PNHP

Rise of for-profit hospice industry raises troubling questions, new study says

Rise of for-profit hospice industry raises troubling questions, new study says

Ethical and quality concerns grow as end-of-life hospice care, once the province of charitable organizations, is increasingly dominated by investor-owned chains that cherry-pick patients and cut labor costs in order to maximize profits

FOR IMMEDIATE RELEASE
May 18, 2011

Contact:
Robert Stone, M.D.
Mark Almberg, PNHP communications director, (312) 782-6006, mark@pnhp.org

A new survey of hospice care in the United States says that the rapidly growing role of for-profit companies in providing end-of-life care for terminally ill patients raises serious concerns about whose interests are being served under such a commercial arrangement: those of shareholders or those of dying patients and their loved ones.

“Under a corporate model of hospice care, there’s an inherent conflict of interest between a company’s drive to maximize profits and a patient’s need for the kind of holistic, multidisciplinary and compassionate care originally envisioned by the founders of the modern hospice movement,” said Dr. Robert Stone, an emergency medicine physician in Bloomington, Ind.

Stone, who serves as assistant medical director at a hospital hospice program at Indiana University, is co-author of “In the Business of Dying: Questioning the Commercialization of Hospice,” a newly published article in the Journal of Law, Medicine and Ethics. Joshua Perry, a professor of business law and ethics at Indiana University, is the lead author of the article.

Stone and Perry point out that the for-profit hospice industry grew by 128 percent from 2001 to 2008, while the nonprofit sector grew by only 1 percent and government-sponsored hospices increased by 25 percent. The for-profit sector now accounts for 52 percent of hospices.

“Research shows that for-profit hospices, and especially publicly traded chain providers, generate higher revenues than their nonprofit counterparts,” Stone said. “They do this in part, studies show, by selectively recruiting longer-term patients, most of whom do not have cancer, thereby gaming the Medicare payment system.” Medicare currently pays hospice providers a fixed per diem payment throughout a patient’s stay, regardless of whether services are provided on any given day, he said.

“Hospice patients’ use of services are greatest on the first day of hospice care, when services are being set up, and in the last few days of life, when round-the-clock nursing care may be required,” Stone said. “Hospices that recruit longer-term patients will be overpaid and will drain funds from the hospice program that should be going to patient care.”

Stone continued: “Typically, the for-profit companies also pay lower salaries and benefits to a less-skilled staff, and employ fewer registered nurses. This raises quality concerns.”

Such practices not only undermine the Samaritan traditions of the hospice movement, he said, but also put nonprofit hospices at a competitive disadvantage, threatening their financial survival. Nonprofits have been shown to provide a greater range of services than their for-profit counterparts, including continuous home care and bereavement services, he said.

Stone and Perry point to research documenting ethically questionable marketing practices used by for-profit hospice companies, including instances of company representatives going into nursing homes and offering free pens and coffee cups to staff and subsequently paying a commission to staff members who refer patients to them.

While more research on hospice quality needs to be done, Stone said, comparative studies of U.S. hospitals, dialysis centers and nursing homes have shown that nonprofit institutions, on average, provide a higher quality of care than do for-profits.

******

“In the Business of Dying: Questioning the Commercialization of Hospice,” Joshua E. Perry, J.D., M.T.S., and Robert C. Stone, M.D., Journal of Law, Medicine and Ethics, Summer 2011.

A copy of the manuscript of the study can be found here.

******

Physicians for a National Health Program (www.pnhp.org) is an 18,000-member organization advocating a nonprofit, single-payer national health insurance program for the United States. PNHP had no role in funding the study mentioned above. To speak with a physician/spokesperson in your area, visit www.pnhp.org/stateactions or call (312) 782-6006.

Market decisions negatively impact safety-net emergency departments

Factors Associated With Closures of Emergency Departments in the United States

By Renee Y. Hsia, MD, MSc; Arthur L. Kellermann, MD, MPH; Yu-Chu Shen, PhD
JAMA, May 18, 2011

Our nationwide analysis of ED closures between 1990 and 2007 identified several risk factors that suggest economic drivers are associated with ED closures. Hospital-specific characteristics related to higher risk of closure were safety-net status, for-profit ownership, and low profit margin. After controlling for demographic and market factors, safety-net hospitals are at higher risk of closing their EDs compared with non–safety-net hospitals, suggesting that safety-net hospital status reflects other pressures that, although less measurable, are associated with ED closure. For example, some EDs have difficulty maintaining a full on-call panel of specialty physicians because of unwillingness of specialists to cover emergency calls, especially for poorly insured patients.​ While this finding deserves more study, it signals that safety-net hospitals may require particular attention if emergency care access is to be sustained.

Hospitals in counties where a high proportion of residents live in poverty were more likely to close their EDs than hospitals in more economically secure communities. Factors such as crowding and the increasing challenges of providing high-quality care in the face of burgeoning demand could contribute to difficulty in recruiting and maintaining staff at all levels. These community-characteristic findings are especially compelling given that vulnerable populations, including those in minority groups and both uninsured and underinsured patients, use EDs for acute care at greater rates than other populations. As more of these patients lose access to primary care, an increasing number of EDs are meeting criteria as safety-net facilities, which suggests that more EDs may be at risk of closing in the future. ED closures can have substantial effects on vulnerable communities, causing a decline in care as hospitals serving poor and minority populations select to provide services based on profitability rather than community health needs.

Local market competition is strongly associated with the ability of an ED to remain open. The presence of other EDs within a 15-mile radius and highly competitive markets are both associated with increased risk of ED closures. Previous literature reported that emergency services in areas with poor payer mix are often money losers. Our study extends this finding, showing that market forces, beyond profit margin alone, are substantially related to the ability of an ED to remain open.

Our findings expand the evidence base by showing that economic factors related to ED closures are similar to those related to hospital closures and may be even stronger. All factors (except for the increased risk of hospitals serving a higher proportion of patients in poverty) identified in our study can be shown to be market-driven. Profit margin, for example, is influenced by a number of factors ranging from patient payer mix, reimbursement decisions from payers (and negotiated discounts between hospitals and payers), to competition. Market factors may also be the reason that many for-profit hospitals choose not to provide emergency services.

In some areas, the episodic closure of EDs may be of little consequence, particularly in competitive health care markets where nearby facilities can deliver the needed clinical care for patients who seek ED treatment. Some might assert that such “creative destruction” is a manifestation of a healthy marketplace. However, the market economics of US health care, particularly emergency care, are distorted by the fact that 51 million Americans lack health insurance, and another 48 million are covered by Medicaid and other forms of public insurance that reimburse well below cost. With health care reform, the numbers of individuals covered by Medicaid and other forms of public insurance are likely to increase substantially, with far-reaching implications if these patients cannot access timely and adequate care. In most of the US health care system, an effective business strategy is to minimize uncompensated costs by declining to treat these patients, but EDs cannot do so.

The economic challenge of operating an ED in the face of a federal obligation may explain, in part, why for-profit hospitals were twice as likely to close their EDs as facilities that are nonprofit or publicly owned. It may also explain why hospitals in the lowest quartile of profitability (essentially, negative profitability) and those in highly competitive markets were more likely to close their EDs. Yet even after controlling for these and other characteristics, we observed that safety-net hospitals were significantly more likely to close their EDs than hospitals that did not serve this role.

The closure of an ED can have profound repercussions for a community. Closures can adversely affect access to emergency care for everyone—insured and uninsured alike. Hospital closures significantly affect access to care not only by increasing the distance to the nearest hospital but also by increasing the patient load at neighboring hospitals. ED crowding degrades quality of care, not only by prolonging patient waiting times and increasing the rate of patients who leave without being seen, but also in terms of outcomes, including increased rates of morbidity and mortality. Because Medicaid, SCHIP, and uninsured patients are highly reliant on hospital EDs for acute care, ED closure can displace tens of thousands of uninsured and low-income patients to other EDs, worsening crowding and potentially setting the stage for additional closures.

Our findings underscore that market-based approaches to health care do not ensure that care will be equitably distributed. In fact, the opposite may be true. As long as tens of millions of Americans are uninsured, and tens of millions more pay well below their cost of care, the push for “results-driven competition” will not correct system-level disparities that markets cannot—and should not—be expected to resolve.

In summary, this study demonstrated that from 1990 to 2009, the number of hospital EDs in nonrural areas declined by 27%, with for-profit ownership, location in a competitive market, safety-net status, and low profit margin associated with increased risk of ED closure.

http://jama.ama-assn.org/content/305/19/1978.short

Comment: 

By Don McCanne, MD

We have a crisis with closures of our emergency departments. With our current dysfunctional mechanisms of financing health care – mechanisms that are perpetuated by the Affordable Care Act – market considerations rather than medical need are driving these decisions. The more vulnerable populations suffer the most.

Many of the affluent individuals who have had great influence over the reform efforts may not care that safety-net emergency departments are shutting down, but they should. They could become victims of major traffic accidents and taken through rush hour traffic to their preferred for-profit emergency departments. If they had to ride past padlocked safety-net emergency departments to the other side of town, they could DIE no matter how much money they had or how good their private insurance is.

A well designed single payer system includes regional planning and separate budgeting of capital improvements. Decisions on the location and funding of Emergency Departments are made based on community need rather than on market considerations.

Maybe most of the rich don’t care about the rest of us, but you would think that, at least, they would care about themselves and their families.

Market decisions negatively impact safety-net emergency departments

Factors Associated With Closures of Emergency Departments in the United States

By Renee Y. Hsia, MD, MSc; Arthur L. Kellermann, MD, MPH; Yu-Chu Shen, PhD
JAMA, May 18, 2011

Our nationwide analysis of ED closures between 1990 and 2007 identified several risk factors that suggest economic drivers are associated with ED closures. Hospital-specific characteristics related to higher risk of closure were safety-net status, for-profit ownership, and low profit margin. After controlling for demographic and market factors, safety-net hospitals are at higher risk of closing their EDs compared with non–safety-net hospitals, suggesting that safety-net hospital status reflects other pressures that, although less measurable, are associated with ED closure. For example, some EDs have difficulty maintaining a full on-call panel of specialty physicians because of unwillingness of specialists to cover emergency calls, especially for poorly insured patients.​ While this finding deserves more study, it signals that safety-net hospitals may require particular attention if emergency care access is to be sustained.

Hospitals in counties where a high proportion of residents live in poverty were more likely to close their EDs than hospitals in more economically secure communities. Factors such as crowding and the increasing challenges of providing high-quality care in the face of burgeoning demand could contribute to difficulty in recruiting and maintaining staff at all levels. These community-characteristic findings are especially compelling given that vulnerable populations, including those in minority groups and both uninsured and underinsured patients, use EDs for acute care at greater rates than other populations. As more of these patients lose access to primary care, an increasing number of EDs are meeting criteria as safety-net facilities, which suggests that more EDs may be at risk of closing in the future. ED closures can have substantial effects on vulnerable communities, causing a decline in care as hospitals serving poor and minority populations select to provide services based on profitability rather than community health needs.

Local market competition is strongly associated with the ability of an ED to remain open. The presence of other EDs within a 15-mile radius and highly competitive markets are both associated with increased risk of ED closures. Previous literature reported that emergency services in areas with poor payer mix are often money losers. Our study extends this finding, showing that market forces, beyond profit margin alone, are substantially related to the ability of an ED to remain open.

Our findings expand the evidence base by showing that economic factors related to ED closures are similar to those related to hospital closures and may be even stronger. All factors (except for the increased risk of hospitals serving a higher proportion of patients in poverty) identified in our study can be shown to be market-driven. Profit margin, for example, is influenced by a number of factors ranging from patient payer mix, reimbursement decisions from payers (and negotiated discounts between hospitals and payers), to competition. Market factors may also be the reason that many for-profit hospitals choose not to provide emergency services.

In some areas, the episodic closure of EDs may be of little consequence, particularly in competitive health care markets where nearby facilities can deliver the needed clinical care for patients who seek ED treatment. Some might assert that such “creative destruction” is a manifestation of a healthy marketplace. However, the market economics of US health care, particularly emergency care, are distorted by the fact that 51 million Americans lack health insurance, and another 48 million are covered by Medicaid and other forms of public insurance that reimburse well below cost. With health care reform, the numbers of individuals covered by Medicaid and other forms of public insurance are likely to increase substantially, with far-reaching implications if these patients cannot access timely and adequate care. In most of the US health care system, an effective business strategy is to minimize uncompensated costs by declining to treat these patients, but EDs cannot do so.

The economic challenge of operating an ED in the face of a federal obligation may explain, in part, why for-profit hospitals were twice as likely to close their EDs as facilities that are nonprofit or publicly owned. It may also explain why hospitals in the lowest quartile of profitability (essentially, negative profitability) and those in highly competitive markets were more likely to close their EDs. Yet even after controlling for these and other characteristics, we observed that safety-net hospitals were significantly more likely to close their EDs than hospitals that did not serve this role.

The closure of an ED can have profound repercussions for a community. Closures can adversely affect access to emergency care for everyone—insured and uninsured alike. Hospital closures significantly affect access to care not only by increasing the distance to the nearest hospital but also by increasing the patient load at neighboring hospitals. ED crowding degrades quality of care, not only by prolonging patient waiting times and increasing the rate of patients who leave without being seen, but also in terms of outcomes, including increased rates of morbidity and mortality. Because Medicaid, SCHIP, and uninsured patients are highly reliant on hospital EDs for acute care, ED closure can displace tens of thousands of uninsured and low-income patients to other EDs, worsening crowding and potentially setting the stage for additional closures.

Our findings underscore that market-based approaches to health care do not ensure that care will be equitably distributed. In fact, the opposite may be true. As long as tens of millions of Americans are uninsured, and tens of millions more pay well below their cost of care, the push for “results-driven competition” will not correct system-level disparities that markets cannot—and should not—be expected to resolve.

In summary, this study demonstrated that from 1990 to 2009, the number of hospital EDs in nonrural areas declined by 27%, with for-profit ownership, location in a competitive market, safety-net status, and low profit margin associated with increased risk of ED closure.

http://jama.ama-assn.org/content/305/19/1978.short

We have a crisis with closures of our emergency departments. With our current dysfunctional mechanisms of financing health care – mechanisms that are perpetuated by the Affordable Care Act – market considerations rather than medical need are driving these decisions. The more vulnerable populations suffer the most.

Many of the affluent individuals who have had great influence over the reform efforts may not care that safety-net emergency departments are shutting down, but they should. They could become victims of major traffic accidents and taken through rush hour traffic to their preferred for-profit emergency departments. If they had to ride past padlocked safety-net emergency departments to the other side of town, they could DIE no matter how much money they had or how good their private insurance is.

A well designed single payer system includes regional planning and separate budgeting of capital improvements. Decisions on the location and funding of Emergency Departments are made based on community need rather than on market considerations.

Maybe most of the rich don’t care about the rest of us, but you would think that, at least, they would care about themselves and their families.

David Cameron's adviser says health reform is a chance to make big profits

Kitchen cabinet aide says charging improves service and NHS should be shown 'no mercy' in drive for reform

By Daniel Boffey and Toby Helm
The Guardian, Saturday 14 May 2011

A senior adviser to David Cameron says the NHS could be improved by charging patients and will be transformed into a “state insurance provider, not a state deliverer” of care.

Mark Britnell, who was appointed to a “kitchen cabinet” advising the prime minister on reforming the NHS, told a conference of executives from the private sector that future reforms would show “no mercy” to the NHS and offer a “big opportunity” to the for-profit sector.

The revelations come on the eve of an important speech by the prime minister on the future of the NHS, during which he is expected to try to allay widespread fears that the reforms proposed in health secretary Andrew Lansley’s health and social care bill would lead to privatisation.

It has been suggested that Cameron may even announce an extension to the “pause” in the progress of the bill until after the party conference season, amid growing tensions on the issue within the coalition government.

Nick Clegg, has insisted that the Liberal Democrats will not support any reforms that allow the “profit motive to drive a coach and horses through the NHS”. Backbench Tory MPs, however, have called for the government to stick to the reforms and open the provision of services to the private sector. Britnell’s comments will inevitably raise the temperature of the debate.

Britnell, a former director of commissioning for the NHS, who is now head of health at the accountancy giant KPMG, was invited to join a group of senior health policy experts, described by the respected Health Service Journal as a “kitchen cabinet”, in Downing Street earlier this month. The group, which includes former NHS executives and the former Department of Health permanent secretary Lord Crisp, was assembled by Cameron’s new special adviser on health, Paul Bate.

In unguarded comments at a conference in New York organised by the private equity company Apax, Britnell claimed that the next two years in the UK would provide a “big opportunity” for the for-profit sector, and that the NHS would ultimately end up as a financier of care similar to an insurance company rather than a provider of hospitals and staff.

According to a glossy brochure summarising the conference held last October, Britnell told his audience: “GPs will have to aggregate purchasing power and there will be a big opportunity for those companies that can facilitate this process … In future, the NHS will be a state insurance provider, not a state deliverer.” He added: “The NHS will be shown no mercy and the best time to take advantage of this will be in the next couple of years.”

Writing in the Health Service Journal, Britnell also suggested that the NHS would be better served by breaking with the mantra that all services should be free at the point of delivery by allowing co-payment, where patients share the costs of care and drugs.

“It appears that countries that have a mixed blend of public and private provision, co-payment and social insurance are possibly more capable of providing resilient healthcare systems.”

The shadow health secretary, John Healey, said: “This revelation comes direct from Cameron’s inner circle and gives the game away on the government’s NHS plans. It confirms the Tories’ true purpose is to set up a free-market NHS and open up all parts of the health service to private companies.”

In a move that will pile more pressure on Lansley, the Department of Health last week released the latest Mori poll on satisfaction levels with the NHS. It shows that 66% of people questioned believed the NHS was the best health service in the world, while 37% of the public expected services to deteriorate following the reforms. However, nearly three-quarters said that they knew “not very much” or “nothing at all” about changes that the government plans to make.

Sir Michael Scholar, chairman of the UK Statistics Authority, demanded a rethink of the halt on funding for the General Lifestyle Survey, which is run by the Office for National Statistics. Scholar said: “If government is planning a major reform of the NHS, people will want to know if it is worse afterwards or not. These statistics are very important in reaching a rational view.”

Labour sources said that the only explanation for the cuts in funding was that the government expected a hostile reaction to the reforms that do proceed and ministers were “planning how best to keep that from view”.

Downing Street tried to distance itself from Britnell. A No 10 spokesman said: “We will never privatise the NHS. We remain committed to the principle of an NHS funded from general taxation and based on need not ability to pay. Mark Britnell is not the prime minister’s health adviser. We are listening to the views of experts, patients and staff on how to improve our plans to strengthen the NHS.”

http://www.guardian.co.uk/politics/2011/may/14/david-cameron-adviser-health-reform

ACOs, ACA, and integrated health systems

Letter to Donald Berwick, M.D., Administrator, CMS

American Medical Group Association
May 11, 2011

Re: Medicare Shared Savings Program:  Accountable Care Organizations

We write today, however, to express our serious concerns over the direction of the Proposed Rule. On its face, it is overly prescriptive, operationally burdensome, and the incentives are too difficult to achieve to make this voluntary program attractive. As you know, most policy experts believe multi-specialty medical groups are best poised to become ACOs in the short term. However, in a survey of AMGA members, 93 percent said they would not enroll as an ACO under the current regulatory framework.  
 
Our membership’s concerns were many and focused on issues such as the risk sharing requirement, static risk adjustment, retrospective attribution, quality measurement requirements, the Minimum Savings requirements and others. Without substantial changes in the Final Rule, we fear that very few providers will enroll as ACOs and that CMS and the provider community will miss the best opportunity to inject value and accountability into the delivery system. 

http://thehill.com/images/stories/blogs/healthwatch/amga.pdf

And…

Letter to Donald Berwick, M.D., Administrator, CMS

Billings Clinic
The Everett Clinic
Park Nicollet
Geisinger Clinic
Dartmouth-Hitchcock Health
Univ. of Michigan Med. School
Marshfield Clinic
St. John’s Clinic
Novant Medical Group
Middlesex Health System

May 12, 2011

On behalf of the multi-specialty groups participating in the Physician Group Practice (PGP) Demonstration Program, we are writing to you today regarding Section 3022 of the Affordable Care Act’s notice of proposed rule-making (NPRM) for the Medicare Shared Savings Program/Accountable Care Organizations (ACOs).

However, as presently proposed, we ALL have serious reservations about the economics and the complexity of the Medicare Shared Savings Program/ACO NPRM. All of our organizations are planning to individually respond with our own respective concerns, but broadly, the “Shared Savings” model/NPRM has the following aspects that are problematic: 
 
* There is downside risk during the initial 3-year term, unlike the recently concluded PGP Demonstration project. Such downside risk is compounded by significant investment cost on the part of the ACO.
* Savings are measured net of 2% threshold for the one-sided risk model. Additionally, the Minimum Savings Rate (MSR) is set at high levels for ACOs with lower enrollment. 
* Limits placed on accounting for beneficiary acuity level that is documented and appropriate will dilute true savings realized by the ACO, and is a disincentive for management of patients with complex care needs.  
* There are a large number of quality measures, especially new quality metrics in several domains, that go into effect starting year one. As an example, on average, it costs about $30,000 just to program a single new quality metric. This NPRM has more than 60 new ones, which equates to nearly $2,000,000 for each organization. The excellent results produced by the PGP demonstration are evidence of the benefits of a careful expansion of quality measures.
* Retrospective attribution places limits on the ACO’s ability to bend the cost curve. It impedes optimal patient engagement, timely program planning and course correction, and compounds underlying issues of claims lag and financial settlement. 
* The logistics associated with Medicare beneficiaries’ opt-out of the ACO program is simply not practical. We believe this would lead to beneficiary and physician confusion on the terms of engagement.

As currently proposed, ACOs have a greater potential for incurring losses under either track, than for generating savings. This risk-reward imbalance makes it difficult, if not impossible, for internal decision-makers to accept the financial design.

http://thehill.com/images/stories/blogs/healthwatch/unhappyacos.pdf

And…

ACO start-up costs higher than estimated, AHA study says

By Rich Daly
ModernHealthcare.com, May 14, 2011

Accountable care organizations will likely face start-up and first-year costs six to 14 times higher than HHS has estimated, according to a study released by the American Hospital Association.

The study, which was based on an analysis of previous research, concluded that the various elements required to successfully manage the care of a specific population will cost between $11.6 million and $26.1 million—depending on the size of the hospital or hospital system involved in the ACO—and far more than the $1.8 million estimated by the CMS in its proposed rule.

The cost findings are based on 23 different capabilities that ACOs will need to develop across four categories: network development and management; care coordination, quality improvement and utilization management; clinical information systems; and data analytics.

http://www.modernhealthcare.com/article/20110514/NEWS/305149999/

Comment: 

By Don McCanne, MD

The accountable care organizations (ACOs) called for in the Accountable Care Act (ACA) don’t seem to be getting off to a good start. Most medical groups do not intend to participate, the hospitals have found that they are too expensive, and the distinguished participants in the Group Practice Demonstration Program all have serious reservations about the proposed rules for ACOs under the ACA. What is going on here?

The goal seems to be to establish integrated health care delivery systems with varying design characteristics based on local needs and logistical considerations. Size and complexity would vary greatly. Such systems should provide a primary care base for entry into the system and for coordination of services. Specialty care should be integrated within the system, providing appropriate access and interaction with primary care. Information technology systems should enable access to clinical records while providing tools that reduce error and duplication of services, while assisting with clinical decisions. Basically, we want health care professionals and hospitals working together to provide more efficient, higher quality care for everyone.

That is the concept behind ACOs. Integrated systems would be rewarded based on quality and efficiency (i.e., lower costs). Because of political considerations, Congress decided that they should apply the ACO concept exclusively to Medicare, while letting the private insurers supervise their own quality and cost programs.

The simplistic solution was to establish the Medicare Shared Savings Program. Reduced costs would be built in by rewarding the ACO systems with a portion of the funds that they saved, and ensuring quality by making the rewards dependent on meeting certain quality measures. The problem with this became evident when it came time to write the rules. Not only were the systems required to enable this very expensive, the rules would create what bureaucracies are so adept at creating – a bureaucratic quagmire. The letter from the participants in the Group Practice Demonstration Program list some of these aspects that proved to be problematic.

Bundling of payments has been another approach, but only certain clinical presentations conform well to bundling. So it would not be an answer to the majority of clinical problems. Also bundling removes risk from the common financing pool and splits it up amongst the provid
ers of health care. Luck or lack thereof plays too great of a role to ask the providers to place bets on it merely by agreeing to accept patients with conditions subject to bundling.

Much of the difficulty has stemmed from the new, widely touted principle that we should no longer pay for volume but instead we should pay for quality and efficiency, but both quality and efficiency have proven to be very difficult to define. The default has been a few parameters of each which in no way can represent the broader spectrum of quality and efficiency.

Health care is a lot of work. No matter what else, the delivery system will have to be paid primarily on volume, but we need to get the volume right. Much attention has been paid to excess volume being driven by the rewards of fee-for-service care. In fact, the largest volume increase has been in imaging services, yet most physicians who order the procedures are not compensated for these services. The Dartmouth variations do remain of concern and further attention in defining these is certainly warranted.

The greater problem with volume has been demonstrated to be underutilization of services. According to a RAND study, most patients receive only about half of the care that they should have. The emphasis on reducing the volume of care has been somewhat misguided since there is a greater need to increase the volume, though we need to get the pricing right when we do that. The SGR dilemma must be addressed, but the basis for it will not go away.

The bottom line? Integrated health systems that are designed for optimal patient service are an admirable goal, but integrated health systems designed predominantly as a business model are not. ACOs designed to comply with the Medicare Shared Savings Program are an abstract concept that will never fly, as today’s quotes indicate. On the other hand, ACOs designed as a business model – the so-called commercial ACOs – are just another label for the intrusive managed care organizations that most of us have been trying to get away from.

The goals of higher quality at reasonable costs would best be achieved by humanitarian integrated health systems financed not by a dysfunctional, fragmented system of private and public plans, but rather by a publicly-financed and publicly-administered universal risk pool – an improved Medicare for everyone.

The ACO misstep is more of a problem of well intentioned but misdirected policy application. The now-tarnished ACO label should be dropped as we move forward with mutual efforts to improve the quality and efficiency of our health care delivery system so it works well for all of us.

Vermont approves universal health program

The measure adopted by the Legislature and supported by the governor would establish a single-payer-type plan, although some private insurers would stay.

By Doug Trapp
Amednews, May 16, 2011

Vermont Gov. Peter Shumlin has pledged to sign a bill that paves the way for the state to launch a health system approaching a single-payer model later in the decade and to create a state health insurance exchange within the next several years.

The measure creates a powerful five-member Green Mountain Care Board, members of which will determine the benefits and craft a funding plan for Green Mountain Care, a state universal health plan. The board would have wide authority over state health spending and health system reform. The bill requires the governor to nominate Green Mountain board members by Oct. 1 and the Vermont Senate to confirm them.

The measure will set up a health insurance exchange in which Vermonters will shop for private health plans and enroll in public coverage. The exchange is to begin enrolling residents in November 2013 and be fully operational by January 2014. The bill calls for at least two private health insurance plans to participate in the exchange.

The Democratic-controlled Vermont Legislature approved the bill along party lines, with the state Senate voting 21-9 to pass it on May 3 and the House adopting it on May 5 with a 94-49 vote. Shumlin scheduled a bill-signing ceremony for May 26.

He had pledged to enact a single-payer health system during his Jan. 6 inaugural address. “Let Vermont be the first state in the nation to treat health care as a right and not a privilege.”

Reaction to the bill

Many health care stakeholders are taking a wait-and-see approach to Green Mountain Care, which might not be implemented fully until 2017 — or ever, if it is projected to cost as much or more than the state’s existing health system, said Vermont Rep. Mark Larson, the bill’s sponsor. But Larson is optimistic that the plan will produce the necessary savings to proceed.

The measure’s lack of specificity created anxiety among health insurers, businesses and others in the state, said Leigh Tofferi, director of government, public and community relations for Blue Cross Blue Shield of Vermont, the state’s largest health plan. The nonprofit insurer supports the state’s efforts on payment and delivery system reforms and the creation of the insurance exchange, which could produce savings for the system.

But the measure does not lay out the financing plan and minimum benefits for Green Mountain Care, nor does it establish what would happen to existing health insurance and coverage. Those decisions are up to the Green Mountain Care Board. “We will weigh in on those other issues as they become more specific next year and the year after,” Tofferi said.

The measure requires the Green Mountain plan to pay enough to attract and retain high-quality health care professionals, said Vermont Sen. Kevin Mullin, the lone Republican to vote for the bill. He offered this and other changes that made it into the final bill, including a mandate that the plan’s funding be sustainable. Tofferi credited Mullin with improving the bill’s specificity.

The Vermont Medical Society did not take a position on the bill and has no policy on single-payer health care, said VMS Executive Vice President Paul Harrington. He expects the Legislature to adopt legislation related to the health reform bill in each of the next several years.

Larson predicted a similar outcome. “There’s much more work to be done in moving forward with the plan than not,” he said.

Not quite single-payer

The measure requires the Green Mountain Care Board to examine and attempt to limit the growth of state health care spending, begin pilot payment reforms, and continue to implement a previously enacted patient-centered medical home program.

The board would implement Green Mountain Care. All Vermonters would be eligible for the plan, which would cover hospital services and prescription drugs.

But Green Mountain Care cannot launch until three conditions are met. The Vermont Legislature must approve a board-proposed three-year budget for the plan — one that costs less than the state’s existing health system. The board also must define the plan’s benefits. Finally, Vermont needs the U.S. Health and Human Services Dept.’s permission to use health insurance exchange subsidies in the federal health reform law to support Green Mountain Care beginning in 2017. Waivers would be required to incorporate Medicaid, Medicare and other federal health funds.

Despite Shumlin’s statements on his inaugural promise, the bill does not meet the strict definition of a single-payer plan, in which the government is the sole third-party payer for health care. “But it is as close as we can get at the state level,” said bill sponsor Larson.

The measure would allow private health plans to continue in the state indefinitely. “You give up a significant part of the administrative savings by doing that,” said David Himmelstein, MD, founder of Physicians for a National Health Program. The organization, based in Chicago, advocates for a single-payer health system.

A true single-payer plan should have separate operating and capital budgets, Dr. Himmelstein said. It should require a single insurance fund to pay all claims, he said.

Self-insured businesses such as IBM — the state’s largest employer — could continue to offer private health coverage to employees. But businesses likely will be required to contribute to Green Mountain Care’s funding, possibly through a payroll tax.

Although the bill goes further toward single-payer than all other states and the national health reform law, it won’t solve Vermont’s health care problems, Dr. Himmelstein said. “Maybe it lays the foundation.”

Larson said no one else proposed a bill that could deliver the quality improvements and savings possible through his measure.

Mullin, the Republican senator, said he doesn’t care if the state enacts a single-payer or a multipayer system, as long as it works. “If they can prove that single-payer is going to work, God bless them,” he said.

ADDITIONAL INFORMATION: Step 1 to single-payer

Vermont lawmakers OK’d a bill that would pave the way for a single-payer-type health care system in the state. The measure approved by the Legislature has three major parts:

* Green Mountain Care Board, a five-member panel appointed by the governor with Senate confirmation. The board would design the state’s universal coverage plan, develop state health care budgets, and carry out health cost containment and payment reform.

* The Vermont Health Benefit Exchange, a state marketplace for health insurance as called for under the national health system reform law. The exchange would start operating by 2014 and could become the main source of health coverage in Vermont by 2017.

* Green Mountain Care, the state’s universal coverage plan, which could launch by 2017. The state would need federal approval to use federal health funds to help finance the plan. The state is expected to adopt payroll or income taxes to help pay for the plan.

http://www.ama-assn.org/amednews/2011/05/16/gvsa0516.htm

ACOs, ACA, and integrated health systems

Letter to Donald Berwick, M.D., Administrator, CMS

American Medical Group Association
May 11, 2011

Re: Medicare Shared Savings Program:  Accountable Care Organizations

We write today, however, to express our serious concerns over the direction of the Proposed Rule. On its face, it is overly prescriptive, operationally burdensome, and the incentives are too difficult to achieve to make this voluntary program attractive. As you know, most policy experts believe multi-specialty medical groups are best poised to become ACOs in the short term. However, in a survey of AMGA members, 93 percent said they would not enroll as an ACO under the current regulatory framework.

Our membership’s concerns were many and focused on issues such as the risk sharing requirement, static risk adjustment, retrospective attribution, quality measurement requirements, the Minimum Savings requirements and others. Without substantial changes in the Final Rule, we fear that very few providers will enroll as ACOs and that CMS and the provider community will miss the best opportunity to inject value and accountability into the delivery system.

http://thehill.com/images/stories/blogs/healthwatch/amga.pdf

And…

Letter to Donald Berwick, M.D., Administrator, CMS

Billings Clinic
The Everett Clinic
Park Nicollet
Geisinger Clinic
Dartmouth-Hitchcock Health
Univ. of Michigan Med. School
Marshfield Clinic
St. John’s Clinic
Novant Medical Group
Middlesex Health System

May 12, 2011

On behalf of the multi-specialty groups participating in the Physician Group Practice (PGP) Demonstration Program, we are writing to you today regarding Section 3022 of the Affordable Care Act’s notice of proposed rule-making (NPRM) for the Medicare Shared Savings Program/Accountable Care Organizations (ACOs).

However, as presently proposed, we ALL have serious reservations about the economics and the complexity of the Medicare Shared Savings Program/ACO NPRM. All of our organizations are planning to individually respond with our own respective concerns, but broadly, the “Shared Savings” model/NPRM has the following aspects that are problematic:

* There is downside risk during the initial 3-year term, unlike the recently concluded PGP Demonstration project. Such downside risk is compounded by significant investment cost on the part of the ACO.
* Savings are measured net of 2% threshold for the one-sided risk model. Additionally, the Minimum Savings Rate (MSR) is set at high levels for ACOs with lower enrollment.
* Limits placed on accounting for beneficiary acuity level that is documented and appropriate will dilute true savings realized by the ACO, and is a disincentive for management of patients with complex care needs.
* There are a large number of quality measures, especially new quality metrics in several domains, that go into effect starting year one. As an example, on average, it costs about $30,000 just to program a single new quality metric. This NPRM has more than 60 new ones, which equates to nearly $2,000,000 for each organization. The excellent results produced by the PGP demonstration are evidence of the benefits of a careful expansion of quality measures.
* Retrospective attribution places limits on the ACO’s ability to bend the cost curve. It impedes optimal patient engagement, timely program planning and course correction, and compounds underlying issues of claims lag and financial settlement.
* The logistics associated with Medicare beneficiaries’ opt-out of the ACO program is simply not practical. We believe this would lead to beneficiary and physician confusion on the terms of engagement.

As currently proposed, ACOs have a greater potential for incurring losses under either track, than for generating savings. This risk-reward imbalance makes it difficult, if not impossible, for internal decision-makers to accept the financial design.

http://thehill.com/images/stories/blogs/healthwatch/unhappyacos.pdf

And…

ACO start-up costs higher than estimated, AHA study says

By Rich Daly
ModernHealthcare.com, May 14, 2011

Accountable care organizations will likely face start-up and first-year costs six to 14 times higher than HHS has estimated, according to a study released by the American Hospital Association.

The study, which was based on an analysis of previous research, concluded that the various elements required to successfully manage the care of a specific population will cost between $11.6 million and $26.1 million—depending on the size of the hospital or hospital system involved in the ACO—and far more than the $1.8 million estimated by the CMS in its proposed rule.

The cost findings are based on 23 different capabilities that ACOs will need to develop across four categories: network development and management; care coordination, quality improvement and utilization management; clinical information systems; and data analytics.

http://www.modernhealthcare.com/article/20110514/NEWS/305149999/

The accountable care organizations (ACOs) called for in the Accountable Care Act (ACA) don’t seem to be getting off to a good start. Most medical groups do not intend to participate, the hospitals have found that they are too expensive, and the distinguished participants in the Group Practice Demonstration Program all have serious reservations about the proposed rules for ACOs under the ACA. What is going on here?

The goal seems to be to establish integrated health care delivery systems with varying design characteristics based on local needs and logistical considerations. Size and complexity would vary greatly. Such systems should provide a primary care base for entry into the system and for coordination of services. Specialty care should be integrated within the system, providing appropriate access and interaction with primary care. Information technology systems should enable access to clinical records while providing tools that reduce error and duplication of services, while assisting with clinical decisions. Basically, we want health care professionals and hospitals working together to provide more efficient, higher quality care for everyone.

That is the concept behind ACOs. Integrated systems would be rewarded based on quality and efficiency (i.e., lower costs). Because of political considerations, Congress decided that they should apply the ACO concept exclusively to Medicare, while letting the private insurers supervise their own quality and cost programs.

The simplistic solution was to establish the Medicare Shared Savings Program. Reduced costs would be built in by rewarding the ACO systems with a portion of the funds that they saved, and ensuring quality by making the rewards dependent on meeting certain quality measures. The problem with this became evident when it came time to write the rules. Not only were the systems required to enable this very expensive, the rules would create what bureaucracies are so adept at creating – a bureaucratic quagmire. The letter from the participants in the Group Practice Demonstration Program list some of these aspects that proved to be problematic.

Bundling of payments has been another approach, but only certain clinical presentations conform well to bundling. So it would not be an answer to the majority of clinical problems. Also bundling removes risk from the common financing pool and splits it up amongst the providers of health care. Luck or lack thereof plays too great of a role to ask the providers to place bets on it merely by agreeing to accept patients with conditions subject to bundling.

Much of the difficulty has stemmed from the new, widely touted principle that we should no longer pay for volume but instead we should pay for quality and efficiency, but both quality and efficiency have proven to be very difficult to define. The default has been a few parameters of each which in no way can represent the broader spectrum of quality and efficiency.

Health care is a lot of work. No matter what else, the delivery system will have to be paid primarily on volume, but we need to get the volume right. Much attention has been paid to excess volume being driven by the rewards of fee-for-service care. In fact, the largest volume increase has been in imaging services, yet most physicians who order the procedures are not compensated for these services. The Dartmouth variations do remain of concern and further attention in defining these is certainly warranted.

The greater problem with volume has been demonstrated to be underutilization of services. According to a RAND study, most patients receive only about half of the care that they should have. The emphasis on reducing the volume of care has been somewhat misguided since there is a greater need to increase the volume, though we need to get the pricing right when we do that. The SGR dilemma must be addressed, but the basis for it will not go away.

The bottom line? Integrated health systems that are designed for optimal patient service are an admirable goal, but integrated health systems designed predominantly as a business model are not. ACOs designed to comply with the Medicare Shared Savings Program are an abstract concept that will never fly, as today’s quotes indicate. On the other hand, ACOs designed as a business model – the so-called commercial ACOs – are just another label for the intrusive managed care organizations that most of us have been trying to get away from.

The goals of higher quality at reasonable costs would best be achieved by humanitarian integrated health systems financed not by a dysfunctional, fragmented system of private and public plans, but rather by a publicly-financed and publicly-administered universal risk pool – an improved Medicare for everyone.

The ACO misstep is more of a problem of well intentioned but misdirected policy application. The now-tarnished ACO label should be dropped as we move forward with mutual efforts to improve the quality and efficiency of our health care delivery system so it works well for all of us.

Vermont moves closer to becoming first US state to provide 'socialised medicine'

By Jeanne Lenzer
BMJ, May 10, 2011

Vermont is set to become the first US state to launch a single payer healthcare plan after a bill passed both houses of the state’s legislature.

The plan is expected to be signed by Governor Peter Shumlin, who in February originally proposed the idea that would abolish most insurance plans and would instead provide healthcare to all residents through public funding. In the United States this is known as a “single payer” scheme and is fiercely opposed by many conservative politicians as “socialised medicine.”

Some doctors in Vermont are unhappy about the proposed changes. In an online poll of roughly 600 doctors conducted by the state representative George Till, a doctor who specialises in obstetrics and gynaecology, 28 percent said that they will stop practising medicine in the state if the plan is enacted. However, the poll by Dr Till, who opposes the governor’s plan, has been criticised for not preventing multiple responses from the same person or responses from people who weren’t doctors.

The man responsible for designing Vermont’s plan, William Hsiao, professor of economics at the Harvard School of Public Health in Boston, told the BMJ that he and his colleagues evaluated healthcare schemes around the globe and found that “fee for service is the worst payment [mechanism] in the world, [as] it’s inflationary—and it’s the incentive structure embedded in our healthcare system.” Costs spiral out of control, he said, because doctors and hospitals are paid more for doing more.

An analysis by Dr Hsiao, published in the New England Journal of Medicine (2011;364:1188-1190; doi:10.1056/ NEJMp1100972), concluded that the new plan is necessary because one in five Vermont residents have either inadequate or no health insurance and rising healthcare costs threaten the solvency of small businesses and citizens.

Dr Hsiao told the BMJ, “The US is the only advanced nation other than South Africa that builds health insurance on a free market of multiple private insurers” and conditional on employment. “We need to decouple employment and health insurance,” he said. “If you live in Vermont, you will be eligible for health insurance.”

The Vermont plan, Dr Hsiao’s analysis shows, could lead to cost savings of 25 percent over 10 years. Savings would come from “administrative simplification,” introduction of a no-fault malpractice system, elimination of “perverse [financial] incentives,” and by “insulating major decisions about healthcare spending from politics.” This last reform is especially needed in the US, Dr Hsiao told the BMJ, because politicians, whose campaigns are often underwritten by large contributions from industry, often support schemes that increase profits for drug companies, hospitals, and specialist groups.

One example, he says, is the Medicare plan passed under the former president George W Bush that prohibits Medicare from competitive bidding on drugs.

As for fears that doctors will leave Vermont, Dr Hsiao told the Boston Globe that he doubts doctors will actually leave the state (7 Apr, “With health costs rising, Vermont moves toward a single-payer system,” www.boston.com/bostonglobe/editorial_ opinion/blogs/the_angle/2011/04/vermonts_single.html). If they do, he said, communities and medical centres will not have trouble recruiting replacements.

Dr Hsiao acknowledges that the legislation has been weakened from its original version, owing to “politics.” He told the BMJ that, among other changes, the legislature defeated the no-fault insurance plan, instead calling for “further study.”

Stephanie Woolhandler, professor of medicine at Harvard Medical School and co-founder of Physicians for a National Health Program, told the BMJ that the Vermont legislation “falls well short of the single payer reform needed to resolve the healthcare crisis,” in part because it allows a “continuing role for private insurance, negating many of the administrative savings attainable through a single payer reform.” The plan, she said, would “force many patients to face copayments that obstruct access to care,” and it allows the participation of “for-profit hospitals and other providers, which research has shown deliver inferior care at inflated prices.”

But despite its shortcomings, the plan “may be a useful step toward progressive health reform,” Dr Woolhandler said.

Cite this as: BMJ 2011;342:d2921

Single Payer in Vermont? Well, Not Exactly

By Roger Collier
Healthcare Finance News, May 16, 2011

In just a few days, Vermont’s Governor Peter Shumlin will sign into law what the media is calling “single payer health care reform.” But is it?

Vermont has certainly demonstrated more enthusiasm for a single payer approach than any other state. The Governor and key Democratic legislators have supported the concept, the state has a well-organized lobbying group in Vermont for Single Payer, and a state-funded study earlier this year estimated that a single payer approach could dramatically reduce health care costs. The major result has been passage in the past month by both of the state’s legislative chambers of the bill that Governor Shumlin indicates that he will sign.

So does this mean that Vermont is ready to upend its existing health care financing system and replace it with a French or British-style system? Not exactly.

The versions of the bill passed by Vermont’s House and Senate are each far, far more tentative than committed single payer advocates would wish, and have already been subject to scathing criticism by national single payer advocates. [PNHP note: The PNHP board’s April 7 statement on Vermont, hardly “scathing,” can be found here.] The bill provides for the creation of the legal framework of a public insurance program, to be called Green Mountain Care, but includes no funding mechanism, defines no benefit standards, is vague on the future roles of private insurers, and is silent on exactly how existing federal programs are to be incorporated.

What the bill does do is to establish the state exchange required by the Accountable Care Act, encourage experimental capitated payment structures, and create a Board for Green Mountain Care with responsibility for examining funding, benefit, and other issues, with recommendations to be submitted to the state legislature in 2013.

Even if the Board’s proposals are very strongly in favor of a single payer system, they will face some considerable obstacles to implementation.

Because the present bill’s approach to creation of a new system is to allow two years for development of recommendations, any implementing legislation will be delayed until 2013 at the earliest, giving opponents considerable time to organize and fund their fight. At the same time, whatever funding structure the Board recommends will inevitably result in some winners and some losers—who will almost certainly oppose the proposal—even if the net result is a gain for Vermont’s citizens.

While small businesses are expected to get coverage through the state’s planned exchange, and thus could be forced to participate in a future state-controlled single payer plan, larger employers present more of a problem. If a single payer plan could be shown to be less costly, such employers would presumably be willing to participate. If they are not persuaded of the merits of single payer, however, they could rely on ERISA law to keep their employees out of the new program.

The bigger obstacles, however, are likely to be at the federal level. The Accountable Care Act allows states to opt out of federal reform starting in 2017, but not before. (Although an earlier date has been proposed, it has limited support). The pooling of federal funds envisioned by Vermont’s single payer advocates would require negotiations with Medicare, Medicaid, TRICARE, and Public Health administrators, all in the face of opposition from lobbyists for insurers, providers, and businesses who fear the impacts of a single payer structure on their revenues and profits. And who would be willing to guess whether or not in 2013 the administration in Washington DC is favorable towards any kind of health care reform?

http://www.healthcarefinancenews.com/blog/single-payer-vermont-well-not-exactly

Not everyone buying into Vermont's single-payer plan

By Nancy Remsen
Burlington Free Press, May 16, 2011

MONTPELIER, Vt. — The headline “Green Mountain Dreams” over a David Weigel piece in the online news magazine Slate last week captured how many people view the health reform legislation that Gov. Peter Shumlin will sign into law May 26.

For advocates of a single-payer health care system, the bill the Legislature passed during the final days of the 2011 session is a dream come true. For the first time, policy-makers have put the state on a road leading toward a government-financed insurance program that would cover all Vermonters.

Supporters acknowledge much remains to be done before the dream can become reality. The bill poses dozens of questions that must be answered, lists a host of conditions that must be met and sets the likely start date far in the future — 2017, or 2014 if the federal government cooperates.

Still one local supporter, Walter Carpenter of Montpelier, said the legislation means the state now stands “on the doorstep of history.”

Outside Vermont, single-payer advocates have a more tempered reaction.

“They have announced an intention more progressive than other states have done,” said Dr. David Himmelstein, a founder of Physicians for a National Health Program. “It could be important if they go ahead and do it, but they haven’t done anything that I can tell.”

Opponents see the legislation’s stated intention — to establish Green Mountain Care to provide health insurance to Vermonters — as either a pipe dream or a nightmare.

Rep. Patti Lewis, R-Berlin, explained some of her concerns after voting against the bill.

“I cannot support a bill of this magnitude, when there is no true answer to how much this plan will cost. Our state is simply too small to finance this plan,” she said. She added, “This is like taking a prototype plane for its first flight.”

Darcie Johnston, executive director of a newly organized group, Vermonters for Health Care Freedom, fears the worst.

“As much as the governor would like to portray this bill as harmless, it is anything but,” Johnston said. “This bill will put into motion a process that will kill job growth and drive some of our doctors out of state or out of business. It will also require the Legislature to come back next year and pass the largest tax increase in Vermont history to begin paying for it.”

Outside Vermont, Robert Zirkelbach, press secretary for America’s Health Insurance Plans, warned that Vermont’s legislation would take away the health insurance coverage that people like and rely upon, and “put Vermont taxpayers on the hook for the soaring cost of medical care.”

More than single-payer

Anya Rader Wallack, Gov. Shumlin’s special assistant for health reform, says the legislation is much more than a promise to explore consolidation of the state’s health insurance system.

For example, the bill responds to the federal mandate that states establish health benefit exchanges, or health insurance markets, by planning one for Vermont that would also simplify insurance purchases and claims processing.

“What makes Vermont stand out is it is taking the federal law and going a step further with it,” said Alan Weil, executive director of the National Academy of State Health Policy. “It is intriguing and exciting in the sense of seeing a state want to pursue its own approach within the national context.”

The legislation also tries to tackle the biggest problem in health care — its skyrocketing cost, Wallack said.

“In most states, the focus is on how to contain costs in the current budget year,” Wallack said. “We were able to pull together all the legislative leaders and the governor to look way out in the future.”

The bill creates a board charged with overseeing initiatives to control cost growth. Topping the list of initiatives the board must pursue: revamping the way doctors and hospitals are paid to move away from a system that encourages quantities of tests and procedures over efficiency and best practices.

Enrique Martinez-Vidal, vice president of AcademyHealth and director of its State Coverage Initiative, said many states are talking about provider payment reform, but few have laid the groundwork that Vermont has with its Blueprint for Health. Nor, he added, has any other state tried to “tackle that issue statewide.”

A lot of states will be watching Vermont’s payment reform efforts, Martinez-Vidal said.

“Vermont could be totally unsuccessful doing single-payer health care and be successful in payment reform, and that could be huge,” Martinez-Vidal said.

The third component of the legislation is the planning process it spells out to determine if and how the state could move to a more consolidated health coverage system.

“The fact that people were able to broadly agree that we need to go somewhere like single-payer is something to be proud of,” Wallack said. “There is a lot of work to do here. We know that.”

Himmelstein at Physicians for a National Health Program said he would have preferred legislation with more commitment to a single-payer system. Still, he added, “I’m not condemning what they did.”

“There are a lot of studies and reports, but that will provide a lot of information states will be interested in,” Martinez-Vidal said. “We applaud Vermont for taking the lead in that.”

In Vermont, supporters, critics and skeptics also wait anxiously for the reports that more than 50 people across state government have been charged with producing over the next one to two years.

Wendy Wilton, Rutland treasurer and former state senator, is among those eager for more details. Over several months, she gathered data to produce what she called her “back-of-the-envelope” analysis of the finances for Green Mountain Care.

She ended up with more questions than answers about the feasibility of a more consolidated insurance system, she said.

“Having done this process, I concluded the proposed system has the same damn problem as the current system — health care costs will increase faster than the economy grows.” she said.

“I know we need reform,” Wilton said, noting that health insurance represents one quarter of the payroll expense in Rutland where she is treasurer.

“This thing is monumental. It affects everyone. That is why it is so important to get this right,” Wilton said. “We have to have our eyes wide open going forward.”

http://www.burlingtonfreepress.com/article/20110516/NEWS03/110515016/Not-everyone-buying-into-Vermont-s-single-payer-plan

Funding for primary care panel blocked

Partisan fights in Congress stall panel on primary-health-care shortage

By Amy Goldstein
The Washington Post, May 13, 2011

When the government set out to help 32 million more Americans gain health insurance, Congress and the Obama administration acknowledged that steering more people into coverage had a dark underside: If it works, it will aggravate a shortage of family doctors, internists and other kinds of primary care.

So Page 519 of the sprawling 2010 law to overhaul the health-care system creates an influential commission to guide the country in matching the supply of health-care workers with the need. But in the eight months since its members were named, the commission has been unable to start any work.

The group cannot convene, converse or hire staff because $3 million that it needs for its initial year has been blocked by two partisan wars on Capitol Hill — strife over the federal budget and Republicans’ disdain for the health-care changes that Democrats muscled into law 14 months ago.

“We’ve been sort of hamstrung,” said Fitzhugh Mullan, a professor of medicine and health policy at George Washington University who is one of the 15 commission members appointed by the Government Accountability Office. The panel’s only activity so far, Mullan said, was a single conference call during which members were told they could not lobby members of Congress for funds or accept money to operate from foundations or anywhere else.

The National Health Care Workforce Commission is intended as an ongoing brain trust to focus new energy on solving an old problem that will become increasingly severe. The law says the new commission will analyze primary-care shortages and propose innovations for the government — and medical schools — to help produce the doctors and other health workers the nation needs.

Proponents of the workforce commission say they were surprised that Republicans have balked, because there has, in the past, been little ideological schism over the need to bolster the supply of primary care — doctors, nurses, physicians assistants and others.

http://www.washingtonpost.com/national/health/partisan-fights-in-congress-stall-panel-on-primary-health-care-shortage/2011/05/09/AFCKBW2G_story.html

Comment: 

By Don McCanne, MD

Republicans and Democrats agree with the health policy community that we desperately need to reinforce our primary care infrastructure. The National Health Care Workforce Commission that would propose innovations to help build primary care requires a mere $3 million to establish operations, but the Republicans have blocked this authorization. Do they expect us to simply rely on the private sector to meet this need? How is that working for us so far?

Options for Bringing Down the Cost of Health Care

Letters, The New York Times, May 15, 2011

In “The Missing Fifth” (column, May 10), David Brooks says there are two basic ways to control health care costs: top-down government regulation (President Obama) and shifting costs to beneficiaries (Representative Paul D. Ryan). Neither approach alone or when combined is likely to work because neither improves health care or deals with the real drivers of medical inflation.

Fee-for-service payment, a fragmented and disorganized medical care system focused on providers’ income, and an investor-owned private insurance industry all contribute to rising costs. Fraudulent billing, duplicated and unnecessary services, and a large but unknown amount of defensive medicine compound the problem. These factors could be controlled in a public single-payer system that paid private not-for-profit organized groups of salaried physicians on a capitated basis to deliver quality care.

Difficult as such reform might be to achieve, there is hope in the fact that we are already spending enough to pay all the costs of a greatly improved system. Our problem is primarily political, and it should not take many more years for the general realization that major reform is not just the best, but the only, way to control costs.

ARNOLD S. RELMAN
Cambridge, Mass., May 10, 2011

The writer is professor emeritus of medicine and social medicine at Harvard Medical School and former editor in chief of The New England Journal of Medicine.