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Important: Uwe Reinhardt on health care price transparency and economic theory

Important: Uwe Reinhardt on health care price transparency and economic theory

Health Care Price Transparency and Economic Theory

By Uwe E. Reinhardt, PhD
JAMA, October 22/29, 2014

Citizens in most economically developed nations have health insurance coverage that results in only modest cost sharing at the time health care is used. Furthermore, physicians, hospitals, and other clinicians and entities that provide health care within most systems outside the United States are paid on common fee schedules uniformly applied to all clinicians, health care organizations, and insurers. That approach spares the insured the need to seek out lower-priced health care and obviates the need for transparency on the prices charged by individual clinicians and organizations that provide health care.

Not so in the United States, where every private health insurer negotiates prices with every health care practitioner and organization, where large public health insurance systems such as Medicaid and Medicare pay fees that do not cover the full cost of treating patients covered by these programs, and where uninsured, self-paying patients can often be asked to pay whatever can be extracted from their household budgets, sometimes with the help of debt collectors and the judiciary. Economists call the approach price discrimination, which means the identical service is sold to different buyers are different prices.

This approach to pricing health care has led in the United States to a system in which, at one end of the spectrum, hospitals and physicians are expected by society to treat low-income patients free of charge, on a charitable basis, or for modest fees that do not cover the cost of those treatments and then to finance that informal catastrophic health insurance system for the poor out of the other part of their enterprises that they can operate as profit-maximizing business firms. This is true even in some of the large segment of institutions referred to as not-for-profit. The harsh excesses that this quest for profits in health care can unleash—even among not-for-profit hospitals—have been well reported in various articles in the popular press.

Private employers in the United States have played a pivotal role in the evolution of this system. They hired as their agents in health care the private insurers who helped put that system into place, and they supported it. To gain better control over the growth of their health spending, employers have of recent resorted to a technique long recommended to them by the market devotees among health economists, namely, putting the patient’s “skin in the game,” as the jargon goes. It is done with health insurance policies imposing on the insured very high annual deductibles before insurance coverage even begins, followed by significant coinsurance, perhaps requiring patients to pay 10% to 20% of every medical bill, up to a maximum total annual out-of-pocket expenditure that can potentially exceed $10 000 for a family.

This approach of shifting more of the cost of employment-based health insurance visibly and directly into the household budgets of employees amounts to rationing parts of US health care by price and ability to pay and delegates the bulk of the hoped-for belt-tightening to low-income families. Because the word rationing is anathema in the US debate on health policy, the strategy has been marketed instead under the felicitous label of consumer-directed health care, presumably designed to empower consumers in the health care market to take control of their own health care. However, this strategy, based mainly on economic theory, so far has put the cart before the horse.

In virtually all other areas of commerce, consumers know the price and much about the quality of what they intend to buy ahead of the purchase. This information makes comparison shopping relatively easy and is the sine qua non of properly functioning markets. By contrast, consumer-directed health care so far has led the newly minted consumers of US health care (formerly patients) blindfolded into the bewildering US health care marketplace, without accurate information on the prices likely to be charged by competing organizations or individuals that provide health care or on the quality of these services. Consequently, the much ballyhooed consumer-directed health care strategy so far has been more a cruel hoax than a smart and ethically defensible health policy.

http://jama.jamanetwork.com/article.aspx?articleid=1917413

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Association Between Availability of Health Service Prices and Payments for These Services

By Christopher Whaley, BA; Jennifer Schneider Chafen, MD, MS; Sophie Pinkard, MBA; Gabriella Kellerman, MD; Dena Bravata, MD, MS; Robert Kocher, MD; Neeraj Sood, PhD
JAMA, October 22/29, 2014

Conclusions

Use of price transparency information was associated with lower total claims payments for common medical services. The magnitude of the difference was largest for advanced imaging services and smallest for clinician office visits.

http://jama.jamanetwork.com/article.aspx?articleid=1917438

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Comment:

By Don McCanne, MD

In a JAMA editorial commenting on an article about price transparency and health care spending, Uwe Reinhardt first describes the ridiculous system we currently have, concluding, “the much ballyhooed consumer-directed health care strategy so far has been more a cruel hoax than a smart and ethically defensible health policy.”

He then discusses the article by Christopher Whaley and his colleagues in which they describe price savings resulting from health care price shopping: an average of a mere $1.18 for clinician office visits, $3.45 for laboratory tests, and a more impressive average savings of $124.74 for advanced imaging services.

Imaging aside, think about that one dollar saved by shopping office visit prices. Does that one dollar really pay for the labor involved in price shopping, much less the additional transportation costs and other inconveniences of going to a different doctor, not to mention the disruption in care provided by a primary care medical home? Not exactly a shopper’s paradise.

Even the more significant savings in advanced imaging can have drawbacks if it results in non-coordinated care outside of a system functioning as an integrated unit, whether or not it is technically a single integrated health care entity.

But what is really important here lies in Uwe Reinhardt’s comments. As he states, “other clinicians and entities that provide health care within most systems outside the United States are paid on common fee schedules uniformly applied to all clinicians, health care organizations, and insurers. That approach spares the insured the need to seek out lower-priced health care and obviates the need for transparency on the prices charged by individual clinicians and organizations that provide health care.”

Other nations pay the right amount to sustain he system, without the waste of overpaying some nor the threat of inequitable access caused by underpaying others. No matter how much price transparency we have in the United States, our highly dysfunctional, fragmented system of financing health care will never get pricing right.

Yes, we need a single payer national health program. Under such a system the pricing would be transparent to our public administrators, and who better could determine whether or not the price is right? We surely can’t.

Pharmacy benefit managers moving to narrow networks?

CVS Smoke-Free Pharmacy Benefit Excludes Tobacco-Selling Rivals

By Bruce Japsen
Forbes, October 20, 2014

CVS Health (CVS) confirmed its Caremark pharmacy benefit management subsidiary would sell a smoke-free drugstore network to employers and health plans that would provide subscriber discounts for using “tobacco-free” pharmacies.

The move, which would benefit CVS Health pharmacies given the company’s decision to stop selling tobacco, could at the same time hurt rivals like Walgreens, Wal-Mart and others because a health plan subscriber that would use pharmacies outside the Caremark smoke-free network would pay higher co-payments and related cost-sharing.

CVS Health is able to exact some control on customer choices of prescription purchases through its Caremark pharmacy benefit management (PBM) subsidiary, which has contracts with CVS pharmacies as well as myriad other drugstore chains and independent pharmacies.

“Following our announcement that we would no longer be selling tobacco at CVS/pharmacy, a number of our pharmacy benefit management clients approached us about developing a tobacco-free pharmacy network,” Carolyn Castel, vice president of corporate communications at CVS Health said in an e-mailed statement to Forbes.

“As a result, CVS Health is in the process of identifying pharmacies that do not sell tobacco products to participate in such a new offering. We look forward to making this new pharmacy network available to our clients who choose this offering and providing their plan members with an option to select a tobacco-free environment for their prescription fulfillment needs.”

The Wall Street Journal’s Pharmalot blog reported CVS Health’s Caremark PBM would require a co-pay of “up to $15,” but CVS Health wouldn’t confirm any specifics on a cost-sharing structure.

It’s believed to be a first, according to health benefits analysts who see CVS Health’s move as a narrow network strategy, which is becoming more common from insurance companies and pharmacy benefit managers.

Insurers and benefit managers can better control costs by limiting plan subscriber choices to a smaller group of medical-care providers. By limiting choices, insurers say they can better focus on quality of medical care that is delivered to plan customers.

http://www.forbes.com/sites/brucejapsen/2014/10/20/cvs-smoke-free-pharmacy-network-would-exclude-tobacco-selling-rivals/

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Comment:

By Don McCanne, MD

Last month CVS announced, with considerable fanfare, that it would discontinue sales of tobacco products at its drugstores – a move that would cost it $2 billion in annual sales. After a month-long publicity campaign touting its altruistic action in support of a healthier America, we learn of the not-so-noble purpose of their decision.

They are claiming that in response to this move, numerous pharmacy benefit manager (PBM) clients approached them to request that they develop “a tobacco-free pharmacy network.” Sure they did. One month ago, they announced the end of tobacco sales one, but making that announcement one month ahead of their intended schedule. By splitting the announcements, they a get a twofer: favorable publicity for ending tobacco sales, and then publicity for a new PBM program that would allow them to “focus on quality of medical care” by selling drugs in a tobacco-free environment (as if there were a difference in identical pills sold in their tobacco-free stores versus the stores of their competitors that still carried tobacco products).

They are clearly being dishonest when that say that this concept arose only as an afterthought when their PBM clients suggested that it would be a good idea to segregate tobacco-free chains in their PBM plans. Obviously this was a carefully thought out marketing plan. Tobacco-free was a ruse. Their obvious deception in their releases should make us question the integrity of their entire organization.

So what are they really doing? Two of the most important moves in health insurance products have been to shift more costs to the consumers (whom we call patients) and to establish narrow networks that are anti-competitive, benefiting the insurer financially. CVS now owns one of the nation’s largest PBMs: Caremark.

What they are doing is to establish a narrow network of tobacco-free pharmacies (primarily CVS) which will be dominated by CVS’s own Caremark PBM. If the customers (patients) obtain their prescriptions outside of their narrow network, they will be required to pay larger out-of-pocket costs. Wow! With their own PBM they are introducing the health insurer innovations of higher patient cost-sharing and narrow networks. We’re screwed again!

How would it be under single payer? We would have a national formulary that included all appropriate medications. Pharmaceuticals would be priced properly through bulk purchasing and other forms of administered pricing, and they would be paid for through equitable public financing. There would be no crooks controlling the gates that would otherwise impair access to the medications that we need.

Not a threat to Medicare

By Ellen Oxfeld
Rutland (Vt.) Herald, Letters, Oct. 21, 2014

Recent letters have expressed the fear that a Vermont-based single-payer system would be a threat to Medicare. This is simply untrue and here is why. The law which set Vermont on the path to single payer specifies on its very first page that Green Mountain Care will cover all Vermonters “regardless of income, assets, health status, or availability of other health coverage.” Also, federal law does not allow for any state to take away Medicare or change Medicare benefits for seniors.

This provides an answer to the queries about Medicare. People on Medicare, or retirees, can keep their coverage. Nothing in Vermont’s law changes how people sign up for Medicare or what benefits seniors would receive. However, Green Mountain Care will be there for them as well, because it will cover all Vermonters regardless of any other coverage they have.

Rather than Green Mountain Care, Vermont’s future single-payer plan, being a threat to Medicare, it will actually ensure that all Vermonters have the same kind of protection that seniors have with Medicare.

Ellen Oxfeld resides in Middlebury.

http://www.rutlandherald.com/article/20141021/OPINION02/710219988

Covered California demonstrates the administrative complexity in renewing exchange plans

California spends $13.4 million to fix Obamacare service woes

By Chad Terhune
Los Angeles Times, October 17, 2014

California’s health insurance exchange hired two outside firms for $13.4 million to address long wait times for consumers calling about their Obamacare coverage.

“We had call response times that were far too long,” said Peter Lee, the exchange’s executive director. “We were swamped.”

Lee said the exchange is nearly doubling its service-center staff to 1,300 to help more than 1 million Californians renew their health-law policies by Jan. 1. The first batch of renewal notices for 2015 went out this week.

Covered California said more than 200,000 people have signed up for Obamacare coverage since regular enrollment ended in April under the Affordable Care Act.

But in a sign of the churn in the individual insurance market, an additional 150,000 people dropped out of the exchange after getting health benefits at work or failing to pay their premium.

People who move, lose their employer coverage or have some other qualifying event in their life can enroll outside the normal sign-up period.

Overall, Covered California said it has 1.1 million people enrolled now, down from its previous tally of 1.2 million.

Part of that was because the exchange said 81% of enrollees paid their initial premium compared with its earlier estimate of 85%.

http://www.latimes.com/business/healthcare/la-fi-obamacare-california-enrollment-20141016-story.html

Comment:

By Don McCanne, M.D.

When the Affordable Care Act (ACA) was being crafted, it was almost as if the designers thought that they were developing a relatively static system. They would simply cover the lowest-income individuals with Medicaid, make available subsidized private plans for moderately-low-income individuals, and then use individual and employer mandates, under threat of penalty, to force the rest of the uninsured into private plans. Although a limited amount of churning in and out of various plans and programs was expected, what they did not seem to understand was how unstable these categories actually are. The churning is massive.

California’s health insurance exchange – Covered California – provides an example of only one part of the churning – that within the exchanges. Just look at some of the numbers:

*  The 1.2 million enrolled in Covered California dropped to 1.1 million, though the instability is much more than the 100,000 difference

*  After open enrollment ended, 200,000 more enrolled in the several months following, allowable only because they had some qualifying event that changed their eligibility status

*  Only 81 percent of enrollees paid their initial premium, so the other 19 percent were dropped

*  150,000 dropped out of the exchange for reasons such as gaining health benefits at work, or failing to pay the premium for the exchange plans

*  1,300 Covered California staff members are required to help about 1 million Californians renew their coverage

Although this amount of churning did not seem to be expected by the designers of ACA, it was thought that at least those remaining in the exchanges would have stable coverage – a static situation for them. No, not really. Because of the variable bids of the private insurers, the benchmark plan – the second lowest cost silver plan – is changing for many exchange participants. Since most premiums are going up, not down, the change in the benchmark plans will change the portion  of the premium for which most of the exchange enrollees will be responsible. To keep their share of the premium lower, many will have to change plans. That means that they will have to shop not only the premiums but also shop the amount of the deductibles, and, as if that weren’t enough, they will have to shop the provider network lists which have been notorious for their inaccuracies, if you can even find a list. Even if the provider lists were accurate, they too are not a static as these lists continue to change as well, with providers moving onto and off of the lists.

If nothing changes, enrollees can accept automatic renewal. That means that nothing could have happened that would change eligibility – no change in employment, income, residence, family size, etc. Also it means that the insurer must be offering the same plan, and yet we know that plan designs change frequently. Nevertheless, everyone enrolled through the exchange plans should enquire as to their options for next year if for no other reason than that the benchmark plan will likely have changed, changing the amount of the premium they will have to pay. Some patients may be dismayed that shopping for premiums may cause them to lose their established health care providers.

There are about 1.7 million Californians who are eligible for coverage but who remain uninsured. This does not count the undocumented. For both logistical and administrative reasons, this will be a more difficult group to insure. Combine this with the fact that perhaps 1 million people already enrolled in Covered California will have to revisit their options means that the task will inevitably necessitate extensive administrative services.

And next year? This static system is not so static after all. And remember that here we are discussing only the administrative hassles of the exchanges. This does not count all of the hassles with Medicaid, employer-sponsored plans, private plans purchased outside of the exchanges, and the administrative nightmare of determining which of the uninsured must pay penalties, how much they must pay, and how the penalties are to be collected when they are linked to income tax refunds.

Suppose we had a single payer national health program. This annual renewal, with all of the administrative costs, hassle, and especially the grief, disappears. Why is nobody in power seriously considering an improved Medicare for all?

Unable to Meet the Deductible or the Doctor

By Abby Goodnough and Robert Pear
The New York Times, Oct. 17, 2014

Patricia Wanderlich got insurance through the Affordable Care Act this year, and with good reason: She suffered a brain hemorrhage in 2011, spending weeks in a hospital intensive care unit, and has a second, smaller aneurysm that needs monitoring.

But her new plan has a $6,000 annual deductible, meaning that Ms. Wanderlich, who works part time at a landscaping company outside Chicago, has to pay for most of her medical services up to that amount. She is skipping this year’s brain scan and hoping for the best.

“To spend thousands of dollars just making sure it hasn’t grown?” said Ms. Wanderlich, 61. “I don’t have that money.”

About 7.3 million Americans are enrolled in private coverage through the Affordable Care Act marketplaces, and more than 80 percent qualified for federal subsidies to help with the cost of their monthly premiums. But many are still on the hook for deductibles that can top $5,000 for individuals and $10,000 for families — the trade-off, insurers say, for keeping premiums for the marketplace plans relatively low. The result is that some people — no firm data exists on how many — say they hesitate to use their new insurance because of the high out-of-pocket costs.

Insurers must cover certain preventive services, like immunizations, cholesterol checks and screening for breast and colon cancer, at no cost to the consumer if the provider is in their network. But for other services and items, like prescription drugs, marketplace customers often have to meet their deductible before insurance starts to help.

While high-deductible plans cover most of the costs of severe illnesses and lengthy hospital stays, protecting against catastrophic debt, those plans may compel people to forgo routine care that could prevent bigger, longer-term health issues, according to experts and research.

“They will cause some people to not get care they should get,” Katherine Hempstead, who directs research on health insurance coverage at the Robert Wood Johnson Foundation, said of high-deductible marketplace plans. “Unfortunately, the people who are attracted to the lower premiums tend to be the ones who are going to have the most trouble coming up with all the cost-sharing if in fact they want to use their health insurance.”

Deductibles for the most popular health plans sold through the new marketplaces are higher than those commonly found in employer-sponsored health plans, according to Margaret A. Nowak, the research director of Breakaway Policy Strategies, a health care consulting company. A survey by the Kaiser Family Foundation found that the average deductible for individual coverage in employer-sponsored plans was $1,217 this year.

In comparison, the average deductible for a bronze plan on the exchange — the least expensive coverage — was $5,081 for an individual and $10,386 for a family, according to HealthPocket, a consulting firm. Silver plans, which were the most popular option this year, had average deductibles of $2,907 for an individual and $6,078 for a family.

Jon R. Gabel, a health economist at NORC, a research organization affiliated with the University of Chicago, said that employer-sponsored plans had lower deductibles, in part, because they provided more generous coverage than the most popular exchange plans. The typical employer-sponsored health plan would qualify as a gold-level policy under the standards of the Affordable Care Act, Mr. Gabel said.

The website for the federal insurance marketplace serving 36 states, HealthCare.gov, strongly encourages consumers to focus on premiums: When consumers search for a plan online, the results are ranked by premium price, with plans offering the lowest premiums listed first.

But insurance plans with lower premiums generally have higher deductibles. Gina Brown, 37, of Nashville, was paying about $155 a month for a Blue Cross Blue Shield of Tennessee plan, after taking account of her subsidy. But her deductible was $4,000, she said, and so she avoided going to the doctor even when she got an ear infection over the summer.

“I attempted to treat it with over-the-counter and homeopathic meds,” she said. “Eventually it went away.”

Ms. Brown recently got a job with health benefits, so she canceled the marketplace plan. Her new insurance has a deductible of $1,000, but primary care visits and prescriptions are not subject to the deductible.

“Now that I know I can go and safely just pay a co-pay,” she said, “it makes me feel better.”

Mark Yuschak, 57, of Jackson, N.J., said he had a silver plan with an annual deductible of $3,000. He discovered its limits in March.

“My wife had an incident, a digestive disorder, and we had to go to the emergency room of a hospital in Freehold, N.J.,” Mr. Yuschak said. “We presented our insurance card and filled out all the forms. They told us, ‘You don’t have a co-payment, you’re free to go.’ ”

Later, though, they received a bill “that could choke a horse,” Mr. Yuschak said — for more than $1,000. “Our insurance wouldn’t cover any of it because we had not met our deductible.”

Carol Payne, a respiratory therapist in Gilbert, Ariz., signed up through HealthCare.gov for a Blue Cross Blue Shield plan with a $6,000 deductible. She pays $91 toward her monthly premium and gets a subsidy of $353 to cover the rest.

The plans she could have chosen with lower deductibles were from insurers that “were not as reputable,” Ms. Payne said. She has used the insurance for preventive care and an emergency room visit after a car accident.

“I’m just doing what I can to keep myself healthy,” she added. “I mean, $6,000 — do they think I’ve just got that under my mattress?”

People with low incomes may qualify for subsidies that reduce their deductibles, co-payments and other out-of-pocket costs. The assistance is available to people with incomes from 100 percent to 250 percent of the poverty level (from $23,550 to $58,875 for a family of four), but only if they choose a silver plan.

Consumers also benefit from a provision of the Affordable Care Act that limits out-of-pocket costs, which include deductibles. The limit this year is $6,350 for an individual and $12,700 for a family plan. But in general, the limits apply only to care provided by doctors and hospitals in a plan’s network and do not cap charges for out-of-network care.

Dr. Rebecca Love, of Moab, Utah, is well on her way to passing that limit. Dr. Love, 63, who has degenerative arthritis and a host of other health problems, pays $422 a month in premiums for a plan that has a deductible of $6,000. But she has already paid more than $6,000 in medical costs this year that did not count toward her deductible because the doctors and hospitals — more than 100 miles away in Grand Junction, Colo. — were not in her network.

To see certain specialists in her network, Dr. Love said, she would have had to travel to Salt Lake City, which is much farther away and requires driving through a treacherous mountain pass.

“Medical care costs too much and health insurance as it stands doesn’t address this,” she said. “What have we become?”

Ms. Wanderlich, who had suffered the brain hemorrhage, was even avoiding preventive care until last month, when she had to get a prescription renewed and her doctor’s office required her to be seen first. Grudgingly, she went for an annual physical exam on Sept. 12. She was relieved to learn that she owed only $30 for the visit; the provider billed her insurer more than $1,200.

When the next open enrollment period begins on Nov. 15, Ms. Wanderlich said, she will probably switch to a plan with a narrower network of doctors and a smaller deductible. It will probably mean losing her specialists, she said, but at this point she is resigned.

“A $6,000 deductible — that’s just staggering,” she said. “I never thought I’d say this, but how many minutes until I get Medicare?”

A version of this article appears in print on October 18, 2014, on page A1 of the New York edition with the headline: Unable to Meet the Deductible or the Doctor.

http://www.nytimes.com/2014/10/18/us/unable-to-meet-the-deductible-or-the-doctor.html?_r=0

Americans still need a national health plan for everyone

An expanded Medicare program would save enough money in reduced bureaucracy to cover every uninsured American

By Johnathon Ross, M.D.
The Blade (Toledo, Ohio), Oct. 19, 2014

America’s 57 highest-paid health insurance executives collected a total of $300 million in salary and bonuses last year. The complex medical insurance market and the profit motive make private insurers a bad bargain.

Doctors and hospitals waste enormous sums on insurance paperwork and bureaucracy. More competition generates more administrative expenses, as well as astronomical salaries for insurance CEOs.

These money-changers thrive by chasing money to pay for care, not by delivering it. Meanwhile, nearly 2,000 Americans go bankrupt every day because of medical crises and debt, even though most were insured against illness or injury.

Republican governors in 21 states — not including Ohio and Michigan — still refuse to expand their states’ Medicaid programs under the federal Affordable Care Act. Medicaid covers the poorest of uninsured Americans, including the working poor. As many as 17,000 unnecessary deaths are likely to occur each year because of these governors’ political failure, a new Harvard University study estimates.

Yet even if the ACA were fully implemented, 31 million Americans would remain uninsured. In this wealthy country, with the best doctors, nurses, and hospitals in the world, we allow tens of thousands of people to die every year from lack of health insurance coverage.

As a primary care physician in Toledo, I can tell you this human toll is real. I see patients who are at grave risk, but cannot afford blood pressure or diabetes medicine. I see them die after the heart attack or stroke they would not have had if they had been able to afford care.

Individual market forces, such as high co-payments or medical savings accounts, will not lower health-care costs because the most expensive services are the least negotiable. Can a patient with a ruptured appendix, who is on morphine, haggle over fees?

Health care is a human need that should be available to every American. A national health insurance program — an expanded Medicare program for all Americans — would save enough money in reduced paperwork and bureaucracy to cover every uninsured American and improve coverage for all of us.

It would eliminate the high co-payments and deductibles of the present system. It would allow each of us to choose our own doctor and hospital, not force us to pick from a narrow provider network that profits an insurance company.

The Affordable Care Act includes provisions for experimentation. Any new approach cannot cost more than the ACA, and must cover just as many people with equivalent or better benefits. For nearly 50 years, Medicare has done that for tens of millions of uninsured elderly and disabled Americans.

Powerful, monied interests would oppose Medicare expansion. The same ideologues who would deny medical coverage to the poorest of the poor, and who lied to us about “death panels,” would call this the biggest tax increase in history.

They will not mention that improved, expanded Medicare would also lead to an even larger decrease in premiums, co-pays, and deductibles. About 95 percent of Americans would pay less for care than they do now.

Critics will say that the government cannot do anything as well as the private sector, but Medicare works where private insurance does not. It is just too complex and costly to administer 300 million individual policies, with different co-pays, deductibles, and coverage networks. What we have now costs too much and will never cover everyone.

This is a political fight as well as a moral one. We must insist that our elected officials understand that our lives are literally at stake, and that we will defend ourselves from their negligence.

Improved and expanded Medicare for all will save lives and money. It is the right thing to do. Being uninsured is worse than being at war. Americans will have to fight politically to end this travesty.

Johnathon Ross, M.D., of Toledo is past president of Physicians for a National Health Program.

http://www.toledoblade.com/Opinion/2014/10/19/Americans-still-need-a-national-health-plan-for-everyone.html

Top Doc Says Ebola Shows Skewed Priorities

By Amitabh Pal
The Progressive, Oct. 17, 2014

The Ebola crisis has revealed severe deficiencies in how the American health care system works, experts say.

Dr. Walter Tsou, past president of the American Public Health Association and the former health commissioner for Philadelphia, says that the Ebola crisis shows the skewed priorities of the U.S. health care system.

“Our chronic disease-oriented health care system is ill-equipped to address an acute infectious disease outbreak,” Dr. Tsou, a board adviser to Physicians for a National Health Program, tells The Progressive. “We don’t have enough biocontainment units, sufficiently trained experts on how to control for highly infectious disease agents, trained sanitation crews who can clean up and properly handle waste disposal.”

Tsou says that the Ebola epidemic has uncovered big flaws in the global health system, too.

“We have known about Ebola since 1976 and yet we still have no vaccine or treatment,” he points out. “The fact that we are now scrambling to find some type of vaccine and  treatment only speaks to the paucity of research that we have invested in the developing world. In the cruel economics of the pharmaceutical industry, unless the drugs promise a significant return on investment, they are unwilling to invest in it essentially condemning most of the developing world.”

The Ebola crisis has also made apparent the impact of drastic health budget cuts. Bloomberg News reports that there’s been a nearly one-fifth reduction in public health employees at the state and local levels in just the last six years, with 60,000 fewer people employed than in 2008. This manifests itself in many ways.

“There are fewer people to deploy to take care of education, training, public service messages, and other information,” Johns Hopkins Professor Albert Wu tells Bloomberg. “Ebola is not the first and is not the last challenge to our public health system.”

Dr. Tsou says that the lack of sufficient resources is not confined to the United States.

“The World Health Organization is a shadow of what it should be and is unable to mount a ‘boots on the ground surveillance, mitigation and quarantine program,” he says. “The United Nations has called for the world to donate $1 billion to confront the Ebola crisis, but we only have $100,000 in the bank so far.”

National Nurses United Executive Director RoseAnn DeMoro has commended the recent appointment of an Ebola czar, but has asked the Obama Administration to go further.

“What we need is a real czar to assure public safety, not a communicator, and the power to cut the hospitals’ Medicare and Medicaid funding if they still refuse to adhere to those standards and leave their patients, nurses and other caregivers at extreme risk,” she states in a press release.

For Dr. Tsou, one key public policy measure is necessary to combat such public health emergencies.

“All residents, including immigrants regardless of legal or financial status, should be able to access the health care system to be diagnosed and treated,” he says. “Our health care system already excludes over 42 million who are uninsured and erroneously denies insurance to millions of immigrants, many who are the most likely to bring Ebola into the country. A single payer system, open to all, offers the best mechanism to ensure early detection of illnesses.”

– See more at: http://www.progressive.org/news/2014/10/187889/top-doc-says-ebola-shows-skewed-priorities#sthash.HWi8BPmb.dpuf

Ebola didn’t have to kill Thomas Eric Duncan, nephew says

By Josephus Weeks
The Dallas Morning News, Oct. 14, 2014

On Friday, Sept. 25, 2014, my uncle Thomas Eric Duncan went to Texas Health Presbyterian Hospital Dallas. He had a high fever and stomach pains. He told the nurse he had recently been in Liberia. But he was a man of color with no health insurance and no means to pay for treatment, so within hours he was released with some antibiotics and Tylenol.

Two days later, he returned to the hospital in an ambulance. Two days after that, he was finally diagnosed with Ebola. Eight days later, he died alone in a hospital room.

Now, Dallas suffers. Our country is concerned. Greatly. About the lack of answers and transparency coming from a hospital whose ignorance, incompetence and indecency has yet to be explained. I write this on behalf of my family because we want to set the record straight about what happened and ensure that Thomas Eric did not die in vain. So, here’s the truth about my uncle and his battle with Ebola.

Thomas Eric Duncan was cautious. Among the most offensive errors in the media during my uncle’s illness are the accusations that he knew he was exposed to Ebola — that is just not true. Eric lived in a careful manner, as he understood the dangers of living in Liberia amid this outbreak. He limited guests in his home, he did not share drinking cups or eating utensils.

And while the stories of my uncle helping a pregnant woman with Ebola are courageous, Thomas Eric personally told me that never happened. Like hundreds of thousands of West Africans, carefully avoiding Ebola was part of my uncle’s daily life.

And I can tell you with 100 percent certainty: Thomas Eric would have never knowingly exposed anyone to this illness.

Thomas Eric Duncan was a victim of a broken system. The biggest unanswered question about my uncle’s death is why the hospital would send home a patient with a 103-degree fever and stomach pains who had recently been in Liberia — and he told them he had just returned from Liberia explicitly due to the Ebola threat.

Some speculate that this was a failure of the internal communications systems. Others have speculated that antibiotics and Tylenol are the standard protocol for a patient without insurance.

The hospital is not talking. Until then, we are all left to wonder. What we do know is that their error affects all of society. Their bad judgment or misjudgment sent my uncle back into the community for days with a highly contagious case of Ebola. And now, officials suspect that a breach of protocol by the hospital is responsible for a new Ebola case, and that all health care workers who care for my uncle could potentially be exposed.

Their error set the wheels in motion for my uncle’s death and additional Ebola cases, and their ignorance, incompetence or indecency has created a national security threat for our country.

Thomas Eric Duncan could have been saved. Finally, what is most difficult for us — Thomas Eric’s mother, children and those closest to him — to accept is the fact that our loved one could have been saved. From his botched release from the emergency room to his delayed testing and delayed treatment and the denial of experimental drugs that have been available to every other case of Ebola treated in the U.S., the hospital invited death every step of the way.

When my uncle was first admitted, the hospital told us that an Ebola test would take three to seven days. Miraculously, the deputy who was feared to have Ebola just last week was tested and had results within 24 hours.

The fact is, nine days passed between my uncle’s first ER visit and the day the hospital asked our consent to give him an experimental drug — but despite the hospital’s request they were never able to access these drugs for my uncle. (Editor’s note: Hospital officials have said they started giving Duncan the drug Brincidofovir on October 4.) He died alone. His only medication was a saline drip.

For our family, the most humiliating part of this ordeal was the treatment we received from the hospital. For the 10 days he was in the hospital, they not only refused to help us communicate with Thomas Eric, but they also acted as an impediment. The day Thomas Eric died, we learned about it from the news media, not his doctors.

Our nation will never mourn the loss of my uncle, who was in this country for the first time to visit his son, as my family has. But our nation and our family can agree that what happened at Texas Health Presbyterian Hospital Dallas must never happen to another family.

In time, we may learn why my uncle’s initial visit to the hospital was met with such incompetence and insensitivity. Until that day comes, our family will fight for transparency, accountability and answers, for my uncle and for the safety of the country we love.

Josephus Weeks, a U.S. Army and Iraq War veteran who lives in North Carolina, wrote this piece exclusively for The Dallas Morning News. Reach him at josephusweeks@yahoo.com.

http://www.dallasnews.com/opinion/latest-columns/20141014-josephus-weeks-ebola-didnt-have-to-kill-my-uncle.ece

Complexity of the 90 day grace period for paying exchange plan premiums

The Ninety-Day Grace Period

Health Affairs, Health Policy Briefs, October 16, 2014

To help enrollees new to the system keep their insurance, the ACA provides a ninety-day grace period before an insurer can discontinue someone’s coverage for failure to pay a monthly premium. This applies only to those who have received an advance premium tax credit to purchase health insurance through the Marketplaces and have previously paid at least one month’s full premium in that benefit year.

The grace period allows for continuity of care for patients by preventing people from shifting or “churning” in and out of coverage when they fail to make a monthly premium payment.

In final regulations, CMS said issuers must pay all appropriate claims for medical services rendered to the enrollee during the first month of the grace period, and the insurer may put on hold claims for services rendered to the enrollee in the second and third months. Issuers must also notify HHS of such nonpayment and notify providers of the possibility for denied claims when an enrollee is in the second and third months of the grace period.

During these second and third months of the grace period, because the patient is still insured, he or she cannot be billed by the provider for any remainder that is owed for medical services that the enrollee received. But if an enrollee fails to pay his or her premiums and the entire grace period elapses, providers are allowed to seek payment for the medical services they gave to that patient and for which the insurance company did not reimburse claims.

Patient assistance programs: Some providers have expressed interest in providing premium and cost-sharing assistance for their patients enrolled in coverage through the Marketplaces. By helping their patients maintain coverage and avoid the grace period in the first place, providers hope to reduce the risk that medical claims for care they provide will go unpaid.

However, questions continue to swirl about the legality of such an approach. Although federal anti-kickback regulations might seem to prohibit this type of practice, HHS has stated that such regulations do not apply to the Marketplaces, their plans, and premium tax credits because they are not considered “federal health care programs.”

The ACA’s uniform grace period could prove to play an important role in keeping people enrolled in their plans. But big questions remain unanswered about the financial risks to which physician practices or hospitals could be exposed, as well as how much risk insurers face for claims in the grace period and how that might affect premium growth for all enrollees over time.

http://www.healthaffairs.org/healthpolicybriefs/brief.php?brief_id=128

Comment:

By Don McCanne, M.D.

The Affordable Care Act provides a 90 day grace period during which health care coverage through exchange plans is continued before insurers can cancel the plans for non-payment of premiums. However, the insurers must pay claims for only the first 30 days, whereas providers are not allow to collect from the patient during the remaining 60 days. After 90 days of nonpayment of premiums, the patient can be retroactively billed, though collection can be difficult since most of these patients do not have enough funds to pay their premiums, much less their health care bills.

If you read the full Health Policy Brief, you will see that the issues are even more complex. The 90 day rule is yet one more unnecessary administrative burden that ACA added to our already highly complex system of financing health care. Under a single payer system there would be no such thing as a 90 day grace period. Financing of the health care system would be as automatic as it is now with Medicare.

US Hospitals Lead Global Pack on Costly Paperwork

By Steffie Woolhandler and David Himmelstein
Common Dreams, Oct. 16, 2014

In some countries, bereaved families get condolence cards and flowers. In ours, the survivors are also deluged with hospital bills and insurance paperwork.

That paperwork isn’t merely an insult. It costs our society a fortune. Take hospitals, for instance. According to research we recently published in Health Affairs, U.S. hospitals spent $215 billion in 2011 on billing and administration, a striking 1.43 percent of GDP.

Put another way, about $1 of every $4 of U.S. hospital spending goes to bureaucracy rather than patient care.

Other countries manage modern, first-rate hospital systems for far less. While administration devoured $667 per capita annually in the U.S., we found that Canada spent only $158, Scotland $164, England $225 and the Netherlands $325.

If U.S. hospitals ran as efficiently as Canada’s, the average U.S. family of four would save $2,000 annually on health care.

Moreover, our hospital paperwork costs have risen sharply since 2000, even after adjusting for inflation. In contrast, administration’s share of hospital budgets in Canada has actually fallen since 1999.

A generation ago, it took just one or two managers to run a U.S. hospital. Now, the CEO has been joined by “chief officers” for operations, finance, compliance, information, quality management, and more.

Each chief commands his/her own legions – hundreds of billing and registration clerks, referral managers, upcoding specialists (to translate doctors’ diagnoses into the most profitable billing codes), and massive IT departments whose first commandment is “get the bill right.”

Why are U.S. hospitals so inefficient? Our multiple-payer insurance system forces every hospital to negotiate rates with dozens of insurance plans, each with its own coverage rules, billing procedures and documentation requirements. And each hospital must collect deductibles, co-payments and co-insurance from tens of thousands of patients.

In contrast, Canada and Scotland – where bureaucratic costs are lowest – have single-payer systems that reject this kind of red tape and the need to bill for every Band-Aid. They pay hospitals simple lump-sum budgets, the way we fund local fire stations. And like fire departments, their hospitals don’t need to collect from each victim of misfortune.

But the complexity of hospital billing isn’t the only thing driving bureaucracy. Hospitals have been forced to add layers of business expertise in order to survive in our market-driven system.

A hospital that doesn’t show an operating profit can’t fund essential new investments in new equipment and cutting-edge services, or modern buildings. That means administrators have to devote resources to financial gaming like marketing lucrative services (e.g. sports medicine); billing units to squeeze every penny from insurers and patients; and strategies to recruit profitable (well-insured) patients, and avoid unprofitable (e.g. uninsured) ones.

The dismal record of for-profit hospitals illustrates the problem with running hospitals as businesses. The for-profits have higher death rates and employ fewer clinical personnel like nurses than their non-profit counterparts. But care at for-profits actually costs more, and they spend much more on the bureaucracy, a reflection of the high cost of implementing shrewd financial strategies.

Canadian and Scottish hospital administrators don’t have to play financial games to assure their survival. Government grants – rather than operating profits – pay for new buildings and equipment. Even in France and Germany, where hospitals bill multiple payers, bureaucratic costs are modest because government directly funds most hospital investments.

England and the Netherlands provide unfortunate counter-examples. Pro-market reforms initiated during the Thatcher era have driven English hospital administrative costs sharply higher. And only U.S. hospitals have higher administrative costs than those in the Netherlands, where radical market-oriented reforms now pressure hospitals to show a profit.

Economics textbooks hold that subjecting medicine to market forces will stimulate efficiency and root out waste. But reality stubbornly refuses to obey. In health care, market-oriented policies encourage hospitals to shift resources to business strategies that boost the bottom line, and contribute nothing to care.

The management takeover of health care is redolent of Charles Dickens’ tale of a hostel bequeathed as a lodging for six homeless travelers. Eventually, the charitable administrators fully occupied the hostel, and relegated the travelers to outbuildings:

“I found, too, that about a thirtieth part of the annual revenue was now expended on the purposes commemorated in the inscription over the door – the rest being handsomely laid out in chancery, law expenses, collectorship, receivership, poundage, and other appendages of management, highly complimentary to the importance of the six Poor Travelers.”

Dickens’ message was clear. Will we act accordingly today?

Dr. Steffie Woolhandler is a co-founder of Physicians for a National Health Program. She is professor of public health at the City University of New York and visiting professor of medicine at Harvard Medical School. She is also a primary care physician at Cambridge Hospital in Cambridge, Mass.

Dr. David Himmelstein is a co-founder of Physicians for a National Health Program. He is professor of public health at the City University of New York and visiting professor of medicine at Harvard Medical School. He has served as the chief of the division of social and community medicine at Cambridge Hospital where he practices primary care internal medicine, and co-founded the Center for a National Health Program Studies at Harvard.

This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License

http://www.commondreams.org/views/2014/10/16/us-hospitals-lead-global-pack-costly-paperwork

Think about your health when you vote in November

By Philip Caper, M.D.
Bangor (Maine) Daily News, Oct. 16, 2014

Elections matter. And when it comes to health care, the upcoming election on Nov. 4 will matter a lot. This seems an appropriate time to take stock of where we stand.

I strongly believe in health care with dignity for everybody. When I took the Hippocratic Oath, I swore to put the patient first. That means treating people according to their medical needs, not their employment status, net worth, place of employment, age, gender, lifestyle or where they happen to live.

The United States spends more on health care — about 50 percent more — than any other wealthy country. Despite continuing to pour more and more money into health care, we still rank behind those countries on infant mortality, life expectancy, health care quality and access to needed care. The fact that we continue to do so every year tells us we need new thinking.

Where is all that money going? According to the Institute of Medicine, we in the U.S. waste $750 billion a year on our broken health care system.

The Affordable Care Act is a first step in trying to repair it. Offering federal subsidies for private insurance, expanding Medicaid and neighborhood health centers and regulating insurance industry abuses are important advances. We shouldn’t toss them aside. Repealing the ACA, as many conservatives propose, would be a disaster for Maine and for the country — unless we replace it with something better.

The ACA is in some ways a step forward, but it is not enough. Even with greatly expanded coverage, too many Americans will not see the benefits they would with a universal health care system.

Maine is the only state in New England that has failed to expand Medicaid and is one of just two states in the country where the number of people without health insurance increased in 2013. Expanding MaineCare would cover an additional 70,000 Mainers at almost no cost to the state and would inject nearly $1 million a day of federal revenue into our economy. Failure to do that — because of Gov. Paul LePage’s vetoes, sustained by Republicans in the Legislature — has cost the people of Maine more than $300 million so far.

We can do much better than that. We need a simpler, less expensive system that includes everybody. We already have such system for seniors — it’s called “Medicare.” When Medicare was implemented by the federal government in 1965, 19 million people were enrolled within nine months, using index cards. There were no software glitches, no crashing websites and little confusion. There was no need to re-enroll every year. Once people are enrolled in Medicare, they stay in it for life.

We need to extend the benefits of Medicare to every Mainer and to every American. There are two ways we can accomplish this.

Congress could pass a new law expanding Medicare. There are bills in the House and the Senate that would do that. But we don’t need to wait for new national legislation. There is another way.

Starting in 2017, existing federal law allows individual states to design their own health care reform if it provides at least as many benefits at no greater cost. No more exchanges, mandates on businesses and individuals to buy private insurance, or hard-to-enforce tax penalties.

That opportunity shouldn’t be missed. Our neighbors in Vermont already have passed a law setting the goal of a single publicly financed health care system to include every Vermonter. They are now moving forward to implement that law. Rather than cutting more people from the rolls, Maine should retake its position as a national leader in health care.

The popular and successful Canadian health care system, which was once almost identical to ours, got started in one province: Saskatchewan. It was so successful that within 10 years it spread across the country.

According to William Hsiao, an internationally respected Harvard health care economist, we could save $1 billion a year in unnecessary administrative costs in Maine alone by making fundamental changes in the ways we finance health care. The money we save could then be invested in roads and bridges, improved public safety and educating our children. It would result in higher wages for our workers and would stimulate the creation of new businesses. It would free our people up to pursue their dreams, instead of being stuck in dead end jobs just to get health care benefits.

But those changes can’t and won’t be made without the full and energetic support of our people, our governor, our legislature and our entire congressional delegation.

That’s worth thinking about when you go to the polls Nov. 4.

Physician Philip Caper of Brooklin is a founding board member of Maine AllCare, a nonpartisan, nonprofit group committed to making health care in Maine universal, accessible and affordable for all. He can be reached at pcpcaper21@gmail.com or through his website at philcaper.net.

http://bangordailynews.com/2014/10/16/health/blogs-and-columns/think-about-your-health-when-you-vote-in-november/?ref=search

Will malpractice reform prevent “defensive medicine”?

The Effect of Malpractice Reform on Emergency Department Care

By Daniel A. Waxman, M.D., Ph.D., Michael D. Greenberg, J.D., Ph.D., M. Susan Ridgely, J.D., Arthur L. Kellermann, M.D., M.P.H., and Paul Heaton, Ph.D.
The New England Journal of Medicine, October 16, 2014

Emergency department care has been a particular focus of a new generation of malpractice reform laws. Approximately a decade ago, the states of Texas (in 2003), Georgia (in 2005), and South Carolina (in 2005) changed their malpractice standard for emergency care to “willful and wanton negligence” (in Texas) and “gross negligence” (in Georgia and South Carolina). From a legal standpoint, these two standards are considered to be synonymous and are widely considered to be a very high bar for plaintiffs. Under typical interpretations of this standard, a plaintiff must show that a physician had “actual, subjective awareness” of “the likelihood of serious injury” but nevertheless proceeded with “conscious indifference.”

The Texas, Georgia, and South Carolina laws are intended to protect physicians who are practicing with incomplete information in high-intensity care settings. The enactment of these laws offers an unusual circumstantial experiment with which to evaluate a type of reform that is qualitatively different from what has been studied previously.

Study Design

We used a quasi-experimental analytic approach that was designed to evaluate the effect of legal reform on the treatment of Medicare patients in the emergency department; we attempted to isolate the effect of the law from temporal trends and from characteristics of patients and hospitals (i.e., to evaluate changes that could be attributable to the new policy).

Results

Malpractice reform was not associated with a significant decrease in CT or MRI utilization in any of the three states. There was no significant reduction in per-visit emergency department charges in Texas or South Carolina. In Georgia, reform was associated with a 3.6% reduction (95% confidence interval [CI], 0.9 to 6.2; P=0.01) in charges. There was no reduction in the rate of hospital admissions in any of the three states.

Discussion

Malpractice reforms in Texas, Georgia, and South Carolina, which changed the liability standard for emergency care from ordinary negligence to gross negligence, provide unusually broad protection for emergency physicians. We did not find evidence that these reforms decreased practice intensity, as measured by the rate of the use of advanced imaging, by the rate of hospital admission, or in two of three cases, by average charges. Although there was a small reduction in charges in one of the three states (Georgia), our results in aggregate suggest that these strongly protective laws caused little (if any) change in practice intensity among physicians caring for Medicare patients in emergency departments.

In the context of the existing literature, our findings suggest that physicians are less motivated by legal risk than they believe themselves to be. Although a practice culture of abundant caution clearly exists, it seems likely that an aversion to legal risk exists in parallel with a more general risk aversion and with other behavioral, cultural, and economic motivations that might affect decision making. When legal risk decreases, the “path of least resistance” may still favor resource-intensive care. Our results suggest that malpractice reform may have less effect on costs than has been projected.

http://www.nejm.org/doi/full/10.1056/NEJMsa1313308

****

Comment:

By Don McCanne, MD

When the topic of controlling health care costs comes up, those opposed to single payer reform, and, for that matter, opposed to the Affordable Care Act, frequently cite the need for malpractice reform, often claiming that defensive medicine (ordering unnecessary tests and medical interventions merely to prevent lawsuits) is a major cause of excess health care spending. This article casts doubt that malpractice reform would reduce supposed defensive medicine.

The three states studied – Texas, Georgia and South Carolina – passed laws requiring a much more rigid standard of “gross negligence” for emergency department physicians to be found liable for malpractice. Data available from Texas demonstrates that their reforms did reduce malpractice claim filings by 60 percent, and reduced malpractice payments by 70 percent. Physicians were reassured that they were protected as long as they did not proceed with “conscious indifference” with care that had a “likelihood of serious injury.”

Now that there was no longer a need for CT and MRI scans and hospital admissions that  were done only to prevent lawsuits, the level of these presumed defensive medicine measures should have decreased. They did not.

This suggests that these measures were taken for reasons other than simply to prevent lawsuits. A low yield test or procedure is not necessarily a no yield intervention. These are done because there is a real chance, even if at low odds, that the intervention may benefit the patient.

This study leads us to conclude that the concept that there is excessive resource-intensive care provided strictly as defensive medicine should be abandoned and replaced with patient-centered outcomes research to better determine what is of value in health care (PCORI in ACA is such an attempt).

We should no longer allow ourselves to be distracted by false promises of health care savings through flawed concepts such as defensive medicine. We know what will greatly reduce wasteful spending, and that is a single payer national health program. We must not be distracted from trying to achieve that goal.