PNHP

Medicare’s failed experiment with disease management

Medicare’s failed experiment with disease management

Medicare Finds How Hard It Is to Save Money

By Reed Abelson
The New York Times
April 7, 2008

An ambitious three-year experiment to see whether the Medicare system could prevent expensive hospital visits for people with chronic conditions like congestive heart failure and diabetes has suggested that such an approach may cost more than it saves.

The test borrowed a practice long available through private health plans. Nurses periodically place phone calls to patients to check whether they are taking their drugs and seeing the right doctors. The idea is that keeping people healthier can help patients avoid costly complications.

After paying eight outside companies about $360 million since mid-2005 to try to improve such patients’ health, Medicare is still trying to figure out whether the companies were able to keep people healthier. But the preliminary data indicate that the government is unlikely to save money.

Several of the companies, including two that specialize in disease management, Healthways and Health Dialog, are pressing Medicare to continue the project in some fashion beyond the end of this year, saying the government mishandled the experiment.

“We haven’t proven anything,” said Dr. Jeffrey L. Kang, a former Medicare official who is now the chief medical officer for the insurer Cigna. The companies say Medicare signed up patients who were much sicker than they had expected. Instead of giving companies a chance to intervene before someone went to the hospital, Dr. Kang said, most of the patients were already so ill that it was “no longer a preventive program.”

George B. Bennett, the chief executive of Health Dialog, which is overseeing about 15,000 Medicare patients in western Pennsylvania, favors continuing the experiment, but with adjustments. He wants Medicare to give the companies more flexibility to manage patients in ways they say have already been proven to work among the employees they cover in commercial plans. Such measures, he said, include giving the insurer a bigger role in selecting the patients, with an eye toward identifying the ones most likely to be helped.

Medicare is already exploring other ideas, like the development of so-called “medical homes,” where a doctor with a team of other professionals oversees a patient’s care. A few doctors’ groups involved in a separate Medicare experiment have reported some success in saving the government money by more actively managing their patients’ care.

http://www.nytimes.com/2008/04/07/business/07medicare.html?hp

Comment:

By Don McCanne, MD

The presidential candidates claim that they will pay for expanding coverage to everyone by using the savings made possible though chronic disease management. But what is disease management, and will it save money?

The Medicare experiment with disease management has demonstrated what it should not be. The comments of the executives in the industry contracted by Medicare provide us with an understanding of the flaws of this model. They imply that Medicare was unfair because they selected patients with chronic disease to be managed by these private chronic disease managers. What?

To make the experiment work, the disease managers want to be able to select the patients themselves. We already have ample experience with this industry to know what that means. They want to select the healthy, low-cost patients and turn the expensive, high-needs patients over to the taxpayers. Cream skimming is already rampant in the private insurance industry. We certainly don’t need any more of it.

So what should disease management look like? The establishment of medical homes within a well-functioning primary care infrastructure would be the ideal model for chronic disease management. Although we are approaching a crisis in the shortage of primary care physicians, well trained nurse practitioners, as part of the primary care team, would be well positioned to use standard protocols plus clinical judgement to assist patients in the management of their chronic conditions.

Of course, that would be much simpler through a single payer national health program in which our abundant resources could be realigned to achieve this crucial goal. Imagine… using our resources more efficiently while achieving the goals of a high-performance system. Pipe dream? Don’t think so.

2008 Dartmouth Atlas of Health Care

Tracking the Care of Patients with Severe Chronic Illness

Lead Author: John E. Wennberg
Co-Authors: Elliott S. Fisher, David C. Goodman, and Jonathan S. Skinner
The Dartmouth Atlas of Health Care 2008

Nowhere are the system’s failings more apparent than in the care of the chronically ill. More than 90 million Americans live with at least one chronic illness, and seven out of ten Americans die from chronic disease. Among the Medicare population, the toll is even greater: about nine out of ten deaths are associated with just nine chronic illnesses, including congestive heart failure, chronic lung disease, cancer, coronary artery disease, renal failure, peripheral vascular disease, diabetes, chronic liver disease, and dementia. Treating chronic disease is both enormously costly and not particularly effective. Most patients with chronic disease are treated in episodic fashion by multiple physicians, who rarely coordinate the care they deliver. As chronic disease progresses, the amount of care delivered and the costs associated with this care increase dramatically. Patients with chronic illness in their last two years of life account for about 32% of total Medicare spending, with much of it going toward physician and hospital fees (Medicare Part A and Part B) associated with repeated hospitalizations.

This edition of the Dartmouth Atlas will focus on disentangling the phenomenon known as “unwarranted variation,” or variation in different regions of the country that is not explained on the basis of illness, patient characteristics or preferences, or the dictates of evidence-based medicine. Like the last edition, it focuses on supply-sensitive care delivered to chronically ill Medicare beneficiaries in the last two years of life.

Concerning feasibility

Given the complex, entangled web of economic incentives and false assumptions that currently operate in today’s health care system, is it possible to successfully address the underlying major structural problems behind the unwarranted variation phenomenon: poor science, poor coordination of care, and overuse of care, particularly of acute care hospitals? The first step, we suggest, is to understand the causes and consequences of variation in the way chronic illness is managed from state to state, from region to region, and from provider to provider. Much of this edition of the Atlas has been devoted to this task. The next step is to implement reforms that can address unwarranted variation. In this chapter, we have outlined a general approach to reducing variation. The end game is the establishment of science-based, cost-effective, and coordinated management of chronic illness through care that is also sensitive to patient preferences and supported by adequate infrastructure. An adequate infrastructure includes the personnel and technology that serve as the means for both guiding and monitoring quality and efficiency. Eventually, reimbursement should be determined on the basis of these measures.

A strategy for improving the scientific basis of clinical care

Today, there is virtually no clinical research that focuses on variation in care intensity. The nation needs a crash program to transform the management of chronic illness to a rational system where what happens to patients is based primarily on illness severity, medical evidence, and the patient’s wishes, and where resource allocation and Medicare spending can be guided more and more by knowledge of what is needed to produce cost-effective, high-quality care.

The support of such research needs to be the responsibility primarily of federal science policy. It makes no sense for the government to invest in biomedical research (such as most of the research funded by the National Institutes of Health) without complementary research aimed at determining how new and existing treatments affect the outcomes of care, the lives of patients, and the efficiency of clinical practice.

How hospitals might respond

Using the Dartmouth Atlas database, hospitals can learn quickly where they stand on the relative efficiency scale, and those with acute hospital resource inputs and utilization that are substantially in excess of efficient practice benchmarks set by providers like the Mayo Clinic and Intermountain Healthcare will understand that in the long run, CMS may penalize them for providing high-cost, high-intensity, chaotic care. Under the shared savings model, CMS would offer a strong financial incentive for hospitals to organize their care.

How physicians might respond

The primary care “medical home” could provide a model for coordinating care among sectors and ensuring that patients’ transitions between sectors run smoothly. In this role, primary care physicians would have an advantage, because in today’s health care markets, most primary care physicians do not have entangling owner relationships with acute care hospitals, skilled nursing facilities, or long-term care facilities. They are thus in a better position to help reduce the remarkable variation among these sectors of care. We believe that CMS should develop strong financial incentives for primary physicians to assume a leadership role in coordinating care and reducing overuse of acute care hospitals.

http://www.dartmouthatlas.org/

The Dartmouth Atlas of Health Care 2008:
http://www.dartmouthatlas.org/atlases/2008_Chronic_Care_Atlas.pdf

Comment:

Don McCanne, MD

Uwe Reinhardt has said that for the past few decades John Wennberg has been howling in the wind. So what is the noise all about? It is about the hundreds of billions of dollars that we are wasting on poor quality, intensive high-tech care that does not improve outcomes.

Wennberg’s group tends to dismiss national health insurance as being an inadequate response to our needs, instead suggesting solutions such as deciding that “that only accountable care organizations capable of providing evidence-based care would be eligible for Medicare reimbursement for routine management of chronic illness.” Such an approach would not only perpetuate our highly-flawed, fragmented system of financing health care, but would further compound the fragmentation of our health care delivery system.

That is not to dismiss the very great importance of the contributions of John Wennberg and his associates. They have provided us with a data base that provides an opportunity to shift spending from wasteful, poor quality excesses to higher quality care that benefits everyone. They have demonstrated the importance of establishing a primary care medical home.

To achieve that goal, we really do need to reform our health care financing system. Just imagine how effective a single payer national health program would be in “transforming the management of chronic illness to a rational system where what happens to patients is based primarily on illness severity, medical evidence, and the patient’s wishes, and where resource allocation can be guided more and more by knowledge of what is needed to produce cost-effective, high-quality care.”

Local doctor not alone in favoring national health insurance

By JOHN BULGER
Idaho Statesman
Apr 4, 2008
jbulger@journalnet.com

Pocatello physician Bill Woodhouse delivers a grim prognosis on the state of health care in America.

“We’re dealing with a catastrophe of the first order,” Woodhouse said.

Woodhouse is not alone in his opinion. A recent study in Annals of Internal Medicine reported that a solid majority — 59 percent — of U.S. physicians support national health insurance.


Local physician Dr. Bill Woodhouse advocates the adoption of
a national health care plan.
JOURNAL PHOTO BY JOHN BULGER

An estimated 47 million Americans currently lack health insurance coverage, and 50 million more are believed to be underinsured. Health care costs are rising approximately 7 percent per year, twice that of inflation.

“It’s the greatest moral failing of our times,” Woodhouse said.

Woodhouse is a family physician, a past president of the Idaho Academy of Family Physicians, and a former opponent of a single-payer health care system that many industrialized nations employ. But Woodhouse experienced a change of heart a few years ago.

“I got tired of going to bed thinking I was part of something corrupt,” he said.

Woodhouse is now active in state and national groups advocating for health care reform. He speaks on the topic frequently, armed with statistics which are troubling.

* The U.S. spent $2 trillion on health care in 2007. And $1 trillion of that amount went to administrative costs.

* We pay nearly twice as much per person for health care than Switzerland, the second-most expensive nation.

* More than 50 percent of U.S. bankruptcies are now medically related.

Woodhouse points to a 2000 study in Seattle which encompassed 2,777 patients. The patient pool had 755 individual insurance plans, with differing benefits, co-payments, deductibles and coverage rules.

The upshot of such a fragmented pay system?

“It costs three times more to administer a practice here than in Canada,” Woodhouse said.

Canadian health care providers never need question where to bill insurance. It goes to the province’s health care provider. Every Canadian citizen is insured under the Canada Health Act’s tax-supported system.

Canada’s tax spending was $880 per person in 2002. The U.S. spent $2,130 per person.

A poll by the World Health Organization found 54 percent of Canadians were satisfied, while only 49 percent of Americans were pleased with their overall care.

Woodhouse notes the vicious cycle of cost shifting that occurs in our system. Fixed costs rise, which result in higher premiums. Higher premiums result in more people being uninsured or underinsured, many of whom delay seeking treatment until forced to visit a doctor. The illnesses are then more acute, resulting in higher costs. Unable to pay for the services out of pocket, the health care system absorbs the charge and fixed costs increase. And upward it spirals.

“We put people in the hospital every week who wouldn’t be there if they had primary care,” Woodhouse said.

And the results are sobering. More than 18,000 deaths are attributed annually to lack of insurance.

“That’s six 9/11s every year,” he said.

A visit to the Pocatello Free Clinic illustrates the problems with the system. Go there any day, he said, and the clinic is crowded with women between 50 and 65 years of age.

“Their chronic medical conditions are patched together until they can qualify for Medicare (at age 65),” Woodhouse said. “And most people down there? They’re working one or two jobs.”

Personal finances shouldn’t be part of the thought process when seeking medical care, Woodhouse said. He argues we need to start treating health care as a common good, similar to education, fire prevention and road maintenance.

“Two o’clock in the morning, your chest starts hurting. What happens next is not a business transaction,” he said.

Despite the daunting challenge of reform, Woodhouse remains optimistic, although he does not see a banner carrier for a single-payer system among current policy makers. But he believes change is inevitable in a broken system.

“What’s the tipping point?” he muses. “We’re getting there.”

An unheard majority for national health insurance

By Jess Fiedorowicz and Dennis Fiedorowicz
Guest Opinion
Iowa City Press-Citizen
Saturday, April 5, 2008

The adjective “broken” has so frequently been used to describe our healthcare system as to become a cliché. Recently an important new study was published in the Annals of Internal Medicine that reveals a growing consensus among medical professionals on a path forward. A solid majority of doctors, now 59 percent, support national health insurance.

National health insurance plans typically involve a single, federally-administered social insurance fund that guarantees health care coverage for everyone. This may effectively eliminate or at least reduce the role of private insurance companies in health care financing, while still allowing patients to choose their personal physician. This growing consensus of the medical community on the need for national health insurance may reflect two values upon which our system fails: social justice and fiscal responsibility.

System’s current flaws

Our current system is unjust. An estimated 47 million Americans now are without health insurance, and more than 50 million are “underinsured.” In Iowa, more than a quarter million are uninsured. Health care should represent a community value. The public invests in schools, emergency services and transportation infrastructure. These goods and services are distinctly different from others in the “free market.” These services are required for public safety and to facilitate participation in a democracy. Health care should not only represent a public need, but also a human right. All Americans deserve access to comprehensive and preventative health care. Our current system has failed in its stewardship, squandering our resources by fostering the growth of a wasteful system, which has lost its focus on advocacy for quality health care. We can empower our citizens through access to comprehensive healthcare.

Our current system is inefficient and fiscally irresponsible. Per capita, we pay the most for health care in the industrialized world yet have poorer health outcomes. We, in fact, spend more public funds per capita on health care than countries providing access to all. The private insurance industry consumes nearly one-third of every U.S. health care dollar on bureaucratic paperwork and overhead. Physicians also have witnessed a deterioration in the quality of patients coverage or patients losing coverage altogether, often leading to their financial ruin. In fact, medical bills cause half of all bankruptcies in the country, and three-quarters of those bankruptcies happen to those with health insurance.

It is time for those seeking the presidency to stop avoiding the barriers posed by special interests, such as private insurance, to delivering affordable, quality health care for all. Unfortunately, our leading candidates for president fail to offer a sound approach to solving the crisis.

Proposed changes

Republican Sen. John McCain’s solution has been described as missing in action. He proposes tax incentives to encourage the uninsured to buy coverage. These subsidies, however, fall short of the cost of adequate insurance. Senator McCain says his plan would let the “free market” work to bring down health costs. In fact, his plan would dis-incentivize businesses from providing coverage for their workers.

Democratic Senators Hillary Clinton and Barack Obama are offering “mandate” models for reform. Under these models, the government would require individuals (or their employers) to purchase private coverage, effectively penalizing the uninsured, while offering an expanded Medicaid-like program for the poor and near-poor. They appeal to social justice through use of the term “universal” though they fall short of delivering health care for all.

The incremental changes suggested by these candidates cannot solve our problems because they leave large private insurance companies in place. State plans based on similar incremental models have faltered or failed. Previously, both Clinton and Obama have voiced support for a single-payer national health insurance system as a solution to the health care crisis, but they have apparently determined it is not politically feasible today. We cannot afford to waste time with incremental solutions that don’t work while our health care system continues to deteriorate.

As the American proverb states, “It doesn’t work to jump a 20-foot chasm in 10-foot jumps.”

Radical reform needed

National health care will require radical reform, a threat to powerful special interests. Insurance companies have added cost with executives assuming huge profits. They have not been good stewards. Insurance companies have created confusion and made our system unnecessarily complex.

Many “insured” are but one major illness away from bankruptcy. The insurance industry spends a great deal of time and effort in constructing barriers or denying payment for testing and procedures physicians request. Physician time is squandered in negotiation with insurance representatives who do not know the patient and lack an ethical duty or fiduciary responsibility to the patient.

Does this make sense?

The new survey of the nation’s doctors suggests otherwise — that national health insurance is not only necessary but also increasingly popular. The findings dovetail with an Associated Press/Yahoo public opinion poll from last December showing nearly two-thirds of Americans favor a similar approach. These polls point the way forward.

The time has come for our political leaders to stand up for the health of the American people and implement a non-profit, single-payer national health insurance system. Will they leap or fall into the chasm? Will we advocate and educate others to allow this socially just and fiscally responsible solution to become politically feasible?

Jess G. Fiedorowicz is a psychiatrist and clinician-investigator at the University of Iowa. Dennis D. Fiedorowicz works as a purchasing agent in manufacturing and lives in Pound, Wis.

National health care rising in popularity

By JOHNATHON ROSS
Toledo Blade
Op-Ed
Saturday, April 5, 2008

OUR health care system is broken.

An estimated 47 million people are without health insurance today; another 50.3 million are “underinsured.”

We pay the most in the industrialized world, per capita, for health care, but have poorer health outcomes. Lack of insurance alone accounts for about 101,000 preventable deaths each year.

In Ohio, we waste $11.6 billion yearly on unnecessary administrative paper work and profits. This is more than enough to cover 1.2 million uninsured Ohioans.

We can do better, and we must.

This past week, researchers at Indiana University published an important new study that reveals a growing consensus among medical professionals on a path forward.

Reflecting a shift in thinking over the past five years among U.S. physicians, a solid majority of doctors, 59 percent, now support national health insurance.

Support among primary care physicians and psychiatrists averages well above 60 percent. Even 55 percent of the usually conservative general surgeons now support national health insurance. They know when to clamp a bleeder, and our sickness care non-system is hemorrhaging money.

This growing consensus among physicians on the need for national health insurance is no doubt connected to the waste and inefficiency they witness on a daily basis.

Our private insurance industry consumes 31 percent of every U.S. health care dollar, much of it on bureaucratic paperwork and overhead.

As doctors, we have seen more and more of our patients experience a deterioration in the quality of their employer-based coverage or lose such coverage altogether.

Too often, this leads to financial ruin.

National health insurance plans typically involve a single, federally administered social insurance fund that guarantees health care coverage for everyone, much like Medicare currently does for senior citizens. They eliminate or substantially reduce the role of private insurance companies in the health care financing system, but still allow patients to go the doctors of their choice.

It is past time for those seeking high political office to stop avoiding the “elephant in the room” – the private health insurance industry – and the obstacle it poses to delivering quality affordable health care to everyone who needs it.

Disappointingly, none of the leading candidates for president are taking on the elephant. Rather they are following the elephant with shovel in hand. None offers a sound approach to solving the crisis.

Republican Sen. John McCain’s solution can best be described as missing in action.

He proposes tax incentives to encourage the uninsured to buy coverage, but these subsidies fall far short of the cost of adequate insurance.

Senator McCain says his plan would let the “free market” work to bring down health costs.

In fact, his plan would change the tax code to encourage business to drop coverage for their workers, forcing millions of workers to seek coverage in the high-cost, high-overhead individual market.

His proposed tax credits are a fraction of what an individual health insurance policy costs, and far below the cost of the taxpayer-provided coverage he enjoys.

If Senator McCain has his way, tens of millions more Americans will join the ranks of the uninsured and scantily insured; only the wealthy will be able to afford anything but bare-bones coverage.

On the Democratic side, Sens. Hillary Clinton and Barack Obama are offering either full or partial “mandate” models for reform.

Under these models, the government would require us (or our employers) to buy private coverage, in effect criminalizing the uninsured, while offering an expanded Medicaid-like program for the poor and near-poor.

The incremental changes suggested by Senator Clinton and Senator Obama cannot solve our problems, because they share the fatal flaw of Senator McCain’s: they leave the big private insurance companies in place.

State plans based on these mandate models, as in Massachusetts, have already begun to falter.

The fines for failing to purchase health insurance in Massachusetts will exceed those for murdering your neighbor’s cat or beating your spouse.

If you go to jail for failure to buy insurance in Massachusetts, at least you will get health care for free while in jail, as required by law.

What must be changed is the system itself. It’s time for the big private insurance companies to go.

At one time or another, both Senator Clinton and Senator Obama have said they could support a single-payer national health insurance system, a kind of “Medicare for all,” as a solution to the health care crisis, but they have apparently calculated that it is not politically feasible to advocate it today.

The new survey of the nation’s doctors suggests otherwise.

These findings dovetail with those of an AP/Yahoo public opinion poll last December showing 65 percent of Americans favor a similar approach.

National health insurance is not only necessary, but increasingly popular.

Winston Churchill is remembered to have said of Americans that we always do the right thing, after we have exhausted all the other possibilities.

It is time for our political leaders to stand up for the health of the American people and implement a nonprofit, single-payer national health insurance system.

It will save lives, save money, and the 15,000 members of Physicians for a National Health Plan will be there to support them when they finally do the right thing.

Dr. Johnathon Ross is an associate clinical professor of internal medicine at the University of Toledo and medical director of outpatient internal medicine at St. Vincent Mercy Medical Center. He also is past president of Physicians for a National Health Program.

Health insurance in small firms

The Economic Burden of Providing Health Insurance

How Much Worse Off Are Small Firms?

By Christine Eibner
RAND Corporation
April 4, 2008
Technical Report

Conclusion

Health-insurance burdens borne by employers grew substantially between 2000 and 2005, regardless of firm size. While growth was highest for small firms (<25 employees), medium-sized firms (25 to 99 employees) did not face higher growth in health-insurance burdens than larger employers did. Our results suggest that targeting health reforms that build on the employer-based system solely to large firms may be unwarranted, given that large firms do not face lower health-insurance burdens than moderately small firms do. However, our results indicate that the growth in health-insurance burdens has been substantial regardless of firm size. As a result, it seems that all employers -- large and small alike -- may have difficulty shouldering health-insurance burdens if costs continue to rise. Although firms may pass insurance costs back to employees in the form of lower wages, employees may be unwilling or unable to afford these cost increases in the future. This may be particularly true at very small firms, at which employees appear to be sacrificing a larger share of their wages for a lower-quality benefit. News release:
http://rand.org/news/press/2008/04/04/

Technical report:
http://rand.org/pubs/technical_reports/2008/RAND_TR559.pdf

Comment:

By Don McCAnne, MD

This report provides extensive data documenting the increased burden of employer-sponsored health insurance, especially in small firms. Those interested in defining and quantifying the extent of this problem would be interested in downloading this report.

For most of us, the important bottom line is that employees, especially in small firms, are sacrificing a larger share of their wages for a lower-quality benefit.

Building on our current system would not get us where we need to be. We desperately need a single payer national health program.

Health care for all

Brattleboro Reformer
Editorial
Thursday, April 3

Regarding health care, in a recent survey of 26,000 American workers conducted by the AFL-CIO, nearly three-quarters of the people interviewed said they feared losing their health insurance if they changed jobs.

Ninety-five percent said they were unhappy with the cost of health care and 64 percent said they were unhappy with the quality of the care they received.

The numbers weren’t surprising. What was surprising is that these responses came from people who already had health insurance. Three-quarters of the respondents had some kind of coverage and nearly 80 percent of them were covered through their employers.

The focus of the health care debate usually falls on the uninsured. That more than 40 million Americans have no form of health insurance is a national scandal. But it’s a surprise that people who do have insurance are still feeling insecure about their coverage.

Of the people who responded to the survey who had insurance, about half said it did not cover all the care they needed at a price they could afford.

Prescription drugs were ranked first as the most unaffordable element of health care.

Another one-third of respondents said that their insurance companies had at some time refused to cover them for something that should have been covered by their policies. The amount of fighting that goes on between patients and their insurers to get the coverage that’s due them is considerable.

Again, these are the people who have health insurance. Too often, high deductibles and co-payments mean that even people with coverage are forced to choose between going to the doctor and paying for rent, utilities or groceries.

We now have a system where having a health insurance plan you can afford to pay for and afford to use when you are ill is entirely dependent on where, or if, you have a job. If you are unemployed, self-employed, or in any other situation where you don’t have health insurance and can’t afford it, you are left to the mercy of charity or underfunded state and federal health insurance programs.

Even the doctors know the system is broken. According to a survey released this week by the journal Annals of Internal Medicine, 59 percent of U.S. doctors now favor a national health care plan, while only 32 percent oppose it. This compares to 49 percent in favor and 40 percent opposed when a similar survey was done in 2002.

“Across the board, more physicians feel that our fragmented and for-profit insurance system is obstructing good patient care, and a majority now support national insurance as the remedy,” said Dr. Ronald Ackermann, one of the physicians who worked on the study.

Vermont has tried to take a tentative step toward solving the problem with Catamount Health, the state’s program for uninsured Vermonters. But it’s now apparent that the state will not have the money to fund even a modest expansion of coverage either this year or in years to come.

Our nation still spends more than any other nation on Earth for health care, yet 47 million Americans are uninsured and tens of millions more have inadequate insurance. And few in Montpelier or in Washington have the will to take a step toward what the rest of the industrialized world provides for its citizens – a national health insurance program.

WellPoint tanks

The 52-Week Low Club

MarketWatch (Dow Jones)
March 28, 2008

Wellpoint (WLP) Downgrade from Lehman. Sells down to $43.02 from 52-week high of $90.

http://www.marketwatch.com/news/story/story.aspx?guid=%7B54CC3830-623F-4C66-8CAF-E5DD58D401FF%7D&link=http://www.247wallst.com/2008/03/the-52-week–16.html&dist=msr_2

And…

Analysis Look to First-Quarter Financial Results of Insurers for Signs of Industry’s Health

Kaiser Daily Health Policy Report
April 3, 2008

According to Sheryl Skolnick, a health care analyst and senior vice president at CRT Capital Group, the health insurance industry has experienced a downturn for two years, and “it just took (WellPoint) imploding for us to figure it out.” She added that the current prices of health plans do not account for growth in medical costs. Skolnick said that health insurers will begin to reverse the downturn when they “create affordable health insurance plans that consumers really want to buy instead of affordable-but-barebones plans that do not offer consumers a compelling value” (Wisenberg Brin, Dow Jones, 4/2).

http://www.kaisernetwork.org/Daily_reports/rep_hpolicy.cfm#51337

Comment:

By Don McCanne, MD

WellPoint has been the leader in marketing innovative “affordable-but-barebones plans that do not offer consumers a compelling value.” So now the industry will need to reverse its downturn by creating “affordable health insurance plans that consumers really want to buy.”

It’s all very simple. Restore the health benefits in their plans, and then sell them at a competitive premium that will cause consumers to want to buy them. It must be a good idea since Senators Clinton, Obama and McCain each propose private health plan competition as the major component of their health reform proposals.

Before benefits are restored, one little glitch will have to be solved. In addition to the revenues that they will receive from their competitive premiums, they are going to have to figure out where they will get the money to pay for the health care benefits that consumers really want to have. Apparently the presidential candidates will let the market figure that out.

OECD paper on the economics of prevention

The Prevention of Lifestyle-Related Chronic Diseases: an Economic Framework

By Franco Sassi and Jeremy Hurst
Organisation for Economic Co-operation and Development
OECD Health Working Paper No. 32
March 25, 2008

Abstract:

This paper provides an economic perspective on the prevention of chronic diseases, focusing in particular on diseases linked to lifestyle choices. The proposed economic framework is centred on the hypothesis that the prevention of chronic diseases may provide the means for increasing social welfare, enhancing health equity, or both, relative to a situation in which chronic diseases are simply treated once they emerge. Testing this hypothesis requires the completion of several conceptual and methodological steps. The pathways through which chronic diseases are generated must be identified as well as the levers that could modify those pathways. Justification for action must be sought by examining whether the determinants of chronic diseases are simply the outcome of efficient market dynamics, or the effect of market and rationality failures preventing individuals from achieving the best possible outcomes. Where failures exist, possible preventive interventions must be conceived, whose expected impact on individual choices should be commensurate to the extent of those failures and to the severity of the outcomes arising from them. A positive impact of such interventions on social welfare and health equity should be assessed empirically through a comprehensive evaluation before interventions are implemented.

Paragraph 171 (page 61):

Tackling major risk factors for health, or chronic diseases linked to behaviours that are highly prevalent in a population, requires more than a single preventive intervention, however effective and broadly based it may be. Turning the tide of diseases that have assumed epidemic proportions during the course of the 20th century requires fundamental changes in the social norms that regulate individual and collective behaviours. Such changes can only be triggered by wide ranging prevention strategies addressing multiple determinants of health, strategies that are likely to develop incrementally, rather than through comprehensive planning. Although the contribution and cooperation of many agents is needed for the success of a prevention strategy, none of the agents potentially involved, at any point in time, is in possession of the information, the tools and the power required for the comprehensive planning of chronic disease prevention, and none of the agents is able to take a sufficiently long time perspective in its action to make such an approach possible. Social norms cannot be engineered. They set the boundaries and the rules for a complex interplay of conflicting interests which we have interpreted here, using the tools of economics, as market dynamics. At the same time, it is precisely that interplay of interests that progressively adapts and changes social norms.

http://www.oecd.org/dataoecd/57/14/40324263.pdf

Comment:

By Don McCanne, MD

“We are not going to control health care costs until we change from a health care system focused on treating disease to a system that focuses on prevention.”

How many times have you heard that statement? It’s everywhere – in questions from audiences at community forums, in letters to the editor, in op-eds, in communications from advocacy organizations, in the ubiquitous blogs throughout the Internet, and everywhere else. It even appears in the health policy literature – often in the form of reducing spending through disease management by preventing the complications of obesity, diabetes, hypertension, and other disorders.

Before addressing this report, let’s acknowledge that everyone agrees that prevention of disease and injury is far better than treating it after it occurs. Efforts to promote prevention are crucial to maintaining and improving the health of the people of the nation.

Accepting the health benefits of prevention as a given, there are two other questions to be addressed as we sort out the proposals to reform the financing of our health care system. First, does the health care delivery system provide the appropriate infrastructure for providing the interventions that would prevent injury and disease? Second, assuming that it does, would these interventions be effective in controlling health care costs, making health care affordable?

So what answers does this OECD health working paper provide to these questions?

It is important to understand what this paper is. It is a highly technical discussion of the economic framework of the prevention of lifestyle-related chronic diseases. The issues are very complex. If you really want to understand the economics of prevention, I would recommend reading the entire paper (78 pages). At a minimum, you should read the conclusions, pages 57-63.

What will become evident is that the statement that we must change the emphasis from treatment of disease to prevention really does not have much applicability to the topic of reforming the financing of health care, when one of our most important goals is to ensure that health care will be affordable for present and future generations.

In answering the first question posed, the paper demonstrates that prevention is complex function involving the interaction of government and private sectors of our society. Although the health care delivery system plays a role in prevention, it is comparatively minor. Most interventions would occur outside of the health care delivery system.

For the second question, interventions within the health care delivery system can have only a very minor impact on total health care spending. Further, it is not at all clear as to whether that would reduce or increase our total national health expenditures.

It is important that both government and the private sector invest in prevention, simply to improve the health of our nation. But we must not allow ourselves to divert the national dialogue from the other important goals of financing reform to a non-productive debate over the theoretical cost savings from prevention.

This paper is important to policy advocates since it will arm you with the confidence to reply to questions about and proposals for prevention. It is also a paper that you can recommend to individuals who are locked into the concept that health care reform is all about prevention. You can show that that prevention is crucial, but that it alone does not adequately address the very important issue of making access to the health care delivery system affordable for everyone.

Health care changes sought

Majority of doctors want federal government to pay costs of medical treatment

By CATHLEEN F. CROWLEY, Staff writer
Albany Times Union
First published: Wednesday, April 2, 2008

Tired of seeing families go broke under the pressure of medical bills and fed up with insurance companies interfering in medical care, doctors say it’s time for a nationwide health insurance system.

A majority of doctors now think the federal government should pay for health care, according to a study in Tuesday’s Annals of Internal Medicine. Doctors and student doctors at Albany Medical College held a news conference on Tuesday to draw attention to the study and show support for a single-payer system.


Dr. Paul Sorum, an Albany Medical College professor of
medicine and pediatrics, speaks Tuesday, April 1, about a
study showing 59 percent of doctors favor a single-payer
national health care system. (Paul Buckowski / Times Union)

The number of doctors supporting a single-payer system today jumped significantly from the last time physicians were surveyed in 2002, according to the study. “They see how our fragmented and for-profit health care system no longer serves the interest of patients, medical professional or employers,” said Jessin Blossom, a third-year medical student and student leader of Physicians for a National Health Program.

The number of uninsured in the United States is 47 million and many others are under-insured, according to recent Census data. More than half of all personal bankruptcies are caused in some part by medical expenses, according to a 2005 Harvard study.

Under a single-payer system, the government pays for all health care and everyone is covered.

The Annals of Internal Medicine study, conducted by two doctors at the Indiana University School of Medicine, found that 59 percent of doctors supported a single-payer system, up from 40 percent in 2002. In the latest survey, 32 percent opposed it and 9 percent were neutral.

The study is based on survey responses from 2,193 doctors. The biggest supporters of a single-payer system are doctors in psychiatry, emergency medicine and pediatrics. The doctors who least supported it are radiologists, anesthesiologists and specialty surgeons.

“We are seeing families who have no health care for their children and no health care for themselves and going through the anguish of poor medical care,” said Dr. Jennifer Pearce, co-director of the Center for Childhood Cancer and Blood Disorders at Albany Med. “It’s not American. It’s not moral. And it’s not healthy.”

Pearce said she couldn’t think of a doctor at Albany Med who doesn’t support a single-payer system. The dozen doctors who attended Tuesday’s news conference said they believe a single-payer system will be cheaper, easier and provide better health care.

“About 30 percent of our time in medicine is spent in the forms, appeals and the paperwork involved with the thousands of different insurance plans,” Pearce said. “A lot of our time, effort and intelligence is wasted.”

Paul Sorum, a primary care doctor and chairman of the Capital District Chapter of Physicians for a National Health Program, believes the government would be less intrusive than private insurers.

“There would be far less interference in the day-to-day decision making under a single-payer system rather that the private insurers who are increasingly reaching in to the examination room to decide what kind of care is best for you,” Sorum said.

The government would have rules, too, he said.

“But the rules would be simple, uniform, transparent,” he said. “They would be public and well-known.”

Cathleen F. Crowley can be reached at 454-5348, or by e-mail at ccrowley@timesunion.com.

National health care? Even doctors want it

Editorial
Des Moines Register
April 2, 2008

When it comes to reforming health care, special interests have run the show in Congress. Crafting Medicare reforms that benefit insurers and drug companies. Snuffing out proposals to allow Americans to import cheaper prescription drugs from other countries. Stonewalling the creation of a taxpayer-financed system of health insurance to cover all Americans.

Among the most powerful special interests on health care: insurance companies and physician groups. Both have opposed national health insurance that would provide coverage to all Americans similar to the way Medicare covers seniors.

Well, the times they are a changin’.

According to a new study published in the Annals of Internal Medicine, a majority of American physicians now support national health insurance. A survey of nearly 2,200 doctors found that 59 percent think government legislation should establish national health insurance – a jump from 49 percent in 2002.

“More and more physicians are realizing they’re seeing more uninsured patients, said Dr. Aaron E. Carroll, director of Indiana University’s Center for Health Policy and Professionalism Research and lead author of the study. “Even those patients with insurance are having more difficulty getting care. Doctors in general are fed up waiting for the system as we have it to get better.”

Physicians embrace a credo that they must provide care to everyone. But then there’s the reality of needing to secure payment for their services, even though millions of Americans don’t have insurance to help pay the bill for that care. And doctors are tired of the paperwork burden of dealing with thousands of different private insurance programs.

The shift by doctors toward supporting creation of a national health-insurance system is an important finding, because the organizations that represent them continue to march to a different drummer in the halls of Congress. The American Medical Association, for example, has long opposed a taxpayer-financed system of health care.

It appears the special interests may no longer be representing their members. It’s time for the doctors themselves to speak up. And Congress to listen.