PNHP

A single-payer health care system would work for Oregon

A single-payer health care system would work for Oregon

By Samuel Metz
The Oregonian, March 29, 2011

Am I crazy, a physician embracing legislative efforts to create a single-payer health care system in Oregon? You be the judge.

It would create thousands of jobs. It would provide health care to people whether they work full time, part time or are retired, disabled, sick or unemployed. It would stimulate Oregon business. It would reduce our state deficit. And it would provide comprehensive care to every Oregonian without spending more than we do now.

Where would the money come from? Oregon businesses and families already spend this money. But Oregon wastes $4 billion annually in private insurance administration. That’s premium money that never goes toward health care. Half is the insurance company overhead. The rest is what hospitals and providers like me waste collecting payments from insurance companies. Princeton economics professor Uwe Reinhardt, speaking recently before the Senate Finance Committee, said of Duke University’s 900-bed hospital: “We have 900 billing clerks at Duke. I’m not sure we have a nurse per bed, but we have a billing clerk per bed. It’s obscene.”

For physicians, it’s no easier. A Chicago doctor faces as many as 17,000 different sets of benefits for her patients. Your physician in Oregon might deal with only 300. But that’s still a lot of paperwork that doesn’t provide health care.

Single payer would eliminate these administrative losses. Diverting $4 billion to real health care is more than enough to enable comprehensive, no-deductible, no-co-pay, all-medications-included health care to every Oregonian, young and old.

So why doesn’t everybody embrace single-payer financing? It’s a stark answer: The money is re-labeled as “taxes.” And unfortunately many voters who unknowingly pay thousands of dollars in premiums and out-of-pocket payments refuse to pay a penny of it as a tax, even when this tax would buy them more health care at less cost and protect their families from medical bankruptcy.

Other objections are mere distractions. Single payer will destroy jobs? No evidence. Single-payer studies in 14 other states suggest 35,000 new jobs in Oregon. That’s 12,000 more than the entire Oregon insurance industry. And because these new jobs are highly paid medical personnel, they generate $500 million in new tax revenues.

Will businesses flee Oregon? Single payer would eliminate labor disputes over health care benefits. It would halve the cost of human resource departments (no health benefit management). Entrepreneurs would be free to create new businesses without fear of losing health care. Business would flourish.

Worried about our state deficit? Single payer would reduce government costs to provide comprehensive benefits to state employees. Couple this with increased tax revenue and the budget deficit would go down.

A new single-payer health care bill — House Bill 3510 and Senate Billl 888 — would be a win for all Oregon. Families finally would get the health care they need. Workers would enjoy thousands of new jobs. Employer costs would go down. And so would our state government’s deficit.

Single-payer health care: It’s not crazy. It’s good for Oregon, good for you and good for your legislators. Tell them now.

Samuel Metz is a Portland physician.

http://www.oregonlive.com/opinion/index.ssf/2011/03/a_single-payer_health_care_sys.html

Market or government for hospital pricing?

Blue Cross investigation is expanded

The Baltimore Sun
March 29, 2011

A probe of alleged anti-competitive agreements between Blue Cross Blue Shield companies and hospitals has been expanded by the U.S. Justice Department beyond Michigan, where an antitrust lawsuit that alleged the agreements raised hospital prices was filed last year.

CareFirst BlueCross BlueShield, Maryland’s largest insurer, confirmed to the Wall Street Journal that it received a civil investigative demand from the Justice Department but declined to comment further.

Federal and state investigators also have sent civil subpoenas to Blue Cross Blue Shield units in Kansas, Missouri, Ohio, West Virginia, North Carolina, South Carolina and the District of Columbia, a person familiar with the matter said.

The expansion of the Blue Cross Blue Shield investigation is important because “they’re using exclusionary practices to hold competitors at bay,” said David Balto, an antitrust attorney and senior fellow at the Center for American Progress, a Washington-based policy group that generally favors Democratic initiatives.

The department’s Michigan complaint said Blue Cross negotiated contracts with 70 of the state’s 131 general acute- care hospitals that led to higher prices for the insurer’s competitors. In some cases, the hospitals charged rivals 30 percent to 40 percent more than Blue Cross, the department said at the time.

http://www.baltimoresun.com/business/bs-bz-carefirst-justice-20110329,0,7272326.story

And…

One state’s hospital cost solution: regulated prices

By Christine Vestal
The Pew Center on the States
March 29, 2011

The new federal health law has created a flurry of hospital mergers as the industry prepares for major changes in financing and delivery of care. Some worry that the resulting behemoths will have too much price-setting power.

In one state, however, monopoly pricing won’t be a problem. The state sets the prices.

For more than 30 years, Maryland has regulated the rates hospitals can charge, while all 49 other states have relied on market mechanisms to keep prices in check. For the most part, it has worked. The urban hospitals that serve large numbers of uninsured Maryland patients are financially strong, instead of nearly bankrupt like most inner-city hospitals.  And everyone — private insurers, the uninsured, and those on Medicaid and Medicare—is charged the same amount.

Maryland has the lowest price in the country for average hospital cases — a little more than $13,000, compared to a national average of $32,500.  The cost of health insurance in Maryland is second lowest in the nation as a percentage of median income.

Whether other states will emulate Maryland’s system is an open question.  Any attempt to invoke cost regulation relies heavily on the people involved and the voluntary cooperation of the state’s hospitals. That is not always easy to achieve. In the end, however, (Maryland’s chief regulator Robert) Murray insists that the regulatory approach relies on a simple concept: “It’s no surprise that when people try to stick to a budget, they tend to limit their needs. Hospitals are no different.”

http://www.stateline.org/live/details/story?contentId=562689

Comment: 

By Don McCanne, MD

Because of market dominance, Blue Cross Blue Shield plans have been able to negotiate lower hospital prices in many regions throughout the nation. Hospitals, in turn, have been able to negotiate higher prices for insurers that do not dominate the markets, resulting in higher premiums and consequently less ability for the smaller insurers to penetrate these markets. The U.S. Justice Department quite appropriately is investigating these agreements.

The Blue Cross Blue Shield plans competing unfairly in the private market have proven once again that private insurers are not capable of providing equitable financing of our health care.

If instead of using market dynamics to price hospital services, what would happen if the government regulated the rates? We have an example of that in Maryland which uses an “all-payer” system. The state sets the prices. All insurers, including Medicare and Medicaid, pay the same.

How well has that worked? Maryland’s hospital prices are the lowest in the nation – only 40 percent of the national average. That has resulted in insurance premiums that also are amongst the lowest in the nation.

Although the all-payer system has had a very favorable impact on pricing, there are still many other inefficiencies and inequities in a financing system that depends on private insurers. A single payer system would eliminate the private insurers and establish global budgets for hospitals – funding them just as you would police, fire, libraries, and other public or quasi-public institutions.

As Maryland’s chief regulator stated, “It’s no surprise that when people try to stick to a budget, they tend to limit their needs. Hospitals are no different.”

Given that we have a finite though generous amount of funds available to pay for health care, we can get the best value if we do that within a government budget, administered efficiently through a single payer system.

Market or government for hospital pricing?

Blue Cross investigation is expanded

The Baltimore Sun
March 29, 2011

A probe of alleged anti-competitive agreements between Blue Cross Blue Shield companies and hospitals has been expanded by the U.S. Justice Department beyond Michigan, where an antitrust lawsuit that alleged the agreements raised hospital prices was filed last year.

CareFirst BlueCross BlueShield, Maryland’s largest insurer, confirmed to the Wall Street Journal that it received a civil investigative demand from the Justice Department but declined to comment further.

Federal and state investigators also have sent civil subpoenas to Blue Cross Blue Shield units in Kansas, Missouri, Ohio, West Virginia, North Carolina, South Carolina and the District of Columbia, a person familiar with the matter said.

The expansion of the Blue Cross Blue Shield investigation is important because “they’re using exclusionary practices to hold competitors at bay,” said David Balto, an antitrust attorney and senior fellow at the Center for American Progress, a Washington-based policy group that generally favors Democratic initiatives.

The department’s Michigan complaint said Blue Cross negotiated contracts with 70 of the state’s 131 general acute- care hospitals that led to higher prices for the insurer’s competitors. In some cases, the hospitals charged rivals 30 percent to 40 percent more than Blue Cross, the department said at the time.

http://www.baltimoresun.com/business/bs-bz-carefirst-justice-20110329,0,7272326.story

And…

One state’s hospital cost solution: regulated prices

By Christine Vestal
The Pew Center on the States
March 29, 2011

The new federal health law has created a flurry of hospital mergers as the industry prepares for major changes in financing and delivery of care. Some worry that the resulting behemoths will have too much price-setting power.

In one state, however, monopoly pricing won’t be a problem. The state sets the prices.

For more than 30 years, Maryland has regulated the rates hospitals can charge, while all 49 other states have relied on market mechanisms to keep prices in check. For the most part, it has worked. The urban hospitals that serve large numbers of uninsured Maryland patients are financially strong, instead of nearly bankrupt like most inner-city hospitals.  And everyone — private insurers, the uninsured, and those on Medicaid and Medicare—is charged the same amount.

Maryland has the lowest price in the country for average hospital cases — a little more than $13,000, compared to a national average of $32,500.  The cost of health insurance in Maryland is second lowest in the nation as a percentage of median income.

Whether other states will emulate Maryland’s system is an open question.  Any attempt to invoke cost regulation relies heavily on the people involved and the voluntary cooperation of the state’s hospitals. That is not always easy to achieve. In the end, however, (Maryland’s chief regulator Robert) Murray insists that the regulatory approach relies on a simple concept: “It’s no surprise that when people try to stick to a budget, they tend to limit their needs. Hospitals are no different.”

http://www.stateline.org/live/details/story?contentId=562689

Because of market dominance, Blue Cross Blue Shield plans have been able to negotiate lower hospital prices in many regions throughout the nation. Hospitals, in turn, have been able to negotiate higher prices for insurers that do not dominate the markets, resulting in higher premiums and consequently less ability for the smaller insurers to penetrate these markets. The U.S. Justice Department quite appropriately is investigating these agreements.

The Blue Cross Blue Shield plans competing unfairly in the private market have proven once again that private insurers are not capable of providing equitable financing of our health care.

If instead of using market dynamics to price hospital services, what would happen if the government regulated the rates? We have an example of that in Maryland which uses an “all-payer” system. The state sets the prices. All insurers, including Medicare and Medicaid, pay the same.

How well has that worked? Maryland’s hospital prices are the lowest in the nation – only 40 percent of the national average. That has resulted in insurance premiums that also are amongst the lowest in the nation.

Although the all-payer system has had a very favorable impact on pricing, there are still many other inefficiencies and inequities in a financing system that depends on private insurers. A single payer system would eliminate the private insurers and establish global budgets for hospitals – funding them just as you would police, fire, libraries, and other public or quasi-public institutions.

As Maryland’s chief regulator stated, “It’s no surprise that when people try to stick to a budget, they tend to limit their needs. Hospitals are no different.”

Given that we have a finite though generous amount of funds available to pay for health care, we can get the best value if we do that within a government budget, administered efficiently through a single payer system.

New RAND study on high-deductible plans

Healthcare Spending and Preventive Care in High-Deductible and Consumer-Directed Health Plans

By Melinda Beeuwkes Buntin, PhD; Amelia M. Haviland, PhD; Roland McDevitt, PhD; and Neeraj Sood, PhD
The American Journal of Managed Care
March 2011

The effect of enrollment in high-deductible health plans (HDHPs) or consumer-directed health plans (CDHPs) on healthcare spending and on the use of preventive care was assessed across multiple employers, insurance carriers, and plans in a 2-year retrospective study.

* Families enrolling in HDHPs or CDHPs and firms offering HDHPs or CDHPs spent less on healthcare.

* Significant savings were realized only for enrollees in plans with deductibles of at least $1000, and savings decreased with generous employer contributions to healthcare accounts.

* Enrollment in HDHPs or CDHPs was associated with moderate reductions in the use of preventive care, despite the fact that these plans waived the deductible for preventive care.

http://www.ajmc.com/publications/issue/2011/2011-3-vol17-n3/AJMC_11mar_Buntin_222to230

Comment: 

By Don McCanne, MD

The Affordable Care Act has established silver or bronze plans, with low actuarial values of 70 or 60 percent respectively, as the new standard for plans to be offered in the insurance exchanges. Since the plans will have to provide a mandated basic level of benefits, it is inevitable that they will have to include high deductibles since an average of 30 to 40 percent of the costs of health care will to be shifted to the patients to pay out of pocket. Is the wholesale adoption of high-deductible health plans a wise policy decision?

This new RAND study of over 800,000 families with employer-sponsored health plans showed that deductibles of $1000 or more do result in lower total spending, but also result in lower use of important preventive services, specifically immunizations and cancer screening. (As an aside, this study also shows how commonplace high-deductible plans have become in the employer-sponsored market as well.)

This study does have limitations. It was a two year study of the healthy workforce and their young healthy families during a healthy period in their lives. It was too short to measure differences in outcomes, and no attempt was made to do so. For our purposes, we can assume that the reduction in the use of preventive services serves as a proxy for what might be predicted when patients are not taking full advantage of the health care opportunities available to them.

The landmark RAND Health Insurance Experiment (RAND HIE) had previously shown that cost sharing resulted in a decline of both beneficial services and services of questionable value. In a press release announcing this new RAND study, co-author Amelia Haviland stated, “We discovered that costs go down dramatically during the first year people are enrolled in high-deductible health plans, as long as the deductible is at least $1,000 per person. But we also found concerning reductions in use of preventive care. This suggests people are cutting both necessary and unnecessary care.”

We do need to be concerned about costs, but there are many different policies that can control costs. Any policy that reduces spending by reducing beneficial services that patients should be receiving is bad policy. High-deductible health plans represent bad policy. They should be eliminated.

It is particularly annoying to hear policy experts say that we can’t control costs unless we put patients in charge of spending their own health care dollars, as if that were the only cost reduction tool available. Here’s what the authors of this study have to say:

“Employers often make contributions to personal medical accounts to provide incentives to employees to switch to high-deductible plans, as high enrollments are necessary to capture substantial cost savings. Some have posited that such contributions would reduce the cost savings of HDHPs (high-deductible health plans) or CDHPs (consumer-directed health plans which are HDHPs with health savings accounts) by undermining consumer cost sensitivity. However, this was not the case for HDHPs or CDHPs with moderate employer contributions. These HDHPs or CDHPs seem to reduce spending as much as plans with similar deductibles but no employer account contribution.” (High employer contributions also reduced spending, but not as much.)

Instead of erecting financial barriers to beneficial health care services, we need to erect a financing infrastructure that blocks spending on wasteful administrative excesses and non-beneficial services, while promoting access to appropriate health care. The single payer model is designed specifically to get patients the care that they need while eliminating wasteful spending.

New RAND study on high-deductible plans

Healthcare Spending and Preventive Care in High-Deductible and Consumer-Directed Health Plans

By Melinda Beeuwkes Buntin, PhD; Amelia M. Haviland, PhD; Roland McDevitt, PhD; and Neeraj Sood, PhD
The American Journal of Managed Care
March 2011

The effect of enrollment in high-deductible health plans (HDHPs) or consumer-directed health plans (CDHPs) on healthcare spending and on the use of preventive care was assessed across multiple employers, insurance carriers, and plans in a 2-year retrospective study.

* Families enrolling in HDHPs or CDHPs and firms offering HDHPs or CDHPs spent less on healthcare.

* Significant savings were realized only for enrollees in plans with deductibles of at least $1000, and savings decreased with generous employer contributions to healthcare accounts.

* Enrollment in HDHPs or CDHPs was associated with moderate reductions in the use of preventive care, despite the fact that these plans waived the deductible for preventive care.

http://www.ajmc.com/publications/issue/2011/2011-3-vol17-n3/AJMC_11mar_Buntin_222to230

The Affordable Care Act has established silver or bronze plans, with low actuarial values of 70 or 60 percent respectively, as the new standard for plans to be offered in the insurance exchanges. Since the plans will have to provide a mandated basic level of benefits, it is inevitable that they will have to include high deductibles since an average of 30 to 40 percent of the costs of health care will to be shifted to the patients to pay out of pocket. Is the wholesale adoption of high-deductible health plans a wise policy decision?

This new RAND study of over 800,000 families with employer-sponsored health plans showed that deductibles of $1000 or more do result in lower total spending, but also result in lower use of important preventive services, specifically immunizations and cancer screening. (As an aside, this study also shows how commonplace high-deductible plans have become in the employer-sponsored market as well.)

This study does have limitations. It was a two year study of the healthy workforce and their young healthy families during a healthy period in their lives. It was too short to measure differences in outcomes, and no attempt was made to do so. For our purposes, we can assume that the reduction in the use of preventive services serves as a proxy for what might be predicted when patients are not taking full advantage of the health care opportunities available to them.

The landmark RAND Health Insurance Experiment (RAND HIE) had previously shown that cost sharing resulted in a decline of both beneficial services and services of questionable value. In a press release announcing this new RAND study, co-author Amelia Haviland stated, “We discovered that costs go down dramatically during the first year people are enrolled in high-deductible health plans, as long as the deductible is at least $1,000 per person. But we also found concerning reductions in use of preventive care. This suggests people are cutting both necessary and unnecessary care.”

We do need to be concerned about costs, but there are many different policies that can control costs. Any policy that reduces spending by reducing beneficial services that patients should be receiving is bad policy. High-deductible health plans represent bad policy. They should be eliminated.

It is particularly annoying to hear policy experts say that we can’t control costs unless we put patients in charge of spending their own health care dollars, as if that were the only cost reduction tool available. Here’s what the authors of this study have to say:

“Employers often make contributions to personal medical accounts to provide incentives to employees to switch to high-deductible plans, as high enrollments are necessary to capture substantial cost savings. Some have posited that such contributions would reduce the cost savings of HDHPs (high-deductible health plans) or CDHPs (consumer-directed health plans which are HDHPs with health savings accounts) by undermining consumer cost sensitivity. However, this was not the case for HDHPs or CDHPs with moderate employer contributions. These HDHPs or CDHPs seem to reduce spending as much as plans with similar deductibles but no employer account contribution.” (High employer contributions also reduced spending, but not as much.)

Instead of erecting financial barriers to beneficial health care services, we need to erect a financing infrastructure that blocks spending on wasteful administrative excesses and non-beneficial services, while promoting access to appropriate health care. The single payer model is designed specifically to get patients the care that they need while eliminating wasteful spending.

Elliott Fisher questions whether ACOs will work

The Model of the Future?

By Avery Johnson
The Wall Street Journal
March 28, 2011

The 2010 health-care law encourages the development of accountable-care organizations as a way to improve care and reduce costs.

So what exactly are accountable-care organizations, anyway?

In broad outline, these entities propose to unite doctors and clinics or hospitals in groups that pool their resources with the goal of trimming spending while boosting the quality of care. When the group can show that it is improving care and delivers it for less than the cost projected—arrived at by crunching historical patient data for that market—a share of the savings goes to the ACO’s bottom line.

ACOs exist more on paper than in reality, for now.

“An ACO is like a unicorn; everyone thinks they know what one is, but no one has ever seen one,” says Gene Lindsey, president and chief executive of Atrius Health.

Elliott Fisher, the Dartmouth Medical School professor who helped coin the term ACO, and who worked with members of Congress to draft the ACO concept into the health-care law, concedes that “there are some really important questions about whether this will work.”

But, Dr. Fisher adds: “I think it’s the best hope we have.”

http://online.wsj.com/article/SB10001424052748703300904576178213570447994.html

And…

Cost control the next step for Massachusetts health reform

By Tanya Albert Henry
American Medical News
March 28, 2011

In February, Massachusetts Gov. Deval Patrick unveiled his cost-containment plan to follow up on the landmark 2006 coverage expansions. If approved by legislators, it would define and encourage accountable care organizations within the state; give the state insurance commissioner the ability to scrutinize insurers’ rates, including underlying physician pay, and disapprove rates that are excessive; and revamp the medical liability system to try to resolve disputes more quickly and curb defensive medicine.

Accountable care organizations

* Mandates that ACOs provide patient-centered primary care coordination and referral services.

* Requires ACOs to share financial risk, distribute savings and meet quality measures.

* Expects ACOs to be competent in population health management, financial and contract management, quality measurements, and communication.

* Charges ACOs with providing behavioral health services, either internally or by contract.

* Makes physician participation voluntary.

* Allows primary care physicians to belong to only one ACO but places no limits on specialists.

* Requires MassHealth, the Group Insurance Commission, the Commonwealth Connector and all other state-funded insurance programs to implement ACOs and alternative payments by January 2014.

http://www.ama-assn.org/amednews/2011/03/28/gvsb0328.htm

Comment: 

By Don McCanne, MD

Accountable care organizations (ACOs) began as an abstract concept of integrating health care providers into a not-yet-defined entity that would be rewarded for improving quality and reducing costs. Without knowing what they were, Congress included them in the Affordable Care Act (ACA). Dartmouth’s Elliott Fisher, who was one of the first to promote the concept, now says that “there are some really important questions about whether this will work.”

Nevertheless, Massachusetts, which is serving as a prototype for the now-enacted ACA, is intending to move forward with its version of ACOs. Their model not only measures quality and distributes savings, but it also shares financial risk. Also it includes exclusive primary care networks, limiting patient choices. The intent of Dr. Fisher and his colleagues is very noble, but it appears that we may be opening up the process to enable a return to the worst of the managed care era.

Quoting from a personal communication from Steffie Woolhandler and David Himmelstein, “Universal, geographically-based, non-profit ACOs are called a national health service, a reform we would heartily endorse. Unfortunately, the ACOs actually being pursued are profit-driven recreations of full-risk capitated HMOs.”

Very soon HHS will be releasing their guidelines for ACOs. The question we need to ask then is will these organizations be designed specifically to provide patients higher quality care at more reasonable costs, as Dr. Fisher envisions, or will they be designed by businessmen to… well, you know.

Medical students rally for single-payer system in Vermont

By Daniel Staples, Staff Writer
Times-Argus (Barre-Montpelier, Vt.), March 27, 2011

MONTPELIER, Vt. — U.S. Sen. Bernie Sanders and Gov. Peter Shumlin spoke before health profession students who gathered Saturday at the Statehouse in support of single-payer health care.

The Vermont House passed a version of the universal health care bill, which is being championed by Shumlin, with a party-line vote of 92-49 Thursday.

The bill, which will be debated in the Senate, is a critical step toward the creation of a publicly financed medical system that would deliver benefits to every resident of the state.

The students, who came from New England, New York and Pennsylvania, and as far away as Oregon, expressed concerns over the mire of paperwork and bureaucracy that they say would hamper them from practicing medicine in the way they are being trained to.

“I want my future patients to have a comprehensive health care insurance,” said Larry Bodden, a medical student at the University of Vermont.

“Whether or not the single-payer health care reforms are passed could have an effect on where I decide to practice,” Bodden said.

Bodden said he believes having a single-payer system could draw top medical professionals to the state to practice.

Bodden and 38 other medical students at the school have written and signed a letter that lays out what they would like to see in a single-payer health care system that included attracting high-quality health care professionals to the state. The letter, Bodden said, is the students’ way to influence the passing of single-payer health care reforms.

“Our goal is to have a single-payer system that is balanced and sustainable,” Bodden said.

UVM Medical School student Calvin Kegan said he came out for the event because he thinks that, “as Vermont is courageously undertaking the path to universal health care that is more sustainable as a whole, it is important for future health care professionals to express their support for legislation that could affect them throughout their entire practices.”

Kegan said that he believes the current system is frustrating for physicians as the paperwork and bureaucracy can be cumbersome.

A copy of the letter was presented to Sanders, who said that he would submit it to be included in the congressional record.

“It’s inspiring,” said Sanders. “It’s one thing for Vermonters to get behind this cause, but when you see physicians and young people from all over leading the way for health care reform, you begin to see that they are saying that they can’t provide the care they want to with the system we have in place now.”

Sanders said that politicians and lobbyists, including those for drug and insurance companies in Washington, are watching the progress of the Vermont health-care bill very closely.

“If we win here, they know it will spread,” Sanders said.

In his address to the crowd, Sanders said that under the current system patients often wait too long to seek care, and when they finally do, they are much sicker, which leads to more hospitalizations and emergency room visits.

Sanders said that with a new system, patients will be able to seek care before their conditions reach such desperate stages.

Shumlin touted his belief that Vermont can lead the way for health care reform for the nation.

Hundreds Of Health Advocates Rally For Single Payer System

Doctors Say It Would Save Money, Provide Better Treatment

WPTZ TV News (Burlington, Vt.), March 26, 2011

MONTPELIER, Vt. — Hundreds of health advocates and lawmakers rallied for a single payer health system inside Vermont’s Statehouse Saturday afternoon. The sweep of support comes two days after Vermont’s House of Representatives approved a bill for a single payer system.

There was little room to move as medical students and Vermont lawmakers packed the conference room. Many stood up one by one to make their appeals for single payer, which they say will better serve patients.

“A single payer system is the kind of system that really gives you the freedom to not only choose who you’re health care provider is, but freedom for a healthcare provider to provide the treatment that best fits,” Dr. Elizabeth Samuels, who is studying at Tufts University said.

“The are saying in order to do our profession right we have to provide health care to every man, woman, and child and they must do it in a cost effective way,” U.S. Sen. Bernie Sanders said.

Physicians say single payer healthcare will cut spending because patients can be seen more frequently and faster, which will prevent a more time-consuming and costly treatment.

Ultimately, those rallying hope to see the same sweep of approval for single payer healthcare by Vermont state senators.

http://www.wptz.com/news/27332474/detail.html

Supporting single payer

By Andy Potter
WCAX TV News (Montpelier, Vt.), March 26, 2011

MONTPELIER, Vt. — Advocates of a single payer health care system in Vermont rallied at the state house Saturday.  It came following the passage of a single payer bill in the House this week.

It had the feel of a labor rally, and in fact many of the advocates of single payer work in health care or attend medical school.

“What is unique and important about your presence here today is that you are saying I want to be the best doctor that I can be, but I can’t be that unless we change the system,” said Senator Bernie Sanders.

When it comes to single payer, the devil is in the details. For instance, Governor Shumlin has put off any discussion of how to pay for single payer — which taxes to raise — and what to do about unions, which have negotiated generally pretty good benefits for themselves.

Many advocates say they’re not concerned about losing income in the medical profession under single payer.

“Having a single payer being able to control payments in a way. They’re able to negotiate prices down and overall create a cheaper health care system for all,” said Stanton Shek of the Dartmouth Medical School.  When asked if he is to work for less money, Shek Replied, “Yes, although it’s not about less money. A doctor’s main concern is for patients.”

“I want to be able to care for everyone. Right now people are not coming in. Their deductibles are too high or they don’t have insurance. And they’re not getting the care they need,” said Primary Care Doctor Peggy Carey.   When asked if she was willing to work for less money, Carey replied, “absolutely.”

Supporters of single payer say that’s the way it’s supposed to be — the patient comes first. That’s the ideal at work here.

Full story, with video footage:
http://www.wcax.com/global/story.asp?s=14328153

Elliott Fisher questions whether ACOs will work

The Model of the Future?

By Avery Johnson
The Wall Street Journal
March 28, 2011

The 2010 health-care law encourages the development of accountable-care organizations as a way to improve care and reduce costs.

So what exactly are accountable-care organizations, anyway?

In broad outline, these entities propose to unite doctors and clinics or hospitals in groups that pool their resources with the goal of trimming spending while boosting the quality of care. When the group can show that it is improving care and delivers it for less than the cost projected—arrived at by crunching historical patient data for that market—a share of the savings goes to the ACO’s bottom line.

ACOs exist more on paper than in reality, for now.

“An ACO is like a unicorn; everyone thinks they know what one is, but no one has ever seen one,” says Gene Lindsey, president and chief executive of Atrius Health.

Elliott Fisher, the Dartmouth Medical School professor who helped coin the term ACO, and who worked with members of Congress to draft the ACO concept into the health-care law, concedes that “there are some really important questions about whether this will work.”

But, Dr. Fisher adds: “I think it’s the best hope we have.”

http://online.wsj.com/article/SB10001424052748703300904576178213570447994.html

And…

Cost control the next step for Massachusetts health reform

By Tanya Albert Henry
American Medical News
March 28, 2011

In February, Massachusetts Gov. Deval Patrick unveiled his cost-containment plan to follow up on the landmark 2006 coverage expansions. If approved by legislators, it would define and encourage accountable care organizations within the state; give the state insurance commissioner the ability to scrutinize insurers’ rates, including underlying physician pay, and disapprove rates that are excessive; and revamp the medical liability system to try to resolve disputes more quickly and curb defensive medicine.

Accountable care organizations

* Mandates that ACOs provide patient-centered primary care coordination and referral services.

* Requires ACOs to share financial risk, distribute savings and meet quality measures.

* Expects ACOs to be competent in population health management, financial and contract management, quality measurements, and communication.

* Charges ACOs with providing behavioral health services, either internally or by contract.

* Makes physician participation voluntary.

* Allows primary care physicians to belong to only one ACO but places no limits on specialists.

* Requires MassHealth, the Group Insurance Commission, the Commonwealth Connector and all other state-funded insurance programs to implement ACOs and alternative payments by January 2014.

http://www.ama-assn.org/amednews/2011/03/28/gvsb0328.htm

Accountable care organizations (ACOs) began as an abstract concept of integrating health care providers into a not-yet-defined entity that would be rewarded for improving quality and reducing costs. Without knowing what they were, Congress included them in the Affordable Care Act (ACA). Dartmouth’s Elliott Fisher, who was one of the first to promote the concept, now says that “there are some really important questions about whether this will work.”

Nevertheless, Massachusetts, which is serving as a prototype for the now-enacted ACA, is intending to move forward with its version of ACOs. Their model not only measures quality and distributes savings, but it also shares financial risk. Also it includes exclusive primary care networks, limiting patient choices. The intent of Dr. Fisher and his colleagues is very noble, but it appears that we may be opening up the process to enable a return to the worst of the managed care era.

Quoting from a personal communication from Steffie Woolhandler and David Himmelstein, “Universal, geographically-based, non-profit ACOs are called a national health service, a reform we would heartily endorse. Unfortunately, the ACOs actually being pursued are profit-driven recreations of full-risk capitated HMOs.”

Very soon HHS will be releasing their guidelines for ACOs. The question we need to ask then is will these organizations be designed specifically to provide patients higher quality care at more reasonable costs, as Dr. Fisher envisions, or will they be designed by businessmen to… well, you know.

We need single-payer, nonprofit health insurance

By Garrett Adams
Lexington Herald-Leader, March 27, 2011

Since the passage of its landmark health reform law of 2006, the people of Massachusetts have been living like a canary in a coal mine. National health policy experts have been watching them, closely studying how they’re faring under the reform.

That watch intensified after enactment of the new federal health law, which is patterned after the Massachusetts plan. Both laws contain an individual mandate requiring people to buy private insurance, for example. The theory is that, as the Bay State goes, so goes the nation.

The first reports were glowing. The number of uninsured went down. Massachusetts now boasts the lowest percentage of uninsured residents in the nation, 4.4 percent.

But with the passage of time, and despite generous dollops of supplementary federal aid to help keep the Massachusetts plan afloat, the canary isn’t looking too chipper these days.

Insurance premiums and out-of-pocket health costs keep rising. These skyrocketing costs prompted Gov. Deval Patrick to call for the program’s “overhaul” just last week.

Now comes a Harvard research study showing that despite the increase in the number of people covered, the Massachusetts reform hasn’t made a significant dent in the medical bankruptcy rate. Families still are being ruined by unpayable medical bills.

The researchers discovered that between early 2007 and mid-2009 — before and after the reform took effect — the share of medical bankruptcies in Massachusetts changed very little, from 59.3 percent to 52.9 percent. The absolute number of medical bankruptcies actually climbed from 7,504 to 10,093.

Lest you think only low-income families are being financially clobbered by medical debt, think again. Two-thirds of the bankruptcy filers were college-educated and 89 percent had health insurance when they filed their court papers.

In explanation, the authors of the study, which appears in the American Journal of Medicine, write: “Health costs in the state have risen sharply since reform was enacted. Even before the changes in health care laws, most medical bankruptcies in Massachusetts — as in other states — afflicted middle-class families with health insurance. High premium costs and gaps in coverage — co-payments, deductibles and uncovered services — often left insured families liable for substantial out-of-pocket costs. None of that changed.”

Lead author Dr. David Himmelstein elaborates: “Massachusetts’ health reform, like the national law modeled after it, takes many of the uninsured and makes them under-insured, typically giving them a skimpy, defective private policy that’s like an umbrella that melts in the rain: The protection’s not there when you need it.”

Needless to say, these findings don’t bode well for the look-alike federal law’s ability to end the scandalous blight of medical bankruptcies in the U.S. And behind these statistics are tragic, heart-rending stories.

The crux of the problem is this: Both the Massachusetts law and the new federal law are based on the crumbling foundation of for-profit, employer-based health insurance, a financing model that has outlived its usefulness.

Our present setup is a crazy-quilt patchwork of plans that results in huge inefficiencies and mountains of wasteful paperwork — just ask your doctor! And our current arrangements contain a deeply embedded incentive for private insurers to enlarge their profits by enrolling the healthy, screening out the sick and denying claims.

In Canada, which has a truly universal, non-profit single-payer system of financing care called medicare (bearing resemblance to our own much more limited Medicare program), medical bankruptcies are virtually unknown.

Sure, you’ll hear the occasional exaggerated story about wait times in Canada. But if you want to hear real horror stories, you need look no further than our own community. And if you ask Canadians if they’d prefer a U.S.-style health system, 9 out of 10 will say no.

It’s never too late to do the right thing. Congress should move beyond patchwork solutions and implement a streamlined single-payer system, an improved Medicare for all.

The savings in bureaucracy alone would be enough to cover everyone, and the threat of medical bankruptcy would vanish overnight. Significantly a single-payer system’s bargaining power would control costs.

We can’t wait for the canary to keel over.

Dr. Garrett Adams is a pediatric infectious diseases specialist in Louisville He is a co-founder of Physicians for a National Health Program-Kentucky and president of Physicians for a National Health Program

Read more:
http://www.kentucky.com/2011/03/27/1686304/we-need-single-payer-nonprofit.html

IBM should support single-payer

By MARVIN MALEK
Barre-Montpelier (Vt.) Times Argus, March 26, 2011

I was astonished when I read the rationale given by IBM’s John O’Kane in opposing the inclusion of IBM and other self-insured companies into the single-payer system the Legislature is attempting to craft.

His reason for opposition: Doing so would “introduce inequity among employers and introduce new administrative costs.”

I do not know what country Mr. O’Kane lives in. In case he lives in the United States, it’s really hard to see how he could fail to notice that many employers are scrambling to find affordable insurance policies for their employees, paying higher prices for ever poorer coverage, and that the inequity among employers is gaping. Many small businesses can’t find affordable coverage at any price. In the majority of states which don’t have community rating laws, employers can be severely punished for hiring ill employees.

They may be priced out of the market entirely. Meanwhile, in every other developed country (most every one has some version of a single-payer system), all employers are treated in an equitable, consistent manner, not punished for hiring individuals with chronic illness, and they pay far less for their employees’ health coverage than they pay here in the United States.

Consequently, support of single-payer systems among businesses in every one of those countries is virtually universal. In fact, I am not aware of IBM or any of the other companies mentioned in the article lobbying these other governments to change to a U.S.-like free-for-all insurance system.

And the argument that such a proposal would raise administrative costs would seem to locate O’Kane in some alternate reality. Currently, IBM’s employees may or may not accept coverage (e.g. if they can’t afford their portion of the premium, or receive coverage through their spouse or through Medicare), and if they refuse coverage and the employee fits into a specific category, then IBM may have to contribute to the Catamount fund. Newer employees may be in a category of “not yet eligible.” Some employees may opt for individual coverage, others for family coverage. By the way, over the last three years, a new cost-control strategy of large national companies has been to provide incentives — sometimes direct financial payoffs — to elect individual rather than family coverage, and raising premiums for family coverage much more than the employee contribution for individual coverage. Not exactly a step forward for the kids of the country.

On the other hand, if Vermont adopts a single-payer system, then all Vermont employees will be treated in the identical fashion. All employees — and their family members — are covered, and payments into the system are predictable. In fact, the system would be so simple, that it’s hard to understand why IBM would not be able to save money by reducing the staffing in their personnel department.

In contrast, the massive administrative burden the existing multi-insurer system imposes on every medical provider is orders of magnitude more complex than anything IBM could possibly be describing. Every one of these self-insured companies that doctors and hospitals contend with have different procedures for approving tests and X-rays, different billing procedures, different drug formularies, and different panels of specialists on the companies’ lists of preferred providers. And added to the complexity are the policies of Medicaid, Medicare, the other insurers in the state, the workers compensation insurers, retiree supplemental policies, etc. The necessity to hire so many employees in our billing and administrative departments forces us to boost the price of every medical bill we send to patients, and to insurers. IBM and Walmart also are paying for all our administrative employees.

In addition, if every Vermonter is brought into the single-payer system, the comprehensive single payer database will allow us to detect aberrant practice patterns and fraud much more easily than the current chaotic system allows. And we will be in a much stronger position to negotiate better prices for hospital beds, wheelchairs and perhaps finally stop paying 50 percent more than all the single payer countries do for prescription drugs.

So I ask IBM, Home Depot and other national companies to act in a way that will create a better future for Vermont by creating an affordable single-payer health care system. You haven’t been complaining in any of the other single-payer countries, why not support it here in the United States?

Dr. Marvin Malek is an internist working at Central Vermont Hospital on the hospital care team. He is a member of Vermont Physicians for a National Health Program.

Med Students Rally For Vermont Single Payer System

By Rachel Zimmerman
Commonhealth blog, WBUR.org, March 24, 2011

Medical students from Vermont and neighboring states are heading to Montpelier this weekend to rally in support of a publicly-funded, single payer health system for the Green Mountain state.

A press release from the group, Physicians for a National Health Program, quotes Harvard Medical student Jonathan Takahashi on why he supports the plan:

“Through my training in medicine and public health thus far, I have seen firsthand how much the current lack of a unified and equitable health care system is a stumbling block in doing the work I care about. This is why action to improve health care, through measures such as implementing a single-payer financing system, is important to me.”

Sen. Bernie Sanders, I-Vt., and Gov. Peter Shumlin, D-Vt., both of whom have been outspoken advocates of single-payer reform, are scheduled to speak at the 1 pm rally Saturday at the Vermont Statehouse, the physicians group says.

Earlier this week over 200 physicians from around the country, including 13 from Massachusetts, said they would seriously consider relocating to Vermont if it were to implement a single-payer system.

Read our interview here with one of the students planning to attend the rally.

http://commonhealth.wbur.org/2011/03/med-students-vermont-single-payer-system/

Aetna pushes back and sues doctors

Ultrasound at $59,490 Spurs Aetna Outrage in Suit Naming Doctors

By Peter Waldman
Bloomberg
March 23, 2011

Aetna Inc. (AET) is suing six New Jersey doctors over medical bills it calls “unconscionable,” including $56,980 for a bedside consultation and $59,490 for an ultrasound that typically costs $74.

One defendant billed $30,000 for a Caesarean birth, and another raised his fee for seeing a critically ill patient in a hospital to $9,000 in 2008 from $500 the year before, the insurer alleges in the suits. The Caesarean price was more than 10 times the in-network amount Aetna quotes on its website.

The lawsuits could help determine what pricing limits insurers can impose on “out-of-network” physicians who don’t have contracts with health plans that spell out how much a service or procedure can cost.

The insurer paid some of the large charges because of state regulations mandating timely payments and to prevent doctors from sending patients big bills, (Aetna spokeswoman Cynthia) Michener said.

In April 2010, Aetna said, (cardiologist Benyamin) Hannallah asked for $54,600 for a heart catheterization, up from $5,500 for the same procedure in 2007. When the insurer gave him $2,000 — a sum it deemed “usual and customary” for the procedure — Hannallah complained, and Aetna paid in full to prevent him from billing the patient for the remainder, Michener said.

Aetna tried in 2007 to impose caps on some out-of-network payments, prompting doctor complaints to the New Jersey Department of Banking and Insurance. The agency sided with the doctors, fined the company $2.5 million, and ordered it to pay out-of-network practitioners enough so that patients wouldn’t be asked to pay balances other than co-pays.

In 2009, Aetna, UnitedHealth Group Inc. (UNH), Cigna Corp. (CI) and WellPoint Inc. (WLP) were accused by the New York attorney general of underpaying out-of-network physicians by manipulating a database used to calculate payments. They paid a total of $90 million in settlements without admitting wrongdoing. UnitedHealthcare agreed that year to pay $350 million to settle a lawsuit by the American Medical Association over the same issues. Similar AMA lawsuits against Aetna, Cigna and Wellpoint are pending.

http://www.bloomberg.com/news/2011-03-24/ultrasound-at-59-490-is-outrage-in-aetna-claim-against-doctors.html

Comment: 

By Don McCanne, MD

The most important innovation in coverage established during the managed care revolution was that private insurers could contract with physicians and hospitals to establish networks of providers with agreed-upon payment rates. Part of the backlash against managed care was that patients wanted the freedom to choose care outside of the networks, and they wanted their plans to pay for that care. So what did the insurers do to control fees and prices for services rendered by providers who had no contractual obligation to the insurers?

Insurers simply included in their plans some version of language to the effect that they would pay usual and customary fees in plans that covered out-of-network providers. Ingenix (founded by UnitedHealth Group) developed a data base of customary fees that led to a standard for payment of out-of-network care that was used by most major insurers. Discovery during the lawsuits that were later filed confirmed that the database was manipulated to produce an artificially low standard for customary fees. Either the providers were underpaid, or the patients had to pay excessive amounts for the balances that were billed.

Between pressure from the regulators and dissatisfaction from their own clients, the insurers were in a bind as to how they would keep the out-of-network providers from billing the patients for more than the deductibles and coinsurance.

Some physicians took advantage of this situation. They revoked their contracts with the insurers, and then charged whatever fees they thought that they could get away with. They knew that the insurers wouldn’t pressure their own clients to pay the balances, so they were basically able to extort the insurers for these outrageous fees. Now Aetna is pushing back by filing a lawsuit against these physicians for violating New Jersey Board of Medical Examiners rules against excessive fees.

Obviously, we have a problem with the way we pay for health care. The Affordable Care Act (ACA) will only perpetuate the abuses of the private insurers and the unscrupulous providers who take advantage of the system.

Fraud and abuse will always be a problem. You hear about it all the time with Medicare. That is because a single public administrator can identify fraud and expose it much more readily than a fragmented, private system that protects its proprietary information by not exposing the abuses. In fact, under ACA, the private insurers have incentives to pay outrageous fees and to pay for fraud because they get to keep 15 to 20 percent of the entire kitty. The more fraud and price gouging there is, the greater their revenues.

A single payer financing system automatically prevents gouging, and also has more effective tools to ferret out fraud. As the pain inflicted by the outrageous costs of our health care system continues to grow, the nation will welcome a single payer system, once the concept is better understood.