PNHP

Reinhardt: Is U.S. Health Spending Finally Under Control?

Reinhardt: Is U.S. Health Spending Finally Under Control?

Is U.S. Health Spending Finally Under Control?

By Uwe E. Reinhardt
The New York Times, January 20, 2012
“Growth in U.S. health spending remains slow in 2010” was the headline of a news release on Jan. 9 by the Centers for Medicare and Medicaid Services, part of the Department of Health and Human Services. At an increase of 3.9 percent over national health spending in 2009, “the rates of health spending growth in 2009 and 2010 marked the lowest rate in the 51-year history of the National Health Expenditure Accounts,” the release said.
The $64,000 question is how soon the excess growth of health spending will descend from its historical average of 1.5 to 2.5 percent first to, say, 1 percent or so, and eventually to 0 percent.
It is tempting to view the relatively lower cost growth in recent years as a first step in that direction. But nothing in the history of health spending in the United States suggests that this is the time to break out the Champagne to celebrate that victory.
After all, low rates of spending increases in 2009-10 could just be the lagged effect of the deep recession in 2008-9. There is evidence in the literature that health spending does not completely march to its own drummer, regardless of what happens in the rest of the economy, but instead tends to rise and fall somewhat with the rest of the G.D.P., albeit with a lag of one to two years. The safest bet is that on the long road to eventual zero excess growth in health spending, we will ride up and down quite a few more times on the health-spending roller coaster.
Now why is it reasonable to assume that excess cost growth will just have to decline to zero in the long run – that is, to assume that health spending will not eventually grow faster than G.D.P. and perhaps even more slowly?
Economists would explain such a trend as follows: as the fraction of G.D.P. devoted to health care increases, the added satisfaction, or utility, that people derive from added health care is likely to diminish relative to the added satisfaction derived from consuming more of other things. It could explain a gradual decline in the excess growth of health care spending.
Finally, economists retreat here to the one law on which they all agree, namely, Stein’s Law, named for the late economist Herbert Stein: “If something cannot go on forever, it will stop.” Trust us. It will, in the long run.
http://economix.blogs.nytimes.com/2012/01/20/is-u-s-health-spending-finally-under-control/

Published Comment:

Don McCanne
San Juan Capistrano, CA
How close we already are to meeting the limits of Stein’s Law is exemplified by 1) the current cost of health care for a family of four with an employer-sponsored PPO – $19,393 (Milliman), and 2) median household income – $49,445 (2010).
Although these are not measures of identical family units, they do provide enough of a perspective to show that we have run out of space in family budgets to pay for health care. The forgoing of wages to pay for employer-sponsored health benefits has crimped family budgets to the extent that frugality has become, by necessity, the norm.
We can continue as we are, allowing personal hardship to increase, or we can have our public stewards take control, as they have in other nations. They have been successful in ensuring that everyone has health care at costs averaging only half of those in the U.S.
A properly designed Medicare for all would work just fine for all of us.

Senator Leno’s Single-Payer Health Care Bill Clears Senate Appropriations

SB 810 Creates a Private-Public Partnership That Provides Universal Coverage By Redirecting the Funds Californians Already Spend on Health Care

From the office of California State Senator Mark Leno
FOR IMMEDIATE RELEASE
January 19, 2012

CONTACT: Ali Bay (916) 651-4003
 
SACRAMENTO – The Senate Appropriations Committee today approved the California Universal Health Care Act, authored by Senator Mark Leno (D-San Francisco). Senate Bill 810 guarantees all Californians comprehensive, universal health care while reducing the state’s ballooning health care costs and improving the quality of care and delivery of health services statewide. The legislation passed with a 6-2 vote.
 
California currently spends about $200 billion annually on a fragmented, inefficient health care system that wastes 30% of every dollar on administration. Under Senate Bill 810, that wasteful spending is eliminated. The bill redirects the funds Californians already spend on health care to allow comprehensive coverage. In fact, studies show that the state would save $8 billion in the first year under this single-payer plan.
 
“California is being overrun by out-of-control health care costs, which have a significant impact on families, businesses and the state budget,” said Senator Leno, D-San Francisco. “Health care premiums in the last few years have grown five times faster than our economy. Consequently, fewer employers are providing health benefits to their employees, and those workers who are fortunate enough to receive coverage are paying higher premiums for diminishing services. By guaranteeing universal access for all Californians, our single-payer plan will reduce the health care burdens that are hurting families and our state’s economy.”
 
SB 810 creates a private-public partnership to provide every California resident medical, dental, vision, hospitalization and prescription drug benefits and allows patients to choose their own doctors and hospitals. This single payer, “Medicare for All,” type of program works by pooling together the money that government, employers and individuals already spend on health care and putting it to better use by cutting out the for-profit middle man.
 
“SB 810 is the only proposed solution to the continuing patient care crisis that guarantees healthcare for all Californians and controls costs while eliminating the denials of care and restrictions of provider choice imposed by private insurance companies,” said DeAnn McEwen, a registered nurse at Long Beach Memorial Medical Center and co-president of the California Nurses Association. CNA is one of the co-sponsors of SB 810.
 
“Health is a right, not a privilege,” said Maria Lemus, executive director of Vision y Compromiso, a co-sponsor of SB 810. “All Californians, without exception, need access to quality medical services. Senator Leno’s single-payer proposal would provide California residents access to health services with an opportunity to prevent illness, the right to choose their doctor and control inflation without increasing health care costs in California.”
 
SB 810 is sponsored and supported by a broad coalition of patients, nurses, doctors, teachers and school employees, small businesses, faith community members, retirees, local governments and school districts. These groups represent more than 2 million Californians. The bill is co-sponsored by the California Nurses Association, Health Care for All California, California One Care, California School Employees Association, Physicians for a National Health Program-California, Single Payer Now, Campaign for a Healthy California, California Federation of Teachers, California Alliance of Retired Americans, Amnesty International, League of Women Voters, California Council of Churches, Progressive Democrats of America, California Consumer Federation, National Organization for Women-California, Vision y Compromiso, Wellstone Democratic Renewal Club, Dolores Huerta Foundation, California Health Professional Student Alliance and Courage Campaign.

CBO: Medicare's demonstration projects fail to demonstrate cost savings

Lessons from Medicare's Demonstration Projects on Disease Management, Care Coordination, and Value-Based Payment

Congressional Budget Office
January 2012

In the past two decades, CMS has conducted two broad categories of demonstrations aimed at enhancing the quality of health care and improving the efficiency of health care delivery in Medicare’s fee-for-service program.

* Disease management and care coordination demonstrations have sought to improve the quality of care of beneficiaries with chronic illnesses and those whose health care is expected to be particularly costly.

* Value-based payment demonstrations have given health care providers financial incentives to improve the quality and efficiency of care rather than payments based strictly on the volume and intensity of services delivered.

The evaluations show that most programs have not reduced Medicare spending: In nearly every program involving disease management and care coordination, spending was either unchanged or increased relative to the spending that would have occurred in the absence of the program, when the fees paid to the participating organizations were considered. Programs in which care managers had substantial direct interaction with physicians and significant in-person interaction with patients were more likely to reduce Medicare spending than other programs, but on average even those programs did not achieve enough savings to offset their fees.

Results from demonstrations of value-based payment systems were mixed. In one of the four demonstrations examined, Medicare made bundled payments that covered all hospital and physician services for heart bypass surgeries; Medicare’s spending for those services was reduced by about 10 percent under the demonstration. Other demonstrations of value-based payment appear to have produced little or no savings for Medicare.

The results of those Medicare demonstrations suggest that substantial changes to payment and delivery systems will probably be necessary for programs involving disease management and care coordination or value-based payment to significantly reduce spending and either maintain or improve the quality of care provided to patients.

http://www.cbo.gov/ftpdocs/126xx/doc12663/01-18-12-MedicareDemoBrief.pdf

Comment: 

By Don McCanne, MD

Recognizing the need to slow the increase in health care spending, much hope has been placed on disease management, care coordination, and value-based payments such as pay-for-performance. Medicare has authorized numerous demonstration projects to prove that these programs are effective. They aren’t.

The results of these demonstrations have shown that they have not reduced spending because the costs of the interventions were not offset by the savings, and frequently the costs were greater, resulting in a net loss.

The one exception in the report – bundled payments – doesn’t really belong in this list anyway. The demonstration study negotiated a single fee for coronary bypass surgeries, covering both the hospitals and the in-hospital treating physicians. The negotiated fee was about 10 percent less than the itemized fees had been previously. Thus the savings for Medicare was about 10 percent for these bypass surgeries. There was no attempt to determine if this reduction resulted in efforts to recover the difference from other patients or payers, which makes it difficult to know whether or not bundling actually reduced total health care costs.

On the other hand, imagine a system in which all payments are negotiated, as with a single payer system. Hospitals negotiate an annual global budget. That budget includes their costs of services, such as coronary bypass surgeries, without the need to itemize each single item for the services, nor the need to bundle payments in some sort of pretense that global costs are reduced. The hospital already has incentives to improve efficiencies to stay within budget.

Likewise, physicians collectively negotiate their payments, whether fee-for-service, capitation, or salary, as appropriate to their clinical circumstances. Payments are adequate to ensure a very comfortable net income.

Other nations have proven that negotiated, administered payment is effective in obtaining greater value for health care spending. We’ve now proven that intrusion of market-model games players such as outside disease managers, or pay-for-performance administrators, have failed to improve value. So we should go with a system that really does work – a single payer national health program.

CBO: Medicare’s demonstration projects fail to demonstrate cost savings

Lessons from Medicare’s Demonstration Projects on Disease Management, Care Coordination, and Value-Based Payment

Congressional Budget Office
January 2012

In the past two decades, CMS has conducted two broad categories of demonstrations aimed at enhancing the quality of health care and improving the efficiency of health care delivery in Medicare’s fee-for-service program.

* Disease management and care coordination demonstrations have sought to improve the quality of care of beneficiaries with chronic illnesses and those whose health care is expected to be particularly costly.

* Value-based payment demonstrations have given health care providers financial incentives to improve the quality and efficiency of care rather than payments based strictly on the volume and intensity of services delivered.

The evaluations show that most programs have not reduced Medicare spending: In nearly every program involving disease management and care coordination, spending was either unchanged or increased relative to the spending that would have occurred in the absence of the program, when the fees paid to the participating organizations were considered. Programs in which care managers had substantial direct interaction with physicians and significant in-person interaction with patients were more likely to reduce Medicare spending than other programs, but on average even those programs did not achieve enough savings to offset their fees.

Results from demonstrations of value-based payment systems were mixed. In one of the four demonstrations examined, Medicare made bundled payments that covered all hospital and physician services for heart bypass surgeries; Medicare’s spending for those services was reduced by about 10 percent under the demonstration. Other demonstrations of value-based payment appear to have produced little or no savings for Medicare.

The results of those Medicare demonstrations suggest that substantial changes to payment and delivery systems will probably be necessary for programs involving disease management and care coordination or value-based payment to significantly reduce spending and either maintain or improve the quality of care provided to patients.

http://www.cbo.gov/ftpdocs/126xx/doc12663/01-18-12-MedicareDemoBrief.pdf

Comment: 

By Don McCanne, MD

Recognizing the need to slow the increase in health care spending, much hope has been placed on disease management, care coordination, and value-based payments such as pay-for-performance. Medicare has authorized numerous demonstration projects to prove that these programs are effective. They aren’t.

The results of these demonstrations have shown that they have not reduced spending because the costs of the interventions were not offset by the savings, and frequently the costs were greater, resulting in a net loss.

The one exception in the report – bundled payments – doesn’t really belong in this list anyway. The demonstration study negotiated a single fee for coronary bypass surgeries, covering both the hospitals and the in-hospital treating physicians. The negotiated fee was about 10 percent less than the itemized fees had been previously. Thus the savings for Medicare was about 10 percent for these bypass surgeries. There was no attempt to determine if this reduction resulted in efforts to recover the difference from other patients or payers, which makes it difficult to know whether or not bundling actually reduced total health care costs.

On the other hand, imagine a system in which all payments are negotiated, as with a single payer system. Hospitals negotiate an annual global budget. That budget includes their costs of services, such as coronary bypass surgeries, without the need to itemize each single item for the services, nor the need to bundle payments in some sort of pretense that global costs are reduced. The hospital already has incentives to improve efficiencies to stay within budget.

Likewise, physicians collectively negotiate their payments, whether fee-for-service, capitation, or salary, as appropriate to their clinical circumstances. Payments are adequate to ensure a very comfortable net income.

Other nations have proven that negotiated, administered payment is effective in obtaining greater value for health care spending. We’ve now proven that intrusion of market-model games players such as outside disease managers, or pay-for-performance administrators, have failed to improve value. So we should go with a system that really does work – a single payer national health program.

Single Payer System Continues to Draw Interest in Oregon

A grassroots campaign is forming to build public support for a ballot measure in 2013

By Amanda Waldroupe
The Lund Report, Jan. 19, 2012

Healthcare advocates, medical professionals, and legislators are developing a state-wide grassroots campaign to start educating the public about a single payer health system to provide universal coverage for everyone.

“It’s really the only way that we can assure affordable, high quality healthcare for all,” said Rep. Mike Dembrow (D-Portland), who introduced such legislation during the 2011 session which received a courtesy hearing in the House Healthcare Committee, but never came up for a vote.

Dembrow doesn’t plan on introducing a similar bill when the Legislature meets next month. Legislators can only introduce two bills each, and a single payer bill wouldn’t get any further than another public hearing. “There’s not that much value in having another public hearing,” he said.

But Dembrow does intend on reintroducing such legislation during the 2013 session, and anticipates that bill will be referred to the voters for approval. “If it involves funding, it will inevitably go to the ballot,” he said.

Meanwhile, advocates continue to support and discuss how a single payer system would work in Oregon because of their strong belief that it’s the best way to reform healthcare, lower costs, and ensure that all citizens receive adequate health care.

“Single payer is always going to be a topic when people talk about making healthcare better,” said Dr. Sam Metz, an anesthesiologist who belongs to an advocacy group known as Mad as Hell Doctors. “Nothing has happened to change the crisis that is before us that is American healthcare. The Affordable Care Act will change very little. It has consumed political capital, and allowed people to think we’ve solved the problem.”

Metz thinks Oregon might be in a better position than other states to implement a single payer system. He points to large employers such as Intel and Nike that are self-insured, as well as Providence Health System and Kaiser Permanente which cover their employees with the insurance offered by them — all versions of single payer. Medicaid, Medicare, and healthcare for veterans are also variations of single payer. “So many people are already half way there,” Metz said.

But major obstacles continue to loom. “The current system has a lot of momentum.” according to Larry Steward, a retired professor at Portland State University. “A lot of people believe in it. There’s a whole lot of money involved in it, and a lot of institutions and private industry. There’s a whole infrastructure. All of that needs to be overcome to create a better system.

Private insurance companies are one of the greatest obstacles to creating a single payer system. “If we go to a single payer, they go out of business,” Metz said. It is thus highly unlikely that insurance companies would support legislation or any effort that would “lure the insurance industry to its destruction.”

The complexity of the insurance and healthcare system also make it difficult to educate consumers. “It is going to be a real struggle,” Dembrow agreed. But public education and getting people to “start agitating” will go a long way, he said, to helping people understand that “there are other models out there.”

Recently, Mt. Hood Community College hosted a forum on single payer and the topic was also discussed at a conference held by an organization known as We Can Do Better.

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

Vermont Moving Forward With Its Own Flavor Of Health Reform

By Jessica Marcy
Kaiser Health News, Jan. 19, 2012

Vermont lawmakers are taking steps to move the state toward a publicly-financed insurance program and craft a state health exchange, which is required by the 2010 federal health law and which state officials hope to use as the groundwork for their eventual move to a unique single-payer system.

Gov. Peter Shumlin’s administration this week offered a bill to the legislature that lays out a plan for building the exchange, a type of marketplace for individuals and small groups to buy health insurance. The proposal would combine the small group and individual health insurance markets, would bar the sale of health insurance to individuals and small employers outside of the exchange and would define a small employer to be 100 employees or fewer instead of 50, which had been under consideration. The bill also seeks to clarify how the state should integrate Medicaid, the state-federal health program for the poor and disabled, into the exchange.

Under the new system, an independent five-member panel called the Green Mountain Board will also be in charge of reviewing hospital budgets and defining final Certificate of Need as well as making health insurance rate decisions. That board is also working on a transition to a single-payer health system.

Shumlin, a Democrat, put Vermont on a path to single-payer health care last spring by signing a bill, known as Act 48, which seeks to create a new publicly funded and run health program called Green Mountain Care to replace the traditional insurance programs currently offered in the state.

“Act 48 really set up the roadmap for moving forward with single-payer. One stop along the way is the federal insurance exchange,” said Robin Lunge, the state’s director of health care reform. She said the exchange will provide an infrastructure to help reduce administrative health costs and can “be reused as a platform for moving forward with single payer.”

The federal health care overhaul law requires all states to create an exchange by 2014 and provides funds to help; otherwise, states may opt to let the feds set up an exchange for them. Vermont plans to use the federal funds to create an exchange but has already filed a waiver so that it can pursue the single payer system and not have to run two duplicative programs in the future.

Deb Richter, head of Vermont for Single Payer, stressed that the ultimate goal is to create a single-payer system, saying, “I look at this as we want to strengthen the exchange so that as many people can get broad coverage that’s affordable in the meantime.”

Vermont has several other key decisions to make, including how to pay for a single-payer health system. The state has held four public meetings in recent months, where people offered their financing recommendations, and is looking at how other countries, particularly Switzerland and Germany, finance their health systems, Lunge said.

In recent years, nearly a dozen states have introduced some type of single payer type legislation, according to Physicians for a National Health Program, but Vermont has been the only state to get this far.

For instance, California advocates saw their push to pass single payer legislation delayed Tuesday when the Senate Appropriations Committee postponed a vote after legislative analysis showed the state-funded program could cost the state general fund $200 billion a year, according to the Los Angeles Times. [PNHP note: On this point, Dr. William Skeen of PNHP California makes the following comment: In reality, it costs $200 billion to pay for health care in California, and under single payer that cost would be paid by the state. What is left out makes all the difference — that the state would capture all the current funding streams of health care in California, giving it enough money to pay the $200 billion. And of course, once in place, the cost controls inherent in single payer (global budgeting, negotiated rates, etc.) would solve California’s budget crisis.]

Despite the setback, William Skeen, executive director of Physicians for a National Health Program in California, said, “I think that what’s happening in Vermont really energizes what’s happening in California.”

http://capsules.kaiserhealthnews.org/index.php/2012/01/vermont-moving-forward-on-its-own-flavor-of-health-reform/

CBO: Medicare's demonstration projects fail to demonstrate cost savings

Lessons from Medicare’s Demonstration Projects on Disease Management, Care Coordination, and Value-Based Payment

Congressional Budget Office
January 2012
In the past two decades, CMS has conducted two broad categories of demonstrations aimed at enhancing the quality of health care and improving the efficiency of health care delivery in Medicare’s fee-for-service program.
* Disease management and care coordination demonstrations have sought to improve the quality of care of beneficiaries with chronic illnesses and those whose health care is expected to be particularly costly.
* Value-based payment demonstrations have given health care providers financial incentives to improve the quality and efficiency of care rather than payments based strictly on the volume and intensity of services delivered.
The evaluations show that most programs have not reduced Medicare spending: In nearly every program involving disease management and care coordination, spending was either unchanged or increased relative to the spending that would have occurred in the absence of the program, when the fees paid to the participating organizations were considered. Programs in which care managers had substantial direct interaction with physicians and significant in-person interaction with patients were more likely to reduce Medicare spending than other programs, but on average even those programs did not achieve enough savings to offset their fees.
Results from demonstrations of value-based payment systems were mixed. In one of the four demonstrations examined, Medicare made bundled payments that covered all hospital and physician services for heart bypass surgeries; Medicare’s spending for those services was reduced by about 10 percent under the demonstration. Other demonstrations of value-based payment appear to have produced little or no savings for Medicare.
The results of those Medicare demonstrations suggest that substantial changes to payment and delivery systems will probably be necessary for programs involving disease management and care coordination or value-based payment to significantly reduce spending and either maintain or improve the quality of care provided to patients.
http://www.cbo.gov/ftpdocs/126xx/doc12663/01-18-12-MedicareDemoBrief.pdf

Recognizing the need to slow the increase in health care spending, much hope has been placed on disease management, care coordination, and value-based payments such as pay-for-performance. Medicare has authorized numerous demonstration projects to prove that these programs are effective. They aren’t.
The results of these demonstrations have shown that they have not reduced spending because the costs of the interventions were not offset by the savings, and frequently the costs were greater, resulting in a net loss.
The one exception in the report – bundled payments – doesn’t really belong in this list anyway. The demonstration study negotiated a single fee for coronary bypass surgeries, covering both the hospitals and the in-hospital treating physicians. The negotiated fee was about 10 percent less than the itemized fees had been previously. Thus the savings for Medicare was about 10 percent for these bypass surgeries. There was no attempt to determine if this reduction resulted in efforts to recover the difference from other patients or payers, which makes it difficult to know whether or not bundling actually reduced total health care costs.
On the other hand, imagine a system in which all payments are negotiated, as with a single payer system. Hospitals negotiate an annual global budget. That budget includes their costs of services, such as coronary bypass surgeries, without the need to itemize each single item for the services, nor the need to bundle payments in some sort of pretense that global costs are reduced. The hospital already has incentives to improve efficiencies to stay within budget.
Likewise, physicians collectively negotiate their payments, whether fee-for-service, capitation, or salary, as appropriate to their clinical circumstances. Payments are adequate to ensure a very comfortable net income.
Other nations have proven that negotiated, administered payment is effective in obtaining greater value for health care spending. We’ve now proven that intrusion of market-model games players such as outside disease managers, or pay-for-performance administrators, have failed to improve value. So we should go with a system that really does work – a single payer national health program.

Folding Medicare into Vermont's single payer system

Act 48 Integration Report: Green Mountain Care

Submitted by Robin J. Lunge, Director of Health Care Reform
Department of Vermont Health Access and the
Department of Banking, Insurance, Securities, and Health Care Administration
January 17, 2012

Act 48 creates Green Mountain Care, which is a publicly financed health care program delivering affordable, high-quality health care coverage to all residents of Vermont. Section 8 of No. 48 of the acts of 2011 (Act 48) calls for a report consisting of a series of studies to inform the development of Green Mountain Care.

The administrative integration of many payers will begin in the Exchange. For example, individuals eligible for Medicaid may use a web-based portal designed for the Exchange to enroll in Medicaid. The Exchange will also integrate the small group and association markets and could additionally integrate the individual market as well. Municipal employees are currently in the small group market, so their coverage would also be integrated in the Exchange.

The three payers who may not be able to be integrated into the Exchange are Medicare, state employees, and school employees.

Medicare

Medicare is a federal program, paid for with all federal funds and administered entirely by the federal government. 33 V.S.A. 1824 provides that the agency of human services shall collect information to determine if an individual is eligible for Medicare in order to ensure that federal funds are utilized before state funds. Act 48 specifically provides that Green Mountain Care will not alter anyone’s Medicare benefits under Medicare. If an individual is enrolled in Medicare, he or she need not apply for or enroll in Green Mountain Care if he or she does not wish to. Act 48 allows the individual the choice to have Green Mountain Care as a secondary insurance, but does not require it. The cost of these provisions will be looked at as part of the financing study due in January 2013.

http://hcr.vermont.gov/sites/hcr/files/GreenMountainCareStudiesIntegration.pdf

And…

Medicare Waiver Demonstration Application

Center for Medicare & Medicaid Services

CMS conducts Medicare-waiver-only demonstrations to test innovations that have been shown to be successful in improving access and quality and/or lowering health care costs. These demonstrations may involve new benefits, fee-for-service or Medicare Advantage payment methodologies, and/or risk sharing arrangements that are not currently permitted under Medicare statute.

https://www.cms.gov/DemoProjectsEvalRpts/downloads/FESC_Medicare_Waiver_Demo.pdf

For more about Medicare waivers:
Legal Information Institute
http://www.law.cornell.edu/uscode/42/1395b-1.html

And…

Converting Successful Medicare Demonstrations into National Programs (an excellent description of the limitations of the process using the example of P4P):
http://www.rti.org/pubs/rtipress/mitchell/BK-0002-1103-Ch11.pdf

Comment: 

By Don McCanne, MD

As states attempt to set up single payer programs, one problem that comes up is how do you move federal funds from programs such as Medicare into the state single payer system? The simple answer is, you don’t, at least not without getting Congress to enact transformative legislation.

Many have suggested that all you need is a “Medicare waiver.” But the Medicare waiver process is limited to small demonstrations primarily of payment innovations that are budget neutral or less, and that do not reduce benefits. They do not allow changes in the fundamentals of the Medicare program. The populations covered remain the same.

Vermont dropped “single payer” from the title of their legislation. One of the reasons is that Medicare will have to remain a separate program, even though they are making efforts to allow Green Mountain Care to serve as an additional Medigap plan, and to allow for some administrative integration within the insurance exchange.

Vermont should certainly move forward with its process, since beneficial tweaks are better than nothing at all. But the real message is that Vermont, and all of us, could have so much more if we enacted a national single payer health program.

We should not wait to see how well the state efforts and the implementation of the Affordable Care Act will work. We already know. Costs will be higher. Millions will remain uninsured. Underinsurance will be the new standard. Hardship and suffering will increase.

States should try to improve their programs while they are waiting for national reform. But it’s our job to see that they don’t have to wait any longer than they have to. We must act now.

Folding Medicare into Vermont’s single payer system

Act 48 Integration Report: Green Mountain Care

Submitted by Robin J. Lunge, Director of Health Care Reform
Department of Vermont Health Access and the
Department of Banking, Insurance, Securities, and Health Care Administration
January 17, 2012

Act 48 creates Green Mountain Care, which is a publicly financed health care program delivering affordable, high-quality health care coverage to all residents of Vermont. Section 8 of No. 48 of the acts of 2011 (Act 48) calls for a report consisting of a series of studies to inform the development of Green Mountain Care.

The administrative integration of many payers will begin in the Exchange. For example, individuals eligible for Medicaid may use a web-based portal designed for the Exchange to enroll in Medicaid. The Exchange will also integrate the small group and association markets and could additionally integrate the individual market as well. Municipal employees are currently in the small group market, so their coverage would also be integrated in the Exchange.

The three payers who may not be able to be integrated into the Exchange are Medicare, state employees, and school employees.

Medicare

Medicare is a federal program, paid for with all federal funds and administered entirely by the federal government. 33 V.S.A. 1824 provides that the agency of human services shall collect information to determine if an individual is eligible for Medicare in order to ensure that federal funds are utilized before state funds. Act 48 specifically provides that Green Mountain Care will not alter anyone’s Medicare benefits under Medicare. If an individual is enrolled in Medicare, he or she need not apply for or enroll in Green Mountain Care if he or she does not wish to. Act 48 allows the individual the choice to have Green Mountain Care as a secondary insurance, but does not require it. The cost of these provisions will be looked at as part of the financing study due in January 2013.

http://hcr.vermont.gov/sites/hcr/files/GreenMountainCareStudiesIntegration.pdf

And…

Medicare Waiver Demonstration Application

Center for Medicare & Medicaid Services

CMS conducts Medicare-waiver-only demonstrations to test innovations that have been shown to be successful in improving access and quality and/or lowering health care costs. These demonstrations may involve new benefits, fee-for-service or Medicare Advantage payment methodologies, and/or risk sharing arrangements that are not currently permitted under Medicare statute.

https://www.cms.gov/DemoProjectsEvalRpts/downloads/FESC_Medicare_Waiver_Demo.pdf

For more about Medicare waivers:
Legal Information Institute
http://www.law.cornell.edu/uscode/42/1395b-1.html

And…

Converting Successful Medicare Demonstrations into National Programs (an excellent description of the limitations of the process using the example of P4P):
http://www.rti.org/pubs/rtipress/mitchell/BK-0002-1103-Ch11.pdf

Comment: 

By Don McCanne, MD

As states attempt to set up single payer programs, one problem that comes up is how do you move federal funds from programs such as Medicare into the state single payer system? The simple answer is, you don’t, at least not without getting Congress to enact transformative legislation.

Many have suggested that all you need is a “Medicare waiver.” But the Medicare waiver process is limited to small demonstrations primarily of payment innovations that are budget neutral or less, and that do not reduce benefits. They do not allow changes in the fundamentals of the Medicare program. The populations covered remain the same.

Vermont dropped “single payer” from the title of their legislation. One of the reasons is that Medicare will have to remain a separate program, even though they are making efforts to allow Green Mountain Care to serve as an additional Medigap plan, and to allow for some administrative integration within the insurance exchange.

Vermont should certainly move forward with its process, since beneficial tweaks are better than nothing at all. But the real message is that Vermont, and all of us, could have so much more if we enacted a national single payer health program.

We should not wait to see how well the state efforts and the implementation of the Affordable Care Act will work. We already know. Costs will be higher. Millions will remain uninsured. Underinsurance will be the new standard. Hardship and suffering will increase.

States should try to improve their programs while they are waiting for national reform. But it’s our job to see that they don’t have to wait any longer than they have to. We must act now.

Folding Medicare into Vermont's single payer system

Act 48 Integration Report: Green Mountain Care

Submitted by Robin J. Lunge, Director of Health Care Reform
Department of Vermont Health Access and the
Department of Banking, Insurance, Securities, and Health Care Administration
January 17, 2012
Act 48 creates Green Mountain Care, which is a publicly financed health care program delivering affordable, high-quality health care coverage to all residents of Vermont. Section 8 of No. 48 of the acts of 2011 (Act 48) calls for a report consisting of a series of studies to inform the development of Green Mountain Care.
The administrative integration of many payers will begin in the Exchange. For example, individuals eligible for Medicaid may use a web-based portal designed for the Exchange to enroll in Medicaid. The Exchange will also integrate the small group and association markets and could additionally integrate the individual market as well. Municipal employees are currently in the small group market, so their coverage would also be integrated in the Exchange.
The three payers who may not be able to be integrated into the Exchange are Medicare, state employees, and school employees.
Medicare
Medicare is a federal program, paid for with all federal funds and administered entirely by the federal government. 33 V.S.A. 1824 provides that the agency of human services shall collect information to determine if an individual is eligible for Medicare in order to ensure that federal funds are utilized before state funds. Act 48 specifically provides that Green Mountain Care will not alter anyone’s Medicare benefits under Medicare. If an individual is enrolled in Medicare, he or she need not apply for or enroll in Green Mountain Care if he or she does not wish to. Act 48 allows the individual the choice to have Green Mountain Care as a secondary insurance, but does not require it. The cost of these provisions will be looked at as part of the financing study due in January 2013.
http://hcr.vermont.gov/sites/hcr/files/GreenMountainCareStudiesIntegration.pdf

And…

Medicare Waiver Demonstration Application

Center for Medicare & Medicaid Services
CMS conducts Medicare-waiver-only demonstrations to test innovations that have been shown to be successful in improving access and quality and/or lowering health care costs. These demonstrations may involve new benefits, fee-for-service or Medicare Advantage payment methodologies, and/or risk sharing arrangements that are not currently permitted under Medicare statute.
https://www.cms.gov/DemoProjectsEvalRpts/downloads/FESC_Medicare_Waiver_Demo.pdf
For more about Medicare waivers:
Legal Information Institute
http://www.law.cornell.edu/uscode/42/1395b-1.html

And…

Converting Successful Medicare Demonstrations into National Programs (an excellent description of the limitations of the process using the example of P4P):
http://www.rti.org/pubs/rtipress/mitchell/BK-0002-1103-Ch11.pdf

As states attempt to set up single payer programs, one problem that comes up is how do you move federal funds from programs such as Medicare into the state single payer system? The simple answer is, you don’t, at least not without getting Congress to enact transformative legislation.
Many have suggested that all you need is a “Medicare waiver.” But the Medicare waiver process is limited to small demonstrations primarily of payment innovations that are budget neutral or less, and that do not reduce benefits. They do not allow changes in the fundamentals of the Medicare program. The populations covered remain the same.
Vermont dropped “single payer” from the title of their legislation. One of the reasons is that Medicare will have to remain a separate program, even though they are making efforts to allow Green Mountain Care to serve as an additional Medigap plan, and to allow for some administrative integration within the insurance exchange.
Vermont should certainly move forward with its process, since beneficial tweaks are better than nothing at all. But the real message is that Vermont, and all of us, could have so much more if we enacted a national single payer health program.
We should not wait to see how well the state efforts and the implementation of the Affordable Care Act will work. We already know. Costs will be higher. Millions will remain uninsured. Underinsurance will be the new standard. Hardship and suffering will increase.
States should try to improve their programs while they are waiting for national reform. But it’s our job to see that they don’t have to wait any longer than they have to. We must act now.