PNHP

Poll: Mass. health costs ‘a serious problem’ for many

Poll: Mass. health costs ‘a serious problem’ for many

By Martha Bebinger
WBUR (Boston Public Radio), June 11, 2012

BOSTON – We’re hearing from a lot of different groups lately about what’s wrong with health care and how to fix it. But what do patients think? To find out, WBUR asked Massachusetts residents who said they had a serious illness, medical condition, injury or disability requiring a lot of medical care, or spent at least one night in the hospital within the last year.

Our poll, Sick in Massachusetts, finds that 78 percent of patient respondents say the cost of care is a very serious or somewhat serious problem. And 63 percent say the problem has gotten worse over the last five years. (Click through the four charts below for some of the poll’s primary findings. The poll was conducted in partnership with the Harvard School of Public Health, the Blue Cross Blue Shield of Massachusetts Foundation and WBUR.)

* Do you think health care costs are a problem for Massachusetts?

* Costs worse or better over the last five years?

* Major reasons for rising health care costs?

* Gravity of the costs problem?

Selected WBUR Poll Data Points:

On Health Care Costs In Massachusetts:

50% said health care costs are a very serious problem

28% said costs are a somewhat serious problem

15% said costs are not a problem

‘Major Reasons’ For Rising Health Care Costs:

86% said drug companies charging too much money

78% said insurance companies charging too much

73% said hospitals charging too much

On Quality Of Health Care In Massachusetts:

52% said the quality of health care is not a problem

37% said the quality of health care is a problem

Those polled had a serious illness, medical condition, injury or disability requiring a lot of medical care, or spent at least one night in the hospital within the last year.

We’ll bring you several angles on the findings. We begin with the stories of three patients.

The ‘Oh My God’ Moment

Ask a patient about health care costs and they’ll often take you back to an eye-popping moment when they opened the envelope containing a hospital bill. Richard Marggraf, from Amesbury, remembers his “Oh my God” moment.

“Back in 1999, I was diagnosed with testicular cancer,” Marggraf said. “I went through quite a bit of therapy and procedures and what not, and those bills were in excess of $65,000 to $70,000, in 1999.”

Marggraf had a full-time job back then and generous coverage that paid virtually all of his bills. But now he’s working temp jobs and has coverage through the state with a $2,500 deductible. Marggraf can’t afford the CT scan his doctors recommend to make sure his cancer is still in remission.

“It’s a gamble, a little bit of a gamble,” he said. “Hopefully in the near future, when I gain full employment again, I can take care of that right away.”

Well, maybe. More and more employers are switching to plans with deductibles. Forty percent of the patients we polled say medical expenses they had to pay out of pocket last year are a serious problem.

Marggraf said he is more careful about where he goes for tests and procedures now that he is paying for more of the care.

“I have a lot of procedures done on the North Shore rather than going into Boston,” he said. “I think that tries to keep things down a little bit.”

But he’s frustrated by rising costs at his community hospital.

“The CEO that’s been there has increased prices dramatically at that hospital, and they’re profitable now,” Marggraf said. “At the expense of whom? At the expense of the consumer. I owe $1,000, I owe Worcester $500, I owe an ambulance $500.”

Rising Costs Leave Long-Term Bills

Mike Turcotte sat at his dining room table in rural Townsend, near the New Hampshire border, listing bills he must still pay for a one-week hospital stay last November. He’s on a payment plan and praying that he doesn’t have another serious illness anytime soon.

“If I have the same thing happen this year…” Turcotte said. He has insurance through his wife’s employer. Her share recently went up by $50 each week, a 60 percent increase.

“I wouldn’t have minded if I had the same insurance, but aside from that having to meet these deductibles,” he said.

Turcotte’s coverage also added a $2,000 deductible this year. He has Hepatitis C, high blood pressure and problems with his kidneys. He goes to the doctor a lot, takes seven medications every day, and is racking up even more bills.

“So do I, should I just stay home, ’til I really get deathly ill?” he asked.

Turcotte said he is grateful for all the money hospitals and insurers have spent on him already. He hopes to beat liver failure long enough to see his daughter graduate from high school.

“I’m so stubborn that I’ll probably be around for them to spend more money on me,” he said.

Turcotte said he doesn’t know who to blame for rising health care costs.

“I hate to say the government ought to do something, because that’s a mess,” he said. “But I would rather have the government take half of this amount and say, ‘OK, you’re covered for family.’ ”

‘I Couldn’t Keep The Home Plus The Medical Insurance’

“I’m a big girl, look at how I’m big. I can do it by myself now,” said tiny Giannie DeJesus, checking her blood sugar in her Disney princess nightgown. She was diagnosed with juvenile diabetes last year when she was just 2 years old.

“It was the worst day of my life, actually,” said Tracy DeJesus, Giannie’s mother. The diagnosis was scary and, DeJesus soon found out, expensive.

“When I checked out of the hospital, they told me to run down to CVS and pick up her medication,” she said. “It was $250.”

That was the first of many bills, even though DeJesus had health insurance through the dental office where she worked. DeJesus looked at her budget and the demands of monitoring Giannie’s blood sugar and made a calculated, but difficult, decision: She quit her job, left her apartment, and moved into a shelter in Chelsea.

“I realized that I couldn’t keep up the home plus the medical insurance,” DeJesus said. “I just can’t afford both. Pretty much we’re here because I couldn’t afford her insurance and I know I won’t be able to for years.”

Mother and daughter are now on MassHealth,
the state’s Medicaid program.

“There’s like really no words, I’m speechless,” DeJesus said. “I’ve struggled, and I’ve tried. I’ve tried to look at every angle, what if I take this away, but this condition that she has, she has to have food, we just can’t take away from something else to give to the insurance.”

DeJesus has just started working part time at a mall. In the future, if she has the option, she’ll take less pay in return for a more generous insurance plan — one with no deductible, low co-payments and no tiered services.

“I really don’t think a medical insurance that I had the year before should even exist,” she said.

The Blue Cross Blue Shield of Massachusetts Foundation, the Harvard School of Public Health (HSPH) and WBUR worked in partnership to produce Sick in Massachusetts. The Foundation commissioned and funded the HSPH poll. An independent research firm, SSRS, conducted the telephone interviews and provided WBUR with the names of poll participants. WBUR met with the partners to review the poll questions and analyze the results. WBUR shared story scripts with Robert Blendon at HSPH for fact checking purposes. WBUR, using internal editing procedures, decided how to frame and expand on issues raised by the poll results.

http://www.wbur.org/2012/06/11/health-care-costs-poll

Undocumented immigrants fight for lifesaving liver transplants

Without insurance, brothers are denied care

[PNHP note: See a related story about transplants and insurance coverage at the end of this article.]

By Jeff Danna
Chicago Tribune, June 12, 2012

Brothers Elfego and Lorenzo Arroyo each suffers from a deadly liver disease. But despite the urgency of their situation, the Chicago residents have struggled to receive organ transplants.

The Arroyo brothers are undocumented immigrants and lack insurance, friends and relatives say. Like others in their situation, they have been denied care that could increase their chances of survival due to their residency status.

“We know there are thousands of Latinos and (non-)Latinos with no documents who are facing the same situation,” Rev. Jose Landaverde said Monday during a news conference at Our Lady of Guadalupe Angelican Catholic Mission in Chicago’s Little Village neighborhood.

Both Elfego, 38, and Lorenzo, 36, attended the news conference and spoke little, but showed photographs of themselves in healthier times. They both have primary amyloidosis, a disease passed from parent to child, said Dr. David Ansell, senior vice president for clinical affairs and chief medical officer at Rush University Medical Center, who is familiar with the Arroyos and their health care dilemma. The disease makes the liver produce abnormal proteins that cause other organs to fail, he said.

“The only cure is a transplant,” Ansell said.

The Arroyos’ mother died a couple of years ago at age 63 of the same disease. Their older brother, Francisco Arroyo, 40, also had the disease, but because he is a legal resident, he received a liver transplant at Rush, Landaverde said.

The Arroyos’ position is not unique in America. About 5 percent to 10 percent of organs donated in the United States come from people who are uninsured, Ansell said. However, “close to zero percent” of the uninsured receive organ transplants.

In December, Landaverde met with Rush officials and discussed the difficulties undocumented immigrants face when trying to get transplants. Since then, Elfego Arroyo has been placed on a wait list for a liver transplant at Rush, where he had been receiving care, Landaverde said.

Lorenzo Arroyo is being treated at the University of Illinois Medical Center at Chicago, but that institution has not agreed to place him on a transplant list, Landaverde said.

When asked about Arroyo’s case, the University of Illinois Hospital and Health Science System issued a statement saying potential transplant patients, including undocumented immigrants, are assessed individually to determine if they meet medical and financial criteria.

If they have a living donor and the means to cover the transplant and follow-up care, they may be eligible for a transplant. The hospital can work to secure alternative funding for those who cannot afford a transplant or are not eligible for health entitlement funds, according to the statement.

Rush officials see caring for the undocumented and uninsurable as a moral issue, Ansell said. Rush plans to urge other institutions to also provide some transplants to the uninsurable on charitable grounds and has recently agreed to fund three transplants, Ansell said.

Once a person clears the transplant hurdle, their health care situation doesn’t always get easier. Post-transplant medications could run $10,000 a year for life, Ansell said.

Rush officials have not yet determined how the institution would help cover those costs.

Members of the Our Lady of Guadalupe community said they will continue to pressure the medical community and legislators for changes in hospital policy on the treatment of undocumented immigrants. Five people, including Lorenzo Arroyo, are currently on a hunger strike to draw attention to the issue.

“They are treating us like criminals,” said Hilda Burgos, 45, who described herself as a friend of the Arroyo family. “We came here looking for opportunities for our families. That is our only crime.”

http://www.chicagotribune.com/news/local/ct-met-immigrant-hunger-strike-20120612,0,7138960.story

The Reward for Donating a Kidney: No Insurance

By Roni Caryn Rabin
The New York Times, June 11, 2012

When Erika Royer’s lupus led to kidney failure four years ago, her father, Radburn, was able to give her an extraordinary gift: a kidney.

Ms. Royer, now 31, regained her kidney function, no longer needs dialysis and has been able to return to work. But because of his donation, her father, a physically active 53-year-old, has been unable to obtain private health insurance.

Like most other kidney donors, Mr. Royer, a retired teacher in Eveleth, Minn., was carefully screened and is in good health. But Blue Cross and Blue Shield of Minnesota rejected his application for coverage last year, as well as his appeals, on the grounds that he has chronic kidney disease, even though many people live with one kidney and his nephrologist testified that his kidney is healthy. Mr. Royer was also unable to purchase life insurance.

Officials with Blue Cross and Blue Shield of Minnesota refused to discuss Mr. Royer’s case because of privacy laws, but said in a statement that Minnesota residents who are rejected by private insurers can buy coverage through the Minnesota Comprehensive Health Association high-risk pool, which is what Mr. Royer said he did, though he is paying more for less comprehensive insurance.

The officials refused several requests for an interview, saying in an e-mailed statement that “healthy individuals who happen to have one kidney can and do receive coverage” through Blue Cross and Blue Shield as long as their test results are within medically accepted normal ranges.

Mr. Royer said he is baffled by the denial. “From my perspective, I’d be a good risk,” he said. “I’d just be putting in premiums and helping balance the system out.”

There is little data on how often kidney donors have trouble obtaining insurance, but advocates say the fear of being uninsurable may be a powerful deterrent to donation. A 2006 study done by an advocacy organization for transplant professionals found that 39 percent of transplant centers reported that they had had eligible donors who declined to donate because they feared having future insurance problems.

The health of living donors is seldom at issue: Though some research suggests that kidney donors may be slightly more prone to develop high blood pressure as they age, long-term studies have found donors live as long as other healthy people. One study reported that donors live even longer.

Most insurers maintain that prior kidney donation does not affect coverage decisions or premiums, but while transplant cases like Mr. Royer’s are rare, advocates and social workers who work closely with donors say the problem may be more common than is recognized. A review study published in 2007 by Canadian researchers found that as many as 11 percent of them have encountered problems with life and health insurance coverage.

It’s a problem with implications for thousands of people. In 2008, the last year for which figures were available from the National Institute of Diabetes and Digestive and Kidney Diseases, 17,413 kidney transplants were performed, most of them (11,382) from cadavers. But there were 87,820 people awaiting a kidney transplant as of February 2011, and another 2,249 waiting for both a kidney and a pancreas.

While kidney donation relieves society of the expense of dialysis, it does far more than that, experts say, because it dramatically improves patients’ quality of life. Dialysis keeps patients with chronic kidney disease alive, but they are usually too fatigued to work and often are on disability. A transplant usually enables them to resume a full range of activities.

“One patient’s husband compared dialysis to a transcontinental flight three times a week,” said Dr. Jeffrey J. Connaire, a nephrologist at Hennepin County Medical Center in Minneapolis who testified on behalf of Mr. Royer to Blue Cross and Blue Shield. “People come back after receiving a kidney and say ‘Ah, I have energy, food tastes good again, things smell good again.’ The classic sign of kidney failure is a terrible taste in your mouth.”

As of 2008, 382,343 Americans were receiving kidney dialysis, at a cost of $39.46 billion in public and private spending, according to the National Kidney and Urologic Diseases Information Clearinghouse. Dialysis is so expensive, in fact, that transplant surgery pays for itself in two years, according to one estimate.

Donors who aren’t covered through their employer as part of a large group and are buying an individual policy are more likely to encounter problems, experts say.

Linda Bramblett, a 53-year-old self-employed swim instructor from Great Falls, Va., was denied health insurance in 2010 after telling her prospective insurer that she was planning to donate a kidney to her younger brother. She was in good health and had already been approved for surgery, and went ahead with the donation in December 2010, she said.

“For living donors, the insurance thing isn’t exactly what you’re thinking about,” Ms. Bramblett said. “There is teeny fine print when you sign the paperwork, but you don’t really know what it’s like until you go through it.”

Susan Galbreath, a 42-year-old from New Boston, Mich., who is on dialysis, said a friend was going to donate a kidney to her but changed her mind after a conversation with an official from her insurance company, who said her future coverage would be determined on a “claim by claim” basis.

“The conversation left her feeling very very uneasy, and I told her she shouldn’t do it if anything made her uncomfortable,” Mrs. Galbreath said.

Insurance is not the only problem donors may face. Some run into difficulties at work if they need more time to recuperate than anticipated, said Diane Zocchia, a kidney donor who works for the National Kidney Registry, a nonprofit group that assists in living-kidney donation, and who is starting a new organization, Living Kidney Donors Alliance. Women of childbearing age should ask an obstetrician about the implications for future pregnancies of having one kidney, she said.

“Most donors don’t think about these things,” Ms. Zocchia said. “They develop a sort of tunnel vision once they’ve made that decision to be a donor.”

In Mr. Royer’s case, tests found a high creatinine level in his blood, which was interpreted to mean that Mr. Royer had kidney damage. Dr. Connaire told the Blue Cross panel that heard Mr. Royer’s second appeal that creatinine levels are high in most, if not all, kidney donors.

The kidneys clear creatinine from the blood and pass it out in the urine. When kidneys are damaged, the creatinine level in the urine goes down and the blood creatinine level goes up. But while people with compromised kidney function usually have a condition that progresses and ultimately may lead to kidney failure, Dr. Connaire said, Mr. Royer is healthy. He’s just working with one kidney.

“The literature says that if you have kidney problems you’ll have more heart disease, but taking a kidney out in a situation where everything is fine is a very different story,” said Dr. Connie L. Davis, who is chairwoman of the living donor committee of the Organ Procurement and Transplantation Network. “It does not have the same implications.”

More sophisticated kidney function testing would have made this clear, said Dr. Hassan N. Ibrahim, chairman of nephrology at University of Minnesota and director of the kidney transplant program, who has written extensively about the long-term health outcomes of kidney donation.

New research, not yet published, suggests the risk of developing kidney failure is even smaller for living kidney donors than for the general population, he said.

Dr. Connaire said he was especially disturbed that people who commit such a generous and giving act would be penalized for it.

“Kidney donors are some of the finest people you’d ever want to meet,” he said. “I enjoy working with them very much. It keeps my faith in humanity afloat.”

Many advocates believe that living organ donors should be guaranteed lifelong health coverage. The Affordable Care Act, if upheld by the Supreme Court, is supposed to end discrimination based on pre-existing conditions beginning in 2014.

Individuals considering donating a kidney should give the matter of future insurability, for both life and health coverage, careful consideration. Tell your doctor if you engage in contact sports or other risky activities, because you will need to protect your remaining kidney from trauma after donation.

It’s important to maintain continuous coverage and never let health policies lapse. Health coverage provided through a large employer group tends to be more secure, but be aware that circumstances beyond your control — like a spouse’s death, illness, divorce or a layoff — may disrupt coverage.

Do not assume that because you are healthy enough to donate you will be approved for health insurance. Health insurance regulations vary from state to state, so check the laws in your state, but know that some health plans fall under the federal Employee Retirement Income Security Act, or ERISA, regulations.

http://well.blogs.nytimes.com/2012/06/11/the-reward-for-donating-a-kidney-no-insurance/?ref=health

2012 health care spending, including administration

National Health Expenditure Projections: Modest Annual Growth Until Coverage Expands And Economic Growth Accelerates

By Sean P. Keehan, Gigi A. Cuckler, Andrea M. Sisko, Andrew J. Madison, Sheila D. Smith, Joseph M. Lizonitz, John A. Poisal and Christian J. Wolfe
Health Affairs, June 2012
2012
$2,809.0 billion – NHE (National Health Expenditures)
$8,952.8 – NHE per capita
17.9% – NHE as percent of GDP
$37.5 billion – Government administration (Note d)
$162.6 billion – Net cost of health insurance (Note e)
d  Includes all administrative costs (federal, state, and local employees’ salaries; contracted employees, including fiscal intermediaries; rent and building costs; computer systems and programs; other materials and supplies; and other miscellaneous expenses) associated with insuring individuals enrolled in the following public health insurance programs: Medicare, Medicaid, Children’s Health Insurance Program, Department of Defense, Department of Veterans Affairs, Indian Health Service, workers’ compensation, maternal and child health, vocational rehabilitation, Substance Abuse and Mental Health Services Administration, and other federal programs.
e  Net cost of health insurance is calculated as the difference between calendar year premiums earned and benefits paid for private health insurance. This includes administrative costs and, in some cases, additions to reserves; rate credits and dividends; premium taxes; and plan profits or losses. Also included in this category is the difference between premiums earned and benefits paid for the private health insurance companies that insure the enrollees of the following public programs: Medicare, Medicaid, Children’s Health Insurance Program, and workers’ compensation (health portion only).
Conclusion
For 2011 through 2013, the lingering effects of the economic recession and modest recovery, mostly in the form of limited growth in incomes, are expected to continue to constrain health spending growth. In 2014 the coverage expansions laid out in the Affordable Care Act for Medicaid and for private health insurance are expected to increase the growth rate for health spending to 7.4 percent, with notable increases expected in spending on physician services and prescription drugs for newly insured patients. By the end of the projection period, higher income growth and the continuing shift of baby boomers into Medicare are expected to cause health spending to grow roughly two percentage points faster than overall economic growth, which is about the same differential experienced over the past thirty years.
http://content.healthaffairs.org/content/early/2012/06/11/hlthaff.2012.0404.abstract

This is the annual report that is used most often as a resource for our health care spending.
The numbers to remember for 2012:
National Health Expenditures:  about $2.8 trillion
Health spending per capita:  about $9000
Spending as a percent of GDP:  about 18%
After the transitions of the next decade, health care spending is expected to continue to grow two percentage points faster than overall economic growth – the same differential experienced over the past thirty years. It makes you wonder when Herbert Stein’s principle will kick in (essentially, if it can’t go on, it won’t).
Since we are seeing an increase in the political rhetoric divided over whether the government or markets should be the dominant force in health care financing, it is worthwhile looking at the total administrative costs of these two approaches to financing health care. Although government spending accounts for about half of all health care spending, we are paying private insurers more than four times as much in administrative costs and profits as we are spending on government administration of health insurance programs.
It is true that the net cost of private health insurance includes the administrative costs of private Medicare Advantage plans and private Medicaid and CHIP managed care plans, but this does not begin to account for the four fold differences in total administrative costs between public and private insurance.
Keep this in mind during the national debate over the Affordable Care Act this political season, which will continue to take place regardless of the Supreme Court decision. One side will argue that we need to encourage free markets of private plans plus private options for Medicare. The other side will argue that we need exchanges to provide choices of private plans, while continuing to offer private Medicare Advantage plans. The one side will talk about private markets while condemning the government, whereas the other side simply will avoid rhetoric referencing the government while touting the virtues of nominal ACA reforms of the private insurers. Both sides are wrong!
We need to get rid of the private insurers and switch to a publicly administered single payer national health program. Besides, then we can address more effectively our health care costs that continue to increase at a rate two percent above the growth in our economy – a rate that is intolerable when compounded year after year.

Problematic assumptions in study of costs of care

By Claudia Chaufan, M.D.
Health Affairs, Letters, June 2012

Tomas Philipson and coauthors assert that the substantially higher costs of cancer care in the United States versus Europe are “worth it” (Apr 2012). The problem of lead-time bias aside, their assertion relies on additional problematic assumptions.

One is the use of the Surveillance, Epidemiology, and End Results (SEER) database, which, as the authors admit, represented “about 14 percent of the U.S. population during the time period studied.” In contrast, the EUROCARE (European Cancer Registry on Survival and Care of Cancer Patients) databases, used for European countries, represent “national registries [including] the full population of each country” except France and Germany. Thus, the question arises: Which 14 percent of the U.S. population do the SEER data include? Are they people who have good coverage; the underinsured[1], thousands of whom go bankrupt because they cannot pay their medical bills[2]; or some of the nearly fifty million Americans who lack even modest coverage and die for that reason?[3] And how many in the latter groups might have died of cancer, as noted by the American Cancer Society[4], and thus were excluded from the authors’ study? It appears that the SEER population is better off, better educated, and more urban than the overall U.S. population, so naturally the majority of SEER registries underrepresent the U.S. cancer mortality experience.[5]

An article in a prestigious journal featuring complex statistics leads most readers to conclude that its results must be true. Yet a cursory examination of a few basic assumptions should warn against hasty conclusions.

Editor’s Note: Tomas Philipson and coauthors’ rebuttal to reader responses is available online on Health Affairs Blog: http://healthaffairs.org/blog/2012/05/14/when-epidemiology-goesastray-valuing-cancer-care-in-theunited- states-and-europe/

Claudia Chaufan, M.D., Ph.D., teaches at the University of California, San Francisco.

NOTES

1 Bodenheimer T. Underinsurance in America. N Engl J Med. 1992;327(4):274–8.

2 Himmelstein DU, Thorne D, Warren E, Woolhandler S. Medical bankruptcy in the United States, 2007: results of a national study. Am J Med. 2009;122(8):741–6.

3 Wilper AP, Woolhandler S, Lasser KE, McCormick D, Bor DH, Himmelstein DU. Health insurance and mortality in US adults. Am J Public Health. 2009;99(12):2289–95.

4 American Cancer Society. Report links health insurance status with cancer care [Internet].
Atlanta (GA): ACS; 2007 Dec 20 [cited 2012 Apr 19]. Available from: http://www.cancer.org/Cancer/news/News/report-links-healthinsurance-status-with-cancer-care

5 Merrill RM, Capocaccia R, Feuer EJ, Mariotto A. Cancer prevalence estimates based on tumour registry data in the Surveillance, Epidemiology, and End Results (SEER) Program. Int J Epidemiol. 2000;29(2):197–207.

doi: 10.1377/hlthaff.2012.0484

http://content.healthaffairs.org/content/31/6/1369.3.full.pdf+html

Center for American Progress report on illusive administrative savings

Paper Cut - Reducing Health Care Administrative Costs

By Elizabeth Wikler, Peter Basch, and David Cutler
Center for American Progress, June 2012

This paper outlines the nature of administrative costs affecting both health care payers and providers, and considers ways to contain these costs. Many such efforts are underway, including the ongoing implementation of the Health Insurance Portability and Accountability Act alongside several different elements of the Affordable Care Act. Continued progress in these areas is thus a central step to lower administrative spending.

Even still, many additional actions will be needed. In the pages that follow, we outline a three-pronged strategy for addressing administrative costs:
 
* Integration: embedding administrative simplification rules and systems into existing reform efforts

* Coordination: bringing together similar administrative processes by different health care participants to maximize efficiency

* Leadership: creating a new federal office dedicated to simplifying health care administrative plans

Tackling wasteful administrative costs in our health care system in these three ways would result in savings we estimate at $40 billion per year.

These savings are eminently achievable. By integrating new performance standards to promote adoption of electronic transactions such as requiring that electronic health records include utilization metrics for electronic billing and other administrative transactions, we can achieve roughly $26.1 billion in annual savings. By coordinating similar processes by different health care participants—such as physician credentialing and enrollment, quality and safety reporting, and enrollment and retention systems for public programs—we can save $7.7 billion each year. And by ensuring leadership at the federal government level through a new senior-level office dedicated to ensuring that administrative simplification plans are carried through and that innovative results are achieved, we can save potentially much more.

Tackling excessive administrative costs offers a promising opportunity for reducing health care costs while improving the quality of care for all Americans.

report
http://www.americanprogress.org/issues/2012/06/pdf/papercuts_final.pdf

column
http://www.americanprogress.org/issues/2012/06/healthcare_admincost.html

About the Center for American Progress

The Center for American Progress is an independent nonpartisan educational institute dedicated to improving the lives of Americans through progressive ideas and action.

We develop new policy ideas, critique the policy that stems from conservative values, challenge the media to cover the issues that truly matter, and shape the national debate.

Founded in 2003 by John Podesta to provide long-term leadership and support to the progressive movement, CAP is headed by Neera Tanden and based in Washington, D.C.

http://www.americanprogress.org/aboutus

Comment: 

By Don McCanne, MD

The Center for American Progress is dedicated to “improving the lives of Americans through progressive ideas and action.” Yet they were involved in bringing us the Affordable Care Act (ACA) while working with others to keep single payer off the table. They understand that one of the more important features of single payer is administrative efficiency. Let’s see how they would address that under ACA.

Basically, they have three proposals. They would move administrative functions such as billing into the patients’ electronic medical records; they would coordinate processes such as physician credentialing and patient enrollment through information technology systems, and they would add a new governmental bureaucratic agency to provide oversight of these additional administrative functions.

They contend that this would save about $40 billion annually, though $34 billion of that is already projected through the provisions of ACA and HITECH implementation. They contend that their proposal would add another $6.21 billion to the savings.

Can you imagine the expense of these complex computer systems and the nightmare of trying to coordinate and integrate the various systems amongst aggressive competitors, each of whom would attempt to position themselves in a effort to dominate the market? And obsolescence? That’s built in, both through efforts to perpetuate revenue flows to this industry, and through disruptive innovation designed to capture competitors’ markets. This won’t save costs. Costs will dramatically increase.

And adding another governmental administrative bureaucracy to our dysfunctional system is going to reduce administrative costs? In their effort to continue to suppress single payer they seem to have rejected the obvious concept that they need to REPLACE our current fragmented system of private plans and programs that wastes so much in administration. Instead, they would pile more onto the system.

It’s not as if they didn’t understand. They even cited a paper by David Himmelstein and Steffie Woolhandler, well known in the policy community as authors of landmark papers on administrative excesses in health care. But they didn’t include one of the obligatory Woolhandler/Himmelstein papers that showed that the United States could recover hundreds of billions of dollars in administrative waste by switching to a single payer system. Instead, they pushed their own proposal purportedly showing a highly dubious savings of a mere $6 billion, even though it is much more likely that their proposal would increase costs instead.

Neera Tanden, president of the Center for American Progress has been deeply involved with the current administration in formulating and advocating for the Affordable Care Act. This article seems to be a dishonest vehicle for continuing to dismiss single payer, with the excuse that they are taking care of the administrative inefficiencies, and supposedly saving us money in so doing.

This article coincides with the pending release of the Supreme Court decision on the constitutionality of the Affordable Care Act. It seems to be a preemptive maneuver in anticipation of the imminent surge in demand for a single payer national health program when the decision is announced. They may think that, with this paper as a distraction, they’re ready for us, but we’ve got their number. Let’s lead the surge.

Center for American Progress report on illusive administrative savings

Paper Cut – Reducing Health Care Administrative Costs

By Elizabeth Wikler, Peter Basch, and David Cutler
Center for American Progress, June 2012
This paper outlines the nature of administrative costs affecting both health care payers and providers, and considers ways to contain these costs. Many such efforts are underway, including the ongoing implementation of the Health Insurance Portability and Accountability Act alongside several different elements of the Affordable Care Act. Continued progress in these areas is thus a central step to lower administrative spending.
Even still, many additional actions will be needed. In the pages that follow, we outline a three-pronged strategy for addressing administrative costs:
* Integration: embedding administrative simplification rules and systems into existing reform efforts
* Coordination: bringing together similar administrative processes by different health care participants to maximize efficiency
* Leadership: creating a new federal office dedicated to simplifying health care administrative plans
Tackling wasteful administrative costs in our health care system in these three ways would result in savings we estimate at $40 billion per year.
These savings are eminently achievable. By integrating new performance standards to promote adoption of electronic transactions such as requiring that electronic health records include utilization metrics for electronic billing and other administrative transactions, we can achieve roughly $26.1 billion in annual savings. By coordinating similar processes by different health care participants—such as physician credentialing and enrollment, quality and safety reporting, and enrollment and retention systems for public programs—we can save $7.7 billion each year. And by ensuring leadership at the federal government level through a new senior-level office dedicated to ensuring that administrative simplification plans are carried through and that innovative results are achieved, we can save potentially much more.
Tackling excessive administrative costs offers a promising opportunity for reducing health care costs while improving the quality of care for all Americans.
report
http://www.americanprogress.org/issues/2012/06/pdf/papercuts_final.pdf
column
http://www.americanprogress.org/issues/2012/06/healthcare_admincost.html
About the Center for American Progress
The Center for American Progress is an independent nonpartisan educational institute dedicated to improving the lives of Americans through progressive ideas and action.
We develop new policy ideas, critique the policy that stems from conservative values, challenge the media to cover the issues that truly matter, and shape the national debate.
Founded in 2003 by John Podesta to provide long-term leadership and support to the progressive movement, CAP is headed by Neera Tanden and based in Washington, D.C.
http://www.americanprogress.org/aboutus

The Center for American Progress is dedicated to “improving the lives of Americans through progressive ideas and action.” Yet they were involved in bringing us the Affordable Care Act (ACA) while working with others to keep single payer off the table. They understand that one of the more important features of single payer is administrative efficiency. Let’s see how they would address that under ACA.
Basically, they have three proposals. They would move administrative functions such as billing into the patients’ electronic medical records; they would coordinate processes such as physician credentialing and patient enrollment through information technology systems, and they would add a new governmental bureaucratic agency to provide oversight of these additional administrative functions.
They contend that this would save about $40 billion annually, though $34 billion of that is already projected through the provisions of ACA and HITECH implementation. They contend that their proposal would add another $6.21 billion to the savings.
Can you imagine the expense of these complex computer systems and the nightmare of trying to coordinate and integrate the various systems amongst aggressive competitors, each of whom would attempt to position themselves in a effort to dominate the market? And obsolescence? That’s built in, both through efforts to perpetuate revenue flows to this industry, and through disruptive innovation designed to capture competitors’ markets. This won’t save costs. Costs will dramatically increase.
And adding another governmental administrative bureaucracy to our dysfunctional system is going to reduce administrative costs? In their effort to continue to suppress single payer they seem to have rejected the obvious concept that they need to REPLACE our current fragmented system of private plans and programs that wastes so much in administration. Instead, they would pile more onto the system.
It’s not as if they didn’t understand. They even cited a paper by David Himmelstein and Steffie Woolhandler, well known in the policy community as authors of landmark papers on administrative excesses in health care. But they didn’t include one of the obligatory Woolhandler/Himmelstein papers that showed that the United States could recover hundreds of billions of dollars in administrative waste by switching to a single payer system. Instead, they pushed their own proposal purportedly showing a highly dubious savings of a mere $6 billion, even though it is much more likely that their proposal would increase costs instead.
Neera Tanden, president of the Center for American Progress has been deeply involved with the current administration in formulating and advocating for the Affordable Care Act. This article seems to be a dishonest vehicle for continuing to dismiss single payer, with the excuse that they are taking care of the administrative inefficiencies, and supposedly saving us money in so doing.
This article coincides with the pending release of the Supreme Court decision on the constitutionality of the Affordable Care Act. It seems to be a preemptive maneuver in anticipation of the imminent surge in demand for a single payer national health program when the decision is announced. They may think that, with this paper as a distraction, they’re ready for us, but we’ve got their number. Let’s lead the surge.

UnitedHealth's spurious generosity

UnitedHealthcare Voluntarily Extends Important Health Reform Protections Regardless of Upcoming Rulings by Supreme Court

UnitedHealth Group
June 11, 2012

UnitedHealthcare, a UnitedHealth Group (NYSE: UNH) company, will continue to offer important health care insurance protections that were included in the 2010 health care reform law, no matter how the U.S. Supreme Court rules in cases currently pending before the Court.

UnitedHealthcare will continue provisions related to coverage of preventive health care services, coverage of dependents up to age 26, lifetime policy limits, rescissions and appeals.

“The protections we are voluntarily extending are good for people’s health, promote broader access to quality care and contribute to helping control rising health care costs. These provisions make sense for the people we serve, and it is important to ensure they know these provisions will continue,” said Stephen J. Hemsley, president and CEO of UnitedHealth Group. “These provisions are compatible with our mission and continue our operating practices.”

These protections are effective immediately, and will remain available to current and future customers and members. The company is not establishing any sunset provisions.

UnitedHealthcare recognizes the value of coverage for children up to age 19 with pre-existing conditions. One company acting alone cannot take that step, so UnitedHealthcare is committed to working with all other participants in the health care system to sustain that coverage.

The specific provisions being extended by UnitedHealthcare are:

Preventive Health Care Services without Co-Pays

Providing Dependent Coverage Up to Age 26

Eliminating Lifetime Limits

No Rescissions, Except for Fraud

Providing Clear and Timely Options for Appeals

http://www.unitedhealthgroup.com/newsroom/news.aspx?id=59c64ad7-908b-4806-931f-aed3beff7ba0

Comment: 

By Don McCanne, MD

You have to hand it to UnitedHealth’s public relations department. No matter how the Supreme Court rules on the Affordable Care Act (ACA), this press release establishes UnitedHealth as a leader in patient advocacy, or at least it would seem so.

If ACA is upheld, this press release means nothing since these are already requirements of the Act. If ACA is struck down, these are very popular measures that are quite inexpensive and thus will not drive up premiums to non-competitive levels. The most expensive measure is the coverage of dependents up to age 26, but that adds only about one percent to the premiums. Besides, other insurers will likely follow suit in order to more effectively market to a greater number of young, healthy families. So no matter what happens, UnitedHealth takes credit for taking the lead.

UnitedHealth used one example of a policy that they will not follow, indicating that they will not unilaterally provide patients with some of the more important protections required in ACA. They are correct when they say that they cannot cover children with preexisting conditions unless the entire industry cooperates in distributing those higher cost risks. If one insurer generously accepts those risks, then their costs would skyrocket and they would be forced out of the market by the death spiral of insurance premiums.

UnitedHealth has remained silent on some of the more important requirements not yet in effect that could be overturned by the Supreme Court decision. Insuring preexisting conditions for adults in addition to children, guaranteeing issue of coverage to all individuals regardless of projected costs, and setting premiums based on community rating – driving up premiums for lower-cost, healthier patients – are more significant measures that could impair their competitiveness if they acted unilaterally. We won’t see these policy changes unless ACA is upheld and all insurers are required to comply.

Also they are silent on keeping administrative costs and profits down to a level that complies with the medical loss ratios dictated by ACA. Turn ACA over then there would be no federal requirement to comply, though that would still be the prerogative of the states. States under the political control of anti-government, free-market advocates would likely leave medical loss ratios to the insurers and their Wall Street promoters (where low medical loss ratios – spending less on patients-  is a business activity that is rewarded with higher stock valuations).

UnitedHealth’s “generosity” in conceding the very modest positions they listed in their release applies only to the individual and small group markets – a relatively small proportion of their business. Most plans for large employers will be grandfathered, and most of the ACA provisions will not apply – certainly not the requirements specific to the exchanges since large employer plans will not be included in the state exchanges. Also, many large employers are self-insured, and for them UnitedHealth provides only administrative functions, while specific benefits are determined by the employers.

We can’t blame UnitedHealth for trying to protect its market position, but we can blame our elected representatives for adopting policies that perpetuate and expand an industry which must comply with market demands for lower prices – a demand that can be met only by strategic decisions to avoid market segments such as children who are ill.

Is that what America is about? Let’s take care of the kids, even up to age 26, but not the sick ones? What other country does that?

UnitedHealth’s spurious generosity

UnitedHealthcare Voluntarily Extends Important Health Reform Protections Regardless of Upcoming Rulings by Supreme Court

UnitedHealth Group
June 11, 2012

UnitedHealthcare, a UnitedHealth Group (NYSE: UNH) company, will continue to offer important health care insurance protections that were included in the 2010 health care reform law, no matter how the U.S. Supreme Court rules in cases currently pending before the Court.

UnitedHealthcare will continue provisions related to coverage of preventive health care services, coverage of dependents up to age 26, lifetime policy limits, rescissions and appeals.

“The protections we are voluntarily extending are good for people’s health, promote broader access to quality care and contribute to helping control rising health care costs. These provisions make sense for the people we serve, and it is important to ensure they know these provisions will continue,” said Stephen J. Hemsley, president and CEO of UnitedHealth Group. “These provisions are compatible with our mission and continue our operating practices.”

These protections are effective immediately, and will remain available to current and future customers and members. The company is not establishing any sunset provisions.

UnitedHealthcare recognizes the value of coverage for children up to age 19 with pre-existing conditions. One company acting alone cannot take that step, so UnitedHealthcare is committed to working with all other participants in the health care system to sustain that coverage.

The specific provisions being extended by UnitedHealthcare are:

Preventive Health Care Services without Co-Pays

Providing Dependent Coverage Up to Age 26

Eliminating Lifetime Limits

No Rescissions, Except for Fraud

Providing Clear and Timely Options for Appeals

http://www.unitedhealthgroup.com/newsroom/news.aspx?id=59c64ad7-908b-4806-931f-aed3beff7ba0

Comment: 

By Don McCanne, MD

You have to hand it to UnitedHealth’s public relations department. No matter how the Supreme Court rules on the Affordable Care Act (ACA), this press release establishes UnitedHealth as a leader in patient advocacy, or at least it would seem so.

If ACA is upheld, this press release means nothing since these are already requirements of the Act. If ACA is struck down, these are very popular measures that are quite inexpensive and thus will not drive up premiums to non-competitive levels. The most expensive measure is the coverage of dependents up to age 26, but that adds only about one percent to the premiums. Besides, other insurers will likely follow suit in order to more effectively market to a greater number of young, healthy families. So no matter what happens, UnitedHealth takes credit for taking the lead.

UnitedHealth used one example of a policy that they will not follow, indicating that they will not unilaterally provide patients with some of the more important protections required in ACA. They are correct when they say that they cannot cover children with preexisting conditions unless the entire industry cooperates in distributing those higher cost risks. If one insurer generously accepts those risks, then their costs would skyrocket and they would be forced out of the market by the death spiral of insurance premiums.

UnitedHealth has remained silent on some of the more important requirements not yet in effect that could be overturned by the Supreme Court decision. Insuring preexisting conditions for adults in addition to children, guaranteeing issue of coverage to all individuals regardless of projected costs, and setting premiums based on community rating – driving up premiums for lower-cost, healthier patients – are more significant measures that could impair their competitiveness if they acted unilaterally. We won’t see these policy changes unless ACA is upheld and all insurers are required to comply.

Also they are silent on keeping administrative costs and profits down to a level that complies with the medical loss ratios dictated by ACA. Turn ACA over then there would be no federal requirement to comply, though that would still be the prerogative of the states. States under the political control of anti-government, free-market advocates would likely leave medical loss ratios to the insurers and their Wall Street promoters (where low medical loss ratios – spending less on patients-  is a business activity that is rewarded with higher stock valuations).

UnitedHealth’s “generosity” in conceding the very modest positions they listed in their release applies only to the individual and small group markets – a relatively small proportion of their business. Most plans for large employers will be grandfathered, and most of the ACA provisions will not apply – certainly not the requirements specific to the exchanges since large employer plans will not be included in the state exchanges. Also, many large employers are self-insured, and for them UnitedHealth provides only administrative functions, while specific benefits are determined by the employers.

We can’t blame UnitedHealth for trying to protect its market position, but we can blame our elected representatives for adopting policies that perpetuate and expand an industry which must comply with market demands for lower prices – a demand that can be met only by strategic decisions to avoid market segments such as children who are ill.

Is that what America is about? Let’s take care of the kids, even up to age 26, but not the sick ones? What other country does that?

5 Myths About Canada’s Health Care System

The truth may surprise you about international health care

By Aaron E. Carroll, M.D., M.S.
AARP Newsletter, April 16, 2012

How does the U.S. health care system stack up against Canada’s? You’ve probably heard allegedly true horror stories about the Canadian system — like 340-day waits for knee replacement surgery, for example.

To separate fact from fiction, Aaron E. Carroll, M.D., the director of the Center for Health Policy and Professionalism Research in Indianapolis, identified the top myths about the two health care systems.

Myth #1: Canadians are flocking to the United States to get medical care.

How many times have you heard that Canadians, frustrated by long wait times and rationing where they live, come to the United States for medical care? 

I don’t deny that some well-off people might come to the United States for medical care. If I needed a heart or lung transplant, there’s no place I’d rather have it done. But for the vast, vast majority of people, that’s not happening.

The most comprehensive study I’ve seen on this topic — it employed three different methodologies, all with solid rationales behind them — was published in the peer-reviewed journal Health Affairs.

The authors of the study started by surveying 136 ambulatory care facilities near the U.S.-Canada border in Michigan, New York and Washington. It makes sense that Canadians crossing the border for care would favor places close by, right? It turns out, however, that about 80 percent of such facilities saw, on average, fewer than one Canadian per month; about 40 percent had seen none in the preceding year.

Then, the researchers looked at how many Canadians were discharged over a five-year period from acute-care hospitals in the same three states. They found that more than 80 percent of these hospital visits were for emergency or urgent care (that is, tourists who had to go to the emergency room). Only about 20 percent of the visits were for elective procedures or care.

Next, the authors of the study surveyed America’s 20 “best” hospitals — as identified by U.S. News & World Report — on the assumption that if Canadians were going to travel for health care, they would be more likely to go to the best-known and highest-quality facilities. Only one of the 11 hospitals that responded saw more than 60 Canadians in a year. And, again, that included both emergencies and elective care.

Finally, the study’s authors examined data from the 18,000 Canadians who participated in the National Population Health Survey. In the previous year, 90 of those 18,000 Canadians had received care in the United States; only 20 of them, however, reported going to the United States expressively for the purpose of obtaining care.

Next: Are Canadian doctors taking U.S. jobs? »

Myth #2: Doctors in Canada are flocking to the United States to practice.

Every time I talk about health care policy with physicians, one inevitably tells me of the doctor he or she knows who ran away from Canada to practice in the United States. Evidently, there’s a general perception that practicing medicine in the United States is much more satisfying than in Canada.

Problem is, it’s just not so. Consider this chart:

Source: “2009 International Health Policy Survey of Primary Care Physicians in Eleven Countries,” The Commonwealth Fund, November 2009.

The Canadian Institute for Health Information has been tracking doctors’ destinations since 1992. Since then, 60 percent to 70 percent of the physicians who emigrate have headed south of the border. In the mid-1990s, the number of Canadian doctors leaving for the United States spiked at about 400 to 500 a year. But in recent years this number has declined, with only 169 physicians leaving for the States in 2003, 138 in 2004 and 122 both in 2005 and 2006. These numbers represent less than 0.5 percent of all doctors working in Canada.

So when emigration “spiked,” 400 to 500 doctors were leaving Canada for the United States. There are more than 800,000 physicians in the United States right now, so I’m skeptical that every doctor knows one of those émigrés. But look closely at the tan line in the following chart, which represents the net loss of doctors to Canada.


Source: Canadian Institute for Health Information

In 2004, net emigration became net immigration. Let me say that again. More doctors were moving into Canada than were moving out.

Myth #3: Canada rations health care; that’s why hip replacements and cataract surgeries happen faster in the United States.

When people want to demonize Canada’s health care system — and other single-payer systems, for that matter — they always end up going after rationing, and often hip replacements in particular.

Take Republican Rep. Todd Akin of Missouri, for example. A couple of years ago he took to the House floor to tell his colleagues:

“I just hit 62, and I was just reading that in Canada [if] I got a bad hip I wouldn’t be able to get that hip replacement that [Rep. Dan Lungren] got, because I’m too old! I’m an old geezer now and it’s not worth a government bureaucrat to pay me to get my hip fixed.”

Sigh.

This has been debunked so often, it’s tiring. The St. Louis Post-Dispatch, for example, concluded: “At least 63 percent of hip replacements performed in Canada last year [2008] … were on patients age 65 or older.” And more than 1,500 of those, it turned out, were on patients over 85.

The bottom line: Canada doesn’t deny hip replacements to older people.

But there’s more.

Know who gets most of the hip replacements in the United States? Older people.

Know who pays for care for older people in the United States? Medicare.

Know what Medicare is? A single-payer system.

Next: Does Canada have longer wait times than United States? »

Myth #4: Canada has long wait times because it has a single-payer system.

The wait times that Canada might experience are not caused by its being a single-payer system.

Wait times aren’t like cancer. We know what causes wait times; we know how to fix them. Spend more money.

Our single-payer system, which is called Medicare (see above), manages not to have the “wait times” issue that Canada’s does. There must, therefore, be some other reason for the wait times. There is, of course. It’s this:


Source: Organisation for Economic Co-operation and Development (OECD)

In 1966, Canada implemented a single-payer health care system, which is also known as Medicare. Since then, as a country, Canadians have made a conscious decision to hold down costs. One of the ways they do that is by limiting supply, mostly for elective things, which can create wait times. Their outcomes are otherwise comparable to ours.

Please understand, the wait times could be overcome. Canadians could spend more. They don’t want to. We can choose to dislike wait times in principle, but they are a byproduct of Canada’s choice to be fiscally conservative.

Yes, they chose this. In a rational world, those who are concerned about health care costs and what they mean to the economy might respect that course of action. But instead, they attack the system.

Myth #5: Canada rations health care; the United States doesn’t.

This one’s a little bit tricky. The truth is, Canada may “ration” by making people wait for some things, but here in the United States we also “ration” — by cost.

An 11-country survey carried out in 2010 by the Commonwealth Fund, a Washington-based health policy foundation, found that adults in the United States are by far the most likely to go without care because of cost. In fact, 42 percent of the Americans surveyed did not express confidence that they would be able to afford health care if seriously ill.

Further, about a third of the Americans surveyed reported that, in the preceding year, they didn’t go to the doctor when sick, didn’t get recommended care when needed, didn’t fill a prescription or skipped doses of medications because of cost.

Finally, about one in five of the Americans surveyed had struggled to pay or were unable to pay their medical bills in the preceding year. That was more than twice the percentage found in any of the other 10 countries.

And remember: We’re spending way more on health care than any other country, and for all that money we’re getting at best middling results.

So feel free to have a discussion about the relative merits of the U.S. and Canadian health care systems. Just stick to the facts.

Aaron E. Carroll frequently blogs about this topic for The Incidental Economist and is the coauthor of Don’t Swallow Your Gum: Myths, Half-Truths, and Outright Lies About Your Body and Health.

UnitedHealth's spurious generosity

UnitedHealthcare Voluntarily Extends Important Health Reform Protections Regardless of Upcoming Rulings by Supreme Court

UnitedHealth Group
June 11, 2012
UnitedHealthcare, a UnitedHealth Group (NYSE: UNH) company, will continue to offer important health care insurance protections that were included in the 2010 health care reform law, no matter how the U.S. Supreme Court rules in cases currently pending before the Court.
UnitedHealthcare will continue provisions related to coverage of preventive health care services, coverage of dependents up to age 26, lifetime policy limits, rescissions and appeals.
“The protections we are voluntarily extending are good for people’s health, promote broader access to quality care and contribute to helping control rising health care costs. These provisions make sense for the people we serve, and it is important to ensure they know these provisions will continue,” said Stephen J. Hemsley, president and CEO of UnitedHealth Group. “These provisions are compatible with our mission and continue our operating practices.”
These protections are effective immediately, and will remain available to current and future customers and members. The company is not establishing any sunset provisions.
UnitedHealthcare recognizes the value of coverage for children up to age 19 with pre-existing conditions. One company acting alone cannot take that step, so UnitedHealthcare is committed to working with all other participants in the health care system to sustain that coverage.
The specific provisions being extended by UnitedHealthcare are:
Preventive Health Care Services without Co-Pays
Providing Dependent Coverage Up to Age 26
Eliminating Lifetime Limits
No Rescissions, Except for Fraud
Providing Clear and Timely Options for Appeals
http://www.unitedhealthgroup.com/newsroom/news.aspx?id=59c64ad7-908b-4806-931f-aed3beff7ba0

You have to hand it to UnitedHealth’s public relations department. No matter how the Supreme Court rules on the Affordable Care Act (ACA), this press release establishes UnitedHealth as a leader in patient advocacy, or at least it would seem so.
If ACA is upheld, this press release means nothing since these are already requirements of the Act. If ACA is struck down, these are very popular measures that are quite inexpensive and thus will not drive up premiums to non-competitive levels. The most expensive measure is the coverage of dependents up to age 26, but that adds only about one percent to the premiums. Besides, other insurers will likely follow suit in order to more effectively market to a greater number of young, healthy families. So no matter what happens, UnitedHealth takes credit for taking the lead.
UnitedHealth used one example of a policy that they will not follow, indicating that they will not unilaterally provide patients with some of the more important protections required in ACA. They are correct when they say that they cannot cover children with preexisting conditions unless the entire industry cooperates in distributing those higher cost risks. If one insurer generously accepts those risks, then their costs would skyrocket and they would be forced out of the market by the death spiral of insurance premiums.
UnitedHealth has remained silent on some of the more important requirements not yet in effect that could be overturned by the Supreme Court decision. Insuring preexisting conditions for adults in addition to children, guaranteeing issue of coverage to all individuals regardless of projected costs, and setting premiums based on community rating – driving up premiums for lower-cost, healthier patients – are more significant measures that could impair their competitiveness if they acted unilaterally. We won’t see these policy changes unless ACA is upheld and all insurers are required to comply.
Also they are silent on keeping administrative costs and profits down to a level that complies with the medical loss ratios dictated by ACA. Turn ACA over then there would be no federal requirement to comply, though that would still be the prerogative of the states. States under the political control of anti-government, free-market advocates would likely leave medical loss ratios to the insurers and their Wall Street promoters (where low medical loss ratios – spending less on patients-  is a business activity that is rewarded with higher stock valuations).
UnitedHealth’s “generosity” in conceding the very modest positions they listed in their release applies only to the individual and small group markets – a relatively small proportion of their business. Most plans for large employers will be grandfathered, and most of the ACA provisions will not apply – certainly not the requirements specific to the exchanges since large employer plans will not be included in the state exchanges. Also, many large employers are self-insured, and for them UnitedHealth provides only administrative functions, while specific benefits are determined by the employers.
We can’t blame UnitedHealth for trying to protect its market position, but we can blame our elected representatives for adopting policies that perpetuate and expand an industry which must comply with market demands for lower prices – a demand that can be met only by strategic decisions to avoid market segments such as children who are ill.
Is that what America is about? Let’s take care of the kids, even up to age 26, but not the sick ones? What other country does that?

FEHBP as a model for exchanges

Federal Employees Health Program Experiences Lack Of Competition In Some Areas, Raising Cost Concerns For Exchange Plans

By Timothy D. McBride, Abigail R. Barker, Lisa M. Pollack, Leah M. Kemper and Keith J. Mueller
Health Affairs, June 2012

The Affordable Care Act calls for creation of health insurance exchanges designed to provide private health insurance plan choices. The Federal Employees Health Benefits Program is a national model that to some extent resembles the planned exchanges. Both offer plans at the state level but are also overseen by the federal government. We examined the availability of plans and enrollment levels in the Federal Employees Health Benefits Program throughout the United States in 2010. We found that although plans were widely available, enrollment was concentrated in plans owned by just a few organizations, typically Blue Cross/Blue Shield plans. Enrollment was more concentrated in rural areas, which may reflect historical patterns of enrollment or lack of provider networks.

http://content.healthaffairs.org/content/31/6/1321.abstract

Comment: 

By Don McCanne, MD

Supporters of the Affordable Care Act claim that the the state insurance exchanges would provide a robust market of private plans. One need look only as far as the Federal Employees Health Benefits Program (FEHBP) – the largest employer-sponsored private health insurance program in the nation – to see that such markets tend to concentrate dominant players. Instead of the magic of market competition, we can anticipate only more pain characteristic of dysfunctional or non-existent markets.

Single payer, anyone?

Additional comment from QotD reader Joel Segal

I have been on FEHBP plan for the past 12 years, and therefore can credibly speak about the positive and negative aspects of the program.

With the FEHBP plan, I have been able to receive medically necessary care, and the program has covered a good percentage of the costs of my CPAP and bi-pap machines that I use for my severe obstructive sleep apnea. Before I was on the FEHBP plan, I could not receive medically necessary health care services for my sleep apnea and other chronic health conditions. I was forced to become a “health care beggar,” borrowing money from friends, family members, and people of good will just to pay for some of my most serious health care needs. However, despite my charitable friends, for years, I went without the needed care, and remained sick, disabled, and often unable to work a full time job or work at all.

Without the FEHBP plan, I would have become permanently disabled, or developed other serious life-threatening health complications such as heart problems, which often result from untreated sleep apnea. The worst aspect of the FEHBP plan are the steep out-of-pocket costs for hospital visits, doctor’s visits, and other treatment that I need to live a healthy life. Having a chronic illness such as sleep apnea, means high out-of-pocket costs for CPAP masks, sleep studies, and new machines — which are often several hundreds of dollars per year, and sometimes a few thousand dollars per year. My co-pays are often very steep, and there have been many times where providers tried to deny me care that I truly needed, because I could not afford to pay prior balanced billing charges. But, because I demanded that I be treated in their offices (or begged for care!) they let me get the care. Most people are very fearful of their health care providers, and often leave doctor’s offices having been denied medically necessary care due to unpaid bills. This is just a reality of our current for-profit health care system.

I owe approximately $8,000 in co-pays over the last 5 years under the FEHBP, and have paid out-of-pocket approximately $15,000 for medically necessary care over the last 12 years. The problem with the FEHBP plan is that it typically covers 70-80 percent of the bill, leaving the patient who uses the health care system the most with enormous co-pays and medical bills. For young and healthy persons who get sick with the flu or a cold, and see a doctor perhaps twice a year, the program works fine. The people who suffer the most under the FEHBP plan are government employees who have chronic illnesses, or have an emergency surgery or procedure, and must pay the 20 percent of the bill that the plan does not cover.

We need a universal single-payer program like H.R. 676 or H.R. 1200, which will contain rising health care costs, while providing the highest standard of universal health care to all Americans.

Sincerely,

Joel Segal
Universal Single Payer Advocate