1. "Don't Get Sick. If You Do, Die Quickly" A new study by the Center for Disease Control says we have 59 million uninsured based on measuring those lacking coverage in the first quarter of 2010, according to a summary of the study in Reuters (click here). The Reuters article notes: "Nine percent of adults lost private insurance, and public insurance picked up just 5 percent of them... 22 percent of adults aged 18 to 64 are uninsured." According to the CDC's director, Dr. Thomas Frieden:

"Now, the data also allow us to debunk two myths about health care coverage."

"The first myth is that it's only the poor who are uninsured. In fact, half of the uninsured are over the poverty level and one in three adults under 65 in the middle income range -- defined arbitrarily here between $44,000 and $65,000 a year for a family of four -- were uninsured at some point in the year."

Second, while many people claim that only healthy people risk going without health insurance, "In fact ... more than two out of five individuals who are uninsured at some point during the past year had one or more chronic diseases and this is based on just a partial list of chronic diseases."

We hesitate to throw out another statistic on the number of uninsured. At a local health care presentation in August of 2009, one guy got annoyed with the supposed discrepancies in the number of uninsured, used it as an excuse to try to dismiss the whole problem. He didn't seem to want to understand that different surveys use different measures (e.g., the US Census Bureau measures the number without insurance for at least 12 months) and of course may cover different time periods. But no matter what counting methodology you use, we know the number of uninsured is scandalously high: in the range of one sixth of the whole US population and one fifth of those not in Medicare. It's always frustrating that those who want to "repeal and replace" never talk about how they would cover and help pay for those who can't afford health insurance.

Meanwhile, health insurance costs continue to rise faster than incomes. According to a newly released analysis by the Commonwealth Fund, State Trends in Premiums and Deductible... (click here),

"The analysis finds that premiums for businesses and their employees increased 41 percent across states from 2003 to 2009, while per-person deductibles jumped 77 percent in large as well as small firms. If these trends continue at the rate prior to enactment of the Affordable Care Act, the average premium for family coverage will rise 79 percent by 2020, to more than $23,000. The authors describe how health reform offers the potential to reduce insurance cost growth while improving value and protection. If reforms succeed in slowing premium growth by 1 percentage point annually in all states, by 2020 employers and families together will save $2,323 annually for family coverage, compared with projected trends."

The ACA won't stop the increase in health care costs but, if the coverage and delivery system reforms are fully enacted, analysis predict it will slow the rising cost and dramatically lower the numbers of uninsured.

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2. 11-Nation Survey: U.S. Adults Most Likely to Forgo Care Due to Cost, Have Trouble Paying Medical Bills According to a new survey from The Commonwealth Fund (click here), "adults in the United States are by far the most likely [compared to those in 10 other industrialized nations] to go without health care because of cost, have trouble paying medical bills, encounter high medical bills even when insured or payments denied." Some highlights:

• "One-third of U.S. adults went without recommended care, did not see a doctor when sick, or failed to fill prescriptions because of costs, compared with as few as 5 percent of adults in the United Kingdom and 6 percent in the Netherlands.
  
  
• "One-fifth of U.S. adults had major problems paying medical bills, compared with 9 percent in France, the next-highest country, and 2 percent in the U.K."
  
  
• "Thirty-one percent of U.S. adults reported spending a lot of time dealing with insurance paperwork, disputes, having a claim denied by their insurer, or receiving less payment than expected. Only 13 percent of adults in Switzerland, 20 percent in the Netherlands, and 23 percent in Germany—all countries with competitive insurance markets that allow consumers a choice of health plan—reported these concerns."
  
  
• "The authors conclude that more negative access and cost experiences in the United States, plus wide disparities by income, underscore the importance of the Affordable Care Act's emphasis on insurance expansion, benefit standards, and limits on costs for those with lower incomes."

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3. Health Insurance Carriers and Large Employers Don't Want Repeal The major health insurance companies may have done some double dealing, by claiming to support the ACA and then contributing millions of dollars to Republicans in the recent election. But they just want some provisions changed while keeping the major parts of the bill, including the individual coverage mandate and support for small business and many individuals to buy insurance plans. As Reuters reported on Nov. 10th, at an industry summit they sponsored in New York (click here), the new chief executive of Aetna, Mark Bertolini, said ""We can't go back. We need to keep moving, and we need to improve upon what we have." He did call for more changes in certain areas, like "a bigger government push to boost use of health information technology."

The CEO of CIGNA, David Cordani, echoed the same point, saying, "I don't think it's in our society's best interest to expend energy in repealing the law," according to another Reuters article (click here). The major prescription drug manufacturers also endorsed the ACA and want to merely refine it where necessary (click here).

As for employer support, a New York Times article published on the 3rd just after the election (click here), quotes cites Andrew Webber, chief executive of the National Business Coalition on Health (which represents 7,000 medium and large employers around the country) as saying "Reform is here to stay." While not taking a stand on the ACA as a whole, it has also endorsed many of its provisions and implementation decisions, such as the recent launch of the Centers for Medicare and Medicaid Services' "Innovation Center," which selected eight states in November for pilot sites to test a "public/private initiative developed to advance the Medical Home model to improve health care" (click here).

One can be cynical about the reasons for insurer's support for reform. They'll get more members and more profits, and they don't need to compete against a public option (at least not for now). As former CIGNA executive Wendell Potter wrote in the Nov. 5th Newsweek (click here), while the insurance companies claim to support the ACA, they also funded the Republican campaigns this fall, because they want a GOP-controlled Congress to:

"try to gut some of the provisions of the law that protect consumers from the abuses of the industry, such as refusing to cover kids with preexisting conditions, canceling policyholders' coverage when they get sick, and setting annual and lifetime limits on how much they'll pay for medical care. Insurers also hate the provision that requires them to spend at least 80 percent of premium revenues on medical care, as well as the one that calls for eliminating the billions of dollars that the government has been overpaying them for years to participate in private Medicare plans. (Be on the lookout for a death panel–like fear mongering campaign to scare people into thinking, erroneously, that Granny and Pawpaw will lose their government health care if Congress doesn't restore those "cuts" to Medicare.)" Meanwhile, they also want to strengthen the individual coverage mandate, though the Republicans are against that provision almost more than anything else.

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4. Congressman-Elect Mike Fitzpatrick Enters the Real Health Care World As noted in the Nov. 22nd Bucks County Courier Times (click here), Congressman-elect Mike Fitzpatrick is looking forward to getting to Washington so he can help repeal "certain provisions of ObamaCare." At least it seems more encouraging than the "repeal and replace" motto that many Republicans ran on in the midterm elections. According to the article, he wants to:

• Repeal "onerous mandates on small businesses" that would hurt job creation. This may refer to the requirement for employers to file 1099 tax forms for individuals and companies from which they buy more than $600 in goods or services in the calendar year. But, otherwise, only businesses with 50 or more employees will be assessed a $2000/year penalty tax per employee, excluding the first 30 employees. Since most employers already provide coverage (98% of those with 100 or more employees do), this isn't a big deal. Plus businesses with 25 or fewer employees may qualify for a federal tax credit if they decide to provide coverage on their own or through a health exchange. So, other than the 1099 hassle, where are the "onerous mandates on small businesses?" If he is thinking of a slightly higher tax rates on individual incomes over $200,000 if single or $250,000 if married, if the Bush tax cut are not allowed to continued for that income bracket, few of them own small businesses and few small business owners have net taxable incomes that high.
  
  
• Enable portability of insurance policies from job to job, which he said is not in the new health care law passed by Democrats. We're not sure how that would work if the employee goes to a new employer which has its own coverage. Does the employer have to subsidize at the same level as for other employees? How is it administered? Over time, with employee turnover, would employers drop their own plans? And of course, who regulates the coverage if bought in Alabama and the employee moves to PA?
  
  
• Enact liability reform (i.e., shift regulatory control from the states to the federal government and mandate one solution for all).
  
  
• Eliminate the coverage mandate for individuals (and the fine that enforces it). If Mr. Fitzpatrick wants to keep in the new ban on insurance company preexisting conditions exclusions, but allow people to sign up for coverage when they are sick ("free riders"), it will raise premiums and the cost of health care dramatically for everyone else.

Now that the election is over and Mr. Fitzpatrick will be our Congressman again, he needs to get beyond the campaign sound bites and get down to the serious reality of governance that includes helping the 60 million uninsured and slowing the increased cost of health care mentioned at the beginning of this update.

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5. Health Reform Spurring More Employers to Provide Coverage As reported on National Public Radio's Morning Edition on November 17 ("What's Behind More Businesses Offering Insurance?"):

"More small companies are offering medical insurance to their employees. In the past year, the number has increased by 15 percent. A Bernstein Research survey indicates the reason is the health care overhaul legislation. The law offers immediate tax breaks for small business owners."

As the Morning Edition Host Steve Innskeep noted, "It's likely due to the tax credit in the new health care law." The story cited study by New York's Bernstein Research showing that "60% of businesses with fewer than 10 employees are offering health insurance. That's an increase of nearly 14 percent, compared to last year." But of course spokespersons for groups like the National Federation of Independent Business (NFIB) oppose the law, claiming that, in the words of William Dunkelberg, an economist at the NFIB, "It certainly compromises the quality of care and the cost of care that we're going to see delivered to consumers out there." That's not what many others think. So why not give the ACA some time to work and then modify it, if these problems appear?

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6. Speaking of Hypocrisy... As Jonathan Cohn argues the Nov. 8th New Republic (click here), on the one hand Congressional opponents of health reform desire to "restore" the planned $500 billion in Medicare payment "cuts" over the next decade. On the other hand they claim to want to cut federal spending in general, always saw Medicare as a costly entitlement, and opposed its enactment in the first place (Newt Gingrich once said we should let it "wither on the vine"). So you would think they would be in favor of at least the provisions in the ACA, which simply eliminate extra payment to insurance companies for Medicare Advantage plans and reduce primarily the rate of increase for payments to certain providers, which data shows are excessive, and instead provide more money for primary care and prevention.

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7. Update on Medicare sign ups for 2011 The Washington Post reported in an article Medicare Change Smooth So Far (click here) about this years' annual sign up.

"One of the most significant savings envisioned in the new health- care law - limiting payments to the private health plans that cover 11 million older Americans under Medicare - is, so far, bringing little of the turbulence that the insurance industry and many Republicans predicted.

The law, which sets in motion the broadest changes to the U.S. health-care system in decades, will hold down the amount of money the government gives to Medicare Advantage plans, which are available to patients who prefer a managed-care version of the program. The savings is forecast to amount to $145 billion by the end of the decade.

Whether the payment changes are warranted was a contentious subplot in the protracted debate over the legislation. Democrats argued successfully that the private plans were being overpaid and could withstand the changes. Republicans warned that such plans would raise prices, lower benefits or cause defections from the program, stranding the elderly people who rely on them.

Early clues to the actual effects have now materialized, as elderly Americans may sign up for a health plan for 2011 during an enrollment period through the end of the year, and the warnings of swift, serious damage to the program are not borne out. Fewer health plans are available for the coming year, but the decrease is largely for reasons unrelated to the new law. Premiums have not jumped substantially, and benefits have not tended to erode."

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8. Status of Legal Challenges to the ACA For those who might want to review the various legal challenges to the ACA and the likely timing and escalation from lower to higher court reviews, the "Health Reform GPS web site provides a thorough summary by George Washington University professors (click here). They identify four challenges: the individual coverage mandate, the requirement for states to expand their Medicaid programs, the federal standards regulating insurance markets (e.g., prohibiting denying coverage based on health status), and the requirement for employers to offer minimum "essential" benefits or contribute towards premiums for plans their employees select on a health exchange.

They see the challenges taking years to resolve, providing time for further implementation of the program. However, "were several federal Circuits to collectively find the law unconstitutional, the disruptive effect could be considerable."

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9. More Value in Your Health Care Premiums, Starting Next Year The Department of Health and Human Services in November issued their detailed rules that will limit how much of anyone's health care premiums can be spent on administration and sales, vs. paying directly for medical care. As we reported last month, the National Association of State Insurance Commissioners, representing all 50 states, provided much of the guidance to the HHS in developing these rules. So they are not merely the dictates of a federal bureaucracy.
According to the Nov.22nd New York Times (click here):

"[T]he rules would protect nearly 75 million people: 10.6 million with individual policies, 24.2 million with small-group coverage and 40 million covered by large employers.

Starting next year... insurers in the individual and small-group markets must spend at least 80 percent of their premium revenues on medical care and activities to improve the quality of care. Insurers in the large-group market must spend at least 85 percent of premium dollars for those purposes...

Insurers that do not meet the standards next year will have to pay rebates to consumers, starting in 2012. Ms. Sebelius [Secretary of HHS] estimated that up to nine million people could get rebates worth up to $1.4 billion. About 45 percent of people with individually purchased insurance are in health plans that do not meet the new standards."

But to counter concerns that the requirements are too sudden for some smaller carriers to implement, "federal officials can lower the standard for up to three years in states where ‘there is a reasonable likelihood that market destabilization, and thus harm to consumers, will occur.'" Plus the "rules allow special treatment for health plans that provide limited benefits at a more affordable price" such as "mini-med" plans, which may limit the amount of coverage for one or more benefits at $5,000 or $10,000 a year, for example.

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10. What Are Those Minimum Essential Benefits? The ACA mandates that by 2014, insurance plans must cover "minimum essential benefits," so that insurance companies can no longer sell you policies with fine print that exclude coverage in months ending in "y" or "r," or cover hysterectomies only after prostate surgery. Some of course are concerned that lobbyists for various health treatment products or services will push to get medically questionable things covered. But the final Department of HHS regulations on these benefits will be largely guided by outside expert panels, and the ACA only specifies that the essential benefits should cover items normally covered in employer plans.

Since these are managed or provided by insurance carriers, it's important to find out how and why insurance companies determine what to cover and exclude. As reported American Medical News on the 22nd (click here), the Institute of Medicine, an independent advisory group, announced that it "began a study to "recommend how to determine and update these "'essential benefits,'" and will issue their recommendation next September. As the article notes:

IOM researchers will not suggest specific benefits or services to be included as essential benefits. Instead, they will review how insurers determine coverage and medical necessity and provide guidance and principles for the HHS secretary to consider when deciding what other criteria to add to the list. For example, the study will look at the health care needs of diverse population segments and nondiscrimination based on age, disability and life expectancy. IOM researchers will offer advice on how the government can periodically review and update the benefits package.

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11. Commission on Reducing the National Debt Offers Two "Told You So" Ideas The White House's National Commission on Fiscal Responsibility and Reform and other groups weighing in on how to reduce the national debt are now arguing back and forth about if and how much to cut Medicare benefits or raise contributions. We'll cover these various recommendations in our next Bucks Voices Update. But it's interesting that the White House's commission also made two recommendations that we encouraged a year or more ago: the public option and an all-payer rate requirement. According to the Nov. 10th Wall Street Journal (click here), the commission include a recommendation that if the government's health care spending growth exceeds a certain target after 2020, health exchanges should add "a robust public option and/or all-payer system."

The public option idea was heavily discussed by the media in 2009. An all-payer system, which is less widely known and which only Maryland has now, would require health care providers (doctors, hospitals, etc.) to charge all payers (insurance companies, governments, individuals) the same amounts for the same services – no network discounts to some large groups and higher charges to others with less clout. An all-payer system is not only much more equitable and simpler to administer, but forces providers to commit to certain rates that can then more easily identified and compared. You can't compare Hospital A against Hospital B if each has dozens of often proprietary rates for the same service.

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12. Amendment by Senators Wyden and Brown May Offer Compromise on Individual Coverage Mandate Republican Senator Scott Brown (Mass.) and Democrat Senator Ron Wyden (Ore.) introduced legislation this month to let states to opt out of the controversial individual health coverage mandate and other requirements of the ACA. According to Politico (click here):

"The Affordable Care Act (ACA) allows states to set up health care systems without a mandated purchase of health insurance, as long as they meet minimal requirements established by the Department of Health and Human Services. States can begin applying for mandate waivers in 2017, three years after the individual mandate is set to take effect.

But Wyden, who co-authored health reform's waiver provision with Sen. Bernie Sanders (I-Vt.), has previously spoken out against the 2017 start date as problematic: States would have to go through the motions of setting up a mandate-centered system only to dismantle it a few years later.

This new legislation would roll the waiver date back to 2014, when the individual mandate comes into effect.

In an interview with POLITICO, Wyden described the legislation as a natural fit for Oregon and Massachusetts, two states that have experimented significantly with their health care systems."

Another article on the topic, at The Hill website, provides more insight on the purpose of the proposal (click here). To qualify for the opt-out, a state would still have to meet key requirements of the ACA, but, as health policy expert Len Nicholson is quoted as saying, "It really is a clever way to force an adult conversation." It might let some of the steam out of the various state complaints about the law when they try to figure out what other practical alternatives are out there.

Finally, as Ezra Klein pointed out in the Washington Post on the 18th (click here), part of the support for the Wyden-Brown "Empowering States to Innovate Act" comes from single payer advocates, such as Senator Bernie Sanders of Vermont, where there is a strong effort to enact a single payer program. Single payer advocates in PA, CA, and other states also hope this amendment is approved. If states get to take advantage of the opt-out and put in a program that costs less, they get to spend less state dollars and keep any excess federal funds. According to Klein, while this amendment does not yet have much political support, it has a lot that would appeal to both liberals and conservatives. It would enable states to compare the effectiveness of single payer vs., for example, an insurance market-based system with "consumer-directed" (i.e., high cost-sharing) plans.

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13. Higher Cost-Sharing Plans Are Not Very Healthy If You're Poor Speaking of plans with high cost-sharing provisions, like $2000 deductibles, a new study by the University of Pennsylvania found "that low-income families were significantly more likely than wealthier families to delay or skip needed care for an adult or child," according to a write-up in Reuters on the 23rd (click here). For example, they concluded that "poor respondents were twice as likely as wealthier respondents to discuss with their doctor the need for a $100 blood test or the cost of a $1,000 colonoscopy, a screening test for colon cancer."

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14. Let's Play Monopoly One of the concerns that frequently appear in discussions about how the ACA will change (and is already changing) the provider marketplace is further monopolization in many areas with already limited choices for hospitals or physician groups. The ACA encourages consolidation of physicians with hospitals and specialists with generalists, etc. to form "accountable care organizations" that provide more complete and coordinated care. But, the Washington Post's Steven Pearlstein, one of the best economics writers in the major media, has a great article (click here) on the dilemma we all face. You should read the article, but here are a few quotes:

• "The only way for the health-care industry to move toward accountable care is to further accelerate a process of consolidation that has already reduced competition and increased market power."
  
  
• "Insurance companies merge to gain greater clout in negotiating with hospitals and other providers, then the providers merge to gain leverage over the insurers. At any one time, in any one market, one side or the other might have the upper hand, but there is little evidence that the benefits from this endless cycle of consolidation actually flow to those of us who ultimately pay the bills."
  
  
• According to a study published earlier this year in Health Affairs, in California, "In some cases, private insurance companies pay "must-have" hospitals and powerful physician groups twice the rate they are paid by Medicare, with double-digit annual rate increases now routine."
  
  
• "[T]o the degree that we let providers collaborate rather than compete against one another, we also may have to find new "all-payer" mechanisms, as they are called, that would allow insurers to collectively negotiate rates with hospital chains and accountable-care organizations. Market power vs. market power."

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15. 43,000 in PA Could Lose State-Subsidized AdultBasic Coverage In February Due to financial problems, Pennsylvania may have to cut $54 million from its adultBasic health plan for people who can't afford or get coverage elsewhere but don't' qualify for Medicaid. Of the 43,000 people who might be affected state-wide, about 3000 are in Bucks and Montgomery Counties. 460,000 people in the state are also on the waiting list, according to a Nov. 18th article in Phillyburbs.com (click here).

While the program's initial funding in 2002 came from the multi-state tobacco lawsuit settlement, that money ran out and now 80% of it comes from the four nonprofit "Blues" insurers in the state (in part as a trade-off for their tax-exempt status). The Blues organizations don't think they should have to come up with more than the $163 million they currently put in, even though their combined reserves grew by 61% from 2002 to 2009 to $5.6 billion. Let's see... $54 million is a whopping 1% of $5.6 billion...

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16. "Warning – Hospital Zone: Enter at Your Own Risk" Another study on safety in hospitals shows "no progress," according to the Nov. 24th New York Times (click here). The study was limited to 10 North Carolina hospitals over 2002-2007, but according to lead author Dr. Christopher P. Landrigan, "It is unlikely that other regions of the country have fared better." In fact, the study looked at these hospitals because they supposedly had been "more involved in programs to improve patient safety." But, "instead of improvements, the researchers found a high rate of problems. About 18 percent of patients were harmed by medical care, some more than once [statistically "25.1 injuries per 100 admissions"], and 63.1 percent of the injuries were judged to be preventable. Most of the problems were temporary and treatable, but some were serious, and a few — 2.4 percent — caused or contributed to a patient's death, the study found."

Solutions?

• According to the author, "We need a monitoring system that is mandatory... There has to be some mechanism for federal-level reporting, where hospitals across the country are held to it."
  
  
• Computerized systems for ordering drugs, greater and consistent use of checklists, supported by a culture of teamwork and good communication.
  
  
• Greater openness on reporting problems at hospitals. According to "Leah Binder, the chief executive officer of the Leapfrog Group, a patient safety organization whose members include large employers trying to improve health care, ""What we know works ... is a competitive open market where consumers can compare providers and services... Right now you ought to be able to know the infection rate of every hospital in your community."

Sorry to potentially contradict politicians who claim that we have "the best gol-durn health care system in the world," but yet another study, on Medicare specifically, concluded that one in seven Medicare patients are harmed during hospital stays. According to a summary on MSNBC (click here), "About 1.5 percent of those patients, or 15,000 people a month, suffered a complication that contributed to their death, the inspector general for the Department of Health and Human Services said." In response to problems like these, the new head of the Center for Medicare and Medicaid Services, Dr. Donald Berwick, "unveiled a new Medicare ‘innovation center' ... designed to develop and test ways to improve quality of care and lower health care costs for everyone, not just Medicare recipients. The program is one of several established by the new health care law to help Medicare spur improvements in patient safety.

Initial projects focus on helping primary care physicians better coordinate care across multiple health providers, countering today's fragmented care that too often leaves one doctor not knowing what tests or treatments someone received or missed elsewhere.

One project will work with doctors in eight states — Maine, Vermont, Rhode Island, New York, Pennsylvania, North Carolina, Michigan and Minnesota. A second will offer similar integrated care in hundreds of low-income health clinics around the country."

However, as potential new programs get implemented, federal agencies will also have to strike a careful balance between regulations designed to encourage more integrated and organized care and those aimed at preventing fraud, skimping on care, and formation of health care monopolies. A Nov. 20th New York Times article summarizes the concerns of both consumer groups and providers (click here).

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