1. Kaiser Poll Shows Increasing Support for Health Reform Law According to the July 29 Washington Post, the latest Kaiser tracking poll on attitudes towards the health care reform law shows increasing acceptance of it (click here). In the last month, opposition has dropped from 41% to 35%, and favorable opinion has risen from 48% to 50%, with 14% undecided. 69% of Republicans are still opposed. For independents, 48% are in favor and 37% opposed, while for Democrats, support has increased from 69% to 73%, with just 15% opposed. What this seems to show is that opinions are hardening and more Democrats are rallying around the bill as the best we could achieve for now under the circumstances.

Sadly, according to the Kaiser Foundation President Drew Altman commenting on the results, "A year after the town meeting wars of last summer, a striking 36% of seniors said that the law 'allowed a government panel to make decisions about end of life care for people on Medicare.'" Wonder where these people get their "news?"

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2. The Media Bubble and the Real World It's not just Fox News, but all the mainstream media, including supposedly neutral CNN and CNBC, and the more "liberal" MSNBC, who continue to paint a very simplified and distorted picture of the supposed lack of cost control teeth in the Affordable Care Act. The hosts (e.g., Joe Scarborough on MSNBC and Joe Kernan on CNBC), regular pundit commentators, and the politicians they interview on the steps of Congress only a few years ago all probably admitted they couldn't program their VCRs (remember them?). But now they are all ready experts on the complex US health care system and the new law's myriad pages of provisions. And they see nothing but an entitlement expansion.

But of the 906 pages (no longer double spaced) of the final approved bill, about 600 pages apply to improving health care quality and efficiency, strengthening the health care workforce, improving transparency (reporting and data availability) and program integrity, launching demonstration projects (including malpractice reforms), and health care prevention and improvement efforts. Only about 300 pages apply coverage rules, insurance company requirements, revenue provisions, state health exchanges and other administrative measures. As somebody once said, "read the bill!"

So while the pundits and self-appointed experts proclaim the shortcomings of the health reform law, you get a different picture if you read such journals as Health Affairs or the New England Journal of Medicine, and even some employee benefit journals. From these it's pretty clear that those who actually have to deal with the health care system are glad we finally have clarity and direction on moving towards a more rational system and at a reasonable but deliberate pace. The discussions are not gripes about some provision or other but either how best to implement the changes, creative ideas for better cooperation among providers, insurance carriers, pharmaceutical companies, medical researchers, legal experts, IT specialists, and others. Certainly criticisms arise, but are noted in the form of concerns to monitor or recommended specific changes we may need to make in the future, not in the form or gripes about stupid Congress and excuses to "repeal and replace."

For example, a very enlightening article on the Health Affairs blog on June 22 by Chris Fleming (click here) summarizes what's at stake in the attempt to "bend the cost curve" and cites ways to test if reform is working to control costs. It also notes that with the passage of the reform act, other health systems around the country are now considering more seriously how they adopt some of the successful practices and "culture" of the often-cited Geisinger Health System in northern PA. Passage of the Affordable Care Act is now spurring a huge amount of activity on the ground. So ignore those self-important talking heads on TV who live by controversy and "crisis" news.

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3. Medical Suppliers' Dirty Medicine The Washington Monthly in July published a detailed study on the medical supply industry (click here)--an area that is ripe for reform, innovation, cost savings and safety improvements. But it is not being touched by the new health care reform law, due to a complex set of relationships and financial disincentives that tie together hospitals, group purchasing organizations (GPOs) and large suppliers of everything from syringes to towels, like Becton Dickenson.

GPOs started out in the 1970s to enable hospitals to band together for volume purchasing of supplies to get better bargaining position to save costs. But over time, the GPOs became separate entities and worked out arrangements with the suppliers where they got incentives (some called them kickbacks) to use them and avoid purchasing from smaller independent suppliers, who often had cheaper or better products. In fact, "in 1986 Congress passed a bill exempting GPOs from the anti-kickback provisions embedded in Medicare law. This meant that instead of collecting membership dues, GPOs could collect "fees"--in other industries they might be called kickbacks or bribes--from suppliers in the form of a share of sales revenue.

So, since GPO finances are still somewhat secretive, many hospitals like the arrangement and claim it relieves them of a purchasing burden, and the hospitals have a big influence on Congress, health reform kept this area hidden in the closet. According to the article, "the problem could be fixed by simply getting rid of the anti-kickback protections. Nevertheless, lawmakers appear to have limited appetite for taking the issue on. Last August, Congress launched an investigation into GPO contracting practices, and the Government Accountability Office followed suit. But Senate staffers now say that hearings on the subject are unlikely to be held this year, and may not be held at all." There's no constituency that wants to push for reform here, even though the savings and potential improvement in care is significant. The GPO industry claims it saves hospitals about $36 billion a year, so the total cost of medical supplies purchased annually has to be much higher.

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4. You Say 'De-Socialize' and I Say 'Decentralize' – Sweeping Changes Afoot in the British National Health Service? Headline on the "FoxNation" page of the Fox News web site (July 24): "Britain De-Socializes Health Care, Obama Yawns." Headline on the New York Times web site: "Britain Plans to Decentralize Health Care." So is Great Britain suddenly "de-socializing the government-run National Health Service, and should this be a lesson for President Obama? Not really. They are planning to decentralize control of certain budgets and decisions, giving much more power to local doctors and less to the national bureaucracy. It's an effort to reduce administrative costs by 45%.

Perhaps ambitious, but they are not turning it into a private system, and apparently such reorganizations are frequent, depending on the political regime. In any event, it shows the idiocy of calling something as moving towards or away from "socialism" when there are so many variables in a health care system: private or public funding, private or public delivery, centralized or decentralized planning and control, basic public coverage and private "deluxe" plans or options. All sorts of variations exist around the world, and it makes more sense to think through the pros and cons of each variable than to slap ridiculous labels on everything. Click here to read more.

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5. Would You Believe Sales Commissions are a Form of Patient Care? Us Neither. A requirement for health insurers in the new health law is that they must spend 80 cents of every premium dollar (85 cents for large employer plans) on clinical services and activities to improve quality of care. If they spend too much on non-patient-related care, they have to refund the difference later.

So guess what? The carriers are now trying to convince the Secretary of HHS to classify almost every expense they have as falling under this category and not under administration and overhead. A July 23 New York Times article summarized the current battle on the detailed regulation now being drafted, since this applies in 2011 (click here). Some of the carriers' expense are in a gray area of "kind of" supporting quality of care and need to be clarified. But other costs, like sales commissions for insurance agents and taxes on investments? Whose care are we talking about--stockholders and insurance brokers?

Here's a list of what insurance carriers typically spend your premium dollars on:

– Direct claim payments to hospitals, doctors, labs, pharmaceutical managers, and other providers of care, medication or medical equipment.
– Claims administration (to apply co-pays, etc., ensure documentation for a valid claim, ensure the provider is part of the network and charging the negotiated fee–i.e., to prevent provider or patient fraud, limit billing errors, etc.
– Case management for pre-certification for high costs care, concurrent care review, and hospital discharge planning
– Medical network development, annual contract negotiations, and ongoing maintenance
– Nurse-lines for patient questions (perhaps something the patient's medical "team" should provide but currently do not)
– Disease management (e.g., for diabetes or cardiac care) and behavior modification (e.g., wellness coaches for weight loss, smoking cessation, etc.), including outreach based on claim data or health risk assessment data.
– Review of medications by pharmacy benefits manager (e.g., Medco) for adverse interactions, abuse (e.g., multiple prescriptions for same medication from different doctors), and lack of refills for maintenance medications
– Data bases, employer reports, and data mining to track cost and utilization trends and "outliers" on patients, doctors, hospitals, and other providers
– Communications and educational materials (print or online)
– Account service (to individuals or to employers)
– Selling and underwriting (account acquisition)
– Insurance agent and broker commissions
– Corporation administration (including executive salaries)
– Profits or contributions to surplus or reserves (nonprofits)
– Margin (in case overall claims are higher than projected)
– Product development
– Marketing – i.e., advertising, corporate "goodwill," sponsorship of everything from health care conferences to golf tournaments

While some of these expenses are clearly within or not within the scope of direct care (or improving quality of care), some others are in that gray area. Fortunately, Health and Human Services has such experts as health law expert Timothy Jost and former CIGNA VP Wendell Potter helping them draft the regulations. Unfortunately, in our currently disjointed health delivery system, insurance companies have had to perform some of these needed services (like disease and case management and data analysis) that more highly "organized systems of care" should be performing themselves. These regulations may put pressure on insurance companies to either shift certain services back to larger health provider systems or more closely link with them.

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6. Nonprofit Health Insurers Growing Obese on Surpluses? While some Blue Cross Blue Shield organizations are now for-profit (many are part of the Anthem/Wellpoint national network), others are doing very well as nonprofits, thank you. A July 22 article on the MarketWatch financial web site, cites a recent report from Consumers Union (which publishes Consumer Reports) finding that 70% of the nonprofit Blues organizations "held at least three times the amount that regulators require them to maintain for minimal solvency," Nonprofit Blues plans cover about 100 million Americans or one in three of us. Consumers Union claims the plans should have used the money to moderate the high rate increases they have been forcing on policyholders, or now should provide refunds or fund community health services. (See the next story on the PA "adultBasic" program.) The Blues organizations counter that the level of reserves they have booked are needed in case claims costs rise unexpectedly. The question is how much is too much?

Click here to read more.

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7. Pennsylvania's AdultBasic Program Spared for Another Six Months Thanks in part to a campaign by the PA Health Access Network (PHAN), the state's four Blue Cross organizations recently announced they will keep funding adultBasic until June 2011. (It was originally scheduled to die in December 2010). According to the PHAN press release (click here):

"In 2005, the Blues agreed to contribute a portion of their surpluses toward adultBasic, which provides basic health care to uninsured adults earning up to 200% of the poverty level. That agreement expires in December.

While sitting on billions of dollars in surpluses, the Blues now say they will continue contributions for only six months beyond the December expiration. This arrangement is unacceptable. It will require a freeze on new enrollees, reducing adultBasic enrollment from about 46,000 in June to 37,000 a year later."

According to the press release, adultBasic has a 400,000 person waiting list.

The release further notes that:

...the Pennsylvania Budget and Policy Center (PBPC) and PHAN released a report urging the Blues to continue contributions toward adultBasic until 2014 when the U.S. health reform law is fully implemented. It also calls on the General Assembly to enact legislation that would establish in law the Community Health Reinvestment (CHR) Agreement, under which the Blues have been contributing to adultBasic.

Despite contributing to the CHR agreement over the past five years, the Blues have remained profitable. From 2003 to 2009, the four companies' cumulative surpluses went from $3 billion to $5.6 billion, an increase of 61.4%. These surpluses have grown two-and-a-half times faster than Pennsylvania wages since 2002, despite the impact of the recession and the Blues' contributions to fund adultBasic.

You can sign the petition to the Blues organizations to continue funding this program by clicking here.

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8. Final HHS Rules Encourage Meaningful Use of Electronic Health Records Electronic records for patients and other health care-related use sound like a no-brainer to most of us. But changing old ways and paying for and implementing them is always a hurdle. Secretary of Health and Human services, Kathleen Sibelius, in mid-July "announced final rules to help improve Americans' health, increase safety and reduce health care costs through expanded use of electronic health records (EHR)," according to the July 13 press release. Under the program, hospitals and physicians will receive substantial financial support through higher Medicare and Medicaid payments if they adopt qualified EHR technology that meets minimum functional standards, including on patient privacy and electronic security. This will help set industry standards both for vendors offering these systems and providers purchasing them. The press release can be found at the following link, along with other links to technical fact sheets: click here.

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9. Rules Clarify Preventive Care Cost Sharing On July 14, the Obama administration issued rules clarifying health insurance coverage cost sharing related to preventive care, which will start the first day of a new plan year on or after this coming January 1. The rules require no cost-sharing (e.g., deductibles or co-pays) for preventive services, such as screenings and immunizations, unless the employer maintained a "grandfathered" plan (i.e., a plan that makes no more than minimal changes to its plan provisions or employee contributions). Some of the questions the rules clarified for employers:

– They still may impose cost sharing if the preventive care is obtained from an out of-network provider.

– The patient may still have to pay a co-pay or deducible for other care provided during the same visit to a doctor's office.

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