Friday, December 25, 2009
Thursday, December 24, 2009
Senator Reid makes the Doctors Pay for Medicare under Senate Bill 3590
The politicians are claiming that Senator Reid's bill will save the country money according to the latest CBO report. Physicians were scheduled to have a 21% pay cut caring for Medicare patients as of January 1, 2010. However, under Section 3101, this bill provides for .5% increase for physicians in 2010 but assumes no further increases or change to the Medicare Sustainable Growth Rate formula which is used to compute physician payment rates. It is known to be a flawed formula requiring an act of Congress to "fix" each year. Politicians have always provided some nominal increase in physician payments, even if it has not kept pace with inflation. According to the Alliance of Specialty Medicine, "If the SGR formula is not fixed, physicians will receive negative updates of approximately five percent each year from 2006 until 2013 and rates will not return to their 2002 level until well after 2013. In other words, physicians will receive less reimbursement in 2013 than they did in 2002 for the exact same procedure, regardless of inflation and increases in practice costs." This unrealistically assumes doctors will bear the cost burden for the Medicare population. More likely physicians will have to stop Medicare participation (stop caring for Medicare patients) under these conditions. It seems disingenuous to claim "savings," when not all the costs have been realistically accounted for in this bill. This bill will surely go over the CBO estimates if real world historical political behavior of annual "fixes" are assumed as opposed to the static assumptions of the CBO.
Tuesday, December 22, 2009
On Sunday, under Cloak of Darkness, in the Wee Hours of the Night and in a Snow Storm, the Senate Voted on Health Reform
I am reminded of a phrase my grandmother used to say, “Fra dire e fare, ch’é un mare” - Between saying and doing there is an ocean in between. For all the talk about openness and transparency, it seems things could not be more the opposite given the government was shut down yesterday (Monday) due to the snow. Most all of what has been negotiated has been behind closed doors, with only the ruling party invited to participate. All the rhetoric about “If anyone out there has any good ideas, we want to hear them,” appears to be just hot air. Only one party actually got to bring any of their ideas to the floor for a vote. Despite the fact that Rasmussen has polled the public on healthcare reform and 57% do not want the government to do anything at this point, Congress seems determined to ignore the will of the people. Many have called their elected representatives to find no one answers the phone, email is answered by form letter that usually is not even relevant to what the person wrote. Local offices of elected officials are not taking calls from what my colleagues are reporting to me. Americans are frustrated because their voices are being flatly ignored.
It seems our elected officials do not realize healthcare is not like any other issue. People go back to work for healthcare coverage. The definition of a good job is that it has good benefits, especially health benefits. For most people this is a giant security blanket. They will take a lesser paying job in order to get coverage.
What is most disturbing is the fact that Congress fails to appreciate that the uninsured are not a static group of people. According to a 2004 CBO report, “About 30 percent of Americans under age 65 who become uninsured in a given year remain so for more than 12 months, while nearly half obtain coverage within four months.” Given that most are only transiently uninsured, one must ask. “What is the purpose of remaking 1/6 of the economy and financing it with high taxes to build a system that is not scheduled for implementation for four years, for people who will not likely need coverage by then?”
Politicians, beware passing any of the currently proposed healthcare bills. Failure to recognize that this unlike any other matter before Congress, will surely mean peril in next fall’s election and beyond.
It seems our elected officials do not realize healthcare is not like any other issue. People go back to work for healthcare coverage. The definition of a good job is that it has good benefits, especially health benefits. For most people this is a giant security blanket. They will take a lesser paying job in order to get coverage.
What is most disturbing is the fact that Congress fails to appreciate that the uninsured are not a static group of people. According to a 2004 CBO report, “About 30 percent of Americans under age 65 who become uninsured in a given year remain so for more than 12 months, while nearly half obtain coverage within four months.” Given that most are only transiently uninsured, one must ask. “What is the purpose of remaking 1/6 of the economy and financing it with high taxes to build a system that is not scheduled for implementation for four years, for people who will not likely need coverage by then?”
Politicians, beware passing any of the currently proposed healthcare bills. Failure to recognize that this unlike any other matter before Congress, will surely mean peril in next fall’s election and beyond.
Friday, December 11, 2009
Part II: Let's just import our drugs!
Even legitimate importation of drugs by Big Pharma from their overseas manufacturing facilities has caused problems. Recall the heparin manufactured in China by Baxter Healthcare, which was contaminated by over-sulfonated chondroitin sulfate, a cheaper substance that somewhat mimics heparin’s anticoagulant activity. This was deliberate sabotage by the chemists and managers working in the Chinese plant at the expense of the public.
The FDA’s answer to counterfeit drugs and devices has been to open offices in Beijing, Guangzhou and Shanghai, other locations including India, the Middle East, Latin America and Europe. FDA employees are planning on inspecting products and developing liaisons with Chinese officials and groups. While developing liaisons with exporting governments is good, it is important to understand how ineffective it is for the FDA to go it alone on inspecting tours. According to a Reuter’s article that ran in November 2007:
"U.S. regulators inspect few foreign makers of pharmaceutical ingredients and have no accurate count of how many companies supply the American market, a watchdog arm of Congress said on Thursday. Data from the Food and Drug Administration suggest the agency inspects only 7 percent of foreign drugmakers each year, the Government Accountability Office (GAO) told lawmakers. The FDA lacks an accurate list of foreign sites subject to inspection because officials rely on conflicting databases, the GAO said. The agency cannot say how many of the overseas sites have never been visited, the GAO added.
Investigators uncovered similar problems when they reviewed the FDA’s oversight of foreign drug manufacturers in 1998, said Marcia Crosse, the GAO’s director of health-care issues. “Until FDA responds to systemic weaknesses in the management of this important program, it cannot provide the needed assurance that the drug supply reaching our citizens is appropriately scrutinized and safe,” Crosse told the House of Representatives Energy and Commerce subcommittee on oversight and investigations.
Foreign-made medicines are common in Americans’ medicine cabinets. More than 80 percent of active pharmaceutical ingredients now come from other countries, with more than half from India and China, lawmakers said.
The FDA is required to inspect U.S. drug plants every two years, but there is no set timeline for foreign facilities that supply drugs or their ingredients to the United States. One agency database lists more than 3,000 foreign sites registered to market drugs in the United States in fiscal 2007, while another put the number as high as 6,800. At the current pace, it would take the FDA 13 years to inspect each of the 3,000-plus firms once, the GAO said.
…William Hubbard, a former FDA associate commissioner, said the nation was vulnerable. “My concern is it’s only a matter of time if we don’t fix this,” Hubbard said.
FDA Commissioner Andrew von Eschenbach said the agency was “taking an aggressive approach” to adapt to the rapid globalization of drug manufacturing. Initial steps include improving computer systems and deploying FDA personnel to foreign locations for long-term assignments. “We agree we must revamp our entire strategy ... we are doing this,” von Eschenbach told the committee.
…Lawmakers will pursue legislation to give the FDA more funding for inspections and computer upgrades, said Michigan Democratic Rep. Bart Stupak, the subcommittee chairman. “I believe we have an opportunity to fix FDA’s foreign drug program before Americans are sickened or killed,” he said."
The bottom line is that the U.S. government does not have any money to waste. While we may set up offices in countries or cities where we have considerable business or there are an abundance of manufacturing facilities to facilitate trade, it is impractical to open offices everywhere. We do need to split up this task with our fellow First World countries that are also likely to be importing drugs from the same manufacturers.
We cannot waste our government’s resources putting offices in every country that might wish to export drugs to us. If foreign facilities have not been inspected and products randomly tested by us or our First World trading partners, then their products should be quarantined on entry until random samples from each shipment are tested either by the FDA or a government-authorized independent laboratory, at the expense of the exporter.
When pharmaceutical companies want to import medicines from their overseas facilities other than ones in another First World country, those facilities should be required to employ First World expats as the general managers, senior staff and QA personnel. This is not being elitist. The major problem in the Third World is the state of mind, rather than a lack of money; what is and is not acceptable there is often considerably different than in the First World. Consider Europe after the Second World War. Despite the devastation in a city like Milan, a good deal of the destruction had been repaired within seven years and commerce was functioning normally. Yet seven years after going into Iraq and hundreds of billions of dollars later, we have yet to see what resembles a First World country. We won both wars, but the success of the people in creating or recreating a First World country is vastly different. Italy was already a First World country. In the First World, people have a different set of standards and expectations for themselves and how they do business, including how they provide goods and services. In the Third World, particularly in the former communist countries I have worked in, the mentality tends to resemble a form of Ferengi capitalism. A Third World country generally does not move to a First World country in one generation. It usually takes two generations of education and seeing First World business practices for a country to move up into the First World. Until then, expat management is essential.
While we should be clear about the process and pleasant to those exporters who wish to comply, we should not let any country twist our arm by bringing politics into the situation. We should not tolerate the importation of drugs from overseas manufacturers with lower manufacturing standards than our own. This is a quality and safety issue. The FDA has a responsibility first and foremost to protect the American people.
This post is an excerpt from Healthcare Solved - Real Answers, No Politics.
The FDA’s answer to counterfeit drugs and devices has been to open offices in Beijing, Guangzhou and Shanghai, other locations including India, the Middle East, Latin America and Europe. FDA employees are planning on inspecting products and developing liaisons with Chinese officials and groups. While developing liaisons with exporting governments is good, it is important to understand how ineffective it is for the FDA to go it alone on inspecting tours. According to a Reuter’s article that ran in November 2007:
"U.S. regulators inspect few foreign makers of pharmaceutical ingredients and have no accurate count of how many companies supply the American market, a watchdog arm of Congress said on Thursday. Data from the Food and Drug Administration suggest the agency inspects only 7 percent of foreign drugmakers each year, the Government Accountability Office (GAO) told lawmakers. The FDA lacks an accurate list of foreign sites subject to inspection because officials rely on conflicting databases, the GAO said. The agency cannot say how many of the overseas sites have never been visited, the GAO added.
Investigators uncovered similar problems when they reviewed the FDA’s oversight of foreign drug manufacturers in 1998, said Marcia Crosse, the GAO’s director of health-care issues. “Until FDA responds to systemic weaknesses in the management of this important program, it cannot provide the needed assurance that the drug supply reaching our citizens is appropriately scrutinized and safe,” Crosse told the House of Representatives Energy and Commerce subcommittee on oversight and investigations.
Foreign-made medicines are common in Americans’ medicine cabinets. More than 80 percent of active pharmaceutical ingredients now come from other countries, with more than half from India and China, lawmakers said.
The FDA is required to inspect U.S. drug plants every two years, but there is no set timeline for foreign facilities that supply drugs or their ingredients to the United States. One agency database lists more than 3,000 foreign sites registered to market drugs in the United States in fiscal 2007, while another put the number as high as 6,800. At the current pace, it would take the FDA 13 years to inspect each of the 3,000-plus firms once, the GAO said.
…William Hubbard, a former FDA associate commissioner, said the nation was vulnerable. “My concern is it’s only a matter of time if we don’t fix this,” Hubbard said.
FDA Commissioner Andrew von Eschenbach said the agency was “taking an aggressive approach” to adapt to the rapid globalization of drug manufacturing. Initial steps include improving computer systems and deploying FDA personnel to foreign locations for long-term assignments. “We agree we must revamp our entire strategy ... we are doing this,” von Eschenbach told the committee.
…Lawmakers will pursue legislation to give the FDA more funding for inspections and computer upgrades, said Michigan Democratic Rep. Bart Stupak, the subcommittee chairman. “I believe we have an opportunity to fix FDA’s foreign drug program before Americans are sickened or killed,” he said."
The bottom line is that the U.S. government does not have any money to waste. While we may set up offices in countries or cities where we have considerable business or there are an abundance of manufacturing facilities to facilitate trade, it is impractical to open offices everywhere. We do need to split up this task with our fellow First World countries that are also likely to be importing drugs from the same manufacturers.
We cannot waste our government’s resources putting offices in every country that might wish to export drugs to us. If foreign facilities have not been inspected and products randomly tested by us or our First World trading partners, then their products should be quarantined on entry until random samples from each shipment are tested either by the FDA or a government-authorized independent laboratory, at the expense of the exporter.
When pharmaceutical companies want to import medicines from their overseas facilities other than ones in another First World country, those facilities should be required to employ First World expats as the general managers, senior staff and QA personnel. This is not being elitist. The major problem in the Third World is the state of mind, rather than a lack of money; what is and is not acceptable there is often considerably different than in the First World. Consider Europe after the Second World War. Despite the devastation in a city like Milan, a good deal of the destruction had been repaired within seven years and commerce was functioning normally. Yet seven years after going into Iraq and hundreds of billions of dollars later, we have yet to see what resembles a First World country. We won both wars, but the success of the people in creating or recreating a First World country is vastly different. Italy was already a First World country. In the First World, people have a different set of standards and expectations for themselves and how they do business, including how they provide goods and services. In the Third World, particularly in the former communist countries I have worked in, the mentality tends to resemble a form of Ferengi capitalism. A Third World country generally does not move to a First World country in one generation. It usually takes two generations of education and seeing First World business practices for a country to move up into the First World. Until then, expat management is essential.
While we should be clear about the process and pleasant to those exporters who wish to comply, we should not let any country twist our arm by bringing politics into the situation. We should not tolerate the importation of drugs from overseas manufacturers with lower manufacturing standards than our own. This is a quality and safety issue. The FDA has a responsibility first and foremost to protect the American people.
This post is an excerpt from Healthcare Solved - Real Answers, No Politics.
Thursday, December 10, 2009
Part 1: Let’s just import what we need!
This is a common attitude among the public and politicians. The American Association of Retired Persons endorses it and is organizing a grassroots campaign to support the idea. It saves all the work in trying to actually fix the problem—or does it?
It is common for retirees in Sun City, AZ, to carpool down to Mexico for their medications every month or two to save money. In my hometown of Youngstown, OH, day-trips by bus are organized to take Americans to Canada for their prescription drugs. The Internet has a proliferation of advertisements and spam e-mails for cheap prescription drugs. Why should Americans have to pay top dollar? (The answer is we shouldn’t—but don’t stop reading here.)
While it might be all right to go to another First World country to purchase medication, it is not all right to run off to the Second or Third World to do so. Before anyone thinks this unfair, consider that one of the top issues each year at the World Health Organization’s Annual Assembly is the problem of counterfeit products, whether fake, “watered” down or substituted, and the problem is increasing.
"..Increasingly easy access to sophisticated technologies such as those for printing and manufacturing, have made it more difficult for governments and other concerned parties to combat counterfeiters of medical products effectively…the extent of counterfeiting is impossible to quantify…Counterfeiting affects all medical products: from medicines and pharmaceutical ingredients to medical devices and diagnostics…Counterfeit products have been detected in most of WHO’s Member States and in all its regions. Cases have involved widely used medicines such as atorvastatin [Lipitor] and paracetamol [Tylenol], limited use medicines such as growth hormone, paclitaxal [Taxol], and filgrastim [Neupogen], erectile dysfunction medicines and medical devices such as contact lenses, condoms, surgical mesh and diagnostic test strips used by diabetic patients to monitor their blood glucose concentrations. Both expensive products and cheap ones, generic and branded products are being counterfeited with the result that they appear in community pharmacies and hospitals, as well as other less regulated settings.
Although organized crime and individuals acting alone have been associated with the manufacture and/or trade in, counterfeit medical products, in most cases the counterfeit products appear to have been internationally traded between previously unconnected groups or individuals. This fact puts an equal responsibility on importing and exporting countries.
Many factors of varying importance between Member states contribute to creating an environment where the manufacture of, and trade in, counterfeit medical products can thrive:
• Governments’ unwillingness to recognize the existence or gravity of the problem
• Inadequate legal framework and penalties
• Weak administration and coordination, with measures not focused on fighting counterfeiting
• Ineffective control of manufacturing, import and distribution of medical products
• Ineffective collaboration among bodies and institutions, such as health authorities, police, customs and the judiciary, involved in regulation, control, investigation and prosecution
• Ineffective collaboration and exchange of information between the public and private sector
• Insufficient collaboration and exchange of information
Besides the ubiquitous corruption, several other socioeconomic factors, many of which are specific to some countries, or particular areas inside a country, undermine efforts against counterfeiting:
• National drug policies that prioritize economic over public health aspects of medicine manufacturing, with the result that exporting takes priority over compliance with good manufacturing practices.
• Extreme fragmentation of distribution channels involving an unnecessarily large number of transactions, thereby increasing the opportunities for counterfeiters to infiltrate the normal distribution system
• Existence of “extraterritorial” trade zones which largely escape from regulatory and enforcement oversight and goods and their accompanying documentation can be manipulated
• Inadequate access to health services and reliable pharmaceutical supply channels that creates opportunities for “informal operators” who establish “informal supply systems” purportedly to meet populations’ real needs
• Absence of or insufficient social security coverage in countries that do not regulate prices; the resulting search by patients for better prices often leads to fierce competition among vendors and opens opportunities for counterfeiters who can offer unbeatable prices
• Illiteracy and poverty, which puts patients at a particular disadvantage
• Unregulated Internet trade, where unscrupulous sellers can hide their identity and the true origin of traded medical products
• Third-party manufacturing, which, if not properly and carefully supervised, may lead to the unauthorized use of manufacturing techniques and packaging materials." [ Counterfeit medical products. Report by the Secretariat – WHO. 61st World Health Assembly. Provisional agenda item 11.13, April 7, 2008]
This post is an excerpt from Healthcare Solved - Real Answers, No Politics.
It is common for retirees in Sun City, AZ, to carpool down to Mexico for their medications every month or two to save money. In my hometown of Youngstown, OH, day-trips by bus are organized to take Americans to Canada for their prescription drugs. The Internet has a proliferation of advertisements and spam e-mails for cheap prescription drugs. Why should Americans have to pay top dollar? (The answer is we shouldn’t—but don’t stop reading here.)
While it might be all right to go to another First World country to purchase medication, it is not all right to run off to the Second or Third World to do so. Before anyone thinks this unfair, consider that one of the top issues each year at the World Health Organization’s Annual Assembly is the problem of counterfeit products, whether fake, “watered” down or substituted, and the problem is increasing.
"..Increasingly easy access to sophisticated technologies such as those for printing and manufacturing, have made it more difficult for governments and other concerned parties to combat counterfeiters of medical products effectively…the extent of counterfeiting is impossible to quantify…Counterfeiting affects all medical products: from medicines and pharmaceutical ingredients to medical devices and diagnostics…Counterfeit products have been detected in most of WHO’s Member States and in all its regions. Cases have involved widely used medicines such as atorvastatin [Lipitor] and paracetamol [Tylenol], limited use medicines such as growth hormone, paclitaxal [Taxol], and filgrastim [Neupogen], erectile dysfunction medicines and medical devices such as contact lenses, condoms, surgical mesh and diagnostic test strips used by diabetic patients to monitor their blood glucose concentrations. Both expensive products and cheap ones, generic and branded products are being counterfeited with the result that they appear in community pharmacies and hospitals, as well as other less regulated settings.
Although organized crime and individuals acting alone have been associated with the manufacture and/or trade in, counterfeit medical products, in most cases the counterfeit products appear to have been internationally traded between previously unconnected groups or individuals. This fact puts an equal responsibility on importing and exporting countries.
Many factors of varying importance between Member states contribute to creating an environment where the manufacture of, and trade in, counterfeit medical products can thrive:
• Governments’ unwillingness to recognize the existence or gravity of the problem
• Inadequate legal framework and penalties
• Weak administration and coordination, with measures not focused on fighting counterfeiting
• Ineffective control of manufacturing, import and distribution of medical products
• Ineffective collaboration among bodies and institutions, such as health authorities, police, customs and the judiciary, involved in regulation, control, investigation and prosecution
• Ineffective collaboration and exchange of information between the public and private sector
• Insufficient collaboration and exchange of information
Besides the ubiquitous corruption, several other socioeconomic factors, many of which are specific to some countries, or particular areas inside a country, undermine efforts against counterfeiting:
• National drug policies that prioritize economic over public health aspects of medicine manufacturing, with the result that exporting takes priority over compliance with good manufacturing practices.
• Extreme fragmentation of distribution channels involving an unnecessarily large number of transactions, thereby increasing the opportunities for counterfeiters to infiltrate the normal distribution system
• Existence of “extraterritorial” trade zones which largely escape from regulatory and enforcement oversight and goods and their accompanying documentation can be manipulated
• Inadequate access to health services and reliable pharmaceutical supply channels that creates opportunities for “informal operators” who establish “informal supply systems” purportedly to meet populations’ real needs
• Absence of or insufficient social security coverage in countries that do not regulate prices; the resulting search by patients for better prices often leads to fierce competition among vendors and opens opportunities for counterfeiters who can offer unbeatable prices
• Illiteracy and poverty, which puts patients at a particular disadvantage
• Unregulated Internet trade, where unscrupulous sellers can hide their identity and the true origin of traded medical products
• Third-party manufacturing, which, if not properly and carefully supervised, may lead to the unauthorized use of manufacturing techniques and packaging materials." [ Counterfeit medical products. Report by the Secretariat – WHO. 61st World Health Assembly. Provisional agenda item 11.13, April 7, 2008]
This post is an excerpt from Healthcare Solved - Real Answers, No Politics.
Wednesday, December 9, 2009
A Duty to Warn: Healthcare Win or Financial Ruin
Just when we are convinced our politicians couldn't possibly do anything more ridiculous, they manage to exceed our expectations. Last night, the Senate reached a "compromise" on the healthcare bill. The plan includes lowering the age for Medicare to 55 for the uninsured and subsidizing it. There is also a proposed private plan option overseen by the OPM Federal Employee Health Benefits Plan. It is unclear from the details released yesterday exactly who this private plan is supposed to cover. We will have to wait to for the details to be released. However, should it not work as planned, these enrollees will become part of some yet to be determined government plan.
According to a speech given by Richard W. Fisher president & CEO of the Federal Reserve Bank of Dallas, Medicare already is projected to have $86 trillion in unfunded liabilities given those alive today. Last year, according to the Government Accountability Office (GAO), Medicare Part A (hospitalization) benefits began to exceed program tax in their revenues. The difference was made up by Medicare's Hospital Insurance (HI) Trust Fund by redeeming trust fund assets. According to the 2009 Annual Reports on Social Security and Medicare, “Growing annual deficits are projected to exhaust HI reserves in 2017…In addition, the Medicare Supplementary Medical Insurance (SMI) Trust Fund that pays for physician services and the prescription drug benefit will continue to require general revenue financing and charges on beneficiaries that grow substantially faster than the economy and beneficiary incomes over time.” [Note: This is 2 years earlier than projected last year.] We already have a program the Medicare trustees reported is "unsustainable," whose eligibility age should have been raised over the years to 69 or 70 given that Americans are living over 4 years longer than they were when the program started in 1965. This is a pay as you go program. The percentage of the eligible population in 1965 was 9%; today it's 13% and in 20 years it will be 19%. As you can see, less people are working to support a greater percentage of retirees. Adding more potential beneficiaries will only help to dramatically speed up the destabilization of healthcare benefits for current beneficiaries. There will be no choice but to ration care for our elderly.
Despite this, our politicians have decided to expand the program. This is outrageously fiscally irresponsible and catastrophically stupid. Did not one of our elected officials in Washington listen to the business news yesterday morning, when Moody's reported the US Government was in danger of losing its AAA credit rating in 2013?!?! Remember, this is the same group that has often been late to the corporate bankruptcy parties, only downgrading companies after the fact. This time Moody's sounded the alarm in time to warn us, yet Congress continues the spending unabated. Given this continuing pattern and the latest bill, count on it happening sooner rather than later. If our country loses its AAA credit rating, paying for healthcare will be the least of our worries. The dollar will instantly, irrevocably lose its world reserve currency status. That would create a worldwide panic, economic collapse and chaos. Make no mistake, the US would cease to be the economic power we know today. Our lives will be changed...just not the way any of us wants.
According to a speech given by Richard W. Fisher president & CEO of the Federal Reserve Bank of Dallas, Medicare already is projected to have $86 trillion in unfunded liabilities given those alive today. Last year, according to the Government Accountability Office (GAO), Medicare Part A (hospitalization) benefits began to exceed program tax in their revenues. The difference was made up by Medicare's Hospital Insurance (HI) Trust Fund by redeeming trust fund assets. According to the 2009 Annual Reports on Social Security and Medicare, “Growing annual deficits are projected to exhaust HI reserves in 2017…In addition, the Medicare Supplementary Medical Insurance (SMI) Trust Fund that pays for physician services and the prescription drug benefit will continue to require general revenue financing and charges on beneficiaries that grow substantially faster than the economy and beneficiary incomes over time.” [Note: This is 2 years earlier than projected last year.] We already have a program the Medicare trustees reported is "unsustainable," whose eligibility age should have been raised over the years to 69 or 70 given that Americans are living over 4 years longer than they were when the program started in 1965. This is a pay as you go program. The percentage of the eligible population in 1965 was 9%; today it's 13% and in 20 years it will be 19%. As you can see, less people are working to support a greater percentage of retirees. Adding more potential beneficiaries will only help to dramatically speed up the destabilization of healthcare benefits for current beneficiaries. There will be no choice but to ration care for our elderly.
Despite this, our politicians have decided to expand the program. This is outrageously fiscally irresponsible and catastrophically stupid. Did not one of our elected officials in Washington listen to the business news yesterday morning, when Moody's reported the US Government was in danger of losing its AAA credit rating in 2013?!?! Remember, this is the same group that has often been late to the corporate bankruptcy parties, only downgrading companies after the fact. This time Moody's sounded the alarm in time to warn us, yet Congress continues the spending unabated. Given this continuing pattern and the latest bill, count on it happening sooner rather than later. If our country loses its AAA credit rating, paying for healthcare will be the least of our worries. The dollar will instantly, irrevocably lose its world reserve currency status. That would create a worldwide panic, economic collapse and chaos. Make no mistake, the US would cease to be the economic power we know today. Our lives will be changed...just not the way any of us wants.
Tuesday, December 8, 2009
Correction: Mammogram Recommendations
Correction: On November 17 post on mammogram recommendations contained a misstatement. Based on the studies available in 2002, the USPSTF DID recommend in women age 40-49 receive annual mammograms. Since the verification hotlink was not included in the post, the only reasonable explanation for this error was that I had mistakenly viewed the previous recommendations (also found in the 2nd Print Edition of the US Guides) of the Task Force, which agreed with the present recommendations - my apologies. We will make certain the hotlinks are included in future posts. As of November 22, these post have been peer-reviewed by the AOCOPM publications committee, which will hopefully catch any errors prior to posting.
Some medical commentators, such as Bernadine Healy MD, have said that the Task Force is always flip-flopping on their recommendations. However, the Task Force is really looking at the whole body of scientific evidence available to us at a given point in time. Naturally, over time as evidence accumulates and studies are repeated, theories are either verified or disproven. This is why the standard of care for any disease typically does not change with one study. How many health recommendations have changed over the years – such as to use margarine rather than butter, would anyone still make that recommendation today? How is public health any different from any other area of medicine practice?
This mammogram discussion also brings to light the conflicting recommendations as to what constitutes the standard of care in medicine today. The issue is that there are different standards for the same disease across specialties and across the first world. Ironically, the USPSTF is recognized as “the standard” worldwide for making prevention guidelines because of the extensive review of medical research that goes into the process to determine public health guidelines for the general population. The American Cancer Society and other groups are looking at the sub-segment of the population diagnosed with cancer, not the proportion of those people relative to the entire population. Interestingly, no one has mentioned that these groups may have their own political, legal or monetary concerns.
From a public health perspective, if it costs more to screen people to find one case of disease than it does to treat one case of disease (at the average stage it would be found), there is no point in screening. It costs more than it’s worth. [Obviously the individual who may have cancer doesn’t feel that way. But from a societal standpoint, where money is not an unlimited commodity, we must seek the biggest bang for our healthcare buck.] In this case, a better screening test that does not yield a cumulative 43% false-positive rate by the ninth mammogram or a cheaper one to make it worthwhile for this age group.
Some medical commentators, such as Bernadine Healy MD, have said that the Task Force is always flip-flopping on their recommendations. However, the Task Force is really looking at the whole body of scientific evidence available to us at a given point in time. Naturally, over time as evidence accumulates and studies are repeated, theories are either verified or disproven. This is why the standard of care for any disease typically does not change with one study. How many health recommendations have changed over the years – such as to use margarine rather than butter, would anyone still make that recommendation today? How is public health any different from any other area of medicine practice?
This mammogram discussion also brings to light the conflicting recommendations as to what constitutes the standard of care in medicine today. The issue is that there are different standards for the same disease across specialties and across the first world. Ironically, the USPSTF is recognized as “the standard” worldwide for making prevention guidelines because of the extensive review of medical research that goes into the process to determine public health guidelines for the general population. The American Cancer Society and other groups are looking at the sub-segment of the population diagnosed with cancer, not the proportion of those people relative to the entire population. Interestingly, no one has mentioned that these groups may have their own political, legal or monetary concerns.
From a public health perspective, if it costs more to screen people to find one case of disease than it does to treat one case of disease (at the average stage it would be found), there is no point in screening. It costs more than it’s worth. [Obviously the individual who may have cancer doesn’t feel that way. But from a societal standpoint, where money is not an unlimited commodity, we must seek the biggest bang for our healthcare buck.] In this case, a better screening test that does not yield a cumulative 43% false-positive rate by the ninth mammogram or a cheaper one to make it worthwhile for this age group.
Friday, November 27, 2009
HR3962: Duty or Charity - Covering Congenital or Developmental Deformities
HR 3962 assures that children with congenital or developmental deformities be covered under group health plans. But children born to a "covered" parent already have these benefits. The question is - who will benefit from this rule change?
It is quite popular for those who would like to adopt children to go abroad to do so. Many choose to adopt a child with special needs, such as a cleft palate, who would be less likely to be adopted by a local couple. These children may require one or several surgeries as they grow. No doubt, this is a noble and charitable deed. This is not an unknown risk, the parents had full disclosure of the condition when they adopted the child. Often employer health plans willingly choose to extend coverage for such conditions under their plan in these circumstances. Understanding that such generous coverage necessitates higher premiums to pay for it, the question is should an employer-provided health plan be forced to participate in the employee's charity? Health plans do not typically cover adoption as part of their reproductive health options coverage. Parents pay tens of thousands of dollars of their own savings to adopt. Is it unreasonable for them to bear the full
expense of their decisions, rather than mandate it be cost-shifted to their employers, particularly in these difficult economic times?
This does not need to preclude parents from adopting a child with congenital or developmental deformities. Today, many developing countries have first-world internationally accredited hospitals where these children can have the necessary procedures at a tiny fraction of what it would cost for the same care here. It may be easier for the child and parents, given the staff speak the child's native language, as well as English.
It is quite popular for those who would like to adopt children to go abroad to do so. Many choose to adopt a child with special needs, such as a cleft palate, who would be less likely to be adopted by a local couple. These children may require one or several surgeries as they grow. No doubt, this is a noble and charitable deed. This is not an unknown risk, the parents had full disclosure of the condition when they adopted the child. Often employer health plans willingly choose to extend coverage for such conditions under their plan in these circumstances. Understanding that such generous coverage necessitates higher premiums to pay for it, the question is should an employer-provided health plan be forced to participate in the employee's charity? Health plans do not typically cover adoption as part of their reproductive health options coverage. Parents pay tens of thousands of dollars of their own savings to adopt. Is it unreasonable for them to bear the full
expense of their decisions, rather than mandate it be cost-shifted to their employers, particularly in these difficult economic times?
This does not need to preclude parents from adopting a child with congenital or developmental deformities. Today, many developing countries have first-world internationally accredited hospitals where these children can have the necessary procedures at a tiny fraction of what it would cost for the same care here. It may be easier for the child and parents, given the staff speak the child's native language, as well as English.
Thursday, November 26, 2009
Wednesday, November 25, 2009
HR 3962: Domestic Violence - No Longer PreExisting: Is This Enabling?
Clearly, a first case of domestic violence should be covered under any health plan. The question is how many times should a person let someone beat the daylights out of them and a third party be forced to pay for their care? Given that mental health coverage is unlimited under this bill, shouldn't there be some personal responsibility on the part of the patient to get the help they need to assure this doesn't happen again? Would it not seem reasonable that if this person is seeking treatment and another episode occurs, it should be covered,
but any subsequent costs incurred as a result of abuse should be the patient's responsibility? To force insurers and employers to continue covering the costs of domestic violence makes them in essence a facilitator of abuse. Does this really help the patient come to terms with the situation?
but any subsequent costs incurred as a result of abuse should be the patient's responsibility? To force insurers and employers to continue covering the costs of domestic violence makes them in essence a facilitator of abuse. Does this really help the patient come to terms with the situation?
Monday, November 23, 2009
HR 3962: Why is Government Insuring the Already Well-Insured?
HR 3962 provides current retirees with protection against reductions in retiree health benefits now offered by companies or employee organizations. Historically, this has been a popular benefit with unionized companies, particularly in manufacturing. This bill does not mean that such plans must continue the same benefits for current employees. Most retiree health plans will not be able to as they tend to be underfunded given usage patterns and health status. With the Cadillac health plans provided, these employees are accustomed to going to the doctor for every sniffle. These retirees also tend to have metabolic syndrome - obesity, diabetes and hypertension, as well as, cardiovascular disease and tend to need joint replacements to a greater degree than the general population.
However, retirees need not worry because under this bill the US government becomes the reinsurer of retiree health benefits. This means the US taxpayer will underwrite future benefits for these folks. Here's how it works: If the retiree has a large claim, the plan will pay the first $15 thousand in medical expenses. The government will pay 80% of the next $75 thousand in claims up to $90 thousand in claims. If there is a $90 thousand claiming a given year, the US Government will reimburse the plan $60 thousand or in this example 2/3 of the costs. Benefits will be paid from the Retiree Reserve Trust Fund, with $10 billion from the US Treasury. It would seem these people are better off than most retirees. What reason would our politicians in Washington have for being so generous with our tax dollars for people who already have retiree health benefits?
According to this legislation, the DHHS Secretary can stop taking applications for participation in the program or reduce payouts at any time to ensure the government reinsurance program does not exceed the appropriated funds. This gives the government considerable leverage over private retiree health plans. It also gives the government considerable leeway in how to administer the trust fund, who may receive reimbursement and at what levels should the fund run out of funds. Given this $10 billion is a one time appropriation according to the CBO budget analysis (Page 11), what happens when the money does run out? This would seem to place the current politicians in Congress in a powerful position for future elections with one of the most active and well-mobilized voting blocks.
However, retirees need not worry because under this bill the US government becomes the reinsurer of retiree health benefits. This means the US taxpayer will underwrite future benefits for these folks. Here's how it works: If the retiree has a large claim, the plan will pay the first $15 thousand in medical expenses. The government will pay 80% of the next $75 thousand in claims up to $90 thousand in claims. If there is a $90 thousand claiming a given year, the US Government will reimburse the plan $60 thousand or in this example 2/3 of the costs. Benefits will be paid from the Retiree Reserve Trust Fund, with $10 billion from the US Treasury. It would seem these people are better off than most retirees. What reason would our politicians in Washington have for being so generous with our tax dollars for people who already have retiree health benefits?
According to this legislation, the DHHS Secretary can stop taking applications for participation in the program or reduce payouts at any time to ensure the government reinsurance program does not exceed the appropriated funds. This gives the government considerable leverage over private retiree health plans. It also gives the government considerable leeway in how to administer the trust fund, who may receive reimbursement and at what levels should the fund run out of funds. Given this $10 billion is a one time appropriation according to the CBO budget analysis (Page 11), what happens when the money does run out? This would seem to place the current politicians in Congress in a powerful position for future elections with one of the most active and well-mobilized voting blocks.
Thursday, November 19, 2009
Where has opportunity gone?
While we wait to get a copy of the actual final Senate bill - Last week Senator Harry Reid was reportedly debating another proposed tax increase on those earning more than $250,000 per year to pay for the Senate healthcare proposal; it now appears to have been included in the final version. This time it is an increase in the Medicare payroll tax rate. [NYTimes]
It is extremely popular these days for politicians to consider taxing high income earners. This is perhaps not the wisest move from a tax standpoint, since the top 1% paid 39% of all individual income taxes according to CNN. Let us consider why most people or their families immigrated to this country in the first place – it was the land of opportunity.
Economist Richard Florida wrote about this phenomenon in his critically acclaimed book The Rise of the Creative Class, which describes the immigrant draw of cities like Pittsburgh in the industrial age. His sequel, The Flight of the Creative Class is a must read for any thinking person today. [For a taste, read the brief in the Harvard Business Review.] He calls the doctors, lawyers, engineers, scientists, architects, artists, musicians and professors the creative class. He says that it is America’s openness to new people, ideas and the opportunity to succeed that attracted the world’s talent to our shores. He also documents the social change that has occurred in this country over the last 20 years and the reasons why America appears to have lost some of its luster. Now, it seems our politicians are determined to punish our most productive workers. The question is, if this country continues down this path, why should the creative class remain here? These are people with desirable transferrable skills who can live and work anywhere in the world – But what does this have to do with healthcare?
At a medical conference less than two weeks ago, a physical medicine and rehab physician was telling me he was watching this healthcare debate and depending how it went, looking at potentially moving to New Zealand. He had no idea I had been working with the osteopathic medical profession for the last 10 years on expanding the opportunities for the profession; he was telling me where we had practice rights. But it does not end there, my own family practitioner and her husband, an internist, took a trip this spring to investigate a few countries where they thought might be a good place to live and work. None of these folks are international types, yet they are looking uproot their families and move to another country for a better opportunity. Sure, this is anecdotal evidence now; but in two years, given the current political trajectory, there will be objective studies to show the exodus of the creative class. In less than four years, it will be common knowledge. It is time our politicians wake up before we lose our talent and our tax base.
It is extremely popular these days for politicians to consider taxing high income earners. This is perhaps not the wisest move from a tax standpoint, since the top 1% paid 39% of all individual income taxes according to CNN. Let us consider why most people or their families immigrated to this country in the first place – it was the land of opportunity.
Economist Richard Florida wrote about this phenomenon in his critically acclaimed book The Rise of the Creative Class, which describes the immigrant draw of cities like Pittsburgh in the industrial age. His sequel, The Flight of the Creative Class is a must read for any thinking person today. [For a taste, read the brief in the Harvard Business Review.] He calls the doctors, lawyers, engineers, scientists, architects, artists, musicians and professors the creative class. He says that it is America’s openness to new people, ideas and the opportunity to succeed that attracted the world’s talent to our shores. He also documents the social change that has occurred in this country over the last 20 years and the reasons why America appears to have lost some of its luster. Now, it seems our politicians are determined to punish our most productive workers. The question is, if this country continues down this path, why should the creative class remain here? These are people with desirable transferrable skills who can live and work anywhere in the world – But what does this have to do with healthcare?
At a medical conference less than two weeks ago, a physical medicine and rehab physician was telling me he was watching this healthcare debate and depending how it went, looking at potentially moving to New Zealand. He had no idea I had been working with the osteopathic medical profession for the last 10 years on expanding the opportunities for the profession; he was telling me where we had practice rights. But it does not end there, my own family practitioner and her husband, an internist, took a trip this spring to investigate a few countries where they thought might be a good place to live and work. None of these folks are international types, yet they are looking uproot their families and move to another country for a better opportunity. Sure, this is anecdotal evidence now; but in two years, given the current political trajectory, there will be objective studies to show the exodus of the creative class. In less than four years, it will be common knowledge. It is time our politicians wake up before we lose our talent and our tax base.
Tuesday, November 17, 2009
USPSTF: Rationing or Rational Use of Screening Tools for Detecting Breast Cancer
Yesterday, the US Guide to Preventive Services released the latest guidelines on breast cancer screening recommendations. The press went wild and said this was government rationing of preventive testing. The "US Guide to Preventive Services Task Force Guidelines show stark differences of opinion with the specialty groups regarding screening, diagnostic and treatment methods. When the numbers came in, physicians following specialty colleges' recommendations were overtesting, overtreating and unnecessarily worrying patients. The research did not back up the specialty standards." Most of these recommendations are by convention rather than by scientific medical evidence.
Let's set the record straight - The USPSTF never recommended routine screening at 40 - there was insufficient evidence to recommend for or against routine mammography or clinical breast exams in the 40-49 y.o. age group for the general population - NOTHING CHANGED. It was the specialty & disease societies such as American Cancer Society, AMA and American College of Obstetrics and Gynecology that made these recommendations. Other groups, such as the American College of Physicians, said it should be based on the risk of the individual patient. It should always be based on the individual patient's need - these are population guidelines - of course, the patient in front of you may have different needs.
What did change? The 2002 Guidelines said mammography every 1-2 years was recommended for women age 50-69y.o., although recommendations for high risk women 40-49 and healthy women > or = 70 may be made on other grounds. Today's Guidelines say: Mammography screening is recommended every 2 years for women age 50-74. The USGPSTF is recommending screening for a LONGER period of time, NOT less.
Why every two years screening? Because mammograms are not benign - they expose a patient to radiation. The USPSTF also says "Although false-positive test results, overdiagnosis, and unnecessary earlier treatment are problems for all age groups, false-positive results are more common for women aged 40 to 49 years, whereas overdiagnosis is a greater concern for women in the older age groups." Subsequent biopsies will change the breast architecture and make it more difficult to interpret future exams. Evidence also shows that the more mammograms a woman has the more likely she will have a "false-positive" mammogram. According to a Harvard Pilgrim Healthcare study in the Journal of the National Cancer Institute which followed women over a 10-year period with "9747 screening mammograms, 6. 5% were false-positive; 23.8% of women experienced at least one false-positive result. After nine mammograms, the risk of a false-positive mammogram was 43.1%." Clearly more diagnostic testing does NOT equate to higher quality medical care.
Let's set the record straight - The USPSTF never recommended routine screening at 40 - there was insufficient evidence to recommend for or against routine mammography or clinical breast exams in the 40-49 y.o. age group for the general population - NOTHING CHANGED. It was the specialty & disease societies such as American Cancer Society, AMA and American College of Obstetrics and Gynecology that made these recommendations. Other groups, such as the American College of Physicians, said it should be based on the risk of the individual patient. It should always be based on the individual patient's need - these are population guidelines - of course, the patient in front of you may have different needs.
What did change? The 2002 Guidelines said mammography every 1-2 years was recommended for women age 50-69y.o., although recommendations for high risk women 40-49 and healthy women > or = 70 may be made on other grounds. Today's Guidelines say: Mammography screening is recommended every 2 years for women age 50-74. The USGPSTF is recommending screening for a LONGER period of time, NOT less.
Why every two years screening? Because mammograms are not benign - they expose a patient to radiation. The USPSTF also says "Although false-positive test results, overdiagnosis, and unnecessary earlier treatment are problems for all age groups, false-positive results are more common for women aged 40 to 49 years, whereas overdiagnosis is a greater concern for women in the older age groups." Subsequent biopsies will change the breast architecture and make it more difficult to interpret future exams. Evidence also shows that the more mammograms a woman has the more likely she will have a "false-positive" mammogram. According to a Harvard Pilgrim Healthcare study in the Journal of the National Cancer Institute which followed women over a 10-year period with "9747 screening mammograms, 6. 5% were false-positive; 23.8% of women experienced at least one false-positive result. After nine mammograms, the risk of a false-positive mammogram was 43.1%." Clearly more diagnostic testing does NOT equate to higher quality medical care.
Who is the US Preventive Services Task Force?
The past 24 hours I have heard at least a dozen media pundits commenting on when breast cancer screening should or shouldn’t be done. Apparently most seem to think that disease and specialty societies trump the US PSTF. They have bashed “government bureaucrats” who are apparently trying “to deny women care.”
Let’s understand the nature of this Task Force – It is lead by the Agency for Healthcare Research and Quality (AHRQ). All members reviewing breast cancer screeening, save the two PhD nurses, are physician experts, from various specialty colleges, academia and public health service; the majority also have public health degrees in addition. “Federal partners include the Centers for Disease Control and Prevention (CDC), Department of Defense (DOD), Centers for Medicare and Medicaid Services (CMS), Department of Veterans Affairs (VA), Health Resources and Services Administration (HRSA), National Institutes of Health (NIH), U.S. Army Center for Health Promotion and Preventive Medicine, and the U.S. Food and Drug Administration (FDA). Primary care partners include the American Academy of Family Physicians, American Academy of Pediatrics, American Academy of Physician Assistants, American College of Obstetricians and Gynecologists, American College of Physicians, American College of Preventive Medicine, America's Health Insurance Plans, the Canadian Task Force on Preventive Health Care, the National Committee for Quality Assurance, and the Pan American Health Organization.” [1]
“The USPSTF conducts rigorous, impartial assessments of the scientific evidence for the effectiveness of a broad range of clinical preventive services, including screening, counseling, and preventive medications. Its recommendations are considered the "gold standard" for clinical preventive services. [Here are the methods.] The mission of the USPSTF is to evaluate the benefits of individual services based on age, gender, and risk factors for disease; make recommendations about which preventive services should be incorporated routinely into primary medical care and for which populations; and identify a research agenda for clinical preventive care. Recommendations issued by the USPSTF are intended for use in the primary care setting… to present health care providers with…the evidence behind each recommendation, allowing clinicians to make informed decisions about implementation.” [2]
No other organization goes through such a rigorous examination of the evidence for clinical recommendations for the asymptomatic general population. These recommendations are obviously different than for a patient who is symptomatic, has a family history or would otherwise be considered high risk. It is also important to understand and weigh the capabilities, limitations, benefits and potential harms of a given screening test. The distinction not being made by the press is the difference between population medicine versus care of the individual patient.
Let’s understand the nature of this Task Force – It is lead by the Agency for Healthcare Research and Quality (AHRQ). All members reviewing breast cancer screeening, save the two PhD nurses, are physician experts, from various specialty colleges, academia and public health service; the majority also have public health degrees in addition. “Federal partners include the Centers for Disease Control and Prevention (CDC), Department of Defense (DOD), Centers for Medicare and Medicaid Services (CMS), Department of Veterans Affairs (VA), Health Resources and Services Administration (HRSA), National Institutes of Health (NIH), U.S. Army Center for Health Promotion and Preventive Medicine, and the U.S. Food and Drug Administration (FDA). Primary care partners include the American Academy of Family Physicians, American Academy of Pediatrics, American Academy of Physician Assistants, American College of Obstetricians and Gynecologists, American College of Physicians, American College of Preventive Medicine, America's Health Insurance Plans, the Canadian Task Force on Preventive Health Care, the National Committee for Quality Assurance, and the Pan American Health Organization.” [1]
“The USPSTF conducts rigorous, impartial assessments of the scientific evidence for the effectiveness of a broad range of clinical preventive services, including screening, counseling, and preventive medications. Its recommendations are considered the "gold standard" for clinical preventive services. [Here are the methods.] The mission of the USPSTF is to evaluate the benefits of individual services based on age, gender, and risk factors for disease; make recommendations about which preventive services should be incorporated routinely into primary medical care and for which populations; and identify a research agenda for clinical preventive care. Recommendations issued by the USPSTF are intended for use in the primary care setting… to present health care providers with…the evidence behind each recommendation, allowing clinicians to make informed decisions about implementation.” [2]
No other organization goes through such a rigorous examination of the evidence for clinical recommendations for the asymptomatic general population. These recommendations are obviously different than for a patient who is symptomatic, has a family history or would otherwise be considered high risk. It is also important to understand and weigh the capabilities, limitations, benefits and potential harms of a given screening test. The distinction not being made by the press is the difference between population medicine versus care of the individual patient.
Monday, November 16, 2009
Electronic Medical Records:Marginal Quality of Care & Length of Stay Benefits
Today's New York Times contains an article about Boston area hospitals entitled “Little benefit seen so far in electronic patient records.” At present, less than 2% of hospitals and less than 13% of offices have electronic medical resords (EMR) systems. Few of these are comprehensive systems with scheduling, patient intake information, consult notes, nursing notes, labs/diagnostics and billing, etc. The federal government has designated $19 billion in TARP money to help physicians and hospitals make the conversion claiming cost savings and improved patient care.
It seems finally we have the empiric evidence to support what medical professionals have long suspected – that EMRs do NOT translate to better hospital care or shorter lengths of stay. So why should a doctor's office spend $40-60 thousand plus $20 thousand annually in licensing fees for such a system? Why should a hospital system spend tens of millions and up to $100 million to implement such a system? Where is the return on investment?
There are four main issues in implementing electronic medical records.
1.These systems cost a lot of money.
2.The purchasers of EMRs are not the ones to reap the benefits of the system; benefits accrue to the patients, employers, insurers and government.
3.There is no readily exchangable format, as there is no off-the-shelf Microsoft Office version of EMRs that works well for the various specialties and levels of hospital care.
4.There is no means of readily assembling the patient's complete medical record from all sources from which they have sought care when they are sitting on the examining table in front of you.
The benefits of EMRs often touted are elimination of waste, fraud and abuse of the healthcare system. Yes, EMRs could decrease the costs of defensive medicine, estimated at 5-9% of total medical expenditures. They could decrease the need for repeated testing , lower perscription expenditures, facilitate authorization for procedures, verify services provided, shorten payment time, etc. But this does not necessarily occur just because an office or hospital has an EMR in place. There must be a way to access and assemble a complete record when needed. We don't need necessarily EMRs, what we really need is an electronic medical filing cabinet. Similar to the way the credit bureaus assemble financial records, we need a way for verified credentialed providers of healthcare to access the system when a patient is biometrically identified in their office. While the intricate details are too much for a blog, suffice it to say it could be done for the price of a print scanner and biometric scanner at a penny or so per transaction. [See Chapter 5 of Healthcare Solved, if you are curious for more details.]
It seems finally we have the empiric evidence to support what medical professionals have long suspected – that EMRs do NOT translate to better hospital care or shorter lengths of stay. So why should a doctor's office spend $40-60 thousand plus $20 thousand annually in licensing fees for such a system? Why should a hospital system spend tens of millions and up to $100 million to implement such a system? Where is the return on investment?
There are four main issues in implementing electronic medical records.
1.These systems cost a lot of money.
2.The purchasers of EMRs are not the ones to reap the benefits of the system; benefits accrue to the patients, employers, insurers and government.
3.There is no readily exchangable format, as there is no off-the-shelf Microsoft Office version of EMRs that works well for the various specialties and levels of hospital care.
4.There is no means of readily assembling the patient's complete medical record from all sources from which they have sought care when they are sitting on the examining table in front of you.
The benefits of EMRs often touted are elimination of waste, fraud and abuse of the healthcare system. Yes, EMRs could decrease the costs of defensive medicine, estimated at 5-9% of total medical expenditures. They could decrease the need for repeated testing , lower perscription expenditures, facilitate authorization for procedures, verify services provided, shorten payment time, etc. But this does not necessarily occur just because an office or hospital has an EMR in place. There must be a way to access and assemble a complete record when needed. We don't need necessarily EMRs, what we really need is an electronic medical filing cabinet. Similar to the way the credit bureaus assemble financial records, we need a way for verified credentialed providers of healthcare to access the system when a patient is biometrically identified in their office. While the intricate details are too much for a blog, suffice it to say it could be done for the price of a print scanner and biometric scanner at a penny or so per transaction. [See Chapter 5 of Healthcare Solved, if you are curious for more details.]
Thursday, November 12, 2009
HR 3962: Extension of Coverage vs. States Rights
HR 3962, Sec. 105 allows parents to keep their adult children under 27 years of age, who may or may not be in school or working, and are not enrolled in a health plan, enrolled under their parent's health plan. [Of course, the parent and the parent’s employer will pay the added premium for keeping the additional family member on the plan.] At present, state laws have varying ages and conditions under which children may be kept on their parent’s plan. This bill, however, nationalizes those requirements. It is interesting that Congress can nationalize administrative rules previously under the prerogative of the states to increase insurance coverage for Americans; however, Congress is unwilling to use the same logic to open up competition with a national health insurance market, a move that would significantly lower rates in many markets. If the idea is to get more people covered, wouldn’t making cheaper insurance coverage available to more people, more places be a good start?
Wednesday, November 11, 2009
HR 3962: Mental Health Parity is the End of Disability Insurance
Until HR 3962, mental health conditions were subject to a plan’s limits. While this change will no doubt have the effect of dramatically increasing healthcare expenditures, it will have catastrophic effects on the disability insurance industry. In fact, it will virtually eliminate it entirely within about 2 years.
Disability insurance is income insurance if you are sick or otherwise unable to work. Typically, there is a two-year limit on mental nervous illnesses. The thought is - if there is a problem, this should give the person adequate time to get the help they need to recover. Presumably, if a person was capable of working before, that person should be able to be treated.
There are a few things that one must understand about this product: Disability claims routinely go up when the economy goes down. They also rise when a given employer is having financial difficulties and the fear of layoffs is real. Not too surprisingly mental-nervous conditions top the claims list, with depression or anxiety leading the pack. In fact, if employees know it is likely that they will be laid off or given a pink slip, it is not uncommon for them to take preemptive action to assure their income by claiming disability. Since all it takes is a healthcare provider’s note to get the process started, some employees will have their provider write a note the very day they are laid off. Keep in mind, full benefits are good till the end of the day.
As the former Chief Medical Officer for a global disability and workers’ compensation carrier who has reviewed thousands of disability claims, this is what you will commonly see: Providers often refuse to release psychiatric notes claiming patient privacy, despite signed releases for exactly such records. They will often re-write office notes or summarize notes so that insurers do not know what treatment has been given. In fact, there is great variability and little coordination of the treatment that is given. Anyone from a licensed social worker, psychologist, masters level psychologist, masters level degree in counseling, doctoral psychologist, neuropsychologist, psychiatrist, family practioner, physician’s assistant or nurse practitioner may be “treating” the person.
Many times the mental-nervous issues are situational, in which work often helps, but little or no tools are given to the patient as to how to better cope, other than to write them off work. It seems patients often spend their sessions rehashing their problems. There is no documentation of actual counsel given or progress made. In medicine, if it isn’t written in the medical records, it wasn’t done. Often little or no objective testing has been done to determine exactly what the diagnosis is, or if it is even real, versus secondary gain – such as a disability check. Many real physical conditions never receive a full medical work-up. As with other conditions in medicine, medical personnel often add to the prescriptive regimen without checking to see if the medical regimen is causing the problem. Another important issue is the number of people diagnosed with personality disorders in the workplace. There is a prevailing notion that these diagnoses preclude people from working, when in fact many are capable of functioning at a very high level; the issue is how they relate to others, not whether they have the actual knowledge base to do the job.[See the article Personality Disorders in the Workplace.] Granted some disorders are more amenable to treatment than others, however, quite a number of those in the mental health field seem to think these diagnoses are a lifetime pass.
Due to the delays from providers and frequent lack of objective evidence or testing, it takes thousands of dollars and months of time to prove the whether or not the disability is legitimate. The two-year limit at least puts a tail on it for employers and insurers. This bill will mean a guaranteed income to age 65 for the insured who finds a cooperative provider or switches providers often enough to keep the insurer a couple of steps behind. Given the outlook for the economy and this legislation, no good company will be able to afford to continue to provide this valuable benefit to their employees. No disability insurer will be able to continue to stay in business if HR 3962 passes the Senate. Instead, expect disability carriers to stop renewing policies and begin liquidating operations in the coming year.
Disability insurance is income insurance if you are sick or otherwise unable to work. Typically, there is a two-year limit on mental nervous illnesses. The thought is - if there is a problem, this should give the person adequate time to get the help they need to recover. Presumably, if a person was capable of working before, that person should be able to be treated.
There are a few things that one must understand about this product: Disability claims routinely go up when the economy goes down. They also rise when a given employer is having financial difficulties and the fear of layoffs is real. Not too surprisingly mental-nervous conditions top the claims list, with depression or anxiety leading the pack. In fact, if employees know it is likely that they will be laid off or given a pink slip, it is not uncommon for them to take preemptive action to assure their income by claiming disability. Since all it takes is a healthcare provider’s note to get the process started, some employees will have their provider write a note the very day they are laid off. Keep in mind, full benefits are good till the end of the day.
As the former Chief Medical Officer for a global disability and workers’ compensation carrier who has reviewed thousands of disability claims, this is what you will commonly see: Providers often refuse to release psychiatric notes claiming patient privacy, despite signed releases for exactly such records. They will often re-write office notes or summarize notes so that insurers do not know what treatment has been given. In fact, there is great variability and little coordination of the treatment that is given. Anyone from a licensed social worker, psychologist, masters level psychologist, masters level degree in counseling, doctoral psychologist, neuropsychologist, psychiatrist, family practioner, physician’s assistant or nurse practitioner may be “treating” the person.
Many times the mental-nervous issues are situational, in which work often helps, but little or no tools are given to the patient as to how to better cope, other than to write them off work. It seems patients often spend their sessions rehashing their problems. There is no documentation of actual counsel given or progress made. In medicine, if it isn’t written in the medical records, it wasn’t done. Often little or no objective testing has been done to determine exactly what the diagnosis is, or if it is even real, versus secondary gain – such as a disability check. Many real physical conditions never receive a full medical work-up. As with other conditions in medicine, medical personnel often add to the prescriptive regimen without checking to see if the medical regimen is causing the problem. Another important issue is the number of people diagnosed with personality disorders in the workplace. There is a prevailing notion that these diagnoses preclude people from working, when in fact many are capable of functioning at a very high level; the issue is how they relate to others, not whether they have the actual knowledge base to do the job.[See the article Personality Disorders in the Workplace.] Granted some disorders are more amenable to treatment than others, however, quite a number of those in the mental health field seem to think these diagnoses are a lifetime pass.
Due to the delays from providers and frequent lack of objective evidence or testing, it takes thousands of dollars and months of time to prove the whether or not the disability is legitimate. The two-year limit at least puts a tail on it for employers and insurers. This bill will mean a guaranteed income to age 65 for the insured who finds a cooperative provider or switches providers often enough to keep the insurer a couple of steps behind. Given the outlook for the economy and this legislation, no good company will be able to afford to continue to provide this valuable benefit to their employees. No disability insurer will be able to continue to stay in business if HR 3962 passes the Senate. Instead, expect disability carriers to stop renewing policies and begin liquidating operations in the coming year.
Tuesday, November 10, 2009
HR 3962: Pre-existing condition or war injury?
Unless you have been out of the country or trapped under the cone of silence, you have no doubt heard that the House of Representatives narrowly passed HR 3962 – the Affordable Healthcare for America Act – Saturday night, 220 to 215. There are many issues in this bill that it seems both healthcare organizations and the media either haven’t read or didn’t understand. We will address them point by point over the next week or so.
Let us begin today by looking at those pesky pre-existing conditions...
SEC. 211. PROHIBITING PREEXISTING CONDITION EXCLUSIONS.
A qualified health benefits plan may not impose any preexisting condition exclusion (as defined in section 2701(b)(1)(A) of the Public Health Service Act) or otherwise impose any limit or condition on the coverage under the plan with respect to an individual or dependent based on any of the following: health status, medical condition, claims experience, receipt of health care, medical history, genetic information, evidence of insurability, disability, or source of injury (including conditions arising out of acts of domestic violence) or any similar factors.
As written, the burden of caring for our injured war veterans is lifted off the shoulders of the Veterans Administration and places it squarely on the backs of private insurers as our veterans transition back into society. Due to the rapid emergency medical response of our military, we have not had the number of deaths in Iraq & Afghanistan that we have in other wars; but we have had more injuries that previously would have killed our troops. Consequently, many have needed prosthetics and extensive rehabilitation. Good prosthetics cost tens of thousands of dollars and robotic prosthetics (hands that work like hands, such as the DEKA arm, rather than a hook) are near six figures.
This bill also provides for mental health parity. This means private insurers cannot limit mental health benefits. Given that in combination with the pre-ex elimination, the VA can also shift its mental health counseling to the private sector. With many of our troops having had multiple tours of duty, it should not be surprising that they will need some assistance readjusting back to civilian life. When vets get care at the VA, it is easier to gather data for researching what care works best and implement current standard of care treatment. In the private sector, this is much more difficult as it means educating all possible providers who may have varied or no experience treating vets.
In March, Uncle Sam floated the idea of having private insurers reimburse the Veterans Administration for care for service-related injuries. [Washington Post] After protests from veterans groups, the executive branch appeared to back off. Under this bill, House has managed to get the government off the hook again for its obligations to our wounded heroes. This is morally reprehensible.
Let us begin today by looking at those pesky pre-existing conditions...
SEC. 211. PROHIBITING PREEXISTING CONDITION EXCLUSIONS.
A qualified health benefits plan may not impose any preexisting condition exclusion (as defined in section 2701(b)(1)(A) of the Public Health Service Act) or otherwise impose any limit or condition on the coverage under the plan with respect to an individual or dependent based on any of the following: health status, medical condition, claims experience, receipt of health care, medical history, genetic information, evidence of insurability, disability, or source of injury (including conditions arising out of acts of domestic violence) or any similar factors.
As written, the burden of caring for our injured war veterans is lifted off the shoulders of the Veterans Administration and places it squarely on the backs of private insurers as our veterans transition back into society. Due to the rapid emergency medical response of our military, we have not had the number of deaths in Iraq & Afghanistan that we have in other wars; but we have had more injuries that previously would have killed our troops. Consequently, many have needed prosthetics and extensive rehabilitation. Good prosthetics cost tens of thousands of dollars and robotic prosthetics (hands that work like hands, such as the DEKA arm, rather than a hook) are near six figures.
This bill also provides for mental health parity. This means private insurers cannot limit mental health benefits. Given that in combination with the pre-ex elimination, the VA can also shift its mental health counseling to the private sector. With many of our troops having had multiple tours of duty, it should not be surprising that they will need some assistance readjusting back to civilian life. When vets get care at the VA, it is easier to gather data for researching what care works best and implement current standard of care treatment. In the private sector, this is much more difficult as it means educating all possible providers who may have varied or no experience treating vets.
In March, Uncle Sam floated the idea of having private insurers reimburse the Veterans Administration for care for service-related injuries. [Washington Post] After protests from veterans groups, the executive branch appeared to back off. Under this bill, House has managed to get the government off the hook again for its obligations to our wounded heroes. This is morally reprehensible.
Thursday, November 5, 2009
HR 3961, HR 3962, the Medicare SGR & the Debt
We are still awaiting the CBO's scoring of the bill which came out of the Senate majority leader's closed door discussions. Similar to the "bill" sent to the CBO by the Senate Finance Committee, it is still in the conceptual stage and has yet to be officially written.
On the other hand, the bills in the House were merged to form H.R. 3962, the Affordable Health Care for America Act, which was released October 29th. As mentioned in the analysis of the Baucus Bill, H.R. 3962 does not include fixing the physician reimbursement rate (Medicare SGR). While it claims to save the federal government $104 billion, it leaves in place the 21% SGR cut scheduled for 2010, and makes no further provisions to fix the formula. This is clearly unsustainable, as providers will have no choice but to opt out of the program, leaving seniors without care.
Interestingly a separate bill, H.R.3961, the Medicare Physician Payment Reform Act of 2009, was introduced the same day. It restructures the SGR formula, increasing physician payments for Medicare, Medicare Advantage and TRICARE. One quarter of that increase would come from premium increases paid by Medicare Part B enrollees. Ultimately, this bill is estimated to increase the direct spending of the Federal government by $210 billion over the 2010-2019 period.
According to the numbering system, it seems the Medicare Physician Payment Reform Bill was introduced first. It seems someone in the House was aware of the SGR problem. Since this wasn't an afterthought, wouldn't it have been logical to have “fixed” the problem in the comprehensive bill before introducing it? After all, for months politicians have been insisting that we must have ONE bill to reform healthcare. But without the "fix," House politicians could and did proceed to hold press conferences, claiming victory and “savings” for the American people all the while putting us $100+ billion further in debt. This behavior is disrespectful of the hardworking Americans who voted them into office and it does nothing to increase sustainability or affordability.
On the other hand, the bills in the House were merged to form H.R. 3962, the Affordable Health Care for America Act, which was released October 29th. As mentioned in the analysis of the Baucus Bill, H.R. 3962 does not include fixing the physician reimbursement rate (Medicare SGR). While it claims to save the federal government $104 billion, it leaves in place the 21% SGR cut scheduled for 2010, and makes no further provisions to fix the formula. This is clearly unsustainable, as providers will have no choice but to opt out of the program, leaving seniors without care.
Interestingly a separate bill, H.R.3961, the Medicare Physician Payment Reform Act of 2009, was introduced the same day. It restructures the SGR formula, increasing physician payments for Medicare, Medicare Advantage and TRICARE. One quarter of that increase would come from premium increases paid by Medicare Part B enrollees. Ultimately, this bill is estimated to increase the direct spending of the Federal government by $210 billion over the 2010-2019 period.
According to the numbering system, it seems the Medicare Physician Payment Reform Bill was introduced first. It seems someone in the House was aware of the SGR problem. Since this wasn't an afterthought, wouldn't it have been logical to have “fixed” the problem in the comprehensive bill before introducing it? After all, for months politicians have been insisting that we must have ONE bill to reform healthcare. But without the "fix," House politicians could and did proceed to hold press conferences, claiming victory and “savings” for the American people all the while putting us $100+ billion further in debt. This behavior is disrespectful of the hardworking Americans who voted them into office and it does nothing to increase sustainability or affordability.
Monday, November 2, 2009
Medicare, Medicare Supplemental & Medicare Advantage: Part III - Who enrolls in what plan?
A 2005 report by Emory University researchers and commissioned by the Blue Cross Blue Shield Association of America found the following:
Of eligible retirees, 18% percent only have Medicare coverage. It is important to note that 49% of African-Americans and 31% of Hispanics and 33% of Whites fall into this category. Over 30% of retirees have primary or supplemental coverage through employer or union retirement plans. Another 25% of those who are Medicare eligible purchase MedSup (Medigap) policies on their own. Another 13% are Medicare beneficiaries who are also on Medicaid or other public assistance plans. Medicare Advantage covers 13% of retirees (Today, this represents 10 million people.)
Of retirees without employer/union plans or Medicaid, 53% of Hispanics, 40% of African- Americans and 33% of whites are enrolled in Medicare Advantage plans.
Medicare Advantage plans are required to offer at minimum the same benefits as traditional Medicare. Many offer more coverage, including vision, dental and drug benefits. As a result, those with lower incomes (<$20,000) are quick to see the value in joining such programs. In fact, 18% of Medicaid eligible retirees join a Medicare Advantage program instead of Medicaid. [One wonders if this is because of the challenges in signing up for public assistance or because Medicare Advantage is preferred.] It was determined that Medicare Advantage plans provided a $1,128 per person savings to the state and federal government over Medicaid. According to the study, if Medicare Advantage was ended, 39% would join a MedSup plan. Another 39% would be left with only basic Medicare and 22% would join Medicaid. As discussed in the October 29th post, Congress is subsidizing benefits for Medicare Advantage enrollees. Poor and minority groups are disproportionately affected if these are eliminated. Since Medicare Advantage is more cost-efficient than Medicaid and has a 90+% satisfaction rate, perhaps there ought to be some means testing to qualify for these private sector programs. From a cost standpoint, perhaps would it be reasonable for government to encourage elderly Medicaid enrollees, in geographic areas where plans exist, to enroll in Medicaid Advantage programs.
Of eligible retirees, 18% percent only have Medicare coverage. It is important to note that 49% of African-Americans and 31% of Hispanics and 33% of Whites fall into this category. Over 30% of retirees have primary or supplemental coverage through employer or union retirement plans. Another 25% of those who are Medicare eligible purchase MedSup (Medigap) policies on their own. Another 13% are Medicare beneficiaries who are also on Medicaid or other public assistance plans. Medicare Advantage covers 13% of retirees (Today, this represents 10 million people.)
Of retirees without employer/union plans or Medicaid, 53% of Hispanics, 40% of African- Americans and 33% of whites are enrolled in Medicare Advantage plans.
Medicare Advantage plans are required to offer at minimum the same benefits as traditional Medicare. Many offer more coverage, including vision, dental and drug benefits. As a result, those with lower incomes (<$20,000) are quick to see the value in joining such programs. In fact, 18% of Medicaid eligible retirees join a Medicare Advantage program instead of Medicaid. [One wonders if this is because of the challenges in signing up for public assistance or because Medicare Advantage is preferred.] It was determined that Medicare Advantage plans provided a $1,128 per person savings to the state and federal government over Medicaid. According to the study, if Medicare Advantage was ended, 39% would join a MedSup plan. Another 39% would be left with only basic Medicare and 22% would join Medicaid. As discussed in the October 29th post, Congress is subsidizing benefits for Medicare Advantage enrollees. Poor and minority groups are disproportionately affected if these are eliminated. Since Medicare Advantage is more cost-efficient than Medicaid and has a 90+% satisfaction rate, perhaps there ought to be some means testing to qualify for these private sector programs. From a cost standpoint, perhaps would it be reasonable for government to encourage elderly Medicaid enrollees, in geographic areas where plans exist, to enroll in Medicaid Advantage programs.
Thursday, October 29, 2009
Medicare, Medicare Supplemental & Medicare Advantage: Part II
Congress is planning on making big cuts to the Medicare Advantage program claiming that it is subsidizing the private insurers for this program. Is this true? The answer is yes, it is subsidizing the health plan; but it is really subsidizing the beneficiaries, not the insurers. People saw value and as a result the number of people in these plans has grown. The payments/expenditures for beneficiaries are higher on average than traditional Medicare.
The reason lies in how Medicare Advantage plans are paid. The Medicare Modernization act of 2003 set into place the present system of payment. A private insurer places a bid for what price per person it is willing to offer Part A and Part B services in a given geographic area. If it is under the government’s benchmark rate that it is willing to pay in that geographic area, they split the difference. Under the rules, the government keeps 25% of the savings, and the insurer must provide the beneficiary with additional benefits or a rebate equivalent to 75% of the difference. For example, if Medicare is willing to pay $500 per person per month to the insurer and the insurer has bid $400 per person per month, there is a $100 difference. Of that amount $25 in savings goes back to the government and $75 goes to the beneficiary in the form of a Part B or D premium rebate or additional services. Medicare pays out $475 in benefits. As you can see, the amount of additional benefits or rebates enrollees are offered makes one plan more attractive than another.
The heart of the problem is the benchmark rate calculation. By law, it must be at least as high as high as what the government would pay on average per person in the traditional Medicare fee for service (FFS) arena. Remember, Medicare pays 80% of the allowable payment rates. There are risk adjustments fir areas of the country where patients are “sicker.”
According to the Congressional Budget Office, for 2007 the “benchmarks are 17% higher, on average than projected per capita FFS expenditures nationwide.” [Note: This CBO report was released in 2007, yet proposals to fix the problem are just now coming forth.]
These benchmarks are determined by statutory rules. It requires an act of Congress to make any changes. This is the similar to the way the Medicare physician payment formula [SGR] is set. Do you see a pattern here? There is a problem anytime an act of Congress is required to make should be a common sense business decision - namely to fix the formula. Government bureaucracy seems to preclude it from making the necessary adaptations to respond in a timely manner to save money or prevent potential disruptions in service.
The next question is what will happen to current Medicare Advantage enrollees? Who will be most affected? We will try to tackle that tomorrow -
The reason lies in how Medicare Advantage plans are paid. The Medicare Modernization act of 2003 set into place the present system of payment. A private insurer places a bid for what price per person it is willing to offer Part A and Part B services in a given geographic area. If it is under the government’s benchmark rate that it is willing to pay in that geographic area, they split the difference. Under the rules, the government keeps 25% of the savings, and the insurer must provide the beneficiary with additional benefits or a rebate equivalent to 75% of the difference. For example, if Medicare is willing to pay $500 per person per month to the insurer and the insurer has bid $400 per person per month, there is a $100 difference. Of that amount $25 in savings goes back to the government and $75 goes to the beneficiary in the form of a Part B or D premium rebate or additional services. Medicare pays out $475 in benefits. As you can see, the amount of additional benefits or rebates enrollees are offered makes one plan more attractive than another.
The heart of the problem is the benchmark rate calculation. By law, it must be at least as high as high as what the government would pay on average per person in the traditional Medicare fee for service (FFS) arena. Remember, Medicare pays 80% of the allowable payment rates. There are risk adjustments fir areas of the country where patients are “sicker.”
According to the Congressional Budget Office, for 2007 the “benchmarks are 17% higher, on average than projected per capita FFS expenditures nationwide.” [Note: This CBO report was released in 2007, yet proposals to fix the problem are just now coming forth.]
These benchmarks are determined by statutory rules. It requires an act of Congress to make any changes. This is the similar to the way the Medicare physician payment formula [SGR] is set. Do you see a pattern here? There is a problem anytime an act of Congress is required to make should be a common sense business decision - namely to fix the formula. Government bureaucracy seems to preclude it from making the necessary adaptations to respond in a timely manner to save money or prevent potential disruptions in service.
The next question is what will happen to current Medicare Advantage enrollees? Who will be most affected? We will try to tackle that tomorrow -
Monday, October 26, 2009
Insurance: Profitable, but hardly obscene...
Finally today, the news media did their homework on the insurance industry and called the politicians’ bluff. According to TheStreet.com health insurers only made 2.4% last year. [I have to say it; I made this point on pages 1&2 of Healthcare Solved.] According to an article in the American Medical News, October 12, 2009 [print], the nonprofit blues insurers averaged only 2.0% profit last year. Fortune magazine ranked the industry as 35th out of 53 in profits. It is clearly not the most profitable industry in America as Senator Harry Reid has claimed. Not exactly "obscene" profit margins - in fact, the insurance industry is quite anemic in comparison to many other industries. It seems the only possible explanations for these glaring discrepancies are that our politicians are grossly negligent in doing their due diligence on the industry or they are lying.
If they are this ignorant about the industry, is it not pure arrogance to think they can “reform” it? Or, do they believe if enough of politicians repeat these outright lies enough times, Americans will fall for anything they propose? Whether clueless and content to stay that way or desperate, either is deplorable; we need real, meaningful reform. Keep informed, participate in the process. If one of those politicians is yours, call them on it. They get away with it when we let them slide. Shame them into being better men and women then they are. We need statesmen serving the best interests of the people. Accept nothing less.
If they are this ignorant about the industry, is it not pure arrogance to think they can “reform” it? Or, do they believe if enough of politicians repeat these outright lies enough times, Americans will fall for anything they propose? Whether clueless and content to stay that way or desperate, either is deplorable; we need real, meaningful reform. Keep informed, participate in the process. If one of those politicians is yours, call them on it. They get away with it when we let them slide. Shame them into being better men and women then they are. We need statesmen serving the best interests of the people. Accept nothing less.
Medicare, Medicare Supplemental and Medicare Advantage: Part I
What’s the difference?
Traditional Medicare covers 80% of allowable medical expenses for the elderly. In general, it covers hospitalizations (Part A) for free for those over the age of 65 who are also eligible for social security. The elderly who want part B coverage, which covers things like doctor visits, labs, etc., must pay monthly premiums which are deducted from the social security checks. Since it does not cover all medical expenses, many enrollees also buy a Medicare Supplemental [MedSup or Medigap] policy. There are about a dozen MedSup plan options from which to choose. Plan benefits are government-defined, but privately-insured. There is no medical underwriting for the plans, and thus, no pre-existing conditions. While there may be a dollar or two discount per month for enrollees who buy coverage through a union, trade organization or AARP, there is no need to join such an organization as the plan prices are competitive.
Medicare Advantage, previously known as Medicare+Choice or Part C, is a different animal. It was established by the Balanced Budget Act of 1997. People with Medicare A and B can choose to receive their Medicare healthcare services through an Advantage plan. It is a cheaper alternative that negates the need for a MedSup plan, as it provides many of the same benefits without having to buy additional coverage, and may also provide Part D coverage. Enrollees agree to receive their care through the plan’s network of providers. “Medicare Advantage plans include (1) Medicare Managed Care plans (like HMOs), (2) Medicare Preferred Provider Organization plans (PPOs), (3) Private Fee-for-Service plans(PFFS), and (4) Medicare Specialty plans (available in some areas to provide Medicare benefits for certain people with special needs, such as beneficiaries in institutions).” [SSA website]. It was supposedly an attempt to privatize Medicare. But since there are no specific eligibility requirements for this lower cost program, it is not too surprising that this program is growing in popularity, particularly the PFFS plans. Of the 45 million Medicare recipients, 9 million are Medicare Advantage members.
Congress has Medicare Advantage, in particular, in its sites to cut costs. Tomorrow we will look at why.
Traditional Medicare covers 80% of allowable medical expenses for the elderly. In general, it covers hospitalizations (Part A) for free for those over the age of 65 who are also eligible for social security. The elderly who want part B coverage, which covers things like doctor visits, labs, etc., must pay monthly premiums which are deducted from the social security checks. Since it does not cover all medical expenses, many enrollees also buy a Medicare Supplemental [MedSup or Medigap] policy. There are about a dozen MedSup plan options from which to choose. Plan benefits are government-defined, but privately-insured. There is no medical underwriting for the plans, and thus, no pre-existing conditions. While there may be a dollar or two discount per month for enrollees who buy coverage through a union, trade organization or AARP, there is no need to join such an organization as the plan prices are competitive.
Medicare Advantage, previously known as Medicare+Choice or Part C, is a different animal. It was established by the Balanced Budget Act of 1997. People with Medicare A and B can choose to receive their Medicare healthcare services through an Advantage plan. It is a cheaper alternative that negates the need for a MedSup plan, as it provides many of the same benefits without having to buy additional coverage, and may also provide Part D coverage. Enrollees agree to receive their care through the plan’s network of providers. “Medicare Advantage plans include (1) Medicare Managed Care plans (like HMOs), (2) Medicare Preferred Provider Organization plans (PPOs), (3) Private Fee-for-Service plans(PFFS), and (4) Medicare Specialty plans (available in some areas to provide Medicare benefits for certain people with special needs, such as beneficiaries in institutions).” [SSA website]. It was supposedly an attempt to privatize Medicare. But since there are no specific eligibility requirements for this lower cost program, it is not too surprising that this program is growing in popularity, particularly the PFFS plans. Of the 45 million Medicare recipients, 9 million are Medicare Advantage members.
Congress has Medicare Advantage, in particular, in its sites to cut costs. Tomorrow we will look at why.
Friday, October 23, 2009
A.M Best: BESTWIRE: Under Proposed Reforms, Little Rate Regulation, New Customers May Mean Health for Insurers
This is an article from A.M. Best's BESTWIRE. "Founded in 1899, A.M. Best Company is a full-service credit rating organization dedicated to serving the financial services industries, including the banking and insurance sectors. Policyholders and depositors refer to Best's ratings and analysis as a means of assessing the financial strength and creditworthiness of risk-bearing entities and investment vehicles."
Senate Bill 1776: The Fix?
Yesterday, the press finally reported the whole story on the Baucus Bill, which you read here on October 13. Senate Bill 1776, which was supposed to fix the faulty Medicare physician reimbursement formula (Medicare SGR as continued under the Baucus Bill), failed to pass Wednesday. Congress somehow thought the American people would not figure out that paying doctors would be considered part of their supposed comprehensive healthcare “reform” if they put it in another bill. Instead, S. 1776 was an attempt to add $249 billion straight to the national debt. Let’s crunch the numbers: the $81 billion dollar savings of the Baucus bill minus the $249 billion appropriation to “fix” the physician payment formula equals +$168 billion to the national debt – not exactly budget neutral.
Senator Nelson of Florida was interviewed by Greta van Susteren last night saying he hoped this did not derail the Senate’s reform bill. He claimed perhaps we if we had a 5-year fix or even a 3-year fix, we should still push through “reform.” How does postponing the day of reckoning make it better? Certainly, physicians will be right back in the same position they are now, with further cuts threatening because the formula used is faulty; except by then healthcare reform fatigue will have set in with the American public and no one will want to hear about it.
Worse yet, with the current printing and spending spree in Washington, the present economic downturn is going to persist for a considerable period of time. Central banks around the world are warning us that our fiscal and monetary policies are “imprudent.” Given the current policies being pursued on an array of issues, there will be fewer small business starting up and more businesses laying off people. As a result, tax revenues will continue to go down, adding further to the annual deficit and ultimately the federal debt. If this continues, the country may not be able to fix the problem in 3 years. Americans voted for change. Our legislators must be responsible and get it right. If not the only change Americans may have is the change in their pockets.
Senator Nelson of Florida was interviewed by Greta van Susteren last night saying he hoped this did not derail the Senate’s reform bill. He claimed perhaps we if we had a 5-year fix or even a 3-year fix, we should still push through “reform.” How does postponing the day of reckoning make it better? Certainly, physicians will be right back in the same position they are now, with further cuts threatening because the formula used is faulty; except by then healthcare reform fatigue will have set in with the American public and no one will want to hear about it.
Worse yet, with the current printing and spending spree in Washington, the present economic downturn is going to persist for a considerable period of time. Central banks around the world are warning us that our fiscal and monetary policies are “imprudent.” Given the current policies being pursued on an array of issues, there will be fewer small business starting up and more businesses laying off people. As a result, tax revenues will continue to go down, adding further to the annual deficit and ultimately the federal debt. If this continues, the country may not be able to fix the problem in 3 years. Americans voted for change. Our legislators must be responsible and get it right. If not the only change Americans may have is the change in their pockets.
Thursday, October 22, 2009
Co-ops: Real or Phoney?
In addition page 4 of the October CBO letter to the Senate Finance Committee Chair states the Baucus Bill will “provide start-up funds to encourage the creation of cooperative exchange plans (co-ops) that could be offered through the exchanges; existing insurers could not be approved as co-ops.”
Let’s think about this for a minute. Present day insurers are entirely shut out of the game. (You can almost hear the politicians say, “We showed them.” ---but is it a pyrrhic victory?)
Whatever you think about insurers, these are the people who actually know how to do the job. They have the systems and processes in place to service the needs of their customers, send them insurance cards, provide a network of providers and pay claims. This little provision means a lot of “newbie” nonprofit companies will be popping up, by necessity.
Who are these companies? Are they reputable? Do you believe your claims will be paid in a timely manner? What is their track record? Will you get the service you expect? What assurances do we have that they will be there tomorrow to pay claims after giving them your premium dollars? Do you think this opens the public up to a lot of potential fraud? Are state regulators going to be able to handle the job, given the number of new entities that will no doubt arise due to the amount of money at stake?
Of course, we can rely on the government to protect us from the hucksters, can’t we?
Let’s think about this for a minute. Present day insurers are entirely shut out of the game. (You can almost hear the politicians say, “We showed them.” ---but is it a pyrrhic victory?)
Whatever you think about insurers, these are the people who actually know how to do the job. They have the systems and processes in place to service the needs of their customers, send them insurance cards, provide a network of providers and pay claims. This little provision means a lot of “newbie” nonprofit companies will be popping up, by necessity.
Who are these companies? Are they reputable? Do you believe your claims will be paid in a timely manner? What is their track record? Will you get the service you expect? What assurances do we have that they will be there tomorrow to pay claims after giving them your premium dollars? Do you think this opens the public up to a lot of potential fraud? Are state regulators going to be able to handle the job, given the number of new entities that will no doubt arise due to the amount of money at stake?
Of course, we can rely on the government to protect us from the hucksters, can’t we?
Wednesday, October 21, 2009
Baucus Bill Part III: Will it really be cheaper?
The CBO believes that employer provided plans will be “more expensive that the low-cost plans available in the exchanges, because healthcare services in those exchange plans would be more tightly managed.” [September CBO letter, page 4]
Administrative costs for all health plans, both for-profit and nonprofit, have averaged about 11% of premiums. The BCBS family of companies average about 10%. In fact, Highmark BCBS, a nonprofit insurer, in PA specifically states that their goal is for 90% of premiums to go toward paying medical expenses (aka medical-loss ratio) for enrollees. To more tightly manage the plan requires higher administrative costs, not less. And what does more “tightly managed” mean to the doctor and patient? You can bet there will be stricter standards for ordering tests/procedures, more “red-tape” and more non-certifications of coverage. There is simply no other way to make up for the added administrative costs, pay claims and still be competitive with the private sector marketplace, let alone be more affordable for individuals or small businesses.
Administrative costs for all health plans, both for-profit and nonprofit, have averaged about 11% of premiums. The BCBS family of companies average about 10%. In fact, Highmark BCBS, a nonprofit insurer, in PA specifically states that their goal is for 90% of premiums to go toward paying medical expenses (aka medical-loss ratio) for enrollees. To more tightly manage the plan requires higher administrative costs, not less. And what does more “tightly managed” mean to the doctor and patient? You can bet there will be stricter standards for ordering tests/procedures, more “red-tape” and more non-certifications of coverage. There is simply no other way to make up for the added administrative costs, pay claims and still be competitive with the private sector marketplace, let alone be more affordable for individuals or small businesses.
Tuesday, October 20, 2009
Influenza & H1N1: Advice to help businesses cope
The information below is provided to help doctors be a resource for their communities. It is adapted from the CDC's Business Toolkit:
Public health officials are gearing up for the fall /winter flu season; this includes the seasonal flu as well as the H1N1 flu virus. While the degree of severity and amount of added illness H1N1 will cause cannot be predicted, the CDC anticipates that more communities will be affected than were this spring /summer. As such, the CDC is urging the following recommendations for businesses to be proactive in keeping employees healthy while limiting disruptions to business operations.
1. Employers should encourage all employees to get the seasonal flu vaccine, working with their health insurers to make certain their plans cover vaccine costs. This vaccine does not cover H1N1.
2. Since the influenza virus is spread by respiratory droplets, tissues and alcohol based hand sanitizers should be available in the workplace.
3. Hand washing and covering coughs and sneezes should be encouraged.
4. Regular, good housekeeping of all commonly touched surfaces in the workplace is essential, particularly for workstations, keyboards and telephones.
5. During an influenza pandemic, all sick people should be allowed to stay home from the workplace without fear of job loss.
6. Workers with flu-like symptoms, including cough or sore throat, chills or fever over 100ºF, and/or runny nose, body aches, headache, tiredness, diarrhea or vomiting, are recommended to stay home; they should not return to work until 24 hours after their fever has resolved.
Employers are encouraged to have a multilayered plan depending on severity of the outbreak. Employers should:
7. Share their flu plan with employees, along with their interest in protecting employee health and maintaining business operations. Explain the HR leave policies and what pay & benefits are available to them.
8. Encourage H1N1 vaccination, which will be available to certain groups in mid October.
9. Consider policies for telecommuting, flex hours or staggered shifts for workers who must care for sick children or other family members, or if local conditions merit that schools or childcare facilities close in your area. Ask employees to consider child care alternatives.
10. Make certain IT systems can handle the increased demand of remote access.
11. Consider cross-training employees in essential core business functions.
The CDC recommends for businesses to be flexible during this time. Requiring a doctor’s note to validate illness may not be realistic if the local health clinics and hospitals are overwhelmed. Give local managers the authority to take appropriate actions as needed and comply with local and state health authorities. Depending on the outbreak’s severity, companies should be prepared to change business practices if needed: identify alternative suppliers, prioritize customers or temporarily suspend non-critical operations if need be.
REMEMBER:
Listen to your local and state public health officials, regarding the severity of the outbreak in your area and follow their recommendations. Employers may wish to place links on their corporate and/or employee website regarding current policies and instructions for their employees. For more information, answers to any questions and links to your state health department, go to www.flu.gov .
Public health officials are gearing up for the fall /winter flu season; this includes the seasonal flu as well as the H1N1 flu virus. While the degree of severity and amount of added illness H1N1 will cause cannot be predicted, the CDC anticipates that more communities will be affected than were this spring /summer. As such, the CDC is urging the following recommendations for businesses to be proactive in keeping employees healthy while limiting disruptions to business operations.
1. Employers should encourage all employees to get the seasonal flu vaccine, working with their health insurers to make certain their plans cover vaccine costs. This vaccine does not cover H1N1.
2. Since the influenza virus is spread by respiratory droplets, tissues and alcohol based hand sanitizers should be available in the workplace.
3. Hand washing and covering coughs and sneezes should be encouraged.
4. Regular, good housekeeping of all commonly touched surfaces in the workplace is essential, particularly for workstations, keyboards and telephones.
5. During an influenza pandemic, all sick people should be allowed to stay home from the workplace without fear of job loss.
6. Workers with flu-like symptoms, including cough or sore throat, chills or fever over 100ºF, and/or runny nose, body aches, headache, tiredness, diarrhea or vomiting, are recommended to stay home; they should not return to work until 24 hours after their fever has resolved.
Employers are encouraged to have a multilayered plan depending on severity of the outbreak. Employers should:
7. Share their flu plan with employees, along with their interest in protecting employee health and maintaining business operations. Explain the HR leave policies and what pay & benefits are available to them.
8. Encourage H1N1 vaccination, which will be available to certain groups in mid October.
9. Consider policies for telecommuting, flex hours or staggered shifts for workers who must care for sick children or other family members, or if local conditions merit that schools or childcare facilities close in your area. Ask employees to consider child care alternatives.
10. Make certain IT systems can handle the increased demand of remote access.
11. Consider cross-training employees in essential core business functions.
The CDC recommends for businesses to be flexible during this time. Requiring a doctor’s note to validate illness may not be realistic if the local health clinics and hospitals are overwhelmed. Give local managers the authority to take appropriate actions as needed and comply with local and state health authorities. Depending on the outbreak’s severity, companies should be prepared to change business practices if needed: identify alternative suppliers, prioritize customers or temporarily suspend non-critical operations if need be.
REMEMBER:
Listen to your local and state public health officials, regarding the severity of the outbreak in your area and follow their recommendations. Employers may wish to place links on their corporate and/or employee website regarding current policies and instructions for their employees. For more information, answers to any questions and links to your state health department, go to www.flu.gov .
Monday, October 19, 2009
Saving healthcare dollars: Medical malpractice reform
Today's post is a reprint of the article I wrote for the Indianapolis Business Journal, published this week October 19-25, 2009 on page28, entitled, "Let's cut healthcare cost by cutting out the lawyers: Expert panels would bring perspective to malpractice suits." [The editors gave the article a much more provocative title than mine (see above) - guess they know what sells. :) ] It is an opinion piece rather than the usual impartial commentary, but perhaps it will spark discussion to find a better solution. Hope you enjoy it.
One issue Washington seems reluctant to address in any health legislation is that of tort reform. Malpractice premiums are estimated to be over $29 billion annually, of that the actual cost of litigation is about $10.5 billion. Given their inherent nature, certain specialties are much more affected than others. However, the largest costs arise because all physicians believe they must practice defensive medicine. This often means working up every possible obscure cause of any condition, for fear of missing something and the patient not following up in a timely manner. It is estimated that defensive medicine accounts for 5% to 9% of the cost of healthcare or $115 to $207 billion per year.
“No one wants to see patients harmed by bad medical practice or negligence, least of all doctors. The problem with the current civil system is that doctors are not judged by a jury of their peers; they are judged by non-medical people. (Anyone who has ever been in a meeting of physicians can verify that doctors tend to be the harshest critics of one another.) Both the plaintiff’s and defendant’s lawyers proceed to parade their experts in front of the medically naive jury. Between the few unscrupulous physicians who make an excellent living saying whatever will benefit the party paying them and good lawyers who divert attention from the actual medical issue, it is small wonder that the process is seen as less than fair to all.
The standard we use in the insurance industry is outside peer-review. Qualified peer-reviewers are board-certified physicians with a number of years in clinical practice, as well as an academic appointment and/or research background. They are authorities in their field.
Why not apply that to malpractice cases? A panel of say, five qualified, same-specialty physicians vetted by the medical board could peer-review the medical records of the case. To avoid the appearance of a conflict of interest these individuals should not be from areas in close geographic proximity to the defendant. The plaintiff, defendant and their counsels and experts could make presentations before the panel and the panel could question both sides. Much like the Supreme Court, the panel would deliberate, vote and write an opinion, including dissenting views.
If the panel decides that there is a case, it would proceed to the courts. A jury of the general public would hear the case and then be given a copy of the panel’s report. In the presence of the attorneys and judge, the jury could question a member representing the panel regarding the report. The member may not give an opinion. The opinion is the report. His job is merely clarification. The jury would then be sequestered to deliberate the case and judgment award.
There are two components to the award. Economic damages refer to the cost to the inured person, such as past and future medical expenses, lost wages, etc. Noneconomic damages refer to pain and suffering. Both are intended to provide compensation to the injured party. Punitive or exemplary damages are awarded to punish conduct that is reckless disregard for the safety of others beyond negligence. Some states have statutes imposing caps on punitive noneconomic damages treating them separately from compensatory noneconomic damages. Many advocate limiting noneconomic damages and punitive awards to $250,000. In most cases, that is reasonable; however, I have also seen some horrific mistakes that $250,000 would not cover. Limits have been shown to decrease medical malpractice rates for physicians. However, I believe the solution just presented is fair to everyone, eliminating frivolous suits and moving only credible suits forward. Medical judgment is determined by same-specialty medical professionals who understand how to apply the standards of care to the case. The damages are determined by a jury representing the public, with the standard oversight by a trial judge.
Medical malpractice truly is eliminating “access to care” in many parts of the country. In West Virginia, I was told by a gentleman on the medical board at the time that virtually every suit brought, resulted in a judgment against the doctor. In fact, it had gotten so bad that certain specialties were in danger of becoming extinct in the state, such a trauma surgeons and neurosurgeons. Imagine if you or a loved one were in an accident with a head injury, and there was nowhere in the state you could be flown for treatment. A considerable number of states face this issue with “high risk” specialties, such as those listed above, as well as obstetricians, cardiothoracic surgeons and anesthesiology. Other physicians in high liability states have chosen to limit their scope of practice to reduce their liability. Others move to another state. We can no longer ignore this growing problem,” if we are going to preserve access to care and lower healthcare costs.
One issue Washington seems reluctant to address in any health legislation is that of tort reform. Malpractice premiums are estimated to be over $29 billion annually, of that the actual cost of litigation is about $10.5 billion. Given their inherent nature, certain specialties are much more affected than others. However, the largest costs arise because all physicians believe they must practice defensive medicine. This often means working up every possible obscure cause of any condition, for fear of missing something and the patient not following up in a timely manner. It is estimated that defensive medicine accounts for 5% to 9% of the cost of healthcare or $115 to $207 billion per year.
“No one wants to see patients harmed by bad medical practice or negligence, least of all doctors. The problem with the current civil system is that doctors are not judged by a jury of their peers; they are judged by non-medical people. (Anyone who has ever been in a meeting of physicians can verify that doctors tend to be the harshest critics of one another.) Both the plaintiff’s and defendant’s lawyers proceed to parade their experts in front of the medically naive jury. Between the few unscrupulous physicians who make an excellent living saying whatever will benefit the party paying them and good lawyers who divert attention from the actual medical issue, it is small wonder that the process is seen as less than fair to all.
The standard we use in the insurance industry is outside peer-review. Qualified peer-reviewers are board-certified physicians with a number of years in clinical practice, as well as an academic appointment and/or research background. They are authorities in their field.
Why not apply that to malpractice cases? A panel of say, five qualified, same-specialty physicians vetted by the medical board could peer-review the medical records of the case. To avoid the appearance of a conflict of interest these individuals should not be from areas in close geographic proximity to the defendant. The plaintiff, defendant and their counsels and experts could make presentations before the panel and the panel could question both sides. Much like the Supreme Court, the panel would deliberate, vote and write an opinion, including dissenting views.
If the panel decides that there is a case, it would proceed to the courts. A jury of the general public would hear the case and then be given a copy of the panel’s report. In the presence of the attorneys and judge, the jury could question a member representing the panel regarding the report. The member may not give an opinion. The opinion is the report. His job is merely clarification. The jury would then be sequestered to deliberate the case and judgment award.
There are two components to the award. Economic damages refer to the cost to the inured person, such as past and future medical expenses, lost wages, etc. Noneconomic damages refer to pain and suffering. Both are intended to provide compensation to the injured party. Punitive or exemplary damages are awarded to punish conduct that is reckless disregard for the safety of others beyond negligence. Some states have statutes imposing caps on punitive noneconomic damages treating them separately from compensatory noneconomic damages. Many advocate limiting noneconomic damages and punitive awards to $250,000. In most cases, that is reasonable; however, I have also seen some horrific mistakes that $250,000 would not cover. Limits have been shown to decrease medical malpractice rates for physicians. However, I believe the solution just presented is fair to everyone, eliminating frivolous suits and moving only credible suits forward. Medical judgment is determined by same-specialty medical professionals who understand how to apply the standards of care to the case. The damages are determined by a jury representing the public, with the standard oversight by a trial judge.
Medical malpractice truly is eliminating “access to care” in many parts of the country. In West Virginia, I was told by a gentleman on the medical board at the time that virtually every suit brought, resulted in a judgment against the doctor. In fact, it had gotten so bad that certain specialties were in danger of becoming extinct in the state, such a trauma surgeons and neurosurgeons. Imagine if you or a loved one were in an accident with a head injury, and there was nowhere in the state you could be flown for treatment. A considerable number of states face this issue with “high risk” specialties, such as those listed above, as well as obstetricians, cardiothoracic surgeons and anesthesiology. Other physicians in high liability states have chosen to limit their scope of practice to reduce their liability. Others move to another state. We can no longer ignore this growing problem,” if we are going to preserve access to care and lower healthcare costs.
Saturday, October 17, 2009
Key Issues Not Addressed by the Baucus Bill: Part II
Continuing our look at the Baucus Bill based on the CBO Analyses of September 22 and October 7, 2009...
- The fees and taxes this bill imposes on insurers, medical device makers, clinical laboratories and drugmakers will be considered a “pass-through;” that is - passed through to consumers! It seems the CBO recognizes this on page 2 of the September letter which states those fees “will ultimately raise insurance premiums by a corresponding amount.” This is a tax on every person. It further raises medical costs. It’s counterproductive.
- The CBO admits on page 3-4 that comparing costs of coverage to the present system is difficult “for many reasons, including the extent of the coverage…;the rates and methods used to pay providers…; the quantity and intensity of services used; the insurer’s administrative costs; state regulations of the insurance market; employment status and employers’ decisions about offering coverage and the underlying health of the enrollee pool.” It seems that these are huge gaps in analysis that simply cannot be overlooked if this report is to be taken seriously.
Friday, October 16, 2009
Key Issues Not Addressed by the Baucus Bill: Part I
Let’s take a closer look at what wasn’t included in the bill. Since there is no actual written version of the bill, we will look at the CBO Analyses of September 22, 2009 and October 7, 2009:
- The CBO bases its analyses on the low-cost “silver” plans which will be offered in the exchanges. It is reasonable to think if there are silver plans, there are also gold plans. It begs the question, what package of benefits will be covered under either plan? Apparently the bill does not enumerate them. Federal subsidies are tied to the premiums on the ‘silver’ plans. Unlike the Medicare program which covers 80% of approved charges, the Baucus silver plans will only cover 70% of those charges, with the rest still owed by the patient. It seems there will still be a need for supplemental plans to cover the difference, as with Medicare. This appears an incomplete solution. For those with incomes under 200% of the federal poverty level [$23,600(projected for 2016)] there would be a sliding scale to assist in payment. However, for individuals making $14,700 annually (pre-tax), the premiums plus cost-sharing payments the patient is expected to pay would equal $1,200. This burden still seems quite high for our poorest people. It seems likely they will forgo coverage to save what little they have.
- Premiums are still allowed to vary by age. This is problematic because it fails to address the 13% of those aged 55-64 who are uninsured. Because of their age, these people are the most likely to have accumulated chronic conditions and need insurance coverage to optimally manage their care.
Thursday, October 15, 2009
Baucaus Plan's Impact on Insurance Premiums
The big controversy today is whether or not the Baucus Bill will actually be a solution to higher health insurance premiums. Politicians claim the Price Waterhouse Coopers report commissioned by America’s Health Insurance Plans (AHIP) is alarmist and self-serving in stating that insurance premiums will be higher in the proposed health insurance exchanges. However, it seems this report confirms the Congressional Budget Office’s letter to Senator Max Baucus dated September 22, 2009. It explicitly states on page 6 “…premiums in the new exchanges would tend to be higher than the average premiums in the current-law individual market – again with all other factors held equal – because the new policies would have to cover pre-existing medical conditions and could not deny coverage to people with high expected cost of healthcare. (CBO has not analyzed the magnitude of that effect.)…People with low expected costs for healthcare, however, would generally pay higher premiums.” The CBO admits it has not analyzed the effect of the no-prexisting condition policy mandate. And, it seems the CBO agrees with the PWC report.
The plan is written to fail because healthy small employer groups and individuals will go to the private sector for insurance. When they are ill, they will switch to a relatively “lower” cost co-op plan. Since pre-existing condition exclusions are outlawed, this co-op will be a magnet for the high-risk individuals or employer groups, either because of sickness or age. Since there is not a mandate for continuous coverage to be maintained, some individuals may choose to “save” money, by paying the federal fine and purchasing coverage only when they are ill. From an underwriting standpoint, there is nothing to protect the financial integrity of the Baucus plan.
The plan is written to fail because healthy small employer groups and individuals will go to the private sector for insurance. When they are ill, they will switch to a relatively “lower” cost co-op plan. Since pre-existing condition exclusions are outlawed, this co-op will be a magnet for the high-risk individuals or employer groups, either because of sickness or age. Since there is not a mandate for continuous coverage to be maintained, some individuals may choose to “save” money, by paying the federal fine and purchasing coverage only when they are ill. From an underwriting standpoint, there is nothing to protect the financial integrity of the Baucus plan.
Wednesday, October 14, 2009
Senate Finance Committe Approves Baucus Bill
What exactly was voted on yesterday? The Senate Finance Committee refused to post a copy of the proposed bill online for Americans to read. It appears that the reason why may more likely be found in the CBO's October 7, 2009 letter to the Chairman of the Senate Finance Committee, Sen. Max Baucas, page 8 which states that "The Chairman's mark, as amended, has not yet been converted into legislative language. The review of such language could lead to significant changes in the estimates of the proposals effects on the federal budget and insurance coverage."
The CBO goes on in that letter to state (page 9) that "Federal spending that would be funded by future appropriations is not reflected in these estimates. For example, implementation costs for operations of the Internal Revenue Service and the Centers for Medicare & Medicaid Services are not included." Any business must count the costs to implement an idea before it can determine whether or not there will be a positive return on the investment. How is government any different?
It seems the rules of order are now disregarded in the Senate, committees are now passing what is at best the notion of a bill/plan as opposed to a definitive plan. How can such a bill/plan be responsibly administered? A health plan requires a written contract to administer it. Apparently, Americans are now discovering not only is Congress too lazy to read the bills presented for a vote, Congress is now too lazy to even write the bills it passes! Are notions of legislation all we need now? Are we now making it all up, after the fact? This is a travesty of democracy. Americans work hard, pay their taxes and deserve far better treatment than this from their elected officials.
The CBO goes on in that letter to state (page 9) that "Federal spending that would be funded by future appropriations is not reflected in these estimates. For example, implementation costs for operations of the Internal Revenue Service and the Centers for Medicare & Medicaid Services are not included." Any business must count the costs to implement an idea before it can determine whether or not there will be a positive return on the investment. How is government any different?
It seems the rules of order are now disregarded in the Senate, committees are now passing what is at best the notion of a bill/plan as opposed to a definitive plan. How can such a bill/plan be responsibly administered? A health plan requires a written contract to administer it. Apparently, Americans are now discovering not only is Congress too lazy to read the bills presented for a vote, Congress is now too lazy to even write the bills it passes! Are notions of legislation all we need now? Are we now making it all up, after the fact? This is a travesty of democracy. Americans work hard, pay their taxes and deserve far better treatment than this from their elected officials.
Tuesday, October 13, 2009
The Baucus Bill & Physician Reimbursement
The Baucas Bill [America's Healthy Future Act of 2009] does not eliminate the flawed physician reimbursement formula [Medicare SGR (sustainable growth rate)]. It allows for the .5% increase Congress appropriated for 2010; however, it does not eliminate the scheduled 25% cut in 2011. It is assumed that reimbursement rates will remain at current low levels (as specified by the SGR) for the subsequent years through 2019.
Historically, Congress has made adjustments annually to this "flawed" reimbursement formula which rises significantly slower than the rate of medical inflation. By cutting reimbursement rates in 2011 by 25% and keeping them there, there will be far fewer providers willing to provide services to Medicare patients. On the other hand, if Congress continues the annual adjustment process, the projected Congressional Budget Office "savings" in the bill begin to evaporate.
The bill does little to address the current high costs of providing actual care, which someone must pay. Physicians will not be able to sustain a 25% pay cut to provide care for Medicare patients. Those that do, will not be able to continue such services in subsequent years without any inflation adjustments. Apparently, a significant portion of the expense of providing care for the elderly in the future is expected to be born by physicians.
The projected "savings" of this bill are dubious at best; it is really cost-shifting. It seems a bit premature for the Senate Finance Committee to be patting itself on the back, given that this is not actually a viable solution.
Historically, Congress has made adjustments annually to this "flawed" reimbursement formula which rises significantly slower than the rate of medical inflation. By cutting reimbursement rates in 2011 by 25% and keeping them there, there will be far fewer providers willing to provide services to Medicare patients. On the other hand, if Congress continues the annual adjustment process, the projected Congressional Budget Office "savings" in the bill begin to evaporate.
The bill does little to address the current high costs of providing actual care, which someone must pay. Physicians will not be able to sustain a 25% pay cut to provide care for Medicare patients. Those that do, will not be able to continue such services in subsequent years without any inflation adjustments. Apparently, a significant portion of the expense of providing care for the elderly in the future is expected to be born by physicians.
The projected "savings" of this bill are dubious at best; it is really cost-shifting. It seems a bit premature for the Senate Finance Committee to be patting itself on the back, given that this is not actually a viable solution.
Subscribe to:
Posts (Atom)
