PNHP

Million-Dollar Babies Should Have Been Non-Issue for AOL

Million-Dollar Babies Should Have Been Non-Issue for AOL

By Maggie Fox
NBC News, February 10, 2014

Tim Armstrong has had to apologize twice now for his announcement last year saying the company was changing its 401(k) retirement plan policy in part because it had some hefty health care claims, including two babies costing a million dollars each for care.

Experts say he may also have something else to apologize for — not knowing what he was talking about. No company the size of AOL should be strapped by having to pay for the medical care of two “distressed” newborns. And while it might have once been a problem for smaller employers, they say, the issue shows how the new health care law might provide some relief going forward.

“We had two AOL-ers that had distressed babies that were born that we paid a million dollars each to make sure those babies were OK in general. And those are the things that add up into our benefits cost,” Armstrong, pictured above, said last week.

The mother of one of the babies, Deanna Fei, told NBC News that her prematurely born child was one of the costly newborns and said Armstrong’s remarks made her feel like she and her family were “greedy consumers of health care benefits.”

Armstrong later personally apologized to Fei and he also reversed his controversial decision on the 401(k)s.

Dr. Steffie Woolhandler, co-founder of Physicians for a National Health Program, says it never should have been an issue in the first place. “A company as big as AOL ought to be able to do this, so it is a little confusing why they would be so flummoxed a by a couple of million-dollar babies,” she said.

“A million-dollar baby is not that unusual,” added Woolhandler — citing the enormous costs of U.S. health care in general and of keeping a child in a neonatal intensive care unit.

And, several experts pointed out, even if AOL is self-insured and pays its employee health costs directly, any sensible company has what’s called a “stop-loss” health insurance policy that would pay out once expenses reached a certain point.

Some workers may worry that they may be targeted by their employers if they start running up health costs. But it’s unlikely for several reasons, including two laws that protect workers: the Employee Retirement Income Security Act, known widely as ERISA, and well as the Health Insurance Portability and Accountability Act, or HIPAA.

HIPAA means Armstrong almost certainly did not know the specific details of the two cases, says Jennifer Rathburn, a health care expert at Quarles and Brady, LLP, a Milwaukee law firm. “There is a separation between the health plan and the employer,” she said. Employers who are self-insured must use a third-party administrator, usually a major insurance company, to handle the details of the coverage, and these administrators can pass along only aggregated information on the costs.

“Large employers don’t get claims data on a per person basis. It is very hard to discriminate against a specific person,” agreed Paul Fronstin, a senior research associate with the Employee Benefit Research Institute.

This could be different at a small firm, where the boss very likely knows all of the workers personally. But ERISA makes it illegal to fire someone for making use of their benefits and the National Federation of Independent Business, which represents small businesses, advises directly against trying it.

Smaller employers do worry about the possibility of being driven out of business by high employee costs, says Alden Bianchi, an employee benefits expert at Boston-based law firm Mintz Levin.

“Every few months you get a call from a self-funded plan, asking about an employee with a rare condition,” Bianchi said. “The claim poses a threat to the company’s existence.” They might offer the employee a bigger paycheck on the understanding he will refuse the company-sponsored insurance and go buy some on the new Obamacare exchanges instead, Bianchi said.

“My fear here is that this will happen and the exchanges will become dumping grounds for bad risks,” Bianchi said.

The other argument is that the exchanges could be the answer for small employers. Starting in 2015, they’ll be able to send their employees there, if they want, and the Obama administration argues workers will have better choices there than the one or two policies typically offered by an employer.

http://www.nbcnews.com/health/health-care/million-dollar-babies-should-have-been-non-issue-aol-n26776

Physician outcry on EHR functionality and costs

Physician outcry on EHR functionality, cost will shake the health information technology sector

By Daniel R. Verdon
Medical Economics, February 10, 2014

Despite the government’s bribe of nearly $27 billion to digitize patient records, nearly 70% of physicians say electronic health record (EHR) systems have not been worth it. It’s a sobering statistic backed by newly released data from marketing and research firm MPI Group and Medical Economics that suggest nearly two-thirds of doctors would not purchase their current EHR system again because of poor functionality and high costs.

*  Nearly 45% of physicians from the national survey report spending more than $100,000 on an EHR.

*  Nearly 79% of respondents in practices with more than 10 physicians said their EHR investment was not worth the effort, resources and cost.

*  73% of the largest practices would not purchase their current EHR system. The data show that 66% of internal medicine specialists would not purchase their current system. About 60% of respondents in family medicine would also make another EHR choice.

*  67% of physicians dislike the functionality of their EHR systems.

*  45% of respondents say patient care is worse since implementing an EHR.

*  65% of respondents say their EHR systems result in financial losses for the practice.

*  About 69% of respondents said that coordination of care with hospitals has not improved.

The national survey underscores the major disconnect between the current state of EHR software and the needs of physicians.

http://medicaleconomics.modernmedicine.com/medical-economics/news/physic…

Congress keeps coming up with schemes to try to control health care costs. Establishing financial incentives for electronic health records (EHRs) appears to be just one more example where Congress has again fallen short, based on this report of physician outcry over EHR functionality and costs.

It’s too bad. Members of Congress have before them a model that has been proven to be effective in controlling costs – a single payer national health program or “Improved Medicare for All.” If we had such a system in place then other improvements such as a health information technology system (HIT) could be developed in a coordinated manner that would better serve patients and their physicians.

The Office of the National Coordinator for Health Information Technology was established under President George W. Bush, but existed primarily to only encourage the private sector to work together to coordinate their systems. That is asking a lot of competitors that each want to have the dominant system in the market while making sure that competitors’ systems would not be compatible, so they could have the whole thing. The profit incentives in the private, fragmented EHR marketplace are considerably different from the patient care incentives that led to the successful VistA EHRs for the VA Health system – a concept developed by the National Center for Health Services Research and Development of the U.S. Public Health Service (now AHRQ).

Some may cite the boondoggle with the startup of the ACA insurance exchanges as an example of the incompetence of the government in such matters, but it was the government’s reliance on the private sector that resulted in the problems that we saw and are still seeing. Congress should enact a single payer system now so that we’ll have something to work with for the betterment of efficient patient care.

Lancet/Oslo Commission: The political origins of health inequity

The political origins of health inequity: prospects for change

By Ole Petter Ottersen and 23 other co-authors
The Lancet—University of Oslo Commission on Global Governance for Health, The Lancet, February 11, 2014

Executive summary

Despite large gains in health over the past few decades, the distribution of health risks worldwide remains extremely and unacceptably uneven. Although the health sector has a crucial role in addressing health inequalities, its efforts often come into conflict with powerful global actors in pursuit of other interests such as protection of national security, safeguarding of sovereignty, or economic goals. This report examines power disparities and dynamics across a range of policy areas that affect health and that require improved global governance: economic crises and austerity measures, knowledge and intellectual property, foreign investment treaties, food security, transnational corporate activity, irregular migration, and violent conflict.

Global health inequities

*  About 842 million people worldwide are chronically hungry, one in six children in developing countries is underweight, and more than a third of deaths among children younger than 5 years are attributable to malnutrition. Unequal access to sufficient, safe, and nutritious food persists even though global food production is enough to cover 120% of global dietary needs.

*  1·5 billion people face threats to their physical integrity, their health being undermined not only by direct bodily harm, but also by extreme psychological stress due to fear, loss, and disintegration of the social fabric in areas of chronic insecurity, occupation, and war.

*  Life expectancy differs by 21 years between the highest-ranking and lowest-ranking countries on the human development index. Even in 18 of the 26 countries with the largest reductions in child deaths during the past decade, the difference in mortality is increasing between the least and most deprived quintiles of children.

*  More than 80% of the world’s population are not covered by adequate social protection arrangements. At the same time, the number of unemployed workers is soaring. In 2012, global unemployment rose to 197·3 million, 28·4 million higher than in in 2007. Of those who work, 27% (854 million people) attempt to survive on less than US$2 per day. More than 60% of workers in southeast Asia and sub-Saharan Africa earn less than $2 per day.

* Many of the 300 million Indigenous people face discrimination, which hinders them from meeting their daily needs and voicing their claims. Girls and women face barriers to access education and secure employment compared with boys and men, and women worldwide still face inequalities with respect to reproductive and sexual health rights. These barriers diminish their control over their own life circumstances.

Conclusion

The overarching message of the Commission on Global Governance for Health is that grave health inequity is morally unacceptable, and ensuring that transnational activity does not hinder people from attaining their full health potential is a global political responsibility. The deep causes of health inequity are not of a technical character, devoid of conflicting interests and power asymmetries, but tied to fairness and justice rather than biological variance. Health equity should be a cross-sectoral political concern, since the health sector cannot address these challenges alone. A particular responsibility rests with national governments. We urge policy makers across all sectors, as well as international organisations and civil society, to recognise how global political determinants affect health inequities, and to launch a global public debate about how they can be addressed. Health is a precondition, outcome, and indicator of a sustainable society, and should be adopted as a universal value and a shared social and political objective for all.

http://www.thelancet.com/commissions/global-governance-for-health

The political origins of health inequity: prospects for change (38 pages): http://download.thelancet.com/pdfs/journals/lancet/PIIS0140673613624071.pdf

Comment:

By Don McCanne, M.D.

In reviewing the enormity of the global health inequities and the problems that perpetuate them, our compromised status in the United States seems to be minuscule in comparison. Yet when you think of the difficulties that we do have with addressing our own health inequities, it is mind-boggling to contemplate the international scene.

In a related Lancet article, Professor Ole Petter Ottersen is noted to be at pains to point out that this is far from “a doom and gloom report.” Yet they conclude, “Health equity should be a cross-sectoral political concern, since the health sector cannot address these challenges alone. A particular responsibility rests with national governments.”

Judging from the difficulties that we have had with merely tweaking some of our injustices without addressing effectively the major problems, it is difficult to see how nations will be able to work together in making real progress in improving the health of all – but we have to try.

As this is being written, Prof. Ottersen, in closing remarks in a live webcast from the University of Oslo at which this report was presented, reemphasized that that the improvement in global health will require the involvement of national political systems. And we thought single payer was tough.

Lancet/Oslo Commission: The political origins of health inequity

The political origins of health inequity: prospects for change

By Ole Petter Ottersen and 23 other co-authors
The Lancet—University of Oslo Commission on Global Governance for Health, The Lancet, February 11, 2014

Executive summary

Despite large gains in health over the past few decades, the distribution of health risks worldwide remains extremely and unacceptably uneven. Although the health sector has a crucial role in addressing health inequalities, its efforts often come into conflict with powerful global actors in pursuit of other interests such as protection of national security, safeguarding of sovereignty, or economic goals. This report examines power disparities and dynamics across a range of policy areas that affect health and that require improved global governance: economic crises and austerity measures, knowledge and intellectual property, foreign investment treaties, food security, transnational corporate activity, irregular migration, and violent conflict.

Global health inequities

*  About 842 million people worldwide are chronically hungry, one in six children in developing countries is underweight, and more than a third of deaths among children younger than 5 years are attributable to malnutrition. Unequal access to sufficient, safe, and nutritious food persists even though global food production is enough to cover 120% of global dietary needs.

*  1·5 billion people face threats to their physical integrity, their health being undermined not only by direct bodily harm, but also by extreme psychological stress due to fear, loss, and disintegration of the social fabric in areas of chronic insecurity, occupation, and war.

*  Life expectancy differs by 21 years between the highest-ranking and lowest-ranking countries on the human development index. Even in 18 of the 26 countries with the largest reductions in child deaths during the past decade, the difference in mortality is increasing between the least and most deprived quintiles of children.

*  More than 80% of the world’s population are not covered by adequate social protection arrangements. At the same time, the number of unemployed workers is soaring. In 2012, global unemployment rose to 197·3 million, 28·4 million higher than in in 2007. Of those who work, 27% (854 million people) attempt to survive on less than US$2 per day. More than 60% of workers in southeast Asia and sub-Saharan Africa earn less than $2 per day.

* Many of the 300 million Indigenous people face discrimination, which hinders them from meeting their daily needs and voicing their claims. Girls and women face barriers to access education and secure employment compared with boys and men, and women worldwide still face inequalities with respect to reproductive and sexual health rights. These barriers diminish their control over their own life circumstances.

Conclusion

The overarching message of the Commission on Global Governance for Health is that grave health inequity is morally unacceptable, and ensuring that transnational activity does not hinder people from attaining their full health potential is a global political responsibility. The deep causes of health inequity are not of a technical character, devoid of conflicting interests and power asymmetries, but tied to fairness and justice rather than biological variance. Health equity should be a cross-sectoral political concern, since the health sector cannot address these challenges alone. A particular responsibility rests with national governments. We urge policy makers across all sectors, as well as international organisations and civil society, to recognise how global political determinants affect health inequities, and to launch a global public debate about how they can be addressed. Health is a precondition, outcome, and indicator of a sustainable society, and should be adopted as a universal value and a shared social and political objective for all.

http://www.thelancet.com/commissions/global-governance-for-health

The political origins of health inequity: prospects for change (38 pages):http://download.thelancet.com/pdfs/journals/lancet/PIIS0140673613624071.pdf

In reviewing the enormity of the global health inequities and the problems that perpetuate them, our compromised status in the United States seems to be minuscule in comparison. Yet when you think of the difficulties that we do have with addressing our own health inequities, it is mind-boggling to contemplate the international scene.

In a related Lancet article, Professor Ole Petter Ottersen is noted to be at pains to point out that this is far from “a doom and gloom report.” Yet they conclude, “Health equity should be a cross-sectoral political concern, since the health sector cannot address these challenges alone. A particular responsibility rests with national governments.”

Judging from the difficulties that we have had with merely tweaking some of our injustices without addressing effectively the major problems, it is difficult to see how nations will be able to work together in making real progress in improving the health of all – but we have to try.

As this is being written, Prof. Ottersen, in closing remarks in a live webcast from the University of Oslo at which this report was presented, reemphasized that that the improvement in global health will require the involvement of national political systems. And we thought single payer was tough.

Blue Cross and Blue Shield of Louisiana dodges HIV/AIDS patients

CMS may require Obamacare insurers to accept Ryan White payments

By Bill Berkrot and Sharon Begley
Reuters, February 9, 2014

The 1990 Ryan White Act offered people with HIV/AIDS federal financial help in paying for AIDS drugs and health insurance premiums, especially in state-run, high-risk pools. Obamacare, which bans insurers from discriminating against people with preexisting conditions, was designed to replace these high-risk pools.

Hundreds of HIV/AIDS patients are dependent on Ryan White payments for Obamacare because they fall into a coverage gap. They are not eligible for Medicaid, the joint federal-state health insurance program for the poor, because Louisiana did not expand the low-income program, and Obamacare federal subsidies don’t kick in until people are at 100 percent of the federal poverty level.

Hundreds of people with HIV/AIDS in Louisiana trying to obtain coverage under President Barack Obama’s healthcare reform are in danger of being thrown out of the insurance plan they selected in a dispute over federal subsidies and interpretation of rules about preventing Obamacare fraud, Reuters reported on Saturday.

Blue Cross and Blue Shield of Louisiana, the state’s largest health insurer, is rejecting checks from a federal program designed to help these patients pay for AIDS drugs and insurance premiums, and has begun notifying customers that their enrollment in its Obamacare plans will be discontinued.

The insurer insists it is not trying to keep people with HIV/AIDS from enrolling in one of its policies under the Affordable Care Act, but is instead rejecting third party premium payments in an effort to prevent potential fraud.

http://www.reuters.com/article/2014/02/09/us-usa-healthcare-obamacare-idUSBREA180W620140209

Comment:

By Don McCanne, M.D.

One of the advantages of the Affordable Care Act (ACA) is that private insurers can no longer reject the applications of individuals with serious, expensive disorders, such as HIV/AIDS. But the response of Blue Cross and Blue Shield of Louisiana – the largest insurer in Louisiana – is another example of how private insurers are not inclined to change from their business model to a patient service model.

For HIV/AIDS patients, the need was so great that Congress passed the Ryan White Act in 1990 in order to provide funds to pay premiums for them in high-risk pools. Since ACA requires insurers to accept all applicants, many of the high-risk pools are transferring their beneficiaries to the exchange plans. These are expensive patients yet the premiums the insurers receive are the same as for everyone else in the individual risk pools.

Clearly, the insurers do not want these patients, yet the Ryan White funds are still available to pay the premiums, especially for those with incomes below poverty in a state that has refused to expand its Medicaid program.

So what did Blue Cross and Blue Shield of Louisiana do? They refused to accept Ryan White checks to pay for the premiums on the basis that such payments could expose the insurer to fraud. What? A federal government check creates a greater potential for fraud?

The fraud is obviously on the part of Blue Cross and Blue Shield of Louisiana which is using this ruse to keep high-cost HIV/AIDS patients out of their health plans – patients which they are required to cover.

HHS’s response? They are going to encourage insurers and Marketplaces to accept Ryan White payments. They offer what doesn’t even amount to a tweak when what we need is get rid of the private insurers and cover everyone with our own improved version of Medicare. The goal should be optimal patient service, not optimal business success for private insurers.

Letter: Stay the Course on Single-Payer

By Ann Raynolds
Valley News (Vermont), Friday, February 7, 2014 

Gov. Peter Shumlin has been steadfast in his commitment to designing a universal health care system in our state, and he has huge support from Vermont providers and consumers. Michael Costa is the financial guru hired who, with a top flight team of experts in Montpelier, is designing several scenarios for how this will work. It is highly complex, as he says, and they must do impact studies as well as crunch the numbers, and I hear them to be committed not to have the entire burden fall on Vermont’s businesses, especially small businesses.

But if we in Vermont can shed the monstrous costs of for-profit insurance companies that admittedly are in business to provide dividends to investors and astronomical CEO and administrative salaries (high even for the corporate CEO expectations in America), we will have set up a model for other states to follow and improve on. What must be repeated over and over again is that for-profit insurance companies are not in the business of providing health care.

If Vermont can meet this challenge with all the federal roadblocks and right-wing corporate funds being poured into the state to block this people’s movement, many other states will want to have a look. Think of having this universal health care system for public employees. What would this do in reducing tax burdens on all of us? We already support fire, police and schools in the public interest to provide a civil society; I’d like to know that the people serving me in restaurants and elsewhere are healthy and taking care of their well-being just as I feel the protection from police and firefighters.

So we support Gov. Shumlin, we are glad he gave this talk to Dartmouth graduate students (“Shumlin: Timing Is Key for Single Payer,” front page, Jan. 28), and we look for their understanding and help as we organize health care providers in Vermont to stay the course and work with us toward a health care system such as others in Western democracies already benefit from.

Ann Raynolds
VT Health Care for All Board of Directors

http://www.vnews.com/home/10438874-95/letter-stay-the-course-on-single-payer

Blue Cross and Blue Shield of Louisiana dodges HIV/AIDS patients

CMS may require Obamacare insurers to accept Ryan White payments

By Bill Berkrot and Sharon Begley
Reuters, February 9, 2014

The 1990 Ryan White Act offered people with HIV/AIDS federal financial help in paying for AIDS drugs and health insurance premiums, especially in state-run, high-risk pools. Obamacare, which bans insurers from discriminating against people with preexisting conditions, was designed to replace these high-risk pools.

Hundreds of HIV/AIDS patients are dependent on Ryan White payments for Obamacare because they fall into a coverage gap. They are not eligible for Medicaid, the joint federal-state health insurance program for the poor, because Louisiana did not expand the low-income program, and Obamacare federal subsidies don’t kick in until people are at 100 percent of the federal poverty level.

Hundreds of people with HIV/AIDS in Louisiana trying to obtain coverage under President Barack Obama’s healthcare reform are in danger of being thrown out of the insurance plan they selected in a dispute over federal subsidies and interpretation of rules about preventing Obamacare fraud, Reuters reported on Saturday.

Blue Cross and Blue Shield of Louisiana, the state’s largest health insurer, is rejecting checks from a federal program designed to help these patients pay for AIDS drugs and insurance premiums, and has begun notifying customers that their enrollment in its Obamacare plans will be discontinued.

The insurer insists it is not trying to keep people with HIV/AIDS from enrolling in one of its policies under the Affordable Care Act, but is instead rejecting third party premium payments in an effort to prevent potential fraud.

http://www.reuters.com/article/2014/02/09/us-usa-healthcare-obamacare-id…

One of the advantages of the Affordable Care Act (ACA) is that private insurers can no longer reject the applications of individuals with serious, expensive disorders, such as HIV/AIDS. But the response of Blue Cross and Blue Shield of Louisiana – the largest insurer in Louisiana – is another example of how private insurers are not inclined to change from their business model to a patient service model.

For HIV/AIDS patients, the need was so great that Congress passed the Ryan White Act in 1990 in order to provide funds to pay premiums for them in high-risk pools. Since ACA requires insurers to accept all applicants, many of the high-risk pools are transferring their beneficiaries to the exchange plans. These are expensive patients yet the premiums the insurers receive are the same as for everyone else in the individual risk pools.

Clearly, the insurers do not want these patients, yet the Ryan White funds are still available to pay the premiums, especially for those with incomes below poverty in a state that has refused to expand its Medicaid program.

So what did Blue Cross and Blue Shield of Louisiana do? They refused to accept Ryan White checks to pay for the premiums on the basis that such payments could expose the insurer to fraud. What? A federal government check creates a greater potential for fraud?

The fraud is obviously on the part of Blue Cross and Blue Shield of Louisiana which is using this ruse to keep high-cost HIV/AIDS patients out of their health plans – patients which they are required to cover.

HHS’s response? They are going to encourage insurers and Marketplaces to accept Ryan White payments. They offer what doesn’t even amount to a tweak when what we need is get rid of the private insurers and cover everyone with our own improved version of Medicare. The goal should be optimal patient service, not optimal business success for private insurers.

Another Prediction

By Dave Dvorak, MD
Minnesota Medicine, February 7, 2014

I enjoyed the provocative predictions by Minnesota physicians regarding the future of medicine in your excellent December 2013 feature “A Look into the Future”.

May I respectfully add one more prediction? We finally will confront the elephant in the exam room – that the American health care “system” is actually a complicated and inefficient patchwork that squanders 31 percent of our health dollars on administration. We will recognize that the highly profitable and duplicative private insurance industry has proven a perennial failure, both in containing costs and in achieving anything resembling universal coverage.

We will adopt the streamlined efficiencies of a single-payer system to finally bring costs under control, achieve fair and comprehensive risk pooling, and most importantly, guarantee quality coverage for all citizens.

ACOs provoke pointless war between insurers and hospitals

Insurers face new pressure over limited doctor choice

By Anna Wilde Mathews and Christopher Weaver
Wall Street Journal, February 6, 2014

Insurers are facing pressure from regulators and lawmakers about plans that offer limited choices of doctors and hospitals, a tactic the industry said is vital to keep down coverage prices in the new health law’s marketplaces.

This week, federal regulators proposed a tougher review process for the doctors and hospitals in plans to be sold next year through HealthCare.gov, a shift that could force insurers to expand those networks. 

Meantime, regulators in states including Washington and New Hampshire are ramping up their own scrutiny, and lawmakers in Mississippi and Pennsylvania, among others, are weighing bills that could force plans to add more hospitals and doctors.

The moves come amid complaints by some consumers that they don’t have access to a broad enough range of care—such as specialists at top academic medical centers…

http://online.wsj.com/news/articles/SB10001424052702304450904579365373011903340?mg=reno64-wsj&url=http%3A%2F%2Fonline.wsj.com%2Farticle%2FSB10001424052702304450904579365373011903340.html

==

Health law goals face antitrust hurdles

By Eduardo Porter
The New York Times, February 4, 2014

[I]n a remote courthouse in Idaho … less than two weeks ago a district judge sided with the Federal Trade Commission and ordered the unwinding of the merger between one of the state’s biggest hospital systems and its biggest independent network of doctors.

The ruling against St. Luke’s Health System’s 2012 purchase of the Saltzer Medical Group underlined a potentially important conflict between the nation’s antimonopoly laws and the Affordable Care Act. The new law has encouraged the creation of big, broad accountable care organizations, which are paid to keep patients healthy rather than for individual services.

“We want to be providing a more coordinated product that delivers health care at a lower overall cost to the community we serve,” Christine Neuhoff, general counsel at St. Luke’s, told me. ….

Paradoxically, Judge B. Lynn Winmill seemed to agree. In his decision, he noted that the merger, had he let it stand, would probably have improved patient outcomes: “St. Luke’s is to be applauded,” he wrote, “for its efforts to improve the delivery of health care in the Treasure Valley,” which stretches west from Boise.

Still, he slapped it down because the merged group, he reasoned, would be able to demand higher reimbursement rates from health insurers and raise rates for services like X-rays, pushing up health care costs for consumers. “There are other ways” to obtain the desired efficiencies that “do not run such a risk of increased costs,” he concluded.

http://www.isidewith.com/news/article/economic-scene-health-law-goals-face-antitrust-hurdles

==

FTC wins challenge against Idaho hospital deal

By Brent Kendall
Wall Street Journal, January 24, 2014

Lawyer David A. Ettinger, who represented a competing Idaho hospital that opposed the St. Luke’s transaction, said the judge’s ruling effectively rebuts “the notion that all these transactions are appropriate because of the Affordable Care Act.”

http://online.wsj.com/news/articles/SB10001424052702304856504579340733626090534

Comment:

By Kip Sullivan

The Affordable Care Act has set off another wave of mergers among hospitals, and it has induced insurance companies to kick doctors out of their “networks.” Both hospitals and insurers are justifying their behavior by claiming it is exactly what the authors of the Affordable Care Act wanted them to do. Hospitals claim they are merely trying to create “accountable care organizations” (a new synonym for HMO endorsed by the ACA) that will better “coordinate care” and thereby reduce costs. The insurance industry is claiming they are narrowing their networks in order to lower costs and winnow out doctors who don’t care about “quality.”

The emperor here is stark naked. The hospital and insurance industries are building up market power as fast as they can in order to maintain countervailing power against each other. By reducing the size of their networks, insurers create more power over the remaining providers and use it to negotiate lower reimbursements. By merging with other hospitals and buying up clinics, hospitals make it harder for insurers refuse to include them in their networks and to squash their fees. Neither the insurers nor the hospitals can afford to disarm unilaterally.  

Proponents of the ACO provisions within the ACA should have predicted that their handiwork would set off the equivalent of an arms race. The least they can do now is admit that’s what happened and that the consequences – smaller networks and bigger hospital-clinic chains – need to be unraveled. But ACA proponents either ignore the issue or suggest solutions that make no sense. In the New York Times article quoted above, Jonathan Skinner, a leading ACO proponent, argues that empire building by hospitals won’t lead to higher prices because insurance companies are also building up countervailing power by creating narrower networks. The Times quotes Skinner as follows: “It’s certainly true that the consolidation of physician groups and hospitals can lead to greater market power and higher charges to insurance companies. But the insurance companies are creating narrower networks of providers. So providers who try to charge more risk getting dropped entirely from the now narrower network.” What Skinner is saying is that we needn’t worry about giant hospital chains because giant insurance companies will react by reducing consumer choice and all will be well. In this battle between Godzilla and King Kong, patients will lose choice of provider, but that’s not anything we should worry our little minds about. What’s important is that the ACO experiment should play out across the country.

The Times also quotes Obama ally David Cutler saying that if hospital-clinic monopolies do evolve, that’s fine because they are probably the “only way to obtain good care,” and if that turns out to be the case, then we’ll have to “regulate [their] prices or total spending.” Like Skinner, Cutler is assuming that enormous hospital-clinic chains confer such obvious benefits that society must give up choice of provider and learn to tolerate enormous hospital-centered monopolies. The only difference between Cutler’s “solution” and Skinner’s is that the government will play Godzilla to the hospital’s King Kong, not the insurance industry.

But the claim that enormous health “systems,” dressed up as ACOs or anything else, can improve care and lower costs remains unproven. Until it is proven, the FTC, the Justice Department, and state attorneys general should not stand idly by and watch the empire builders. And judges should not treat the claims made by ACO proponents as true as the judge in the St. Luke’s case apparently did. When the FTC or Justice brings the empire builders into court and the empire builders claim they are merely trying to “integrate care” per the ACA, judges should demand evidence that ACOs or “integrated systems” work as advertised. That evidence does not exist today and probably never will exist.

In ruling against St. Luke’s, the Idaho judge made a valuable observation. He said “there are other ways” to achieve the goals ACO advocates claim they want to achieve. Imagine that. May I suggest one way: Why don’t ACO proponents state concretely and specifically what they want ACOs to do, and if evidence indicates what they’re proposing is good for patients, then let’s pay clinics and hospitals (not ACOs) to provide those services. When I say ACO proponents should speak “concretely and specifically,” I mean in everyday language, not “coordinated” this and “integrated” that and other fatuous labels invented by the illuminati at 80,000 feet. 

For example, if ACO proponents were to say that what they really want is nurses to visit heart failure patients at home after discharge and to monitor them remotely thereafter, I believe all of us – ACO proponents and skeptics alike – would agree the evidence indicates that is good for patients http://www.innovations.ahrq.gov/content.aspx?id=275. In that event, we could write a code for those services and order public and private insurers to pay for them. Why funnel un-earmarked “capitation” payments through the headquarters of enormous hospital-clinic chains and hope they’ll use the money to pay nurses to take better care of heart failure patients rather, than, say, more advertising or more mergers? 

Paying clinics and hospitals directly would remove much of the incentive to build empires and it would give society a much better record of where our money went. 

Of course, the ultimate antidote to empire-building is a single-payer system. 

The Single-Payer Answer to Our Broken Healthcare System

By George Sax
Artvoice (Buffalo, NY.), February 6, 2014

A skeptical, well-dressed middle-aged man was the first person to take advantage of Dr. Andy Coates’s surprise invitation to the audience gathered Thursday evening in D’Youville College’s Madonna Lounge to hear him discuss the need and prospects for a national single-payer health insurance system. Instead of immediately proceeding to his remarks, Coates, an Albany physician and a nationally recognized expert, asked the approximately 100 people in the audience if any of them wanted to ask a question, and this questioner challenged the very idea of national health insurance.

“I don’t trust the federal government,” he told Coates. “The postal system had a monopoly and they screwed it up.” Private delivery firms, he charged, had done a better job and dismissed the idea that the government could run a health insurance system.

“I have no love for the federal government,” Coates replied, but, he went on, there was no other realistic choice, and the problem was too crucial, too urgent to avoid. “Tens of millions of Americans are without insurance,” Coates told him, and many will remain un- or underinsured even after the Affordable Care Act—Obamacare—is finally implemented. “I think it’s a minimum of a modern democracy,” he said, that its citizens have access to decent healthcare.

Coates is president of Physicians for a National Health Program, whose local chapter was a sponsor of the forum, which came almost exactly a year after Coates first spoke in Buffalo on the same topic. In his data-filled presentation, he conceded that Obamacare will reduce the often critical healthcare problems of millions of Americans, but he focused on the flaws and inadequacies of this program, and the superiority of a single-payer system. Under the former, somewhere from 40 to 60 percent of the nation’s uninsured will still be without insurance, and the inefficiencies, excessive profit-taking, and inferior care will continue to a great extent. This is because, single-payer advocates say, far from being a socialistic scheme, as rightists have called it, it leaves in place the present profit incentives and centers that deform and restrict healthcare. (Wednesday’s New York Times ran an article about the profitable adaptation to Obamacare of Wellpoint, a large insurer and a former corporate opponent of the program.)

Under a single-payer system, the government is the primary payer of everyone’s healthcare bills, virtually a population-wide extension of Medicare. Coates zeroed in on both the human costs of the present system and the structural infirmities of the Affordable Care Act. The National Institute of Medicine estimated several years ago that there were 25,000 additional deaths each year in this country due to lack of healthcare. Coates pointed to another study that estimated there were 44,000 annual deaths. In this state, Coates noted, where 17.5 percent lack insurance, this works out to 2,254 deaths.

Americans, he told the audience, pay more for medical care, and suffer poorer health than people in other advanced nations. Obamacare, he said, with its reliance on market forces, is ill-designed to solve these problems: “There are 10 essential benefits [mandated], but no standard benefit package, no regulation of premiums, deductibles, and co-pays…Premiums are [often] held low by exorbitant out-of-pocket responsibilities.”

“The present US per capita expenditure on healthcare is sufficient” to finance a single-payer system, Coates argued. Per capita, there is $8,900 in private annual spending and $5,749 in public expenditure, much more than is spent, for example, in Canada, a country with a national, all-inclusive Medicare system and better health outcomes. Insured Americans, he said, each pay an average $606 in out-of-pocket expenses, Canadians $148.

Coates suggested that Massachusetts’ “Romneycare,” after which Obamacare was modeled, offers a sort of forecast of what such market-based system will do. “Over the last five years,” he said, “premium costs have been rising and benefits falling” in that state. “Canada has succeeded in bending the cost curve,” Coates observed, but he expressed skepticism that the American model will.

“The growing polarization” in American income and wealth, Coates explained, is, in part, driven by healthcare. In an email this week, he told Artvoice, “Many health problems stem from the social determinants of health.”

Speaking before Coates, Dr. Myron Glick, CEO and founder of Buffalo’s Jericho Road Community Health Center, which provides care for underserved people, told of a case that, he said, “illustrated how broken our health system is.” A man who lost his insurance a decade ago, was repeatedly in and out of local emergency rooms, and diagnosed with diabetes. A visiting nurse called Glick, begging him to help because she couldn’t find a family physician to see him. “Even with Medicaid,” Glick said, “this man didn’t have access to a family doctor.” Obamacare relies on Medicaid to enroll millions of the uninsured. It will also, he said, “leave in place people who can profit from the present system.”

Later, Glick asked Coates what could be done to advance the single-payer cause in the face of large political obstacles. Coates told him that he has “a hell of a lot more confidence in our communities” than in national politics. “All politics is local,” he said. The tide of opinion is slowly turning in favor of a genuine national health system, he said, and gaining it would give Americans a sense of pride in their country. “Now,” he said, “things aren’t working well in this country.”

ACOs provoke pointless war between insurers and hospitals

Insurers face new pressure over limited doctor choice

By Anna Wilde Mathews and Christopher Weaver
Wall Street Journal, February 6, 2014

Insurers are facing pressure from regulators and lawmakers about plans that offer limited choices of doctors and hospitals, a tactic the industry said is vital to keep down coverage prices in the new health law’s marketplaces.

This week, federal regulators proposed a tougher review process for the doctors and hospitals in plans to be sold next year through HealthCare.gov, a shift that could force insurers to expand those networks.

Meantime, regulators in states including Washington and New Hampshire are ramping up their own scrutiny, and lawmakers in Mississippi and Pennsylvania, among others, are weighing bills that could force plans to add more hospitals and doctors.

The moves come amid complaints by some consumers that they don’t have access to a broad enough range of care—such as specialists at top academic medical centers…

http://online.wsj.com/news/articles/SB1000142405270230445090457936537301…

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Health law goals face antitrust hurdles

By Eduardo Porter
The New York Times, February 4, 2014

[I]n a remote courthouse in Idaho … less than two weeks ago a district judge sided with the Federal Trade Commission and ordered the unwinding of the merger between one of the state’s biggest hospital systems and its biggest independent network of doctors.

The ruling against St. Luke’s Health System’s 2012 purchase of the Saltzer Medical Group underlined a potentially important conflict between the nation’s antimonopoly laws and the Affordable Care Act. The new law has encouraged the creation of big, broad accountable care organizations, which are paid to keep patients healthy rather than for individual services.

“We want to be providing a more coordinated product that delivers health care at a lower overall cost to the community we serve,” Christine Neuhoff, general counsel at St. Luke’s, told me. ….

Paradoxically, Judge B. Lynn Winmill seemed to agree. In his decision, he noted that the merger, had he let it stand, would probably have improved patient outcomes: “St. Luke’s is to be applauded,” he wrote, “for its efforts to improve the delivery of health care in the Treasure Valley,” which stretches west from Boise.

Still, he slapped it down because the merged group, he reasoned, would be able to demand higher reimbursement rates from health insurers and raise rates for services like X-rays, pushing up health care costs for consumers. “There are other ways” to obtain the desired efficiencies that “do not run such a risk of increased costs,” he concluded.

http://www.isidewith.com/news/article/economic-scene-health-law-goals-fa…

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FTC wins challenge against Idaho hospital deal

By Brent Kendall
Wall Street Journal, January 24, 2014

Lawyer David A. Ettinger, who represented a competing Idaho hospital that opposed the St. Luke’s transaction, said the judge’s ruling effectively rebuts “the notion that all these transactions are appropriate because of the Affordable Care Act.”

http://online.wsj.com/news/articles/SB1000142405270230485650457934073362…

Comment:

By Kip Sullivan

The Affordable Care Act has set off another wave of mergers among hospitals, and it has induced insurance companies to kick doctors out of their “networks.” Both hospitals and insurers are justifying their behavior by claiming it is exactly what the authors of the Affordable Care Act wanted them to do. Hospitals claim they are merely trying to create “accountable care organizations” (a new synonym for HMO endorsed by the ACA) that will better “coordinate care” and thereby reduce costs. The insurance industry is claiming they are narrowing their networks in order to lower costs and winnow out doctors who don’t care about “quality.”

The emperor here is stark naked. The hospital and insurance industries are building up market power as fast as they can in order to maintain countervailing power against each other. By reducing the size of their networks, insurers create more power over the remaining providers and use it to negotiate lower reimbursements. By merging with other hospitals and buying up clinics, hospitals make it harder for insurers refuse to include them in their networks and to squash their fees. Neither the insurers nor the hospitals can afford to disarm unilaterally.

Proponents of the ACO provisions within the ACA should have predicted that their handiwork would set off the equivalent of an arms race. The least they can do now is admit that’s what happened and that the consequences – smaller networks and bigger hospital-clinic chains – need to be unraveled. But ACA proponents either ignore the issue or suggest solutions that make no sense. In the New York Times article quoted above, Jonathan Skinner, a leading ACO proponent, argues that empire building by hospitals won’t lead to higher prices because insurance companies are also building up countervailing power by creating narrower networks. The Times quotes Skinner as follows: “It’s certainly true that the consolidation of physician groups and hospitals can lead to greater market power and higher charges to insurance companies. But the insurance companies are creating narrower networks of providers. So providers who try to charge more risk getting dropped entirely from the now narrower network.” What Skinner is saying is that we needn’t worry about giant hospital chains because giant insurance companies will react by reducing consumer choice and all will be well. In this battle between Godzilla and King Kong, patients will lose choice of provider, but that’s not anything we should worry our little minds about. What’s important is that the ACO experiment should play out across the country.

The Times also quotes Obama ally David Cutler saying that if hospital-clinic monopolies do evolve, that’s fine because they are probably the “only way to obtain good care,” and if that turns out to be the case, then we’ll have to “regulate [their] prices or total spending.” Like Skinner, Cutler is assuming that enormous hospital-clinic chains confer such obvious benefits that society must give up choice of provider and learn to tolerate enormous hospital-centered monopolies. The only difference between Cutler’s “solution” and Skinner’s is that the government will play Godzilla to the hospital’s King Kong, not the insurance industry.

But the claim that enormous health “systems,” dressed up as ACOs or anything else, can improve care and lower costs remains unproven. Until it is proven, the FTC, the Justice Department, and state attorneys general should not stand idly by and watch the empire builders. And judges should not treat the claims made by ACO proponents as true as the judge in the St. Luke’s case apparently did. When the FTC or Justice brings the empire builders into court and the empire builders claim they are merely trying to “integrate care” per the ACA, judges should demand evidence that ACOs or “integrated systems” work as advertised. That evidence does not exist today and probably never will exist.

In ruling against St. Luke’s, the Idaho judge made a valuable observation. He said “there are other ways” to achieve the goals ACO advocates claim they want to achieve. Imagine that. May I suggest one way: Why don’t ACO proponents state concretely and specifically what they want ACOs to do, and if evidence indicates what they’re proposing is good for patients, then let’s pay clinics and hospitals (not ACOs) to provide those services. When I say ACO proponents should speak “concretely and specifically,” I mean in everyday language, not “coordinated” this and “integrated” that and other fatuous labels invented by the illuminati at 80,000 feet.

For example, if ACO proponents were to say that what they really want is nurses to visit heart failure patients at home after discharge and to monitor them remotely thereafter, I believe all of us – ACO proponents and skeptics alike – would agree the evidence indicates that is good for patients http://www.innovations.ahrq.gov/content.aspx?id=275. In that event, we could write a code for those services and order public and private insurers to pay for them. Why funnel un-earmarked “capitation” payments through the headquarters of enormous hospital-clinic chains and hope they’ll use the money to pay nurses to take better care of heart failure patients rather, than, say, more advertising or more mergers?

Paying clinics and hospitals directly would remove much of the incentive to build empires and it would give society a much better record of where our money went.

Of course, the ultimate antidote to empire-building is a single-payer system.

CMS’s shocking rules on QHP networks and ECPs

Draft 2015 Letter to Issuers in the Federally-facilitated Marketplaces

Centers for Medicare & Medicaid Services, February 4, 2014

This Letter provides issuers seeking to offer Qualified Health Plans (QHPs), including stand-alone dental plans (SADPs), in a Federally- facilitated Marketplace (FFM) and/or Federally-facilitated Small Business Health Options Program (FF-SHOP), with operational and technical guidance to help them successfully participate in the Marketplaces.

Chapter 2

Section 3. Network Adequacy

Pursuant to 45 C.F.R. 156.230(a)(2), an issuer of a QHP that has a provider network must maintain a network that is sufficient in number and types of providers, including providers that specialize in mental health and substance use disorder services, to assure that all services will be accessible to enrollees without unreasonable delay.

For the 2015 benefit year, issuers will be required to submit a provider list that includes all in-network providers and facilities for all plans for which a QHP certification application is submitted. CMS will review the collected provider list to evaluate provider networks using a “reasonable access” review standard, and will identify networks that fail to provide access without unreasonable delay. In order to determine whether an issuer meets the “reasonable access” standard, CMS will focus most closely on those areas which have historically raised network adequacy concerns. These areas may include the following:

• Hospital systems,

• Mental health providers,

• Oncology providers, and

• Primary care providers.

If CMS determines that an issuer’s network is inadequate under the reasonable access review standard, CMS will notify the issuer of the identified problem area(s) and will consider the issuer’s response in assessing whether the issuer has met the regulatory requirement and prior to making the certification or recertification determination.

Section 4. Essential Community Providers

Essential community providers (ECPs) include providers that serve predominantly low-income and medically underserved individuals (includes federally qualified health centers, Ryan White HIV/AIDS Providers, Title X Family Planning Clinics, Tribal and Urban Indian Organization Providers, Disproportionate Share Hospital (DSH) and DSH-eligible Hospitals, Children’s Hospitals, Rural Referral Centers, Sole Community Hospitals, Free-standing Cancer Centers, Critical Access Hospitals, STD Clinics, TB Clinics, Hemophilia Treatment Centers, Black Lung Clinics, and other entities that serve predominantly low-income, medically underserved individuals).

i. Evaluation of Network Adequacy with respect to ECP

Because the number and types of ECPs available vary significantly by location, CMS intends to propose in rulemaking an approach to evaluating QHP Applications for sufficient inclusion of ECPs for the 2015 benefit year.

If finalized, we intend for certification year 2015 to utilize a general ECP standard whereby the application would first have to demonstrate that at least 30 percent of available ECPs in each plan’s service area participate in the provider network.

http://www.cms.gov/CCIIO/Resources/Regulations-and-Guidance/Downloads/draft-issuer-letter-2-4-2014.pdf

Comment:

By Don McCanne, M.D.

In an effort to improve the function of health plans being offered through the Federally-facilitated Marketplaces (insurance exchanges), CMS has issued a Draft Letter providing guidance to Qualified Health Plans (QHPs) as they apply for certification or recertification of their plans. From CMS’s 51 page letter, two of the issues presented warrant our special attention: 1) network adequacy for the QHPs, and 2) network inclusion of Essential Community Providers (ECPs).

The Affordable Care Act (ACA) very intentionally included limited provider networks as a tool to reduce health care spending. QHPs could negotiate lower payment rates by offering physicians and hospitals exclusivity – exchanging lower fees for higher volume, while excluding the other physicians and hospitals in the community. The insurers seemed to think that they were given carte blanche and trimmed these back to narrow networks or even ultra-narrow networks. The insurers’ bargaining leverage with the few providers that sign on is even greater, plus these narrow networks further reduce spending since patients have greater difficulties accessing care because of transportation problems and difficulties obtaining appointments with overbooked providers. Patients losing their established health care providers not only have the right to be angry, but that can also be disruptive to the care of those in ongoing treatment programs for more serious problems. Disruption of care, impairing access, and depriving patients of choice of their care are opposite of the policies that reform should bring us.

The CMS Letter states that “a provider network must maintain a network that is sufficient in number and types of providers,” and that “issuers will be required to submit a provider list that includes all in-network providers and facilities” so that CMS can “evaluate provider networks using a ‘reasonable access’ review standard.”

Well, that’s a nice process. Sufficient providers? Reasonable access standard? Every community is different. How many hospitals and physicians would be needed in each network, and, furthermore, how do you choose which ones are to be anointed? Is this another one of those public-private partnerships burying corruption under the banner of market efficiency? Further, what about the next year when it turns out that the selected providers were not so hot after all? Do you then turn to the providers who were rejected? Not if they closed shop and left town. Disrupting the community health care infrastructure is the opposite of the policies that reform should bring us.

Since tens of millions will remain uninsured it is essential that ECPs be supported. The uninsured will have to rely largely on federally qualified health centers, disproportionate share hospitals, critical access hospitals, rural referral centers and other institutions that have traditionally provided care to the poor and uninsured. In many communities, these institutions also provide services to insured individuals, including especially those with Medicaid. Sometimes these sites are chosen by patients because of impaired access to mainstream providers, sometimes for convenience, and sometimes because of patient preference, especially when these sites have always been the individual’s source of care.

So what is the new proposed CMS rule on ECPs? For 2015, CMS would require that “at least 30 percent of available ECPs in each plan’s service area participate in the provider network.” The reciprocal? The health plans can exclude up to 70 percent of essential community providers from its networks! ACA reduced the funding for safety-net institutions since “everybody would be insured” so their care could be paid for through the plans. Yet when the beneficiaries use these essential community providers, the insurers do not have to pay for care provided by 70 percent of these ESSENTIAL institutions. Defunding essential community providers is the opposite of the policies that reform should bring us.

The few good polices contained in ACA do not begin to offset all of the terrible policies that already characterize our dysfunctional health care system – policies that were left in place because of the highly flawed design of ACA.

There is something we can do about it. First, it is essential that everyone has a solid foundation in knowledge about social insurance. Once we have that, it will be so obvious that we need a universal, publicly financed and publicly administered program of social insurance for health care, something like an improved Medicare that covers everyone. For those who missed yesterday’s Quote of the Day on “Social Insurance” by Marmor et al, click on the link below, read the message, and then buy the book.

https://www.pnhp.org/news/2014/february/social-insurance-what-you-need-to-know