curve. It’s also positioned to play a crucial role as the White House tries to tie 50 percent of Medicare payments to alternative care models by 2018. Liberal experts say they can’t get there with accountable care organizations and voluntary models alone, and that mandatory bundled payment programs are proven successes.

The decision to make both mandatory programs eligible as Advanced APMs under MACRA is intended to entice physicians to participate.

For veterans of the White House fight over Obamacare, Monday’s news felt like a valedictory. “Finally,” said Zeke Emanuel, who served as a White House aide and pushed for mandatory bundled payments to be included in the Affordable Care Act. (Cost controls like bundled payments were left out, in part, to minimize the law’s effect on the health care industry.) “I’m glad they drank my Kool-Aid.”

http://www.politico.com/tipsheets/politico-pulse#ixzz4FXIuha3F

***

Comment:

By Don McCanne, M.D.

The bureaucrats are fixated on the meme that we can reduce spending by paying for the value of health care rather than the volume. They have been disappointed with models such as accountable care organizations, and they are now turning to MACRA and its alternative payment models (APMs), with a renewed surge of interest in bundled payments.

The concept behind bundled payments is that, by assigning a single fee to a given intervention such as a joint replacement, you will motivate physicians to not spend money on portions of the care that are not really necessary. Medicare, as the payer, gets the advantage of a discounted price, and the physicians and hospitals get to keep whatever they save beyond the discount.

Does this really reduce volume? The joint replacement will be done regardless, so what volume will be reduced? Doing only a cursory pre-op exam, missing the ejection murmur and omitting the pre-op cardiac consult? Send a patient home earlier when it is possible that the post-op status might not be fully stabilized? Cut back on rehabilitation, risking a less favorable long term outcome? These might reduce volume, but they certain bring into question quality and thus value.

Now they want to pay a set bundled payment for a heart attack. The clinical course of a heart attack is highly variable and could involve only a few or a great many interventions. Under a bundled payment, the physicians and hospital are bearing the risk of the high costs of a potentially complicated, protracted course. Isn’t it the role of the insurer, in this case Medicare, to pool risk? Shifting that risk to the health care delivery system creates the potential for either a reduction in important beneficial health care services, or exposing the delivery system to potential monetary losses and the risk of insolvency – neither of which are desirable.

Perhaps an even more important issue is the fallacy that you can bundle most care and thus make strides in bending the cost curve. Think of the  current proposals to bundle coronary artery bypass grafts and to bundle care for a heart attack – one might work some of the time, but the other has outcomes that are too variable. Now think of other hospital admissions – such as workup of a protracted fever, diagnosis and management of an HIV positive patient who has symptoms of a potentially serious but undiagnosed complication, or perhaps a child with fatigue and weight loss. The costs and outcomes are highly variable. How can you bundle those? Or think of the multitude of patients presenting in a ten minute office visit with a set of complex clinical symptoms that would require extensive workups. How do you bundle those?

To get to the goal of fifty percent of Medicare payments being tied to APMs, you are going to have to figure how how to bundle the large numbers of common clinical presentations, like the sore throat that turns out to be due to acute leukemia, or the routine family planning visit in a patient who feels ill that day and turns out to have diabetic ketoacidosis, or the chronic headache patient who has a focal motor seizure in front of you during the visit. What would otherwise be routine medical visits are often not bundable but are better handled on a fee-for-service basis. That makes the point that most health care is provided in a relatively fixed volume. It is really difficult to reduce the volume for patients who actually need care, and that’s almost all patients. Besides, in most instances we really don’t know how to measure value and convert that into a fixed fee. Volume is relatively fixed, and value is what we all strive for anyway.

Peter Orzag and Ezekiel Emanuel don’t listen to others, not even the Medicare actuaries, but they should be able to figure out these obvious fundamentals. Since they haven’t, maybe it’s them who have been drinking Zeke’s Kool-Aid.

Since it’s really cost that they are concerned about we should move forward with reform that has been proven repeatedly to slow the rate of health care inflation – a single payer national health program. Peter and Zeke need to abandon their false meme that single payer is “not feasible.” What isn’t feasible is expecting to fix our dysfunctional health care financing system with “bundled payments.”

Why the Demand for ‘Medicare for All’ Won’t Go Away

And why these days of injustice must come to an end

By Claudia Fegan, M.D.
Common Dreams, July 26, 2016

As the chief medical officer of Chicago’s historic public hospital, I confront on a daily basis the reality of our country’s failure to provide universal access to health care: the steady flow of patients turned away from other hospitals because they are uninsured or have Medicaid, which pays too little; and the legion of insured patients who come to us too late because they couldn’t afford $50 co-payments or $3,500 deductibles.

That’s what drove me and thousands of other doctors to propose a sweeping single-payer, improved-Medicare-for-all reform in the June issue of the American Journal of Public Health. The reform we propose would cover all Americans for all needed care, eliminate premiums, co-payments and deductibles, and be paid for through taxes.

Why now? Didn’t we get to universal coverage with the Affordable Care Act? The simple answer is no.

A plan that leaves 29 million people uninsured – more people than live in Illinois, Iowa and Indiana combined – is not OK.

A plan that leaves 31 million more underinsured – with deductibles and co-payments they can’t afford – is not OK.

A plan that enriches insurers with hundreds of billions of taxpayers’ dollars – and empowers them to impose draconian restrictions on patients – is not OK.

We know single payer works. It works in Canada and many other nations, where health care costs are half the $10,500 per capita that we pay, and people live years longer than we do.

For what we’re now spending we could have Canada deluxe: a free choice of any doctor and any hospital, and no co-payments or deductibles, like they have; but without the waits for high-tech specialty care that some Canadians experience.

Single-payer reform would be painful for insurance companies and Big Pharma, but a simple tonic for patients and doctors.

Under the ACA, each year millions of patients must navigate a bureaucratic thicket of insurance exchanges that offer thousands of plans with opaque and varying coverage restrictions. Millions more – those with employer-based plans – face annual changes to their plans, usually resulting in greater patient cost sharing.

In contrast, enrollment in Medicare-for-all would be virtually automatic, and coverage complete. And patients would no longer face restrictive provider networks.

Single payer would free doctors from the paperwork burden imposed by insurers that saps our time and morale. Our Canadian colleagues spend only minutes each week dealing with billing and administrative hassles; we spend, on average, about 10 hours.

Doctors would no longer waste time getting prior approvals for care that’s obviously necessary, or find that patients can’t afford a vital medication because it’s in a drug tier that requires a monstrous co-payment.

Until this election season, during which we saw the release of deeply flawed, tendentious studies purporting to show that “Medicare for All” would be prohibitively expensive, virtually every serious analyst – the Congressional Budget Office, the Government Accountability Office, and a potpourri of private consultants – acknowledged that single-payer reform could provide universal, first-dollar coverage for about what we’re now spending, and save money in the longer term.

Eliminating the financial barriers to care would result in increased care. But the costs of that care would be fully offset by huge savings on bureaucracy and drugs.

Cutting out the insurance company middlemen would save hundreds of billions on their overhead and profits, and even more on the paperwork they impose on doctors and hospitals. And, as in Canada and Europe, a single public payer could use its buying clout to negotiate large discounts from drug makers.

The simple fact is we can afford universal, comprehensive coverage if we do it right.

I recognize that single payer faces stiff political headwinds, but political climates change. It helps that surveys show the majority of the public and physicians clearly feel its time has come.

My father, a labor union organizer and photographer, took the picture of Emmett Till’s body the night his mother requested the casket be opened so the public could see what they had done to her baby. That photo became an icon of the civil rights movement, part of the upsurge that began to change America.

Eight years from the day Emmett Till was lynched, my father stood behind Dr. King’s shoulder and photographed the massive crowd that stood before him on National Mall as he gave his “I Have a Dream” speech.

Within months, Congress passed the Civil Rights Act – soon to be followed by the Voting Rights Act, as well as Medicare and Medicaid.

Soon thereafter, Dr. King said: “Of all the forms of inequality, injustice in health is the most shocking and inhuman.”

I continue to witness that injustice every day. A single-payer reform would end it.

Claudia Fegan, M.D. is national coordinator of Physicians for a National Health Program and also president of the Chicago-based Health and Medicine Policy Research Group. She is a co-author of “Universal Healthcare: What the United States Can Learn from Canada and a contributor to 10 Excellent Reasons for National Health Care.”

http://commondreams.org/views/2016/07/26/why-demand-medicare-all-wont-go-away

Orszag and Emanuel do not seem to understand bundled payments

Saving Money on Cardiac Care

By Peter R. Orszag
Bloomberg View, July 25, 2016

The federal government’s own actuaries are once again pessimistic that America’s health-care costs will continue their slow growth. Thankfully, their boss, Sylvia Burwell, the secretary of Health and Human Services, is working hard to prove them wrong.

A key driver of this Medicare spending deceleration has been the health-care market’s expectation that the payment system is shifting toward value-based payments — that is, paying doctors, hospitals and other providers based on how well they treat medical problems rather than on how many services they provide.

At this point, it’s crucial to fulfill the market’s expectations. If the system now fails to move quickly away from fee-for-service payments, many recent efficiency efforts are likely to be dropped.

A big question is how. The most promising, and practical, path forward is to set up a cascading array of “bundled payments” — that is, all-inclusive reimbursement for specific episodes of care.

The bundled payments must be mandatory, as is Medicare’s bundle for hip and knee surgery — itself an historic step. Making the shift voluntary for hospitals and doctors leads to watered-down incentives, in an attempt to encourage participation. And weak incentives lead to disappointing outcomes.

Which brings us to Secretary Burwell’s important announcement Monday. She is building on the hip and knee bundle, not only by expanding into other forms of orthopedics but, importantly, by introducing mandatory bundles in cardiac care.

Medicare will pay a set fee for coronary artery bypass grafts, a form of surgery that improves blood flow to the heart. The agency will also pay a set fee for the care involved in responding to a heart attack.

The Medicare actuaries may question whether these new bundles can save much money, but that’s not too surprising; they’ve been missing the boat on the changing dynamic in health-care payments for years.

The bundled payments illustrate how the system is changing for the good. Secretary Burwell has just made it vividly clear to everyone in health care that the days of paying for volume are ending.

http://www.bloomberg.com/view/articles/2016-07-25/saving-money-on-cardiac-care-ir2iwfit

***

Medicare doubles down on bundled payments

By Dan Diamond
Politico Pulse, July 26, 2016

With all eyes on the Democratic convention, CMS on Monday made a key move to secure the party’s signature health reform: It introduced its second bundled mandatory payment program, this one focused on cardiac care.

The bundled payment program is the latest big initiative in the Obamacare effort to bend the health cost curve. It’s also positioned to play a crucial role as the White House tries to tie 50 percent of Medicare payments to alternative care models by 2018. Liberal experts say they can’t get there with accountable care organizations and voluntary models alone, and that mandatory bundled payment programs are proven successes.

The decision to make both mandatory programs eligible as Advanced APMs under MACRA is intended to entice physicians to participate.

For veterans of the White House fight over Obamacare, Monday’s news felt like a valedictory. “Finally,” said Zeke Emanuel, who served as a White House aide and pushed for mandatory bundled payments to be included in the Affordable Care Act. (Cost controls like bundled payments were left out, in part, to minimize the law’s effect on the health care industry.) “I’m glad they drank my Kool-Aid.”

http://www.politico.com/tipsheets/politico-pulse#ixzz4FXIuha3F

The bureaucrats are fixated on the meme that we can reduce spending by paying for the value of health care rather than the volume. They have been disappointed with models such as accountable care organizations, and they are now turning to MACRA and its alternative payment models (APMs), with a renewed surge of interest in bundled payments.

The concept behind bundled payments is that, by assigning a single fee to a given intervention such as a joint replacement, you will motivate physicians to not spend money on portions of the care that are not really necessary. Medicare, as the payer, gets the advantage of a discounted price, and the physicians and hospitals get to keep whatever they save beyond the discount.

Does this really reduce volume? The joint replacement will be done regardless, so what volume will be reduced? Doing only a cursory pre-op exam, missing the ejection murmur and omitting the pre-op cardiac consult? Send a patient home earlier when it is possible that the post-op status might not be fully stabilized? Cut back on rehabilitation, risking a less favorable long term outcome? These might reduce volume, but they certain bring into question quality and thus value.

Now they want to pay a set bundled payment for a heart attack. The clinical course of a heart attack is highly variable and could involve only a few or a great many interventions. Under a bundled payment, the physicians and hospital are bearing the risk of the high costs of a potentially complicated, protracted course. Isn’t it the role of the insurer, in this case Medicare, to pool risk? Shifting that risk to the health care delivery system creates the potential for either a reduction in important beneficial health care services, or exposing the delivery system to potential monetary losses and the risk of insolvency – neither of which are desirable.

Perhaps an even more important issue is the fallacy that you can bundle most care and thus make strides in bending the cost curve. Think of the  current proposals to bundle coronary artery bypass grafts and to bundle care for a heart attack – one might work some of the time, but the other has outcomes that are too variable. Now think of other hospital admissions – such as workup of a protracted fever, diagnosis and management of an HIV positive patient who has symptoms of a potentially serious but undiagnosed complication, or perhaps a child with fatigue and weight loss. The costs and outcomes are highly variable. How can you bundle those? Or think of the multitude of patients presenting in a ten minute office visit with a set of complex clinical symptoms that would require extensive workups. How do you bundle those?

To get to the goal of fifty percent of Medicare payments being tied to APMs, you are going to have to figure how how to bundle the large numbers of common clinical presentations, like the sore throat that turns out to be due to acute leukemia, or the routine family planning visit in a patient who feels ill that day and turns out to have diabetic ketoacidosis, or the chronic headache patient who has a focal motor seizure in front of you during the visit. What would otherwise be routine medical visits are often not bundable but are better handled on a fee-for-service basis. That makes the point that most health care is provided in a relatively fixed volume. It is really difficult to reduce the volume for patients who actually need care, and that’s almost all patients. Besides, in most instances we really don’t know how to measure value and convert that into a fixed fee. Volume is relatively fixed, and value is what we all strive for anyway.

Peter Orzag and Ezekiel Emanuel don’t listen to others, not even the Medicare actuaries, but they should be able to figure out these obvious fundamentals. Since they haven’t, maybe it’s them who have been drinking Zeke’s Kool-Aid.

Since it’s really cost that they are concerned about we should move forward with reform that has been proven repeatedly to slow the rate of health care inflation – a single payer national health program. Peter and Zeke need to abandon their false meme that single payer is “not feasible.” What isn’t feasible is expecting to fix our dysfunctional health care financing system with “bundled payments.”

If we really want fair and less expensive health care, it’s single payer

By Samuel Dickman, M.D., and Steffie Woolhandler, M.D., M.P.H.
The Salt Lake Tribune, July 23, 2016

Americans spend twice as much for health care as Europeans or Canadians. Although our cost growth slowed recently, it’s too soon to celebrate: The slowdown has made health care much less equal.

In a study in this month’s Health Affairs, we found that health spending for poor and middle class Americans has stayed virtually flat since 2004, while care for the wealthiest one-fifth of families skyrocketed. By 2012, the wealthy were seeing doctors 40 percent more often than others, and the dollar value of their care exceeded that of the poor by 43 percent. For the first time since the advent of Medicare and Medicaid, the rich — who are far healthier than others — are getting the most care.

What’s behind the troubling increase in health care inequality? For most Americans, copayments and deductibles are going up but incomes aren’t. In job-based plans, deductibles (what patients have to pay before insurance kicks in) now average $1,318. And after that, most people still face big copayments.

As a result, many working families skip care, and those who can’t often find themselves submerged in medical debt.

Overdue medical bills now account for most debts sent to collection agencies, and crowdfunding sites like GoFundMe feature thousands of pleas from families struggling to pay medical bills.

The poor face even greater obstacles. Nineteen states — Utah included — have refused Obamacare’s Medicaid expansion, even though the federal government would pick up almost all of the costs. And even when states expand Medicaid, complex eligibility rules and enrollment procedures keep many needy families out, and many doctors won’t accept Medicaid. Having an insurance card doesn’t mean much if you can’t get into a doctor’s office. Of course, matters are even worse for the 29 million uninsured Americans.

The millions of Americans hit with catastrophic medical bills aren’t just falling through the cracks. They’re being punished by design: The system we’ve built cuts costs by making it more expensive to go to the doctor. Policy leaders have pushed big copayments and deductibles as the right cost-control strategy. But that strategy favors the rich; a $1,318 deductible hits low-wage workers hard, but is barely noticeable for a CEO.

Other countries use more equitable and effective cost control methods. Canada’s single payer, Medicare-for-all system provides universal, first dollar coverage, and has kept costs low and quality high. It saves vast amounts by cutting out private insurance middlemen and the paperwork they inflict on doctors and hospitals and by bargaining to drive down drug prices. These measures could save Americans more than $500 billion annually, enough to cover the 29 million who remain uninsured and eliminate copayments and deductibles for everyone.

In 21st century America, wealth trumps health in determining who gets care. Single payer reform would reverse that inhumane calculus.

Samuel Dickman, M.D., is a native of Salt Lake City and is now a medical intern at San Francisco General Hospital. Steffie Woolhandler, M.D., MPH, is a professor of health policy at the City University of New York.

http://www.sltrib.com/opinion/4138198-155/op-ed-if-we-really-want-fair

Drug firms gouge taxpayers by gaming Part D catastrophic coverage

Pricey Drugs Overwhelm Medicare Safeguard

By Ricardo Alonso-Zaldivar
Associated Press, July 25, 2016

A safeguard for Medicare beneficiaries has become a way for drugmakers to get paid billions of dollars for pricey medications at taxpayer expense, government numbers show.

The cost of Medicare’s “catastrophic” prescription coverage jumped by 85 percent in three years, from $27.7 billion in 2013 to $51.3 billion in 2015, according to the program’s number-crunching Office of the Actuary.

Medicare’s catastrophic coverage was originally designed to protect seniors with multiple chronic conditions from the cumulatively high costs of taking many different pills. Beneficiaries pay 5 percent after they have spent $4,850 of their own money. With some drugs now costing more than $1,000 per pill, that threshold can be crossed quickly.

Lawmakers who created Part D in 2003 also hoped added protection would entice insurers to participate in the program. Medicare pays 80 percent of the cost of drugs above a catastrophic threshold that combines spending by the beneficiary and the insurer. That means taxpayers, not insurers, bear the exposure for the most expensive patients.

Concerns about catastrophic costs undercut the image of Medicare’s prescription program as a competitive marketplace in which private insurers bargain with drugmakers to drive down prices.

“The incentive is to price it as high as they can,” said Jim Yocum, senior vice president of Connecture, Inc., a company that tracks drug prices. Medicare is barred from negotiating prices, “so you max out your pricing and most of that risk is covered by the federal government.”

http://finance.yahoo.com/news/ap-exclusive-medicare-safeguard-overwhelmed-115221318.html

***

Comment:

By Don McCanne, M.D.

When the Medicare Part D program covering drugs was designed, conservatives were in control of the government. As a result it was decided that the ideology of competition in the marketplace should be used to improve value rather than using government administered pricing. Today’s message demonstrates once again that markets do not work in health care.

Congress knew that they would have to protect the private insurers from adverse selection – that patients with multiple chronic conditions could place an extra burden on the insurers with whom they enrolled. Thus they established catastrophic coverage with the government (taxpayers) paying 80 percent of the costs over a given threshold. This was not to protect the patients, but rather it was to protect the insurers. That is, it was not to protect the taxpayers who finance much of the program, but rather it was to protect the participants in the marketplace – the drug manufacturers, insurers, and pharmacy benefit managers – using our taxpayer funds.

Under the catastrophic coverage, insurers pay 15 percent, patients pay 5 percent, and the taxpayers pay 80 percent. This allows the drug companies to drive their prices sky high. The 15 percent paid by the insurers is closer to the reasonable price of drugs and so they have less incentive to negotiate better prices, since most of it is being paid by the government anyway. The 5 percent paid by the patient is accepted as a necessary “skin in the game” contribution so patients will not fill prescriptions that they allegedly “do not really need” (a flawed policy concept). The 80 percent paid by taxpayers perpetuates the highly dysfunctional, fragmented financing system in the U.S. – using government money for private solutions – that has driven our health care spending up to levels much higher than all other nations.

The magic of the marketplace in health care is a fraud. Taxpayers pay far less for drugs purchased by the government for Medicaid and the VA system. Other nations with greater government oversight of their health care systems also pay much less.

With a well designed single payer national health program, our nation’s pharmacy bill would be fair, and everyone would get the drugs they need. With the price of many drugs now exceeding median household income, you would think there would be a demand to fix our health care financing system. You would think so, but where’s the action?

Medicare-style system needed for Americans

By Richard Master
The Morning Call (Allentown, Pa.), Letters, July 19, 2016

Reflecting on the story, “New peak for U.S. health care spending,” that annual U.S. health care cost has surpassed $10,000 per person: That’s an astounding figure that should wake up readers, that our health care system is eating the rest of the U.S. economy alive. Clearly, other countries of the industrialized world deal with health care more effectively.

Vince Mondillo of Easton and I researched and produced “Fix It … Healthcare at the Tipping Point,” a documentary at fixithealthcare.com that describes our administratively complex and costly system. Unfortunately, the Affordable Care Act was a compromise measure that expanded coverage to more citizens but further entrenched commercial insurance companies’ costly practices.

“Fix It” presents the business case, the economic case, for a Medicare-for-all system. Single-payer reform has worked to provide superb care to all citizens in many countries of the industrialized world. It’s not a government takeover but tax-financed, privately delivered health care.

We Americans are unfortunately stuck in the Dark Ages, trying to put a shine on an archaic, complex expensive health care system that works for special business interests (Big Pharma, insurance companies, massive hospital networks and, yes, the media through advertising revenues) but doesn’t work for our society.

Richard Master is CEO of MCS Industries Inc., Palmer Township, and executive producer of “Fix It … Healthcare at the Tipping Point.” He resides in Bethlehem.

http://www.mcall.com/opinion/letters/mc-health-care-spending-master-20160719-story.html

Drug firms gouge taxpayers by gaming Part D catastrophic coverage

Pricey Drugs Overwhelm Medicare Safeguard

By Ricardo Alonso-Zaldivar
Associated Press, July 25, 2016

A safeguard for Medicare beneficiaries has become a way for drugmakers to get paid billions of dollars for pricey medications at taxpayer expense, government numbers show.

The cost of Medicare’s “catastrophic” prescription coverage jumped by 85 percent in three years, from $27.7 billion in 2013 to $51.3 billion in 2015, according to the program’s number-crunching Office of the Actuary.

Medicare’s catastrophic coverage was originally designed to protect seniors with multiple chronic conditions from the cumulatively high costs of taking many different pills. Beneficiaries pay 5 percent after they have spent $4,850 of their own money. With some drugs now costing more than $1,000 per pill, that threshold can be crossed quickly.

Lawmakers who created Part D in 2003 also hoped added protection would entice insurers to participate in the program. Medicare pays 80 percent of the cost of drugs above a catastrophic threshold that combines spending by the beneficiary and the insurer. That means taxpayers, not insurers, bear the exposure for the most expensive patients.

Concerns about catastrophic costs undercut the image of Medicare’s prescription program as a competitive marketplace in which private insurers bargain with drugmakers to drive down prices.

“The incentive is to price it as high as they can,” said Jim Yocum, senior vice president of Connecture, Inc., a company that tracks drug prices. Medicare is barred from negotiating prices, “so you max out your pricing and most of that risk is covered by the federal government.”

http://finance.yahoo.com/news/ap-exclusive-medicare-safeguard-overwhelmed-115221318.html

When the Medicare Part D program covering drugs was designed, conservatives were in control of the government. As a result it was decided that the ideology of competition in the marketplace should be used to improve value rather than using government administered pricing. Today’s message demonstrates once again that markets do not work in health care.

Congress knew that they would have to protect the private insurers from adverse selection – that patients with multiple chronic conditions could place an extra burden on the insurers with whom they enrolled. Thus they established catastrophic coverage with the government (taxpayers) paying 80 percent of the costs over a given threshold. This was not to protect the patients, but rather it was to protect the insurers. That is, it was not to protect the taxpayers who finance much of the program, but rather it was to protect the participants in the marketplace – the drug manufacturers, insurers, and pharmacy benefit managers – using our taxpayer funds.

Under the catastrophic coverage, insurers pay 15 percent, patients pay 5 percent, and the taxpayers pay 80 percent. This allows the drug companies to drive their prices sky high. The 15 percent paid by the insurers is closer to the reasonable price of drugs and so they have less incentive to negotiate better prices, since most of it is being paid by the government anyway. The 5 percent paid by the patient is accepted as a necessary “skin in the game” contribution so patients will not fill prescriptions that they allegedly “do not really need” (a flawed policy concept). The 80 percent paid by taxpayers perpetuates the highly dysfunctional, fragmented financing system in the U.S. – using government money for private solutions – that has driven our health care spending up to levels much higher than all other nations.

The magic of the marketplace in health care is a fraud. Taxpayers pay far less for drugs purchased by the government for Medicaid and the VA system. Other nations with greater government oversight of their health care systems also pay much less.

With a well designed single payer national health program, our nation’s pharmacy bill would be fair, and everyone would get the drugs they need. With the price of many drugs now exceeding median household income, you would think there would be a demand to fix our health care financing system. You would think so, but where’s the action?

Medicare for all is the way to go

By Bob Balhiser
Helena (Mont.) Independent Record, Letters, July 24, 2016

This letter is in response to Matt Rosendale’s opinion piece whose title asks the question: “Is your health care better now?”

Mine is still good, Matt – I have Medicare! And, I think all Americans should have Medicare. Done right, Medicare for all would provide a net savings of nearly $1 trillion annually by eliminating private health insurance parasites that cause all sorts of added time, effort and expense for doctors, hospitals, clinics and pharmacies, not to mention the HUGE overheads these companies carry.

Below are daily compensation figures for health insurance CEOs in 2013: overhead costs that Medicare is not burdened with.

Aetna – $90,029
WellPoint (now Anthem) – $49,853
Centene – $42,560
Cigna – $39,589
United Health – $35,484

Remember, Matt, these are daily compensation figures. Can you justify what they could possibly do to actually earn that money? Their job is to minimize losses. Do you know what insurance companies call losses? Losses are “claims” that insurers often try to avoid paying because claims cut into their profit margins. Think private health insurers are doing us a favor, Matt? Think again!

Bob Balhiser resides in Helena.

http://helenair.com/news/opinion/readers_alley/medicare-for-all-is-the-way-to-go/article_8a305a26-9c47-5efa-b15b-8bd589fddaee.html

Medical Economics: Obamacare receives a big, fat ‘F’ from physicians

By Joanna Haugen, Jordan Rosenfeld
Medical Economics, July 25, 2016

The Affordable Care Act (ACA) has been a lightning rod for criticism from various healthcare stakeholders, including physicians, since the law’s passage six years ago.

With the upcoming presidential election likely to alter the landscape of “Obamacare”—from simple tweaks by Democrats to outright attempted repeal by Republicans—Medical Economics asked healthcare policy experts and our readers to debate the law’s effect on U.S. physicians.

Our editorial staff, with the assistance of our physician advisers, selected eight provisions and consequences (both intentional and unintentional) stemming from the law.  Policy analysts provided their thoughts on how Obamacare has shaped the last six years. Then we  asked physicians from our editorial advisory board, our 200-member Reader Reactor Panel (comprised of physician readers nationwide who help direct our content), and our e-newsletter subscribers to grade the various elements based on their own experiences.  Each physician ranked each element in terms of how it assisted their day-to-day work as physicians on a score from 0 (not at all) to 10 (extremely helpful). The average of all respondents was used to derive the letter grade. Physicians also offered short justifications for their ranking.

Medicare bonus for primary care physicians
Grade: 33 = F

Medicaid-Medicare parity
Grade: 34 = F

Increased coverage through healthcare insurance exchanges
Grade: 35 = F

Narrow networks
Grade: 29 = F

Accountable care organizations
Grade: 29 = F

Outcomes-based reimbursement
Grade: 28 = F

Physician ratings via the Physician Compare website
Grade: 26 = F

Expansion of health IT
Grade: 31 = F

http://medicaleconomics.modernmedicine.com/medical-economics/news/obamacare-receives-big-fat-f-physicians

***

Comment:

By Don McCanne, M.D.

Celebrations of the success of the Affordable Care Act have to be tempered by the knowledge that it leaves too many uninsured, that health care is still not affordable for far too many, and that the benefits of tighter insurance regulation were largely offset by the insurance design changes of excessive cost sharing and restrictive narrow networks. One other goal was to improve payment systems so that patients would receive greater quality at lower costs. So what do physicians think about the implementation and effectiveness of the design changes in the payment system?

In this survey, physicians gave a grade of F to all eight of the design features evaluated. In trying to improve payment systems, the legislators and bureaucrats have certainly botched things up. Not only have they failed to achieve any improvement, they have made things worse. Not only that, they have compounded physician burnout, now affecting over half of all physicians. Having an unhappy physician negatively impacts patient care.

Much blame can be attributed to the focus of the policy community and the MBAs that guide them. Medicine is about taking care of patients, but the policy community approaches it as a business that can be improved by incentives.

Would a single payer system fix this? It would provide a more equitable, efficient and effective financing system, but it would still be subject the whims of legislators and bureaucrats who do not seem to appreciate the sanctity of the physician-patient relationship. Once we have in place a national single payer system, our work is not done.

Why Black Lives Matter Ought to Matter to Medical Students: A Familiar Message Revisited

By Suhas Gondi
in-Training, July 18, 2016

“Of all the forms of inequality, injustice in health care is the most shocking and inhumane.”

– attributed to Martin Luther King, Jr.

[PNHP note: The “Letter to our Patients on Racism” cited in the last paragraph of this article has been signed by more than 3,000 physicians and medical students as of July 19.]

In December of 2014, one week after the non-indictment in the case of Michael Brown, in-Training published an article entitled “A Lack of Care: Why Medical Students Should Focus on Ferguson.” In it, Jennifer Tsai argued that the systemic racism rampant in our law enforcement and criminal justice systems also permeates our health care system, affecting both access to care for black patients and the quality of care black patients receive. Lamenting that the medical community was largely absent from the Ferguson controversy, she cited startling statistics of disparities in health and health care as part of her call to action. In light of the events last week in Louisiana, Minnesota, and Texas, it’s time to revisit this message.

The deaths of Alton Sterling and Philando Castile re-galvanized the Black Lives Matter movement, which began in Ferguson and has since spread to every corner of this country. Besides spurring impassioned advocacy, they serve as a reminder to us all of the systemic racism is still ingrained in our society. The seemingly innate biases so many of us carry have not eroded — they still abound in our daily lives and the world around us.

These events should also serve as a reminder to every physician, medical student and premedical student of the ways in which our health care system is subject to those biases. While the white coat has come to represent the profession’s humanity and morality, the evidence decisively shows it is not impermeable to prejudice.

The published literature supporting the existence of racial disparities in health care is vast. The seminal report on the subject was published in 2002 by the Institute of Medicine (IOM), which found that a large body of research highlighted the presence of real disparities. It concluded that even after controlling for insurance status, income, age and severity of conditions, minorities receive a different level of care than white patients. They were less likely to be prescribed appropriate cardiac medications, undergo bypass surgery or receive kidney dialysis and more likely to undergo “less-desirable procedures” such as a lower limb amputation due to complications from diabetes.

Since 2002, when the IOM report brought widespread attention to such disparities, researchers have published hundreds of studies that shed more light on the differences in the way black and white patients are cared for by their doctors. One analysis published two months ago examined nationwide trends for racial disparities in cardiac interventions after a heart attack before and after the 2002 IOM report, finding that disparities persisted well after the report. Some of these disparities have been well-studied and widely cited. Black patients face a two-thirds higher risk than white patients of not receiving an analgesic (a pain medication) when in the ER for a long-bone fracture, even after controlling for confounding variables. Minorities are also less likely than white patients to be prescribed opioid medications for a comparable set of symptoms. This disparity is most significant with conditions that have less objective findings, like a migraine. When patient assessment and test results do not point to a conclusive diagnosis, the effect of inherent biases on clinical decision-making is greater.

The federal government has also published its own studies on the topic. The 2015 National Healthcare Quality and Disparities Report reported that black patients received worse care than whites for about 40 percent of quality measures, a statistic almost identical to the 2011 report, the first annual publication. Even in special populations, such as senior citizens over the age of 65, with similar health problems and the same insurer, racial disparities persist. Black Medicare beneficiaries are, on aggregate, less likely to receive recommended care than white ones.

These differences, along with variation in the social determinants of health across race, contribute to the serious health inequities observed between blacks and whites. While the gap in life expectancy has narrowed over the past several decades, a white baby born today can still expect to live, on average, four years longer than her black counterpart. Although disparities in health outcomes such as longevity are largely the product of structural factors, it is difficult to believe that the lower quality of care delivered to blacks versus whites does not play any role in explaining these gaps.

Clearly, the medical community has a stake in the national conversation around systemic racism and police brutality re-launched by the deaths of Sterling and Castile. The evidence overwhelmingly suggests that physicians are just as vulnerable to the inherent biases that affect police officers. The biases that are blamed for higher arrest rates among blacks for crimes that whites commit more often are the same biases that lead to black patients receiving timely and aggressive intervention far less often than white patients in a cardiovascular emergency. These are distinct symptoms of a single underlying cause. The assumptions that cause well-intended police officers to stop-and-frisk blacks five times as frequently as whites are also harbored by physicians. These ingrained stereotypes are not profession-specific. They are universal.

The tragic deaths of five police officers in Dallas last week points to another parallel with the medical establishment. The tension between police officers and the communities they protect is mirrored by a tension between physicians and the patient populations they care for. The skepticism of black patients toward the medical community, especially in the area of clinical research, is well-documented. A Johns Hopkins study reported that a full quarter of black patients, 10 percent more than whites, believe that their physician would ask them to participate in a study even though the study might harm them. 6 percent more blacks than whites felt their physician would willingly expose them to unnecessary risk. Most striking, almost 60 percent of black participants, well over twice the proportion of whites, thought that physicians use medications to experiment on people without the patient’s consent. Evidently, doctors and police officers share the challenge of serving populations that sometimes put little faith in them and their professional authority.

Just as the distrust that many black men have for police is rooted in America’s history of racial profiling, the lack of trust towards physicians has been shaped by a long history of exploitation and experimentation on black bodies. The Tuskegee syphilis trial, which began in the early 1930s and lasted forty years, is perhaps the most infamous example. Government researchers deceived black patients suffering from syphilis into believing they were receiving treatment when, in fact, they were being observed to gain insight into the natural course of the disease. The legacy of Tuskegee is still reflected in the widespread mistrust that undermines doctor-patient relationships across the country.

In a national town hall this week, President Obama spoke on how trust between a community and its police officers is critical for police departments to do their job of serving and protecting. Distrust leads to bad outcomes, often in the form of unwanted violence. The same is true in medicine, except bad outcomes mean poor health. Evidence shows that high levels of distrust of their physicians among black patients contributes to health disparities by causing reduced utilization of preventive services, relative to whites. These services include routine checkups and preventive screening (e.g. mammograms), the most cost-effective and valuable health care services in promoting and preserving health. Distrust also discourages blacks from participating in clinical trials, which hinders the research of therapies targeted at African Americans and intensifies disparities in the quality of health care. Even in the absence of any true discrimination, perceived discrimination, perhaps based on statistics showing differences in how blacks and whites are treated, is associated with poorer health.

Physicians whose priorities are their patients’ health ought to pay attention to disparities in care, the mistrust those disparities breed and the poor health outcomes that are observed as a result. This pernicious cycle begins with subjective biases and often causes objective harm to black patients, perpetuating disparities in care and health.

Black Lives Matter is highlighting and combating the biases that are at the root of unequal policing practices. A medical community that is often impartial to issues outside its purview might find it easy to ignore such a movement. But that would be a grave mistake.

We cannot achieve equity in health care without achieving equity in policing. Both are symptoms that can only be addressed if we treat the underlying cause. We must acknowledge and combat our collective biases in all facets of life to truly cure the disease. Just as the problem is not health care-specific, nor is the solution. We must strive broadly for social justice, not only in the clinic but also in our communities, our neighborhoods and our police departments.

Closing racial disparities is a societal endeavor, and engaging with Black Lives Matter is a step towards that common goal for police officers and physicians alike. If we join the activism all around us and if we stand with this movement for social justice, we can begin to tackle the implicit prejudices that result in a black man getting Tylenol when he needs an analgesic and that result in the fatal shooting of that same man in the absence of any crime. We can begin to heal the underlying problem.

Everyone has a part to play. Physicians can do the challenging work of looking closely at their own patterns of prescribing and treating, searching for biases that are often imperceptible at an individual level but contribute to collective disparities. Medical students and residents can critically reflect on the education they are receiving, if it is imbuing them with stereotypes and ensure they are honing the skills to combat systemic racism. Premedical students, like myself, ought to enter our training understanding the issues at hand and being aware of the unconscious prejudices we, our peers and our mentors hold. It is difficult for us to be critical of the medical guild into which we are working so hard to gain entry, but we are the future of the profession and a necessary part of any solution.

It is natural to feel helpless in the face of the startling statistics of health care disparities and the horrific events of last week. However, there is reason to hope. Over the last few years, the medical community has shown signs of change. Nationwide medical student die-ins in protest of police brutality were a beginning, giving rise to national organizations such as WhiteCoats4BlackLives that consistently advocate for a more equitable future. Doctors for America has taken on racial disparities. Medical leaders, such as New York City’s health commissioner, have joined in the call to action, insisting that the medical community ought “not sit on the sidelines.” Medical education, too, is changing. The American Association of Medical Colleges has spearheaded efforts to incorporate diversity, inclusion and cultural competency as a core value of our nation’s medical schools. Even at the premedical level, the new MCAT encourages studying sociology and explicitly tests knowledge of the disparities in health and health care in an effort to reduce these disparities in the long run.

Perhaps most promising is the recent “Letter to Our Patients on Racism” which has been signed by over 2,600 physicians and medical students. Its authors acknowledge that “historically, physicians as a group have not yet taken adequate responsibility for confronting racism, in our work or outside of it.” They make five commitments: 1) to support Black Lives Matter, 2) to dismantling the structural racism embedded in our healthcare system, 3) to learn how to provide trauma-informed care, and to teach this approach to our students, trainees, and fellow providers, 4) to healing communities ravaged by discriminatory criminal justice practices through engaging public health systems and 5) to using our power as constituents and leaders to insist that every major medical society and association develop a policy on racial justice. These are difficult promises to fulfill, and they require that every one of us do our part.

Suhas Gondi is a pre-medical student at Washington University in St. Louis (Class of 2017). He is pursuing a Bachelor’s degree in Biology with a Neuroscience focus alongside minors in Economics and Healthcare Management. In addition to becoming a physician, he is interested in the systemic problems in American health care (e.g. cost, access, quality) and how we can use innovation and policy initiatives to solve them. A local of the Washington, D.C. metropolitan area, he hopes to pursue leadership in public service at the intersection of government and health care.

http://in-training.org/black-lives-matters-matter-medical-students-familiar-message-revisited-11747

Medical Economics: Obamacare receives a big, fat ‘F’ from physicians

By Joanna Haugen, Jordan Rosenfeld
Medical Economics, July 25, 2016

The Affordable Care Act (ACA) has been a lightning rod for criticism from various healthcare stakeholders, including physicians, since the law’s passage six years ago.

With the upcoming presidential election likely to alter the landscape of “Obamacare”—from simple tweaks by Democrats to outright attempted repeal by Republicans—Medical Economics asked healthcare policy experts and our readers to debate the law’s effect on U.S. physicians.

Our editorial staff, with the assistance of our physician advisers, selected eight provisions and consequences (both intentional and unintentional) stemming from the law.  Policy analysts provided their thoughts on how Obamacare has shaped the last six years. Then we  asked physicians from our editorial advisory board, our 200-member Reader Reactor Panel (comprised of physician readers nationwide who help direct our content), and our e-newsletter subscribers to grade the various elements based on their own experiences.  Each physician ranked each element in terms of how it assisted their day-to-day work as physicians on a score from 0 (not at all) to 10 (extremely helpful). The average of all respondents was used to derive the letter grade. Physicians also offered short justifications for their ranking.

Medicare bonus for primary care physicians
Grade: 33 = F

Medicaid-Medicare parity
Grade: 34 = F

Increased coverage through healthcare insurance exchanges
Grade: 35 = F

Narrow networks
Grade: 29 = F

Accountable care organizations
Grade: 29 = F

Outcomes-based reimbursement
Grade: 28 = F

Physician ratings via the Physician Compare website
Grade: 26 = F

Expansion of health IT
Grade: 31 = F

http://medicaleconomics.modernmedicine.com/medical-economics/news/obamacare-receives-big-fat-f-physicians

Celebrations of the success of the Affordable Care Act have to be tempered by the knowledge that it leaves too many uninsured, that health care is still not affordable for far too many, and that the benefits of tighter insurance regulation were largely offset by the insurance design changes of excessive cost sharing and restrictive narrow networks. One other goal was to improve payment systems so that patients would receive greater quality at lower costs. So what do physicians think about the implementation and effectiveness of the design changes in the payment system?

In this survey, physicians gave a grade of F to all eight of the design features evaluated. In trying to improve payment systems, the legislators and bureaucrats have certainly botched things up. Not only have they failed to achieve any improvement, they have made things worse. Not only that, they have compounded physician burnout, now affecting over half of all physicians. Having an unhappy physician negatively impacts patient care.

Much blame can be attributed to the focus of the policy community and the MBAs that guide them. Medicine is about taking care of patients, but the policy community approaches it as a business that can be improved by incentives.

Would a single payer system fix this? It would provide a more equitable, efficient and effective financing system, but it would still be subject the whims of legislators and bureaucrats who do not seem to appreciate the sanctity of the physician-patient relationship. Once we have in place a national single payer system, our work is not done.

The adequacy of insurance coverage is under threat

Obamacare’s Other Success, Under Threat

By Editorial Board
Bloomberg View, July 20, 2016

Obamacare has made great strides toward its signature goal: to reduce the number of Americans without health insurance. Unfortunately, another important goal — ensuring that everyone’s insurance policy provides adequate coverage — remains under siege in the courts and Congress.

Before the Affordable Care Act, private health insurers were free to exclude coverage for all sorts of care.

Moreover, if anyone’s medical expenses grew too high, insurers could cut them off. A serious or complicated illness or injury could leave people essentially uninsured.

Obamacare changed things by establishing 10 categories of benefits that most insurance plans must cover — including hospitalization, prescription drugs, laboratory services and mental health care — and prohibiting annual or lifetime limits on those benefits.

This month, however, a federal appeals court ruled that people can buy plans with far more limited coverage. Yet those who buy such plans risk being surprised twice — first when they’re saddled with the tax penalty for not carrying adequate insurance, and then when they need care and find their coverage doesn’t go as far as they thought.

Republicans in Congress have likewise targeted Obamacare’s minimum coverage requirements, arguing that consumers, not the government, should determine what services they want insurers to provide.

http://www.bloomberg.com/view/articles/2016-07-20/obamacare-s-other-success-under-threat

***

Comment:

By Don McCanne, M.D.

The majority of Americans believe that everyone should have the health care that they need when they need it, and that we need a financing system that will pay for it. Others believe that they should take care of their own health care needs and not be required to pay into a risk pool that covers the health care of others. So should the health insurance system provide comprehensive coverage for all, or should it allow individuals to purchase coverage for only those benefits they perceive they might need?

“As a man, why should I have to pay for maternity benefits I’ll never use?” “As a woman, why should I have to pay for treatment of prostate cancer – a disease that I’ll never have?” “I take good care of myself; why should I have to pay for care of disorders of others due to their smoking, illicit drug use, reckless driving, sexual promiscuity or whatever?” “I’m healthy so why can’t I wait until I will likely need health care instead of wasting money on insurance now?”

“I want to take care of myself by buying only the insurance I need now, and everyone else can buy whatever they feel they need.” But what about that unexpected disorder that racks up medical bills of $350,000? “Well, I didn’t mean that. Nobody can pay those bills, so the government should pay it instead.”

So we’re divided between “we’re all in this together” and “I’ll take care of myself, and you’re on your own.” But medical care doesn’t work that way. The twenty percent of people who use eighty percent of health care are reliant on pooled funds to pay for their health care. Most of the eighty percent who are relatively healthy will someday shift into the high health care needs group and likewise also be dependent on pooled funds.

Although the Affordable Care Act was a step forward in pooling health care risk, there is a campaign to move us in the other direction. An effort to shut down inadequate plans was reversed by the Supreme Court, even though those plans will unfairly shift costs to others when they do not adequately cover expensive diseases and injuries. Also many politicians want to ensure that people will be able to “buy only the insurance they need” through gimmicks such as private insurance exchanges offering the choice of low benefit plans, purchases out of state to avoid regulatory oversight of insurers, reliance on health savings accounts — usually underfunded, etc.

As a group, those individuals who want to take care of themselves include many individuals who will have high medical expenses. Whatever way they set funds aside – spartan insurance plans, health savings accounts, personal savings – collectively they will not have enough funds set aside to pay for the expensive care some members of their group will need. Besides, they have fragmented much of their funds such that only a limited amount would be available for others, largely through catastrophic plans that have intolerably high deductibles. Whereas those of us who support universal pooling of risk would cover our costs equitably, those who are on their own will dump costs onto the rest of us through taxes we pay for public programs or through higher medical bills due to shifting to us the costs of care provided to those who do not pay their bills.

When people sign up for Medicare, they do not ask for only the Medicare that they need. They expect that they will get essentially the same Medicare that everyone else has (though some may receive similar benefits through the private Medicare Advantage plans). It should be that way not for just Medicare beneficiaries, but for everyone. We should improve Medicare and then make it universal. That will satisfy the majority of us who believe that we are all in this together, and for those who want to be on their own, they will accept the benefits of a Medicare for all program just as they now accept Medicare in their retirement years. Also, they will have paid in their equitable share, based on ability, just like the rest of us.