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U.S. executives most concerned about health care costs

U.S. executives most concerned about health care costs

Healthcare costs top U.S. executives’ concerns: Adecco survey

By Nick Zieminski
Reuters, October 22, 2012
U.S. corporate executives are more worried about providing healthcare benefits to their employees than about issues like wages, taxes or attracting qualified workers, according to a survey by the world’s No. 1 staffing company, Adecco SA.
In Adecco’s poll of senior executives, 55 percent named healthcare benefits as their biggest current business challenge, and about a third say they are holding back hiring because of healthcare reforms introduced by U.S. President Barack Obama.
Healthcare’s prominence as an issue has risen since the 2008-2009 recession, Adecco found: in 2007, only 35 percent called healthcare their top worry.
Obama’s 2010 healthcare law, upheld this year by the U.S. Supreme Court, is expected to raise insurance costs for employers because it calls for wider coverage of more people, including those with pre-existing medical conditions.
http://www.reuters.com/article/2012/10/22/us-adecco-election-survey-idUS…

The Affordable Care Act (ACA) was designed to not disturb the largest sector of health insurance coverage already in existence: employer-sponsored health plans. Although costs were said to be almost intolerable for many employers, ACA included provisions to improve private health plans which will further increase costs for employers. Thus it is no surprise that health care has moved up on the executives’ list of concerns as their biggest business challenge.
Before the Democrats settled on the ACA model of reform, employers were looking for better ways of controlling costs. One of the models under consideration was single payer, an attractive option because of its greater efficiencies and assured coverage of everyone.
Business executives might have been more interested in the single payer model except for two perceived drawbacks: 1) They were not assured that they wouldn’t have to foot much of the bill for a national health program through higher payroll taxes, higher taxes on executive compensation, and higher corporate taxes, and 2) Many of them are ideologically conservative and did not want to see a government-run health care financing system.
With the passage of ACA health care moved from a top concern of 35 percent of the executives to a top concern of 55 percent of them. That suggests that they may believe they made a bad decision in passively allowing ACA to move forward, though there was token opposition from the U.S. Chamber of Commerce and the National Federation of Independent Business.
Another change taking place is that businesses are relying more on Medicare for their retirees as they pare back their health benefit programs for former employees. Obviously they recognize that Medicare provides a greater value for them than did their private programs, especially because of the federal funding of Medicare. It would not be much of a reach for them to decide that Medicare would also provide a greater value for them if it became the health benefit program for their active employees.
If we were to move forward with an improved Medicare that covered everyone, then the employers would need to be convinced that the taxes to fund the universal risk pool would be equitably distributed, and that they would not have to bear an unfair excessive financial burden for the program. Without getting into details on tax policy, suffice it to say that such a goal is readily achievable.
That would leave only ideology as a hurdle. Successful businessmen certainly place great importance on value. When it is demonstrated to them that an improved Medicare for all would control their health care costs well into the indefinite future, they would be very foolish to reject such a good deal. They really wouldn’t have to give up their ideology. They could take it to the smoking lounge and vent with their business colleagues, over a cigar and a snifter of brandy, how terrible it is that they had to accept the terms of a single payer system, but, after all, business is business.

Behavioral hazard in health insurance

By Katherine Baicker, Sendhil Mullainathan and Joshua Schwartzstein
Working Paper 18468
National Bureau of Economic Research, October 2012

ABSTRACT

This paper develops a model of health insurance that incorporates behavioral biases. In the traditional model, people who are insured overuse low value medical care because of moral hazard. There is ample evidence, though, of a different inefficiency: people underuse high value medical care because they make mistakes. Such “behavioral hazard” changes the fundamental tradeoff between insurance and incentives. With only moral hazard, raising copays increases the efficiency of demand by ameliorating overuse. With the addition of behavioral hazard, raising copays may reduce efficiency by exaggerating underuse. This means that estimating the demand response is no longer enough for setting optimal copays; the health response needs to be considered as well. This provides a theoretical foundation for value-based insurance design: for some high value treatments, for example, copays should be zero (or even negative). Empirically, this reinterpretation of demand proves important, since high value care is often as elastic as low value care. For example, calibration using data from a field experiment suggests that omitting behavioral hazard leads to welfare estimates that can be both wrong in sign and off by an order of magnitude. Optimally designed insurance can thus increase health care efficiency as well as provide financial protection, suggesting the potential for market failure when private insurers are not fully incentivized to counteract behavioral biases.

****

6.3 Evidence on Private Plans

These results suggest that competitive forces do not lead to efficient equilibrium insurance contracts when insurees are naive about their biases, but that the insurer will have an incentive to counteract biases when this saves the insurer money. These results may shed light on why more health insurance plans do not incorporate behavioral hazard into their copayment structures. Recall the evidence from Table 2 (from full paper at link below), which summarizes the features of several major insurance plans. Co-payments are rarely a function of the health benefit associated with the care for a particular patient.

Nevertheless, insurers could increase profits by promoting adherence to medications and treatments that save money over a reasonably short horizon (relative to the typical tenure of their enrollees), and the model suggests that insurers will invest in encouraging care in such instances.

http://www.nber.org/papers/w18468.pdf

Comment:

By Don McCanne, MD

Moral hazard in health insurance is said to occur when patients obtain unnecessary care merely because they don’t have to pay for it. Requiring patients to pay for at least a portion of their care, through deductibles, co-payments and coinsurance, supposedly disincentivizes patients from obtaining such unnecessary care, but does so at the cost of patients declining care that is quite appropriate and should be obtained. This paper attempts to compensate for that by adding behavioral hazard to that of moral hazard when determining when and how much financial exposure patients should have when accessing care. If the behavior of patients might cause them to underuse care, then cost sharing should be adjusted downward accordingly.

That’s the theory. In practice it would greatly add to the administrative burden of private health care financing to try to identify not only each instance when a patient might be inclined to overuse care unnecessarily (moral hazard), but also each instance in which a patient might avoid beneficial care because of cost barriers (behavioral hazard), and then to modify the patient’s share of each cost entailed based on these economic hazards.

Current estimates on how much could be saved by avoiding moral hazard are flawed anyway, primarily because they ignore the deleterious effect of behavioral hazard. Yet private insurance products incorporate cost sharing that does ignore behavioral hazard, except in very limited instances such as preventive services or cost sharing for important maintenance drugs. Once you make the adjustments in cost sharing that would prevent most or all behavioral hazard, the savings would dramatically diminish and might even be totally offset by the costs of the administrative excesses.

The most effective way to prevent behavioral hazard is to remove all financial barriers to care. The moral hazard remaining does not even apply to the eighty percent of health care that is consumed by patients with greater needs who have long exceeded their deductibles and stop loss. It’s simply not worth applying cost sharing measures to the remaining twenty percent of care for those of us who are relatively healthy, when the resulting decrease in our total national health expenditures would be almost negligible.

Besides, who are all of these people who are demanding care that they simply do not need? Thinking back through my decades of family practice, no one individual comes to mind.

Health reform won’t shield Utah families from medical debt

Both Obama’s reform and challenger Romney’s plan leave families exposed to high out-of-pocket costs

By Kirsten Stewart
The Salt Lake Tribune, Oct. 21, 2012

Kiarah sits propped up on pillows, her tiny frame seeming to disappear in the sterile expanse of the hospital bed.

The 4-year-old is distracted for now by her Nintendo DS. She’s too young to remember the first two surgeries to rebuild her hip, the body casts and having to learn to walk again. “We try hard to insulate her, to make sure she doesn’t feel different from other kids,” said her mother, Sarah McCoy.

But the well-wishers and balloons will soon give way to months of rehabilitation and piles of medical bills.

Prior to Kiarah’s diagnosis with hip dysplasia, McCoy had no debt. Now, despite having better-than-average health insurance, mounting medical bills and related expenses have pushed the 28-year-old working mom to the brink of bankruptcy.

Medical debt is a common burden in America, shouldered not just by the poor and uninsured, but scores of fully insured, middle-class families. It’s a leading cause of bankruptcy and well-documented drag on the economy, which industry experts say is getting worse.

And it’s uncertain whether federal health reform will bring relief.

“It’s a problem that affects everyone but the extremely wealthy, a problem of the 99 percent. And it’s a matter of bad luck for the people who incur it,” said Mark Rukavina, a former consumer advocate and founder of the hospital advisory group, Community Health Advisors in Massachusetts.

The first hint of Kiarah’s hip dysplasia was the click a nurse heard while examining the newborn’s hips. But the family pediatrician couldn’t replicate the click and dismissed McCoy’s concerns, even 10 months later, when she complained her daughter was walking oddly.

After Kiarah’s first birthday, an orthopedic specialist confirmed Kiarah had hip dysplasia, said McCoy. “Her hip has never been in the socket, so no cup had developed. It was still the size as a newborn.”

The first two attempts to create a socket to grip her femur were only partially successful. Doctors at Primary Children’s Medical Center say prospects are better now that she and her bones are bigger, said McCoy.

Tapping patients’ pockets

The Affordable Care Act aims to reduce medical debt by insuring more people, thereby easing the charity-care burden on hospitals, which will have fewer losses to pass onto paying customers.

The law puts limits on what nonprofit hospitals can do to collect debts and puts new restrictions on insurers, which can no longer deny coverage to the sick or charge them more. Insurers can’t impose lifetime caps on coverage, and they have to spend more of the premiums they collect on actual medical care.

“Health reform will probably succeed at reducing many of the large bills,” said Rukavina. “But there will still be out-of-pocket costs that eat into people’s budgets.”

Indeed, the pioneering reform law in Massachusetts upon which federal reform was built may have kept debt in check, but it hasn’t solved it.

A survey of Bay State residents who filed bankruptcy in 2009 showed 53 percent blamed medical bills, down slightly from 59 percent in 2007 when the law wasn’t yet fully implemented, a study in the American Journal of Medicine showed. But the difference wasn’t statistically significant, the authors said.

The Blue Cross Blue Shield of Massachusetts Foundation reported in a 2010 survey that 1 in 5 adults were carrying medical debt and paying it down — statistically the same as in 2006.

Authors of both surveys blamed the high cost of U.S. medical care, which is rising faster than wages and inflation. Feeling squeezed, insurers are passing more of those costs onto consumers in the form of higher premiums, deductibles, co-payments and co-insurance — practices that neither President Obama’s health care law nor Mitt Romney’s health plan will limit.

Romney’s proposal to repeal the insurance mandate and turn Medicaid into a block grant could raise people’s out-of-pocket costs because, the Commonwealth Foundation predicts, it will increase the number of people who are uninsured. Romney also would provide smaller insurance subsidies to fewer people and steer more people to cheaper health plans that cover less.

“The trend has absolutely been toward increasing patient responsibility. It’s the least likely group to put up a fuss,” said Mark Rieger, a vice president at Gateway EDI, a St. Louis-based company that sells software to help doctors better manage their bills.

It used to be that no more than 9 to 10 percent of a physician’s income came directly from patients, he said. Now in some parts of the country it’s close to 20 to 30 percent.

‘It’s hard to climb out’

Still, health care providers “are only about 50 to 60 percent successful on collecting on patient responsibility,” Rieger said. As a result, clinics and hospitals have become less tolerant of past-due balances.

Days before Kiarah’s surgery, a clerk at Primary Children’s phoned McCoy to ask how she planned to pay for it.

“She said, ‘You’ve met your $700 deductible, but we estimate your portion of the bill will still be $4,000. And because you have an outstanding balance with us, we’ll need you to pay that up-front,’” said McCoy, who feared Kiarah would be denied surgery.

Instead, the nonprofit hospital put her on a payment plan. It routinely conveys the expected cost as patients preregister for care, said hospital spokeswoman Bonnie Midget. “Most families appreciate knowing up-front what their portion will be.”

McCoy is grateful for doctors at Primary and the hospital’s flexibility. A flight scheduler at Hill Air Force Base, she is the sole provider for Kiarah, her 10-year-old sister, Tiyah, and the girls’ father, Justin Adams, who is disabled.

But with every payment plan comes interest, and with each surgery, more bills and time off work.

“I’ve had my wages garnished to pay past premiums on my insurance for when I took unpaid leave. I’ve maxed out my credit cards to pay the rent and make car payments. My credit is shot, so I can’t take out a loan to consolidate my debt,” she said. “Once you’re in a hole, it’s hard to climb out.”

Creditors are now hounding her for more than $100,000.

‘The most common type of debt’

McCoy has hired a lawyer to sue the pediatrician who missed Kiarah’s dysplasia. But the case could take years to litigate. Her attorney has recommended that she file bankruptcy.

Data on how many bankruptcies in Utah are caused by medical debt are hard to come by.

But nearly 88 percent of a random sample of bankruptcy filings between 2003 and 2007 reported at least some medical debt, said Levi Pace, a doctoral candidate in economics at the University of Utah, who for his dissertation is researching the effects of changes to bankruptcy laws.

http://www.sltrib.com/sltrib/news/54935642-78/medical-debt-kiarah-mccoy.html.csp

Oregon lawmaker intends to keep single-payer movement alive next session

The Portland legislator is convinced that a single-payer health system is the most affordable and comprehensive option

By Diane Lund-Muzikant
The Lund Report (Portland, Ore.), Oct. 18, 2012

Despite the emphasis on health care transformation, evident by the $1.9 billion in federal funds that Governor John Kitzhaber garnered to implement coordinated care organizations, the single-payer movement isn’t dead in Oregon.

Its champion, Rep. Michael Dembrow (D-Portland) plans to re-introduce the same legislation again next February. In 2011, it received a hearing in the House but stalled there (House Bill 3510).

This time around, Dembrow has his eyes set on having public hearings in both the House and Senate health care committees.

“I don’t see transformation and single payer as being mutually exclusive, but complimentary,” Dembrow said. “The principles of coordinating care are very much the same with the single-payer philosophy – focusing on focusing on prevention and primary care including oral health and mental health as well as physical health.”

But Dembrow faces an uphill battle with his legislative colleagues, among them Rep., Tina Kotek (D-Portland) who said she applauded the conversation in 2011 but wants to let the dust settle on health reform before jumping on board.

“With the Affordable Care Act and the coordinated care organizations, we need to see how they work first. If they don’t work we’ll have to move to single payer because it’s an economic issue. People need access to health care, and my hope is that restructuring the Oregon Health Plan we can eventually impact and transform the entire private system. Let’s go there first.”

Rep. Bruce Hanna (R-Roseburg) said he’s never seen evidence showing that single payer is the best alternative. “Single payer takes away the competitive nature of providing health care. Anytime you eliminate competition, you increase costs, not decrease them.”

Nevertheless, Dembrow plowing ahead and insists that people have serious questions about the impact of the Affordable Care Act.

“It’s a move in the right direction but will still leave people without affordable coverage. Single payer is where we need to wind up as a country because it’s going be most affordable option. In principle, it will extend Medicare to all Oregonians and lead to lower administrative costs, less paperwork and be more comprehensive.”

Thousands of Oregonians favor a single-payer system, he believes. “They’re calling for us to move in this direction, and this legislation will create a focus for their organizing to keep this movement going.”

Next session, Dembrow’s also contemplating legislation that would call for a constitutional amendment saying health care is a fundamental right, an issue championed in the past by Rep. Mitch Greenlick (D-Portland). If successful, it would appear on the November 2014 ballot.

A rally being planned for the opening day of the session next February could draw support for such an amendment.

“If we do go forward with the constitutional referral, it’ll be kicked off then, but we’ll only go forward if I feel like there’s real potential for a statewide organization,” he said. “I don’t want to put this measure on the ballot unless I feel that proponents are willing to organize at the grassroots level to get it through.”

Dembrow realized the need for a single-payer system after the birth of his first child, who needed surgery when he was two weeks old. Both he and his wife were graduate students at the time, and the medical bill completely wiped out their savings. Four years later, his daughter was born in France, and Dembrow encountered the single-payer system firsthand. “All of our contributions came directly out of our paycheck; we had an excellent level of care without any kind of hardship or worry.”

Later, as president of the faculty union at Portland Community College, he saw the struggles that teachers faced who worked part-time and didn’t have access to health care. That led Dembrow to create a fund allowing these educators to be reimbursed for their insurance bills.

During his first stint in the legislature in 2009, he succeeded in passing legislation that allowed part-time faculty to combine their employment from multiple public colleges or universities and become eligible to purchase benefits from the Oregon Educators Benefit Board.

http://www.thelundreport.org/resource/dembrow_intends_to_keep_single_payer_movement_alive_next_session

Simple treatments: bad doctors or a bad health system?

By Josh Freeman, M.D.
Medicine and Social Justice blog, Oct. 20, 2012

The New York Times editorial on September 9, 2012, “Simple treatments ignored”, is a commentary on a report in the September 7 issue of the Centers for Disease Control and Prevention (CDC) publication Morbidity and Mortality Weekly Report (MMWR)  that many Americans with hypertension (high blood pressure) were not being adequately treated. The Times notes that the study “found that 67 million Americans had high blood pressure and that 31 million of them were being treated with medicines that reduced their blood pressure to a safe level. The remaining 36 million fell into three groups: people who were not aware of their hypertension, people who were aware but were not taking medication, and those who were aware and were treated with medication but still had hypertension.”

This is definitely not a good thing; hypertension is a serious disease that can have devastating results – most obviously in stroke, but also in increasing the risk of heart attack and kidney failure. Also, as the article states, treatment is relatively easy – that is to say, there are drugs that are available for effectively keeping hypertension under control. In fact, so many people are receiving effective treatment that the incidence of bad outcomes, such as stroke, has greatly decreased. The Times editorial, however, creates the impression that much or most of the fault of for lack of treatment is the result of ignorant, incompetent, uncareful (or uncaring) physicians; the reason, they write, is “…mostly because overburdened doctors did not give hypertension high priority.” This is a highly dubious assumption.

The editorial goes on to praise, specifically, the Kaiser Health System for doing a good job of controlling its patients’ blood pressure, and thus reducing the rate of strokes and heart attacks:  “The organization created a hypertension registry to track patients and the care they were getting; eased the burden on doctors by using pharmacists to initiate drug therapy and medical assistants to monitor patients’ progress; made it easy for patients to get free blood pressure checks; and showed doctors how their record on controlling blood pressure compared with others in the system.” This is great.

People should get treated effectively for treatable diseases, and hypertension is certainly one. There are, however, many reasons why they are not always treated, and this problem includes patient as well as provider issues. Hypertension is, on the whole, asymptomatic; it does not cause pain or weakness or even, usually, headaches; thus the sobriquet “silent killer”. The treatments, in addition to drugs, include things like “…weight loss, increased physical activity, lower sodium and alcohol consumption, and stress management,” which require significant effort and commitment on the part of the patient, and are not easy to do.

But, more important, the lessons of Kaiser are not easily translated into the rest of the health system. Kaiser is a very atypical in that it is a vertically-integrated, closed-panel health system. For starters, and it is a very important start, every patient in their panel is insured (though Kaiser) and every patient sees a Kaiser provider. Thus, they control both the coverage and direct care of this population, and they have a large enough scale to do outreach programs to encourage and support people in adopting and maintaining the behaviors listed above. This is, however, not the case for most of the community. Many people are not insured, and many others have insurance that does not cover drugs and other treatments. A variety of factors, some provider related (such as not being able to get an appointment) and others originating from patients’ own decisions (choosing to go to ERs and urgent care centers, and indeed “doctor shopping”), they see different providers. That the US has an uncoordinated health non-system is the key problem, not that “their doctors are asleep at the switch.”

The article concludes: “The benefits of reducing high blood pressure — not to mention the cost savings — are obvious. The wonder is that the health care system has done such a bad job of delivering those benefits.” To me the wonder is that we have tolerated not actually having a health system for as long as we have, and that health policy continues to try to address issues of quality of care while ignoring the elephants in the room: that so many people have no coverage or poor coverage, and that reimbursement overwhelmingly rewards intervening once problems have arisen rather than preventing them. That a physician hired by a hospital to inject clot-busters into the brain’s arteries to try to reverse a stroke that has already occurred earns, literally, several times as much as (and works much less than) a primary care physician who treats hypertension (and many other diseases). The reimbursement system is completely inequitable and inappropriate, and the health system is a sick hodge-podge of half measures.

First, we need a health insurance system that covers everyone: Medicare for all. Then we need to reward systems-based and outcomes-based care. Then maybe all of us can see results like Kaiser’s.

http://medicinesocialjustice.blogspot.com/2012/10/simple-treatments-bad-doctors-or-bad.html

Behavioral hazard in health insurance

By Katherine Baicker, Sendhil Mullainathan and Joshua Schwartzstein
Working Paper 18468
National Bureau of Economic Research, October 2012
ABSTRACT
This paper develops a model of health insurance that incorporates behavioral biases. In the traditional model, people who are insured overuse low value medical care because of moral hazard. There is ample evidence, though, of a different inefficiency: people underuse high value medical care because they make mistakes. Such “behavioral hazard” changes the fundamental tradeoff between insurance and incentives. With only moral hazard, raising copays increases the efficiency of demand by ameliorating overuse. With the addition of behavioral hazard, raising copays may reduce efficiency by exaggerating underuse. This means that estimating the demand response is no longer enough for setting optimal copays; the health response needs to be considered as well. This provides a theoretical foundation for value-based insurance design: for some high value treatments, for example, copays should be zero (or even negative). Empirically, this reinterpretation of demand proves important, since high value care is often as elastic as low value care. For example, calibration using data from a field experiment suggests that omitting behavioral hazard leads to welfare estimates that can be both wrong in sign and off by an order of magnitude. Optimally designed insurance can thus increase health care efficiency as well as provide financial protection, suggesting the potential for market failure when private insurers are not fully incentivized to counteract behavioral biases.
****
6.3 Evidence on Private Plans
These results suggest that competitive forces do not lead to efficient equilibrium insurance contracts when insurees are naive about their biases, but that the insurer will have an incentive to counteract biases when this saves the insurer money. These results may shed light on why more health insurance plans do not incorporate behavioral hazard into their copayment structures. Recall the evidence from Table 2 (from full paper at link below), which summarizes the features of several major insurance plans. Co-payments are rarely a function of the health benefit associated with the care for a particular patient.
Nevertheless, insurers could increase profits by promoting adherence to medications and treatments that save money over a reasonably short horizon (relative to the typical tenure of their enrollees), and the model suggests that insurers will invest in encouraging care in such instances.
http://www.nber.org/papers/w18468.pdf

Moral hazard in health insurance is said to occur when patients obtain unnecessary care merely because they don’t have to pay for it. Requiring patients to pay for at least a portion of their care, through deductibles, co-payments and coinsurance, supposedly disincentivizes patients from obtaining such unnecessary care, but does so at the cost of patients declining care that is quite appropriate and should be obtained. This paper attempts to compensate for that by adding behavioral hazard to that of moral hazard when determining when and how much financial exposure patients should have when accessing care. If the behavior of patients might cause them to underuse care, then cost sharing should be adjusted downward accordingly.
That’s the theory. In practice it would greatly add to the administrative burden of private health care financing to try to identify not only each instance when a patient might be inclined to overuse care unnecessarily (moral hazard), but also each instance in which a patient might avoid beneficial care because of cost barriers (behavioral hazard), and then to modify the patient’s share of each cost entailed based on these economic hazards.
Current estimates on how much could be saved by avoiding moral hazard are flawed anyway, primarily because they ignore the deleterious effect of behavioral hazard. Yet private insurance products incorporate cost sharing that does ignore behavioral hazard, except in very limited instances such as preventive services or cost sharing for important maintenance drugs. Once you make the adjustments in cost sharing that would prevent most or all behavioral hazard, the savings would dramatically diminish and might even be totally offset by the costs of the administrative excesses.
The most effective way to prevent behavioral hazard is to remove all financial barriers to care. The moral hazard remaining does not even apply to the eighty percent of health care that is consumed by patients with greater needs who have long exceeded their deductibles and stop loss. It’s simply not worth applying cost sharing measures to the remaining twenty percent of care for those of us who are relatively healthy, when the resulting decrease in our total national health expenditures would be almost negligible.
Besides, who are all of these people who are demanding care that they simply do not need? Thinking back through my decades of family practice, no one individual comes to mind.

George McGovern

What It Means to Be a Democrat

By George McGovern
Blue Rider Press, Penguin Group, 2011
Universal Health Care
In 2010, Barack Obama and the Democrats in Congress did an outstanding job in passing the Patient Protection and Affordable Care Act to make health insurance available for every American. The bill passed without a single Republican vote.
The law is being phased in over five years, but it already has eliminated some of the major shortcomings of the private insurance system. It has made health care coverage available to more children and young adults, ended lifetime limits on coverage, made more preventive services available at no cost, improved pharmaceutical coverage for seniors on Medicare, and provided tax credits to small businesses that insure their employees. The law also prohibits insurers from the heinous practice of denying coverage to children who have preexisting conditions, a provision that later will be extended to adults. It offers much-needed discipline to the insurance companies, which have called the shots for far too long.
But I think we should go further.
We should replace the 906-page bill, which I’m sure many lawmakers and most citizens haven’t read, with a seven word sentence that reads: “Congress hereby extends Medicare to all Americans.”
My firsthand experience with Medicare has convinced me that a Medicare-like plan, or single-payer system such as Canada enjoys, should apply to everyone, not just to old duffers like me.
http://www.amazon.com/What-Means-Democrat-George-McGovern/dp/B007F7QA5K

Electoral votes, 1972 Presidential election:
17 – George McGovern
520 – Richard Nixon
McGovern tried, and he never quit. We are all the better for it.

George McGovern

What It Means to Be a Democrat

By George McGovern
Blue Rider Press, Penguin Group, 2011

Universal Health Care

In 2010, Barack Obama and the Democrats in Congress did an outstanding job in passing the Patient Protection and Affordable Care Act to make health insurance available for every American. The bill passed without a single Republican vote.

The law is being phased in over five years, but it already has eliminated some of the major shortcomings of the private insurance system. It has made health care coverage available to more children and young adults, ended lifetime limits on coverage, made more preventive services available at no cost, improved pharmaceutical coverage for seniors on Medicare, and provided tax credits to small businesses that insure their employees. The law also prohibits insurers from the heinous practice of denying coverage to children who have preexisting conditions, a provision that later will be extended to adults. It offers much-needed discipline to the insurance companies, which have called the shots for far too long.

But I think we should go further.

We should replace the 906-page bill, which I’m sure many lawmakers and most citizens haven’t read, with a seven word sentence that reads: “Congress hereby extends Medicare to all Americans.”

My firsthand experience with Medicare has convinced me that a Medicare-like plan, or single-payer system such as Canada enjoys, should apply to everyone, not just to old duffers like me.

http://www.amazon.com/What-Means-Democrat-George-McGovern/dp/B007F7QA5K

Comment:

By Don McCanne, MD

Electoral votes, 1972 Presidential election:

17 – George McGovern
520 – Richard Nixon

McGovern tried, and he never quit. We are all the better for it.

Should Medicare patients pay more?

Medicare Planning and Trends Among Seniors

Allsup Medicare Advisor Seniors Survey
October 2012

An independently conducted telephone survey of 1,000 randomly selected individuals 65 years and older who currently have Medicare coverage

Thinking about retirement, are any of the following concerns for you?

61% – Future of Medicare
52% – Having enough money to enjoy retirement
43% – Paying for long-term care
41% – Paying for health care
38% – Outliving money
24% – Paying for housing

In general, how satisfied are you with your current Medicare coverage?

45% – Extremely satisfied
44% – Somewhat satisfied
6% – Not satisfied
5% – Not sure

As you may know, costs for the Medicare program are rapidly increasing. New funding or benefit restructuring will likely be needed. To keep the Medicare coverage you have right now, would you be willing to pay: 20% more/10% more/5% more/1% more?

32% – Pay 20% more
19% – Pay 10% more
10% – Pay 5% more
10% – Pay 1% more
23% – Pay nothing more
4% – Don’t know
2% – Medicare won’t need new funding

http://www.allsup.com/portals/4/AMA-Seniors-Survey-Oct2012.pdf

Comment:

By Don McCanne, MD

This survey confirms what we already knew. Most seniors are satisfied with Medicare, but a majority of them also are concerned about the future of Medicare, doubtlessly provoked by the current political threats to convert Medicare into a defined contribution (voucher) under the rubric of the imperative for entitlement reform. An intriguing inquiry in this survey is whether or not Medicare beneficiaries would be willing to pay more in order to keep their current Medicare coverage.

Sixty-one percent of responders indicated that they would be willing to pay five to twenty percent more to keep their current Medicare coverage. This probably does not communicate their belief that they should be paying more, but rather expresses the view that they are protective of Medicare and would be willing to reach deeper into their pockets to preserve the program.

It would not surprise anyone if the politicians used this result to decide to increase the out-of-pocket expenses for Medicare beneficiaries, again in the name of entitlement reform. But this would be a mistake. In a recent Quote of the Day message, we discussed Medicare’s failure to protect personal finances (https://pnhp.org/news/2012/september/medicares-failure-to-protect-personal-finances). Instead of increasing out-of-pocket costs, financial barriers should be removed by providing first-dollar coverage. You could do that by adopting a single payer system. Health care costs can be controlled by using the other economic tools of a well-designed single payer system.

Rather than using premiums, deductibles and coinsurance assigned to the individual Medicare beneficiary, an improved Medicare program that covered everyone should be separately funded through progressive taxes. The current proposal to adjust Medicare premiums based on income would seem like a step in the right direction, but it would add more unnecessary administrative complexity to Medicare financing. It would be far better to establish a single, separate universal risk pool, funded based on ability to pay, and then to provide health services based on need regardless of the individual’s financial status. We should totally separate health care funding from the delivery of health care services, just like we do with police protection, fire protection, highway systems, public education and the many other government functions that we rightfully take for granted.

Should Medicare patients pay more?

Medicare Planning and Trends Among Seniors

Allsup Medicare Advisor Seniors Survey
October 2012
An independently conducted telephone survey of 1,000 randomly selected individuals 65 years and older who currently have Medicare coverage
Thinking about retirement, are any of the following concerns for you?
61% – Future of Medicare
52% – Having enough money to enjoy retirement
43% – Paying for long-term care
41% – Paying for health care
38% – Outliving money
24% – Paying for housing
In general, how satisfied are you with your current Medicare coverage?
45% – Extremely satisfied
44% – Somewhat satisfied
6% – Not satisfied
5% – Not sure
As you may know, costs for the Medicare program are rapidly increasing. New funding or benefit restructuring will likely be needed. To keep the Medicare coverage you have right now, would you be willing to pay: 20% more/10% more/5% more/1% more?
32% – Pay 20% more
19% – Pay 10% more
10% – Pay 5% more
10% – Pay 1% more
23% – Pay nothing more
4% – Don’t know
2% – Medicare won’t need new funding
http://www.allsup.com/portals/4/AMA-Seniors-Survey-Oct2012.pdf

This survey confirms what we already knew. Most seniors are satisfied with Medicare, but a majority of them also are concerned about the future of Medicare, doubtlessly provoked by the current political threats to convert Medicare into a defined contribution (voucher) under the rubric of the imperative for entitlement reform. An intriguing inquiry in this survey is whether or not Medicare beneficiaries would be willing to pay more in order to keep their current Medicare coverage.
Sixty-one percent of responders indicated that they would be willing to pay five to twenty percent more to keep their current Medicare coverage. This probably does not communicate their belief that they should be paying more, but rather expresses the view that they are protective of Medicare and would be willing to reach deeper into their pockets to preserve the program.
It would not surprise anyone if the politicians used this result to decide to increase the out-of-pocket expenses for Medicare beneficiaries, again in the name of entitlement reform. But this would be a mistake. In a recent Quote of the Day message, we discussed Medicare’s failure to protect personal finances (https://pnhp.org/news/2012/september/medicares-failure-to-protect-per…). Instead of increasing out-of-pocket costs, financial barriers should be removed by providing first-dollar coverage. You could do that by adopting a single payer system. Health care costs can be controlled by using the other economic tools of a well-designed single payer system.
Rather than using premiums, deductibles and coinsurance assigned to the individual Medicare beneficiary, an improved Medicare program that covered everyone should be separately funded through progressive taxes. The current proposal to adjust Medicare premiums based on income would seem like a step in the right direction, but it would add more unnecessary administrative complexity to Medicare financing. It would be far better to establish a single, separate universal risk pool, funded based on ability to pay, and then to provide health services based on need regardless of the individual’s financial status. We should totally separate health care funding from the delivery of health care services, just like we do with police protection, fire protection, highway systems, public education and the many other government functions that we rightfully take for granted.

Health care waste deconstructed: Fraudsters and patients aren’t the problem

By Philip Caper, M.D.
Bangor (Maine) Daily News, Oct. 18, 2012

If anybody ever tells you we can’t afford health care for everybody, consider the following: Every other wealthy country in the world provides health care for all at an average of about half the per-person cost in the United States.

Their health care systems are more popular than ours and get better results for all their people. In those countries, there is no such thing as medical bankruptcies and there is no job-lock due solely to health care coverage.

Last month, the National Academy of Sciences reported that in the U.S. we waste $750 billion on health care, or about one in every three dollars we spend. Apologists for our dysfunctional health care system blame fraud and inadequate prevention — “blame the patient” — for most of that. But those two factors accounted for only 17 percent of the waste, according to the NAS.

The rest of the waste, 83 percent, was accounted for by other factors. Unnecessary services accounted for 28 percent. Unnecessarily high prices accounted for 14 percent. Excess administrative costs due to too many private insurance companies and types of insurance accounted for 25 percent. Inefficiently delivered services due to a lack of coordination among doctors, hospitals and other providers accounted for another 17 percent.

Many of these problems can be solved, and have been in other countries and in parts of this country. But they will not be solved anytime soon unless we fundamentally transform the ways we finance and deliver health care.

The mission of a public financing system, such as Medicare, is to facilitate the delivery of medical care. Medicare has an administrative overhead of less than 5 percent. The mission of private health insurance companies is to create wealth for their owners. To do so, they spend a lot of time, effort and money impeding the delivery of medical care in order to insure that they minimize payouts and maximize profits. In doing so, they have overhead approaching or exceeding the 20 percent limit imposed by the Affordable Care Act.

This is where much of the $190 billion in administrative spending that does little or nothing to improve health goes.

Americans have to wake up to the fact that most prices charged for medical care in the U.S. are simply too high — far higher for most products and services than in any other country. Technology companies are accustomed to charging far higher prices than are necessary to sustain a sound business. While there is a large range of incomes among doctors and other health care professionals, many are making far more money than is necessary to maintain a perfectly comfortable lifestyle.

For many years, in both the public and private sectors, we have attempted to solve problems with the delivery of health care by just throwing more money at them. This glut of money has led to an environment where improving the efficiency of care by better coordinating services, which is hard work, or factoring cost into clinical decisions has not been necessary.

This problem could be solved by putting our health care system on a budget-driven diet while simultaneously expanding access. Such an approach would be politically sustainable only if we are all in the same system in a program like Medicare, for everybody.

If that were the case, we could then all see the benefits of making substantial and effective investments in preventing diseases before they reach advanced — and costly — stages. That’s the way it works in most other wealthy countries.

A centrally financed health care system, such as Medicare for All, would also permit large-scale collection of consistently formatted claims and illness data. Such a database would make fraud much more visible and therefore less attractive, and would make preventive health measures, such as tumor registries, much more effective. Canada, because it has a national health system, is now ahead of us in the creation of such comprehensive registries that help improve prevention measures, and produce their better results.

Moving toward a single, tax-supported public financing system in Maine and the U.S. would also hasten and greatly simplify reform of the ways we pay physicians, hospitals and other providers, rewarding them for improved results and more efficient coordination of services.

The bottom line is that there is already enough money in the system to more than adequately cover everybody, if we can eliminate the waste. To do so, we would have to kill a few golden geese. The owners of those geese will be unhappy and will fight tooth and nail, but the rest of us would be much better off.

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

http://bangordailynews.com/2012/10/18/health/health-care-waste-deconstructed-fraudsters-and-patientsarent- the-problem/

Medicaid, red and blue

E Pluribus Duo

By Jonathan Cohn
The New Republic, October 25, 2012

In all kinds of real and practical ways, the United States today is not one nation, but two.

We’ve come to think of “blue” and “red” states as political and cultural categories. The rift, though, goes much deeper than partisan differences of opinion. The borders of the United States contain two different forms of government, based on two different visions of the social contract.

In blue America, state government costs more — and it spends more to ensure that everybody can pay for basic necessities such as food, housing, and health care. It invests more heavily in the long-term welfare of its population, with better-funded public schools, subsidized day care, and support for people with disabilities.

In the red states, government is cheaper, which means the people who live there pay lower taxes. But they also get a lot less in return. The unemployment checks run out more quickly and the schools generally aren’t as good. Assistance with health care, child care, and housing is skimpier, if it exists at all.

The result of this divergence is that one half of the country looks more and more like Scandinavia, while the other increasingly resembles a social Darwinist’s paradise.

The easiest way to grasp what this means for the actual residents of red and blue America is to look at Medicaid. Although the federal government sets minimum standards for coverage and benefits, states have discretion over how many additional people to include. Based on data compiled by the Kaiser Family Foundation, the five states with the strictest criteria for working parents are Arkansas, Alabama, Indiana, Louisiana, and Texas. The five states with the least restrictive requirements are Minnesota, Connecticut, Maine, Vermont, and Wisconsin. A Minnesota mom with two kids and a job that doesn’t offer health insurance can get Medicaid as long her annual income doesn’t exceed about $40,000. But if she moves to Arkansas, she’ll be ineligible for Medicaid as soon as her household income reaches $3,150 a year—not nearly enough to pay for basic living costs, let alone health insurance.

By nearly every measure, people who live in the blue states are healthier, wealthier, and generally better off than people in the red states. It’s impossible to prove that this is the direct result of government spending. But the correlation is hard to dismiss. The four states with the highest poverty rates are all red: Mississippi, Louisiana, Alabama, and Texas. (The fifth is New Mexico, which has turned blue.) And the five states with the lowest poverty rates are all blue: New Hampshire, New Jersey, Vermont, Minnesota, and Hawaii. The numbers on infant mortality, life expectancy, teen pregnancy, and obesity break down in similar ways.

Advocates for the red-state approach to government invoke lofty principles: By resisting federal programs and defying federal laws, they say, they are standing up for liberty. These were the same arguments that the original red-staters made in the 1800s, before the Civil War, and in the 1900s, before the Civil Rights movement. Now, as then, the liberty the red states seek is the liberty to let a whole class of citizens suffer. That’s not something the rest of us should tolerate. This country has room for different approaches to policy. It doesn’t have room for different standards of human decency.

http://www.tnr.com/article/politics/magazine/108185/blue-states-are-scandinavia-red-states-are-guatemala?wpisrc=nl_wonk#

And…

Miss. says no thanks to Medicaid expansion dollars

By The Associated Press
Picayune Item, October 17, 2012

Mississippi has long been one of the sickest and poorest states in America, with some of the highest rates of obesity, diabetes and heart disease and more than 1 in 7 residents without insurance. And so you might think Mississippi would jump at the prospect of billions of federal dollars to expand Medicaid.

You’d be wrong.

Leaders of the deeply conservative state say that even if Mississippi receives boatloads of cash under President Barack Obama’s health care law, it can’t afford the corresponding share of state money it will have to put up to add hundreds of thousands of people to the government health insurance program for the poor.

Under the law, Washington would pay 100 percent of the costs of expanding Medicaid from 2014 to 2016. Between 2017 and 2020, the federal share would decrease to 90 percent and the states’ contribution would rise in stages to 10 percent, and that’s where it would stay.

“While some people say Obamacare will come as an economic boost with ‘free’ money, the reality is simple: No money is free,” said Republican Gov. Phil Bryant. “Since when did the federal government ever give free money without asking for something in return?”

The governor and GOP leaders in the Republican-controlled Legislature have argued that the expansion will foster a culture of dependency on government.

GOP Govs. Rick Scott of Florida, Bobby Jindal of Louisiana, Nathan Deal of Georgia, Nikki Haley of South Carolina and Rick Perry of Texas have said they, too, will reject a Medicaid expansion, calling it too expensive.

http://picayuneitem.com/statenews/x699448824/Miss-says-no-thanks-to-Medicaid-expansion-dollars

Comment:

By Don McCanne, MD

One strategy in the Affordable Care Act that was introduced to help cover everyone was to expand the Medicaid program for low-income individuals. To encourage state participation, the federal government would pay the full costs of care for three years and then taper down to 90 percent, leaving the states responsible for only 10 percent of the costs. Yet Governors Bryant, Scott, Jindal, Deal, Haley, and Perry have rejected the program, decisions which will surely leave many otherwise qualified individuals with no coverage.

Those of us who supported single payer reform – an improved Medicare for all – warned repeatedly that the model enacted in the Affordable Care Act could never cover everyone. Current predictions are that 30 million people will remain uninsured (CBO).

This is shocking and fills with grief those of us who have been fighting so long and hard for health care justice in America. It is worth repeating the last paragraph in Jonathan Cohn’s article because he states it so well:

“Advocates for the red-state approach to government invoke lofty principles: By resisting federal programs and defying federal laws, they say, they are standing up for liberty. These were the same arguments that the original red-staters made in the 1800s, before the Civil War, and in the 1900s, before the Civil Rights movement. Now, as then, the liberty the red states seek is the liberty to let a whole class of citizens suffer. That’s not something the rest of us should tolerate. This country has room for different approaches to policy. It doesn’t have room for different standards of human decency.”