Avoiding Low-Value Care

Panel: Atul A. Gawande, M.D., M.P.H., Carrie H. Colla, Ph.D., Scott D. Halpern, M.D., Ph.D., M.Bioethics, and Bruce E. Landon, M.D., M.B.A., M.Sc.
The New England Journal of Medicine, April 3, 2014

(Excerpts here are not in continuity.)

Atul Gawande:  When a service is widely recognized as providing little or no benefit, or maybe even harm, what should be done to reduce its use?

I want to start with a seemingly simple question. How do you define low-value care?

Bruce Landon:  It turns out that there are very, very few services that are low-value in all clinical situations. So I actually think it’s really important to use a clinical lens, and particularly for, as I’m taking care of patients, it’s a lens that really focuses on that patient in front of me.

Scott Halpern:  Well, I think it’s incredibly difficult to draw lines, particularly because all our definitions are predicated at the population level. And population-level estimates don’t apply very naturally to individual patients.

So when we describe something as low-value, I think what we’re typically trying to do is to distinguish it from something that is no-value. But it turns out that no-value interventions, first of all, are probably very few and far between. There are very few things we do in medicine that truly could not help any patient to which we might consider applying it.

Landon:  I think it’s going to be hard to address the problem of low-value care by having payers and policymakers make rules, because there’s this clinical heterogeneity story.

Halpern:  The right rates at which we utilize these quote-unquote low-value services is not zero. We don’t want to practice so frugally that we’re missing opportunities to provide benefits to patients by not intervening. So I think at some level, physicians should be comfortable that they can make clearly well-thought-out choices that, although there are recommendations not to do things for the overwhelming majority of patients who fit a particular description, that there may be exceptions where the service is in fact a reasonable choice.

Carrie Colla:  I think that there’s a danger that blunt payment instruments will reduce the high-value care as well, and so I think to some extent that’s why thinking about it at a broader level while also monitoring outcomes, but thinking about it at a broader level in terms of payments makes more sense.

Gawande:  What would you say that the policies of the government ought to be, or of insurers ought to be, in order to make sure decision making more effective for both patients and physicians under these circumstances?

Halpern:  If we had one health insurance coverage system, all the prices would be a lot easier to keep track of, for physicians and patients alike. And it would be much easier to have a set menu at the bedside as these conversations are unfolding, of all the types of information that we would want. I recognize that may be a long way away. But it is one of the sort of unintended consequences of our variegated reimbursement system as it exists today.

Video (30 minute) and link to transcript:http://www.nejm.org/doi/full/10.1056/NEJMp1401245?query=TOC

Diagnostic and therapeutic interventions that are of low value remain a dilemma. In this age with an emphasis on containing costs, should interventions that have a high cost in relation to an anticipated minimal or negligible benefit be avoided simply to help “bend the cost curve”? Or should such interventions be offered since even the smallest potential benefit should not be withheld from the patient if the patient desires such?

The easiest decision to be made would be about interventions that clearly provide no benefit under any circumstances, and may even potentially inflict harm. This is not low-value care, but rather it is no-value care. Obviously such interventions should be abandoned. For the few health care professionals using them who fail to respond to educational processes, discipline should be considered.

What about interventions that have a significant risk of major harm but could provide a small benefit that is not commensurate with the potential harm? Clinical judgement begins to enter here, but it would be a rare circumstance where other factors may warrant proceeding with the intervention.

What about the intervention that is very expensive but potentially provides only minimal benefit? Although some might use measures such as anticipated increase in quality-adjusted life years (QALY), there are levels of spending that common sense tells you are far beyond the value of the potential benefit. Rejecting such interventions risks being labeled as rationing, but such a charge does not mean that common sense should be abandoned.

A variation of this category would be lucrative procedures in widespread use for which only a paucity of conflicting data provides a rationale for these practices – high cost but low benefit. Sometimes these correlate with excess capacity in the system, a problem that separate budgeting of capital improvements could improve. Also, administered pricing could lower payments to more closely match the extent of the benefit.

What about the expensive diagnostic intervention that has a very low probability of of turning up a disorder for which therapeutic interventions could be of great benefit, perhaps even life saving? This is where clinical judgement and being sure that the patient is well informed play a crucial role. This is also where those citing the Dartmouth studies hope to reduce health care spending. But if a low-yield test has a real chance of leading to an intervention of potentially great benefit, then the payer should not intervene.

A frequent criticism is that such low-yield tests are done too often to reduce the risk of a malpractice lawsuit, and that we could reduce the costs of malpractice if we did away with these “unnecessary” tests. Since such tests are low yield, frequently nothing significant is found and therefore no lawsuit was prevented. But the judgement should not be based on the cost per lawsuit prevented, but rather on the clinical benefit to the patient. This is why attacking low-yield tests is not a productive way of reducing malpractice costs.

What about the patient who demands an intervention when it is clear that there is no value in what the patient wants? It is the health care professional’s responsibility to inform the patient why such an intervention should not be entertained. Most patients will appreciate informed advice. For the rare ones that do not, physicians should never conspire with a patient to do wrong, even if it results in the patient seeking care elsewhere.

In all of these situations, the interests of the patient must come first. Clinical judgement is required for most of them.

So how do we address the costs? The current leading approaches are to erect financial barriers to care and to impair access by using narrow provider networks. These interventions are inappropriate because they save costs by preventing the patients from receiving appropriate care that they should have.

There is a far better method of reducing inappropriate spending, and that would be to enact a single payer system – an improved Medicare for all. Such a model dramatically reduces administrative waste and improves pricing of health care services. Under a single payer system it is much easier to match payment with value.

Who Benefits when the Government Pays More? Pass-Through in the Medicare Advantage Program

By Mark Duggan, Amanda Starc, and Boris Vabson
National Bureau of Economic Research, March 2014

Our results strongly suggest that increased subsidies for private insurance in the Medicare market result in increased insurer advertising, but little additional monetary or medical benefit for consumers.

The measures of plan financial characteristics and quality that we use suggest that only about one-sixth of the policy-induced increase in plan reimbursement is captured by consumers.

While reimbursement increases have an ambiguous welfare impact on consumers, they unambiguously increase costs, through increased numbers of MA enrollees and through increased government spending per MA enrollee. A back-of-the-envelope estimate suggests that this additional spending amounted to approximately $6.4 billion during the final year of our sample period

http://www.nber.org/papers/w19989

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40 Senators Sign Bipartisan Letter Urging CMS to Maintain Current Medicare Advantage Payment Levels in 2015

AHIP, February 18, 2014

http://www.ahipcoverage.com/2014/02/18/40-senators-sign-bipartisan-letter-urging-cms-to-maintain-current-medicare-advantage-payment-levels-in-2015/

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Stakeholder Groups Send Bipartisan Letter Urging CMS to Protect Seniors in Medicare Advantage

AHIP, March 7, 2014

http://www.ahipcoverage.com/2014/03/07/stakeholder-groups-send-bipartisan-letter-urging-cms-to-protect-seniors-in-medicare-advantage/

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140 Physician Organizations Sign CAPG Letter Urging CMS to Protect Seniors in Medicare Advantage

AHIP, March 10, 2014

http://www.ahipcoverage.com/2014/03/10/140-physician-organizations-sign-capg-letter-urging-cms-to-protect-seniors-in-medicare-advantage/

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204 Members of Congress Sign New Bipartisan Letter Urging CMS to Protect Seniors in Medicare Advantage

AHIP, March 13, 2014

http://www.ahipcoverage.com/2014/03/13/204-members-of-congress-sign-new-bipartisan-letter-urging-cms-to-protect-seniors-in-medicare-advantage/

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What They Are Saying: Bipartisan Group of 262 Members of Congress Urges CMS to Protect Seniors in Medicare Advantage

AHIP, March 28, 2014

http://www.ahipcoverage.com/2014/03/28/what-they-are-saying-bipartisan-group-of-262-members-of-congress-urges-cms-to-protect-seniors-in-medicare-advantage/

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Dr. Kavita Patel and John Rother: Proposed Medicare Advantage Cuts “Unjustifiable”

AHIP, March 19, 2014

http://www.ahipcoverage.com/2014/03/19/dr-kavita-patel-and-john-rother-proposed-medicare-advantage-cuts-unjustifiable/

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Medicare cuts put coordinated care at risk

By John Rother, JD and Kavita K. Patel, MD MS
The Hill, March 13, 2014

In the last few years, growth in healthcare spending has begun to moderate, fueled in part by Medicare’s shift toward new forms of payment based on outcomes and quality. But short-sighted regulations proposed last week would impose dramatic cuts to Medicare Advantage (MA) that may stifle this exciting transformation.

Many of the new cost-containment strategies now underway in original Medicare were pioneered in Medicare Advantage. The models for the Affordable Care Act (ACA)’s Accountable Care Organizations were integrated delivery systems like Intermountain, Kaiser Permanente and Geisinger, which all operated MA plans.

The Center for Medicare and Medicaid Innovation is currently testing a nurse-led care coordination program in nursing homes that is strikingly similar to United Healthcare’s Evercare program. And under the so-called Dual-Eligibles Demonstrations, states, Medicaid and Medicare are working together to implement the successful chronic care strategies pioneered by specialized MA Special Needs Plans like SCAN Health Plan, Caremore and XL Health.

Last year the very plans that developed these innovations weathered a 6.7 percent cut in payment. The effect of the cut was predictable: a majority of counties across the country saw fewer plan options, premiums climbed 6 percent and out of pocket maximums jumped an average of $560.   But now, after federal regulators issued a new proposal February 21, MA appears to be headed for an entirely new round of cuts. 

The new cuts would slice another 5.9 percent from Medicare Advantage this year. That amounts to nearly 15 percent in cuts over just two years. This trend is unsustainable without imposing real costs to Medicare and its beneficiaries.

Regulators have offered several rationales for these cutbacks, which can sound plausible at first when considered one by one. After all, Congress did redirect some MA funding to offset costs associated with the ACA, and slower cost growth elsewhere in Medicare arguably would mean some adjustment for MA. However, after examining the overall, cumulative impact of this latest proposal, it’s clear that regulators are missing the forest for the trees.

Continued cuts of this magnitude put at risk the next generation of new cost-saving and quality-enhancing reforms. Even as today’s models of accountable care and primary care innovation are taking hold elsewhere in health care, MA plans would be falling behind due to the forced limit on their investment in cost-curbing strategies. That is bad news for the taxpayers who must help finance Medicare today and in the decades to come. 

But the consequences for beneficiaries are even more concerning. As the proposed cuts force plans to pull back from markets they currently serve, some seniors and disabled Americans will have fewer integrated care options from which to choose, or even none at all. For any Medicare enrollee, this is a scenario to avoid. But when you consider how 41% of Medicare beneficiaries make less than $20,000 a year, the proposal becomes unjustifiable.

The Center for Medicare and Medicaid Services (CMS) has the authority to prevent this scenario. They must exercise it.

One element of a smarter approach could be to extend a recently-concluded quality demonstration project. Current law requires CMS to pay bonuses to MA plans that earn 4 or 5 stars in CMS’ 5 star plan evaluation system. But when a now-concluded demonstration program allowed CMS to offer bonuses to 3 and 3.5 star plans, there was a marked improvement in plan quality across MA as plans invested in better care management and partnered with providers to offer the high-value care that patients need. Resurrecting the demonstration would be win/win by mitigating damaging rate cuts for plans while promoting even better quality across the MA program. And rather than denying many beneficiaries the option of pursuing integrated care, continuing the quality demonstration would actually improve the quality of the options availability to them.  

Whatever the exact regulatory levers used to reverse the proposed cuts, CMS must change its course. Blunt cuts will only stifle the very innovation which policymakers, providers and patients are so desperate to pursue in a new era of delivery system reform.

http://thehill.com/blogs/congress-blog/healthcare/200610-medicare-cuts-put-coordinated-care-at-risk

Comment:

By Don McCanne, MD

The extraordinary power of AHIP – the health insurance lobby organization – is currently being demonstrated by its astonishing ability to massively recruit Washington insiders and politicians in its effort to salvage the overpayments being made to the private Medicare Advantage plans.

If you review the letters, op-eds, and press releases of the various individuals and organizations that have recently spoken out in support of Medicare Advantage, you will see that they all use the rhetoric of AHIP. The AHIP release of March 28 (link above) shows the extent of involvement of members of Congress, including links to their letters and op-eds, obviously orchestrated by AHIP.

The op-ed reproduced in full above demonstrates not only the use of obvious AHIP rhetoric, but it shows how pervasive the AHIP efforts have been in that they were able to recruit two respected members of the policy community to sign on to this op-ed – John Rother and Kavita Patel. This Washington sellout to AHIP is not just sad, it’s tragic.

It is not as if there were some saving grace in the private Medicare Advantage plans. The new study from NBER (above) is only the latest amongst the innumerable reports showing that most of the extra funds paid to the plans are going to the insurers rather than the beneficiaries. This particular study shows that the insurers are using our tax funds to buy advertising to sell more plans to jack up their revenues. The advertising campaign has been successful in that one-third of Medicare beneficiaries have now enrolled in the private plans.

The Affordable Care Act included provisions to reduce these overpayments to levels comparable to the costs of patients in the traditional Medicare program. AHIP has already used its influence to convince the administration to use chicanery to reduce the cutbacks in the first two years of the reductions (by issuing phony quality awards and by using accounting gimmickry with the scheduled but deferred SGR adjustments). Since the administration seems to be resisting further chicanery (we’ll soon find out) AHIP has intensified its public campaign using some of Washington’s “finest.”

The main claim that AHIP has induced these Washingtonians to make is that seniors on the Medicare Advantage program will have to pay more since the insurers will have to increase premiums and cost sharing to make up for the reduced government payments. What they don’t point out is that reductions in premiums and cost sharing amount to only about one-sixth of the overpayments that the insurers receive.

Think about those numbers. If the Medicare Advantage program were shut down and everyone in Medicare were granted the same reductions in premiums and cost sharing as those in the Medicare Advantage plans, then the entire cost would be only half of total amount of the overpayments that the Medicare Advantage plans are already receiving (tripling the number of people receiving one-sixth of the overpayments).

If members of Congress cared more about the people instead of the insurers, they would respond to the pleas of “don’t cut my Medicare” by telling their constituents that not only will they protect the savings the Medicare Advantage patients are receiving, but they also will give the same savings to everyone else on Medicare, and they will pay for it by getting rid of the Medicare Advantage plans and have a lot of money left over.

What we don’t want to pay for is more expensive advertising to draw people into a program that wastes our taxpayer dollars while rewarding AHIP’s sponsors. Even if John Rother and Kavita Patel become remorseful and do the right thing, unfortunately the members of Congress know that AHIP lobbyists are the ones who will show them the money.

If we expect to use an improved version of Medicare as a model for single payer reform, we are going to have to get rid of the private insurers – the Medicare Advantage plans.

Who Benefits when the Government Pays More? Pass-Through in the Medicare Advantage Program

By Mark Duggan, Amanda Starc, and Boris Vabson
National Bureau of Economic Research, March 2014

Our results strongly suggest that increased subsidies for private insurance in the Medicare market result in increased insurer advertising, but little additional monetary or medical benefit for consumers.

The measures of plan financial characteristics and quality that we use suggest that only about one-sixth of the policy-induced increase in plan reimbursement is captured by consumers.

While reimbursement increases have an ambiguous welfare impact on consumers, they unambiguously increase costs, through increased numbers of MA enrollees and through increased government spending per MA enrollee. A back-of-the-envelope estimate suggests that this additional spending amounted to approximately $6.4 billion during the final year of our sample period

http://www.nber.org/papers/w19989

****

40 Senators Sign Bipartisan Letter Urging CMS to Maintain Current Medicare Advantage Payment Levels in 2015

AHIP, February 18, 2014

http://www.ahipcoverage.com/2014/02/18/40-senators-sign-bipartisan-lette…

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Stakeholder Groups Send Bipartisan Letter Urging CMS to Protect Seniors in Medicare Advantage

AHIP, March 7, 2014

http://www.ahipcoverage.com/2014/03/07/stakeholder-groups-send-bipartisa…

****

140 Physician Organizations Sign CAPG Letter Urging CMS to Protect Seniors in Medicare Advantage

AHIP, March 10, 2014

http://www.ahipcoverage.com/2014/03/10/140-physician-organizations-sign-…

****

204 Members of Congress Sign New Bipartisan Letter Urging CMS to Protect Seniors in Medicare Advantage

AHIP, March 13, 2014

http://www.ahipcoverage.com/2014/03/13/204-members-of-congress-sign-new-…

****

What They Are Saying: Bipartisan Group of 262 Members of Congress Urges CMS to Protect Seniors in Medicare Advantage

AHIP, March 28, 2014

http://www.ahipcoverage.com/2014/03/28/what-they-are-saying-bipartisan-g…

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Dr. Kavita Patel and John Rother: Proposed Medicare Advantage Cuts “Unjustifiable”

AHIP, March 19, 2014

http://www.ahipcoverage.com/2014/03/19/dr-kavita-patel-and-john-rother-p…

****

Medicare cuts put coordinated care at risk

By John Rother, JD and Kavita K. Patel, MD MS
The Hill, March 13, 2014

In the last few years, growth in healthcare spending has begun to moderate, fueled in part by Medicare’s shift toward new forms of payment based on outcomes and quality. But short-sighted regulations proposed last week would impose dramatic cuts to Medicare Advantage (MA) that may stifle this exciting transformation.

Many of the new cost-containment strategies now underway in original Medicare were pioneered in Medicare Advantage. The models for the Affordable Care Act (ACA)’s Accountable Care Organizations were integrated delivery systems like Intermountain, Kaiser Permanente and Geisinger, which all operated MA plans.

The Center for Medicare and Medicaid Innovation is currently testing a nurse-led care coordination program in nursing homes that is strikingly similar to United Healthcare’s Evercare program. And under the so-called Dual-Eligibles Demonstrations, states, Medicaid and Medicare are working together to implement the successful chronic care strategies pioneered by specialized MA Special Needs Plans like SCAN Health Plan, Caremore and XL Health.

Last year the very plans that developed these innovations weathered a 6.7 percent cut in payment. The effect of the cut was predictable: a majority of counties across the country saw fewer plan options, premiums climbed 6 percent and out of pocket maximums jumped an average of $560.   But now, after federal regulators issued a new proposal February 21, MA appears to be headed for an entirely new round of cuts.

The new cuts would slice another 5.9 percent from Medicare Advantage this year. That amounts to nearly 15 percent in cuts over just two years. This trend is unsustainable without imposing real costs to Medicare and its beneficiaries.

Regulators have offered several rationales for these cutbacks, which can sound plausible at first when considered one by one. After all, Congress did redirect some MA funding to offset costs associated with the ACA, and slower cost growth elsewhere in Medicare arguably would mean some adjustment for MA. However, after examining the overall, cumulative impact of this latest proposal, it’s clear that regulators are missing the forest for the trees.

Continued cuts of this magnitude put at risk the next generation of new cost-saving and quality-enhancing reforms. Even as today’s models of accountable care and primary care innovation are taking hold elsewhere in health care, MA plans would be falling behind due to the forced limit on their investment in cost-curbing strategies. That is bad news for the taxpayers who must help finance Medicare today and in the decades to come.

But the consequences for beneficiaries are even more concerning. As the proposed cuts force plans to pull back from markets they currently serve, some seniors and disabled Americans will have fewer integrated care options from which to choose, or even none at all. For any Medicare enrollee, this is a scenario to avoid. But when you consider how 41% of Medicare beneficiaries make less than $20,000 a year, the proposal becomes unjustifiable.

The Center for Medicare and Medicaid Services (CMS) has the authority to prevent this scenario. They must exercise it.

One element of a smarter approach could be to extend a recently-concluded quality demonstration project. Current law requires CMS to pay bonuses to MA plans that earn 4 or 5 stars in CMS’ 5 star plan evaluation system. But when a now-concluded demonstration program allowed CMS to offer bonuses to 3 and 3.5 star plans, there was a marked improvement in plan quality across MA as plans invested in better care management and partnered with providers to offer the high-value care that patients need. Resurrecting the demonstration would be win/win by mitigating damaging rate cuts for plans while promoting even better quality across the MA program. And rather than denying many beneficiaries the option of pursuing integrated care, continuing the quality demonstration would actually improve the quality of the options availability to them.

Whatever the exact regulatory levers used to reverse the proposed cuts, CMS must change its course. Blunt cuts will only stifle the very innovation which policymakers, providers and patients are so desperate to pursue in a new era of delivery system reform.

http://thehill.com/blogs/congress-blog/healthcare/200610-medicare-cuts-p…

The extraordinary power of AHIP – the health insurance lobby organization – is currently being demonstrated by its astonishing ability to massively recruit Washington insiders and politicians in its effort to salvage the overpayments being made to the private Medicare Advantage plans.

If you review the letters, op-eds, and press releases of the various individuals and organizations that have recently spoken out in support of Medicare Advantage, you will see that they all use the rhetoric of AHIP. The AHIP release of March 28 (link above) shows the extent of involvement of members of Congress, including links to their letters and op-eds, obviously orchestrated by AHIP.

The op-ed reproduced in full above demonstrates not only the use of obvious AHIP rhetoric, but it shows how pervasive the AHIP efforts have been in that they were able to recruit two respected members of the policy community to sign on to this op-ed – John Rother and Kavita Patel. This Washington sellout to AHIP is not just sad, it’s tragic.

It is not as if there were some saving grace in the private Medicare Advantage plans. The new study from NBER (above) is only the latest amongst the innumerable reports showing that most of the extra funds paid to the plans are going to the insurers rather than the beneficiaries. This particular study shows that the insurers are using our tax funds to buy advertising to sell more plans to jack up their revenues. The advertising campaign has been successful in that one-third of Medicare beneficiaries have now enrolled in the private plans.

The Affordable Care Act included provisions to reduce these overpayments to levels comparable to the costs of patients in the traditional Medicare program. AHIP has already used its influence to convince the administration to use chicanery to reduce the cutbacks in the first two years of the reductions (by issuing phony quality awards and by using accounting gimmickry with the scheduled but deferred SGR adjustments). Since the administration seems to be resisting further chicanery (we’ll soon find out) AHIP has intensified its public campaign using some of Washington’s “finest.”

The main claim that AHIP has induced these Washingtonians to make is that seniors on the Medicare Advantage program will have to pay more since the insurers will have to increase premiums and cost sharing to make up for the reduced government payments. What they don’t point out is that reductions in premiums and cost sharing amount to only about one-sixth of the overpayments that the insurers receive.

Think about those numbers. If the Medicare Advantage program were shut down and everyone in Medicare were granted the same reductions in premiums and cost sharing as those in the Medicare Advantage plans, then the entire cost would be only half of total amount of the overpayments that the Medicare Advantage plans are already receiving (tripling the number of people receiving one-sixth of the overpayments).

If members of Congress cared more about the people instead of the insurers, they would respond to the pleas of “don’t cut my Medicare” by telling their constituents that not only will they protect the savings the Medicare Advantage patients are receiving, but they also will give the same savings to everyone else on Medicare, and they will pay for it by getting rid of the Medicare Advantage plans and have a lot of money left over.

What we don’t want to pay for is more expensive advertising to draw people into a program that wastes our taxpayer dollars while rewarding AHIP’s sponsors. Even if John Rother and Kavita Patel become remorseful and do the right thing, unfortunately the members of Congress know that AHIP lobbyists are the ones who will show them the money.

If we expect to use an improved version of Medicare as a model for single payer reform, we are going to have to get rid of the private insurers – the Medicare Advantage plans.

The Ongoing Importance of Enrollment: Churn in Covered California and Medi-Cal

By Miranda Dietz, Dave Graham-Squire, and Ken Jacobs
UC Berkeley Labor Center, April 2014

Projections for enrollment in the new insurance options created under the Affordable Care Act (ACA) are often point-in-time estimates. But just as people frequently move in and out of being uninsured, insurance coverage through Covered California (California’s health insurance marketplace) or through Medi-Cal is dynamic and can change for an individual over the course of a year.

Following each cohort across 12 months and observing changes in income, take up of employer sponsored insurance (ESI), and loss of insurance recorded in the SIPP, the analysis predicts the share of those originally enrolled who will remain in the same type of coverage at the end of the 12 months.

For individuals enrolled in Medi-Cal:

74.5%  Stay in Medi-Cal

16.5%  Income increases, eligible for Covered California

9.1%   Leave for job-based coverage

0.0%   Become uninsured (zero “unlikely to hold in reality”)

For individuals enrolled in Covered California (range between stronger and weaker retention scenarios):

57.5%-53.3%  Stay in Covered California

21.3%-20.5%  Take up Medi-Cal/public coverage

19.0%-18.3%  Leave for job-based coverage

2.2%-7.9%    Become uninsured

Enrollment in Medi-Cal and Covered California will be dynamic as Californians move in and out of coverage and change coverage sources. This policy brief predicts a significant level of churn out of Medi-Cal and Covered California each year. Approximately one-fifth of the cohort of Covered California enrollees are expected to transition to public coverage such as Medi-Cal, and another fifth are expected to transition to employer-sponsored coverage.

Understanding the extent and nature of churn can help in planning for ongoing enrollment, ensuring smooth health coverage transitions and continuity of care, and reducing uninsurance.

*  Effective implementation of the changes aimed at streamlining the redetermination processes is required for the stability of the Medi-Cal population to actually increase.

*  It will be vital for the enrollment infrastructure — from outreach, to the website, to in-person and call-center assistance — to be available and active even outside of open enrollment periods.

*  Making sure that people successfully transition from one type of insurance to another will depend not only on the ease of enrollment, but also the extent to which Covered California and Medi-Cal take advantage of existing institutional points of connection to people undergoing these life transitions, e.g., COBRA notices or government services like unemployment, CalFresh (food stamps), or the Department of Motor Vehicles.

*  It will be important that outreach, enrollment assistance, and effective sign up processes are available throughout the year for Medi-Cal and for those who experience life transitions that qualify them for mid- year enrollment in Covered California.

Bouts of uninsurance are known to have negative health consequences. The uninsured have higher mortality overall, and are more likely to go without care. Those who are not continuously insured underutilize preventive care, and have been found to use more care when they do become insured.

http://laborcenter.berkeley.edu/healthcare/churn_enrollment.pdf

Comment:

By Don McCanne, M.D.

One of the fundamental policy flaws with a fragmented, multi-payer system of financing health care is that the eligibility of each individual for various sources of coverage is dynamic – ever changing – requiring movement in and out of various forms of coverage or ending up with no coverage at all. This study from the UC Berkeley Labor Center shows that just the movement out of California’s Medicaid (Medi-Cal) and exchange plans (Covered California) is projected to be considerable during a twelve month period.

About one-fourth of Medi-Cal enrollees will leave the program because of income increases exceeding eligibility levels for the program, or because of becoming qualified for job-based coverage. For the Covered California exchange, almost half will leave because of a decline in income to levels eligible for Medi-Cal, or because of a transfer into job-based coverage, or simply because of falling into the ranks of the uninsured.

When you look at their recommendations to ameliorate the instability of coverage, it demonstrates once again that ACA is increasing the administrative complexity of our system when what we need is the administrative simplicity of a single payer system.

This study does not address the many other circumstances that can result in a change or loss of coverage, especially with employer-sponsored plans. Unstable coverage – churning – can have negative consequences because of disruption of continuity of care such as through your source of primary care, especially if you have or will have a chronic disorder requiring ongoing medical management.

The following paragraph is from a 2008 Quote of the Day (before ACA) that describes a few but by no means all of the reasons for churning. Churning is not a new discovery. Unfortunately, the ACA improvements have only a minimal impact in reducing churning. With the new mandates, eligibility requirements and other ACA provisions, churning may actually show a net increase. Reading this paragraph will once again remind you why we need single payer reform – an improved Medicare that covers absolutely everyone, forever. With single payer, churning is eliminated.

“You may have changed jobs, likely more than once, and lost the coverage that your prior employer provided. Your employer may have changed plans because of ever-increasing insurance premiums. Frequently your insurer introduces plan innovations such as larger deductibles, a change from fixed-dollar copayments to higher coinsurance percentages, tiering of your cost sharing for services and products, reduction in the benefits covered, dollar caps on payouts, and other innovations all designed to keep premiums competitive in a market of rapidly rising health care costs. You may have lost coverage when your age disqualified you from participating in your parents’ plan. You may have found that health benefit programs have been declining as an incentive offered by new employers. Your children may have lost coverage under the Children’s Health Insurance Program when your income, though modest, disqualified your family from the program. Your union may not have been able to negotiate the continuation of the high-quality coverage that you previously held. Your employer may have reduced or eliminated the retirement coverage that you were promised but not guaranteed. Your employer may have filed for bankruptcy without setting aside the legacy costs of their pensions and retiree health benefit programs. You may have decided to start your own small business and found that you could not qualify for coverage because of your medical history, even if relatively benign, or maybe your small business margins are so narrow that you can’t afford the premiums. You may have been covered previously by a small business owner whose entire group plan was cancelled at renewal because one employee developed diabetes, or another became HIV infected. Your COBRA coverage may have lapsed and you found that the individual insurance market offered you no realistic options. You may have retired before Medicare eligibility, only to find that premiums were truly unaffordable or coverage was not even available because of preexisting medical problems.”

https://www.pnhp.org/news/2008/july/keeping-the-insurance-you-have-dont-believe-it

The Ongoing Importance of Enrollment: Churn in Covered California and Medi-Cal

By Miranda Dietz, Dave Graham-Squire, and Ken Jacobs
UC Berkeley Labor Center, April 2014

Projections for enrollment in the new insurance options created under the Affordable Care Act (ACA) are often point-in-time estimates. But just as people frequently move in and out of being uninsured, insurance coverage through Covered California (California’s health insurance marketplace) or through Medi-Cal is dynamic and can change for an individual over the course of a year.

Following each cohort across 12 months and observing changes in income, take up of employer sponsored insurance (ESI), and loss of insurance recorded in the SIPP, the analysis predicts the share of those originally enrolled who will remain in the same type of coverage at the end of the 12 months.

For individuals enrolled in Medi-Cal:

74.5%  Stay in Medi-Cal

16.5%  Income increases, eligible for Covered California

9.1%   Leave for job-based coverage

0.0%   Become uninsured (zero “unlikely to hold in reality”)

For individuals enrolled in Covered California (range between stronger and weaker retention scenarios):

57.5%-53.3%  Stay in Covered California

21.3%-20.5%  Take up Medi-Cal/public coverage

19.0%-18.3%  Leave for job-based coverage

2.2%-7.9%    Become uninsured

Enrollment in Medi-Cal and Covered California will be dynamic as Californians move in and out of coverage and change coverage sources. This policy brief predicts a significant level of churn out of Medi-Cal and Covered California each year. Approximately one-fifth of the cohort of Covered California enrollees are expected to transition to public coverage such as Medi-Cal, and another fifth are expected to transition to employer-sponsored coverage.

Understanding the extent and nature of churn can help in planning for ongoing enrollment, ensuring smooth health coverage transitions and continuity of care, and reducing uninsurance.

*  Effective implementation of the changes aimed at streamlining the redetermination processes is required for the stability of the Medi-Cal population to actually increase.

*  It will be vital for the enrollment infrastructure — from outreach, to the website, to in-person and call-center assistance — to be available and active even outside of open enrollment periods.

*  Making sure that people successfully transition from one type of insurance to another will depend not only on the ease of enrollment, but also the extent to which Covered California and Medi-Cal take advantage of existing institutional points of connection to people undergoing these life transitions, e.g., COBRA notices or government services like unemployment, CalFresh (food stamps), or the Department of Motor Vehicles.

*  It will be important that outreach, enrollment assistance, and effective sign up processes are available throughout the year for Medi-Cal and for those who experience life transitions that qualify them for mid- year enrollment in Covered California.

Bouts of uninsurance are known to have negative health consequences. The uninsured have higher mortality overall, and are more likely to go without care. Those who are not continuously insured underutilize preventive care, and have been found to use more care when they do become insured.

http://laborcenter.berkeley.edu/healthcare/churn_enrollment.pdf

One of the fundamental policy flaws with a fragmented, multi-payer system of financing health care is that the eligibility of each individual for various sources of coverage is dynamic – ever changing – requiring movement in and out of various forms of coverage or ending up with no coverage at all. This study from the UC Berkeley Labor Center shows that just the movement out of California’s Medicaid (Medi-Cal) and exchange plans (Covered California) is projected to be considerable during a twelve month period.

About one-fourth of Medi-Cal enrollees will leave the program because of income increases exceeding eligibility levels for the program, or because of becoming qualified for job-based coverage. For the Covered California exchange, almost half will leave because of a decline in income to levels eligible for Medi-Cal, or because of a transfer into job-based coverage, or simply because of falling into the ranks of the uninsured.

When you look at their recommendations to ameliorate the instability of coverage, it demonstrates once again that ACA is increasing the administrative complexity of our system when what we need is the administrative simplicity of a single payer system.

This study does not address the many other circumstances that can result in a change or loss of coverage, especially with employer-sponsored plans. Unstable coverage – churning – can have negative consequences because of disruption of continuity of care such as through your source of primary care, especially if you have or will have a chronic disorder requiring ongoing medical management.

The following paragraph is from a 2008 Quote of the Day (before ACA) that describes a few but by no means all of the reasons for churning. Churning is not a new discovery. Unfortunately, the ACA improvements have only a minimal impact in reducing churning. With the new mandates, eligibility requirements and other ACA provisions, churning may actually show a net increase. Reading this paragraph will once again remind you why we need single payer reform – an improved Medicare that covers absolutely everyone, forever. With single payer, churning is eliminated.

“You may have changed jobs, likely more than once, and lost the coverage that your prior employer provided. Your employer may have changed plans because of ever-increasing insurance premiums. Frequently your insurer introduces plan innovations such as larger deductibles, a change from fixed-dollar copayments to higher coinsurance percentages, tiering of your cost sharing for services and products, reduction in the benefits covered, dollar caps on payouts, and other innovations all designed to keep premiums competitive in a market of rapidly rising health care costs. You may have lost coverage when your age disqualified you from participating in your parents’ plan. You may have found that health benefit programs have been declining as an incentive offered by new employers. Your children may have lost coverage under the Children’s Health Insurance Program when your income, though modest, disqualified your family from the program. Your union may not have been able to negotiate the continuation of the high-quality coverage that you previously held. Your employer may have reduced or eliminated the retirement coverage that you were promised but not guaranteed. Your employer may have filed for bankruptcy without setting aside the legacy costs of their pensions and retiree health benefit programs. You may have decided to start your own small business and found that you could not qualify for coverage because of your medical history, even if relatively benign, or maybe your small business margins are so narrow that you can’t afford the premiums. You may have been covered previously by a small business owner whose entire group plan was cancelled at renewal because one employee developed diabetes, or another became HIV infected. Your COBRA coverage may have lapsed and you found that the individual insurance market offered you no realistic options. You may have retired before Medicare eligibility, only to find that premiums were truly unaffordable or coverage was not even available because of preexisting medical problems.”

https://pnhp.org/news/2008/july/keeping-the-insurance-you-have-dont-b…

Obamacare Lives!

By Ross Douthat
The New York Times, March 31, 2014

Back when rate shock, website problems and lagging enrollment were threatening to unravel the new health care law before it fully took effect, I concluded a column on Obamacare’s repeated near-death experiences with the following warning to conservatives:

“The welfare state’s ability to defend itself against reform, however, carries a cautionary message for Obamacare’s critics as well. What isn’t killed outright grows stronger the longer it’s embedded in the federal apparatus, gaining constituents and interest-group support just by virtue of its existence even if it doesn’t work out the way it was designed. And as disastrous as its launch has been, if the health care law can survive this crisis in the same limping, staggering way it survived Scott Brown and the Supremes, then it will be a big step closer to being part of the status quo, with all the privileges and political strength that entails.

“So yes — it’s possible that this brush with death will be fatal, possible that the law will fall with the lightest, most politically painless push. But it’s still likely that Obamacare will be undone only if its critics are willing to do something more painful, and take their own turn wrestling with a system that resists any kind of change.”

With the latest numbers showing exchange enrollment climbing toward 7 million, I think we can safely retire that “possible,” and change the “likely” to an “all-but-definite.” Not because rising enrollment proves that Obamacare is definitely working, in the sense that both its friends and critics would have originally understood the term. We don’t know yet what the paid enrollment looks like or how successfully the program is actually enrolling the uninsured. (After some grim estimates, this Rand study is making liberals feel a little more optimistic, but still suggests a below-expectations result.) We don’t know what the age-and-health-status composition of the enrollee pools looks like or what that means for premiums next year and beyond. We don’t know if any of the suspended/postponed provisions of the law will actually take effect. And we certainly don’t know what any of this means for social policy in the long run.

But we do know that there won’t be an immediate political unraveling, and that we aren’t headed for the kind of extremely-low-enrollment scenario that seemed conceivable just a few months ago, or the possible world where cancellations had ended up outstripping enrollment, creating a net decline in the number of insured. And knowing that much has significant implications for our politics. It means that the kind of welfare-state embedding described above is taking place on a significant scale, that a large constituency will be served by Obamacare (through Medicaid as well as the exchanges) in 2016 and beyond, and that any kind of conservative alternative will have to confront the reality that the kind of tinkering-around-the-edges alternatives to Obamacare that many Republicans have supported to date would end up stripping coverage from millions of newly-insured Americans. That newly-insured constituency may not be as large as the bill’s architects originally hoped, or be composed of the range of buyers that the program ultimately needs. But it will be a fact on the ground to an extent that was by no means certain last December. And that fact will shape, and constrain, the options of the law’s opponents even in the event that Republicans manage to reclaim the White House two years hence.

Such political and policy constraints, I should note, are potentially a good thing for would-be conservative reformers, since the serious right-of-center alternatives to Obamacare have always included policies to expand coverage, and with a coverage expansion accomplished, Republicans may find themselves effectively forced in a more serious direction. (This is a drum that Avik Roy, among others, has been beating for some time.) Or so I would hope; of course, they might just end up drifting toward gimmicky micro-reforms instead, or find themselves embroiled a ruinous civil war over how hard to push toward some kind of full repeal.

But wherever they go and whatever they do, they will have to deal with the reality that Obamacare, thrice-buried, looks very much alive.

==

Obamacare, The Unknown Ideal

By Paul Krugman

No, I haven’t lost my mind — or suddenly become an Ayn Rand disciple. It’s not my ideal; in a better world I’d call for single-payer, and a significant role for the government in directly providing care.

But Ross Douthat, in the course of realistically warning his fellow conservatives that Obamacare doesn’t seem to be collapsing, goes on to tell them that they’re going to have to come up with a serious alternative.

But Obamacare IS the conservative alternative, and not just because it was originally devised at the Heritage Foundation. It’s what a health-care system that does what even conservatives say they want, like making sure that people with preexisting conditions can get coverage, has to look like if it isn’t single-payer.

I don’t really think one more repetition of the logic will convince many people, but here we go again. Suppose you want preexisting conditions covered. Then you have to impose community rating — insurers must offer the same policies to people regardless of medical history. But just doing that causes a death spiral, because people wait until they’re sick to buy insurance. So you also have to have a mandate, requiring healthy people to join the risk pool. And to make buying insurance possible for people with lower incomes, you have to have subsidies.

And what you’ve just defined are the essentials of ObamaRomneyCare. It’s a three-legged stool that needs all three legs. If you want to cover preexisting conditions, you must have the mandate; if you want the mandate, you must have subsidies. If you think there’s some magic market-based solution that obviates the stuff conservatives don’t like while preserving the stuff they like, you’re deluding yourself.

What this means in practice is that any notion that Republicans will go beyond trying to sabotage the law and come up with an alternative is fantasy. Again, Obamacare is the conservative alternative, and you can’t move further right without doing no reform at all.

Douthat: http://douthat.blogs.nytimes.com/2014/03/31/obamacare-lives/

Krugman: http://krugman.blogs.nytimes.com/2014/03/31/obamacare-the-unknown-ideal/

****

Comment:

By Don McCanne, MD

There have been many isolated efforts to define the conservative, or Republican, or libertarian proposal to replace the Affordable Care Act (ACA or Obamacare), but there is no one model that the Republicans wish to advance in Congress at this time. The Republican controlled House of Representatives has voted fifty times to repeal ACA, but they have not voted on any substitute to address the widely acknowledged deficiencies in health care financing.

Conservative Ross Douthat and liberal Paul Krugman now provide us with a perspective on the conservative/Republican alternative for reform.

Douthat acknowledges that a conservative goal is to expand coverage (especially for the more vulnerable), whereas the current “tinkering-around-the-edges alternatives to Obamacare that many Republicans have supported to date would end up stripping coverage from millions of newly-insured Americans.” He suggests that the policy restraints of an ACA already in place would force Republicans “in a more serious direction.”

Krugman, on the other hand, writes, “Obamacare IS the conservative alternative.” Not only does it meet many of the conservative goals of insurance reform, it was even designed by the conservatives. The liberal position would have been to support a single payer model.

Single payer was abandoned in favor of the conservative model that would bring Republicans on board with a new, post-partisan president, while liberals would forfeit the single payer advantages in exchange for a politically feasible, bipartisan accord.

Think of where that puts us now. If the conservatives were to gain complete control, they would tweak ACA to loosen regulation of insurers, to reduce federal funding, and to place greater control within the states. If the liberals were to gain complete control, they would tweak ACA to correct many of the defects that were left in place when the negotiations refining the legislation were halted abruptly because of the Democrats having lost a filibuster-proof majority in the Senate (not to mention the sabotage of a former Democratic vice-presidential nominee).

The fact that further battles will all take place over on the right is a tragedy. The fundamental structure of ACA is irreparably flawed, as would be any modifications that the Republicans would make to move the insurance function further into the private marketplace. Already we have seen a great multitude of very serious flaws that scream out for remedial legislation. But each new patch creates more complexity. The fundamental infrastructure cannot be repaired by patches. We need a new infrastructure (and it would be better and cheaper!).

Krugman says, “in a better world I’d call for single-payer.” Let’s make this a better world.

Obamacare Lives!

By Ross Douthat
The New York Times, March 31, 2014

Back when rate shock, website problems and lagging enrollment were threatening to unravel the new health care law before it fully took effect, I concluded a column on Obamacare’s repeated near-death experiences with the following warning to conservatives:

“The welfare state’s ability to defend itself against reform, however, carries a cautionary message for Obamacare’s critics as well. What isn’t killed outright grows stronger the longer it’s embedded in the federal apparatus, gaining constituents and interest-group support just by virtue of its existence even if it doesn’t work out the way it was designed. And as disastrous as its launch has been, if the health care law can survive this crisis in the same limping, staggering way it survived Scott Brown and the Supremes, then it will be a big step closer to being part of the status quo, with all the privileges and political strength that entails.

“So yes — it’s possible that this brush with death will be fatal, possible that the law will fall with the lightest, most politically painless push. But it’s still likely that Obamacare will be undone only if its critics are willing to do something more painful, and take their own turn wrestling with a system that resists any kind of change.”

With the latest numbers showing exchange enrollment climbing toward 7 million, I think we can safely retire that “possible,” and change the “likely” to an “all-but-definite.” Not because rising enrollment proves that Obamacare is definitely working, in the sense that both its friends and critics would have originally understood the term. We don’t know yet what the paid enrollment looks like or how successfully the program is actually enrolling the uninsured. (After some grim estimates, this Rand study is making liberals feel a little more optimistic, but still suggests a below-expectations result.) We don’t know what the age-and-health-status composition of the enrollee pools looks like or what that means for premiums next year and beyond. We don’t know if any of the suspended/postponed provisions of the law will actually take effect. And we certainly don’t know what any of this means for social policy in the long run.

But we do know that there won’t be an immediate political unraveling, and that we aren’t headed for the kind of extremely-low-enrollment scenario that seemed conceivable just a few months ago, or the possible world where cancellations had ended up outstripping enrollment, creating a net decline in the number of insured. And knowing that much has significant implications for our politics. It means that the kind of welfare-state embedding described above is taking place on a significant scale, that a large constituency will be served by Obamacare (through Medicaid as well as the exchanges) in 2016 and beyond, and that any kind of conservative alternative will have to confront the reality that the kind of tinkering-around-the-edges alternatives to Obamacare that many Republicans have supported to date would end up stripping coverage from millions of newly-insured Americans. That newly-insured constituency may not be as large as the bill’s architects originally hoped, or be composed of the range of buyers that the program ultimately needs. But it will be a fact on the ground to an extent that was by no means certain last December. And that fact will shape, and constrain, the options of the law’s opponents even in the event that Republicans manage to reclaim the White House two years hence.

Such political and policy constraints, I should note, are potentially a good thing for would-be conservative reformers, since the serious right-of-center alternatives to Obamacare have always included policies to expand coverage, and with a coverage expansion accomplished, Republicans may find themselves effectively forced in a more serious direction. (This is a drum that Avik Roy, among others, has been beating for some time.) Or so I would hope; of course, they might just end up drifting toward gimmicky micro-reforms instead, or find themselves embroiled a ruinous civil war over how hard to push toward some kind of full repeal.

But wherever they go and whatever they do, they will have to deal with the reality that Obamacare, thrice-buried, looks very much alive.

==

Obamacare, The Unknown Ideal

By Paul Krugman

No, I haven’t lost my mind — or suddenly become an Ayn Rand disciple. It’s not my ideal; in a better world I’d call for single-payer, and a significant role for the government in directly providing care.

But Ross Douthat, in the course of realistically warning his fellow conservatives that Obamacare doesn’t seem to be collapsing, goes on to tell them that they’re going to have to come up with a serious alternative.

But Obamacare IS the conservative alternative, and not just because it was originally devised at the Heritage Foundation. It’s what a health-care system that does what even conservatives say they want, like making sure that people with preexisting conditions can get coverage, has to look like if it isn’t single-payer.

I don’t really think one more repetition of the logic will convince many people, but here we go again. Suppose you want preexisting conditions covered. Then you have to impose community rating — insurers must offer the same policies to people regardless of medical history. But just doing that causes a death spiral, because people wait until they’re sick to buy insurance. So you also have to have a mandate, requiring healthy people to join the risk pool. And to make buying insurance possible for people with lower incomes, you have to have subsidies.

And what you’ve just defined are the essentials of ObamaRomneyCare. It’s a three-legged stool that needs all three legs. If you want to cover preexisting conditions, you must have the mandate; if you want the mandate, you must have subsidies. If you think there’s some magic market-based solution that obviates the stuff conservatives don’t like while preserving the stuff they like, you’re deluding yourself.

What this means in practice is that any notion that Republicans will go beyond trying to sabotage the law and come up with an alternative is fantasy. Again, Obamacare is the conservative alternative, and you can’t move further right without doing no reform at all.

Douthat: http://douthat.blogs.nytimes.com/2014/03/31/obamacare-lives/

Krugman: http://krugman.blogs.nytimes.com/2014/03/31/obamacare-the-unknown-ideal/

There have been many isolated efforts to define the conservative, or Republican, or libertarian proposal to replace the Affordable Care Act (ACA or Obamacare), but there is no one model that the Republicans wish to advance in Congress at this time. The Republican controlled House of Representatives has voted fifty times to repeal ACA, but they have not voted on any substitute to address the widely acknowledged deficiencies in health care financing.

Conservative Ross Douthat and liberal Paul Krugman now provide us with a perspective on the conservative/Republican alternative for reform.

Douthat acknowledges that a conservative goal is to expand coverage (especially for the more vulnerable), whereas the current “tinkering-around-the-edges alternatives to Obamacare that many Republicans have supported to date would end up stripping coverage from millions of newly-insured Americans.” He suggests that the policy restraints of an ACA already in place would force Republicans “in a more serious direction.”

Krugman, on the other hand, writes, “Obamacare IS the conservative alternative.” Not only does it meet many of the conservative goals of insurance reform, it was even designed by the conservatives. The liberal position would have been to support a single payer model.

Single payer was abandoned in favor of the conservative model that would bring Republicans on board with a new, post-partisan president, while liberals would forfeit the single payer advantages in exchange for a politically feasible, bipartisan accord.

Think of where that puts us now. If the conservatives were to gain complete control, they would tweak ACA to loosen regulation of insurers, to reduce federal funding, and to place greater control within the states. If the liberals were to gain complete control, they would tweak ACA to correct many of the defects that were left in place when the negotiations refining the legislation were halted abruptly because of the Democrats having lost a filibuster-proof majority in the Senate (not to mention the sabotage of a former Democratic vice-presidential nominee).

The fact that further battles will all take place over on the right is a tragedy. The fundamental structure of ACA is irreparably flawed, as would be any modifications that the Republicans would make to move the insurance function further into the private marketplace. Already we have seen a great multitude of very serious flaws that scream out for remedial legislation. But each new patch creates more complexity. The fundamental infrastructure cannot be repaired by patches. We need a new infrastructure (and it would be better and cheaper!).

Krugman says, “in a better world I’d call for single-payer.” Let’s make this a better world.

Beyond Coverage: The High Burden of Health Care Costs on Insured Adults in Massachusetts

By Sharon K. Long
BCBS of Mass Foundation, RWJ Foundation, Urban Institute, March 2014

These findings highlight the vulnerability that Massachusetts families experience when faced with high health care costs. Overall, 42.5 percent of all nonelderly adults in the state reported that health care costs had resulted in financial problems or health care access problems for their families in the past year, with the burden greater for low-income adults (46.5 percent for those with income at or below 138 percent FPL) and middle-income adults (53.9 percent for those with income between 139 and 399 percent FPL). Nearly three-quarters (70.6 percent) of those who were uninsured for all or part of the year reported problems with health care costs. However, neither higher income nor health insurance coverage protected Bay State families: 31.7 percent of higher-income adults and 38.7 percent of adults with insurance coverage for the full year also reported that health care costs had resulted in problems for their families.

Health care costs are creating difficult choices for families in Massachusetts. Insured adults frequently reported going without needed care because of costs, cutting back on non-health-related spending to pay for health care, and reducing their family’s financial security to pay for health care, both by reducing savings and by taking on debt, including credit card debt. As a result, medical debt had a significant impact on many families, particularly middle-income families, with contacts from collection agencies quite common.

http://bluecrossmafoundation.org/sites/default/files/download/publication/MHRS%20Beyond_Coverage.pdf

****

Health Insurance Coverage Is Just The First Step: Findings From Massachusetts

By Sharon Long, Kate Willrich Nordahl, Kaitlyn Kenney Walsh, Kathy Hempstead, and Ariel Fogel
Health Affairs Blog, March 26, 2014

The challenges faced by low-income and middle-income Massachusetts families are particularly worrisome given that the consumer protections for out-of-pocket health care costs are generally better in Massachusetts than those required under the ACA. For individuals with family income between 100 and 200 percent of poverty who are enrolled in the state’s subsidized health insurance program, out-of-pocket spending for covered prescriptions and medical services is limited to $1,000 per benefit year. The ACA allows individuals in this income cohort to have out-of-pocket costs that can sum to more than double this amount ($2,250).

http://healthaffairs.org/blog/2014/03/26/health-insurance-coverage-is-just-the-first-step-findings-from-massachusetts/

Comment:

By Don McCanne, MD

The provisions of the Affordable Care Act (ACA) have provided the nation with health care coverage similar to that which has existed in Massachusetts. However, “the consumer protections for out-of-pocket health care costs are generally better in Massachusetts than those required under the ACA.” Though Massachusetts has better coverage, “Overall, 42.5 percent of all nonelderly adults in the state reported that health care costs had resulted in financial problems or health care access problems for their families in the past year.”

Over half of middle-income adults in Massachusetts also “reported that health care costs had resulted in financial problems or health care access problems for their families.”

Furthermore, “neither higher income nor health insurance coverage protected Bay State families: 31.7 percent of higher-income adults and 38.7 percent of adults with insurance coverage for the full year also reported that health care costs had resulted in problems for their families.”

This is the shocking truth about our new national standard of underinsurance: In spite of having greater financial protection than that offered through the Affordable Care Act, over one-half of middle-income adults and nearly one-third of higher-income adults in Massachusetts still had problems with health care costs. And many of those who didn’t have problems likely avoided them by being fortunate enough to remain healthy. That is not the way an egalitarian health care financing system should work.

This ACA turkey won’t fly. All of us, including many of those with higher incomes, would benefit from single payer.

Beyond Coverage: The High Burden of Health Care Costs on Insured Adults in Massachusetts

By Sharon K. Long
BCBS of Mass Foundation, RWJ Foundation, Urban Institute, March 2014

These findings highlight the vulnerability that Massachusetts families experience when faced with high health care costs. Overall, 42.5 percent of all nonelderly adults in the state reported that health care costs had resulted in financial problems or health care access problems for their families in the past year, with the burden greater for low-income adults (46.5 percent for those with income at or below 138 percent FPL) and middle-income adults (53.9 percent for those with income between 139 and 399 percent FPL). Nearly three-quarters (70.6 percent) of those who were uninsured for all or part of the year reported problems with health care costs. However, neither higher income nor health insurance coverage protected Bay State families: 31.7 percent of higher-income adults and 38.7 percent of adults with insurance coverage for the full year also reported that health care costs had resulted in problems for their families.

Health care costs are creating difficult choices for families in Massachusetts. Insured adults frequently reported going without needed care because of costs, cutting back on non-health-related spending to pay for health care, and reducing their family’s financial security to pay for health care, both by reducing savings and by taking on debt, including credit card debt. As a result, medical debt had a significant impact on many families, particularly middle-income families, with contacts from collection agencies quite common.

http://bluecrossmafoundation.org/system/assets/drupal/download/publicatio…

****

Health Insurance Coverage Is Just The First Step: Findings From Massachusetts

By Sharon Long, Kate Willrich Nordahl, Kaitlyn Kenney Walsh, Kathy Hempstead, and Ariel Fogel
Health Affairs Blog, March 26, 2014

The challenges faced by low-income and middle-income Massachusetts families are particularly worrisome given that the consumer protections for out-of-pocket health care costs are generally better in Massachusetts than those required under the ACA. For individuals with family income between 100 and 200 percent of poverty who are enrolled in the state’s subsidized health insurance program, out-of-pocket spending for covered prescriptions and medical services is limited to $1,000 per benefit year. The ACA allows individuals in this income cohort to have out-of-pocket costs that can sum to more than double this amount ($2,250).

http://healthaffairs.org/blog/2014/03/26/health-insurance-coverage-is-ju…

The provisions of the Affordable Care Act (ACA) have provided the nation with health care coverage similar to that which has existed in Massachusetts. However, “the consumer protections for out-of-pocket health care costs are generally better in Massachusetts than those required under the ACA.” Though Massachusetts has better coverage, “Overall, 42.5 percent of all nonelderly adults in the state reported that health care costs had resulted in financial problems or health care access problems for their families in the past year.”

Over half of middle-income adults in Massachusetts also “reported that health care costs had resulted in financial problems or health care access problems for their families.”

Furthermore, “neither higher income nor health insurance coverage protected Bay State families: 31.7 percent of higher-income adults and 38.7 percent of adults with insurance coverage for the full year also reported that health care costs had resulted in problems for their families.”

This is the shocking truth about our new national standard of underinsurance: In spite of having greater financial protection than that offered through the Affordable Care Act, over one-half of middle-income adults and nearly one-third of higher-income adults in Massachusetts still had problems with health care costs. And many of those who didn’t have problems likely avoided them by being fortunate enough to remain healthy. That is not the way an egalitarian health care financing system should work.

This ACA turkey won’t fly. All of us, including many of those with higher incomes, would benefit from single payer.

Canadians spend more on private health insurance for smaller payouts

Medical Xpress, March 24, 2014

Spending by Canadians on private health insurance has more than doubled over the past 20 years, but insurers paid out a rapidly decreasing proportion as benefits, according to a study published today in the CMAJ (Canadian Medical Association Journal).

The study, by University of British Columbia and University of Toronto researchers, shows that overall Canadians paid $6.8 billion more in premiums than they received in benefits in 2011.

Approximately 60 per cent of Canadians have private health insurance. Typically obtained as a benefit of employment or purchased by individuals, private health insurance usually covers prescription drugs, dental services and eye care costs not paid by public health care.

Over the past two decades, the gap between what insurers take in and what they pay out has increased threefold. While private insurers paid out 92 per cent of group plan insurance premiums as benefits in 1991, they paid only 74 per cent in 2011. Canadians who purchased individual plans fared even worse, with just 38 per cent of their premiums returned as benefits in 2011.

“Small businesses and individual entrepreneurs are the hardest hit – they end up paying far more for private health coverage,” says study lead author Michael Law, an assistant professor in UBC’s Centre for Health Services and Policy Research, “It’s essentially an extra health tax on one of our main economic drivers.

“Our findings suggest that private insurers are likely making greater profits, paying higher wages to their executives and employees, or spending more on marketing,” Law adds.

http://medicalxpress.com/news/2014-03-inefficiency-private-health-canada.html

CMAJ article (first page, paywall for rest): http://www.cmaj.ca/content/early/2014/03/24/cmaj.130913.extract

Comment:

By Don McCanne, MD

Although Canada’s single payer system provides excellent coverage for most health care, a market for private health insurance sprung up to cover prescription drugs, dental services and eye care that were not covered by the original program. The for-profit insurers did what they are expected to do. They began by retaining 8 percent of premiums for administrative costs and profits. But after two decades, they now retain as much as 62 percent of premiums for profits, high executive compensation, marketing and other administrative costs.

Although some are calling for more regulation of Canada’s private insurers, they should have learned from the experience in the United States. No amount of regulation will eliminate their inefficiencies and waste. Coverage for these services should be rolled over into the public single payer system.

Opponents protest that Canada cannot afford to offer these benefits in their public program. Nonsense. Most Canadians are already receiving drugs, dental care and eye care, and it is being paid for out-of-pocket or through private insurance. The money is already being spent; it just needs to be spent better. Placing these benefits into the public program would do the following things: 1) administered pricing would ensure value, 2) financial barriers to care would be reduced, 3) financing would be more equitable, and 3) the excesses and waste of the private insurers would be eliminated.

When we enact our single payer system here in the United States, we’ll need to be sure that we don’t make the same mistakes as Canada, though they are far fewer than our blunders.