Saturday, February 28, 2015

Health Care Reform Articles - February 28, 2015

Equitable Financing Plan
For Vermont’s Universal Healthcare System
Written by the
Healthcare Is a Human Right Campaign
February 2015 

Healthcare financing is a matter of justice and human rights. The system of private, market-based payment for healthcare has caused a deep crisis of inequity that the state of Vermont must address now. The Healthcare Is a Human Right (HCHR) Campaign presents this proposal for equitable, public healthcare financing because we speak for thousands of people affected by this crisis. Too many people cannot use their limited insurance plans to get adequate care, struggle with high out-of-pocket costs and unpaid bills, and have unmet health needs. People’s health and wellbeing are on the line.
Market-based health insurance financing is profoundly inequitable: low-income people pay proportionally more for healthcare than the wealthy, while making do with low-value insurance plans.1 One in five people are struggling with medical bills, while ten BCBSVT executives are paid up to half a million dollars each.2 This failing system-- with its different and unequal insurance products, different and unequal prices for health services, and different and unequal access to doctors-- costs Vermont a fortune. Healthcare spending is growing faster than the state’s GDP, and this trend will continue if we fail to act.3 We can no longer afford to protect and perpetuate a healthcare system that is both wasteful and unjust.
Vermont is in a prime position to implement a publicly financed healthcare system that guarantees access to care for all, increases equity, and reduces costs. To do so, we do not require new money; we need to share existing payments more equitably. In this report, the HCHR Campaign shows how this can be achieved in Vermont by 2017. We develop an equitable healthcare financing plan that is grounded in Governor Peter Shumlin’s proposals for Green Mountain Care and that provides solutions to the questions raised in his report.4 We present cost and revenue models that demonstrate that it is not only possible, but financially and economically advantageous to implement a publicly financed healthcare system in Vermont.

The HCHR Campaign has built a people’s movement for the human right to healthcare since 2008. Our goal is to realize the human right to healthcare in Vermont by establishing a universal healthcare system that provides healthcare as a public good for all. This system must be guided by the human rights principles of universality, equity, transparency, accountability and participation. We successfully advocated for the incorporation of these principles into Act 48, Vermont’s universal healthcare law, passed in 2011.
Act 48 set Vermont on the road to establishing a publicly financed healthcare system, Green Mountain Care (GMC), by 2017. It did not prescribe a financing mechanism but stated that the “financing of health care in Vermont must be sufficient, fair, predictable, transparent, sustainable, and shared equitably.”5

In 2012, the HCHR Campaign published a healthcare financing report that analyzed the compatibility of various financing mechanisms and revenue sources with human rights standards.6 We used the five basic human rights principles to develop detailed financing standards to guide the design of the GMC financing plan. To ensure universality, financial resources must follow health needs, and the financing plan has to ensure the sufficiency of funds. To ensure equity, financing has to be public, using progressive taxes. Access to care should be free at the point of service. To ensure accountability, transparency and participation, healthcare financing and administration has to move from the private to the public sector and support people’s participation in governance.
Guided by these principles, the HCHR Campaign’s 2012 report proposed a progressive income tax, a wealth tax and a graduated payroll tax on employers to finance GMC. We suggested that decision-makers ground their policy choices in the human rights standards, which are reflected in Act 48. Yet when the Governor’s plan was finally published on December 30, 2014 - missing Act 48’s deadline of January 2013 by almost two years - it was not based on principles. Although the Governor proposed income and payroll taxes for healthcare, these taxes were not designed to function in a sufficiently equitable way. The failure to adequately take into account individuals’ and businesses’ ability to pay contributed to dooming the Governor’s proposals – an unnecessary fate for an otherwise sound plan. Guided by human rights principles, the HCHR Campaign seeks to propose necessary design changes to the Governor’s plan, so that it can be used to guide the implementation of GMC.

The HCHR Campaign conducted a basic human rights assessment of the Governor’s healthcare financing proposals. By flagging issue areas in need of better solutions, this assessment offers a guide for the development of a financing plan that improves and expands on the Governor’s proposals.
Human Rights Assessment of Governor Shumlin’s Financing Plan:

Populations included:
The Governor’s plan is inclusive, though it carves out the Medicare population in the absence of a federal waiver. It offers no Medicare wrap-around for seniors.
Health services provided: The Governor’s plan excludes dental, vision, hearing and long-term care.

Out-of-pocket costs:
At an actuarial value of 94% GMC greatly improves on commercial plans, but low- income and sick people would still struggle with co-pays. Seniors, in particular, would continue to face high Medicare out-of-pocket costs.
Income Tax: The Governor’s income tax proposal is more equitable than private premiums. However, the tax rate rises rather steeply for middle income people, while payments are capped for the wealthy. Payroll Tax: The Governor’s payroll tax is flat, which means businesses’ contributions are not based on their ability to pay.

GMC Operations:
The Governor’s proposed public utility model for healthcare administration would enable better regulation but also monopolizes the position of a private insurer and guarantees operating surpluses.
System costs: Public oversight and control of healthcare prices is assumed to happen at a future stage, and savings from such rate setting are not explicitly calculated. Rate setting for drug prices, e.g. through price negotiation, is not included at all.

Income and payroll taxes:
Taxes are more transparent than insurance premiums and other hidden fees. System costs: The Governor’s plan assumes administrative costs will have close to commercial-level overheads (7%); and costs will grow at 4% annually. The assumptions and data points behind these projections and trends are unclear. It is unclear what specific savings have been accounted for.

Health services provided:
The Governor’s exclusion of dental, vision and hearing care does not take into account the health needs expressed by Vermont residents in consultations.
GMC Operations: Neither a private contracting arrangement nor a public utility model enables meaningful public participation in governance.

Economists Throw Weight Behind Universal Health Care in Vermont

Market Guide for Healthcare Payers' Core Administrative Processing Systems

28 January 2015 ID:G00272323
Analyst(s): Constance Sjoquist


Payer CIOs need to enhance, append or replace their existing core administrative systems to more effectively compete in an increasingly complex healthcare environment. Vendors are developing newer or re-engineering existing solutions to meet this demand.


Market Definition

Core administrative processing applications are the main systems of record for all healthcare payer business operations from front-end membership management and claims processing to back-end billing and premium payments. Core administrative systems also provide enterprise business functions, such as membership enrollment, benefits plan and provider management, claims adjudication, repricing and audits, premium billing, regulatory and compliance, reporting, and workflow management.
In most payer organizations, core administrative systems are considered "run the business" enterprise applications and are not managed as strategic technology assets. The value they bring to their clients is not typically promoted to internal or external stakeholders, and so investments in improving these systems are primarily focused on streamlining processes or identifying opportunities to pay claims more accurately or more efficiently. Emphasis is placed primarily on their ability to effectively manage day-to-day operations of a payer's business.
Gartner defines core administrative capabilities within two main categories — standard and differentiator components — which follows Gartner's pace layer approach to application architecture. Standard components include benefits administration, membership management, provider administrative configuration and management, claims processing, rating and underwriting, and premium billing. Differentiator capabilities include enterprise workflows, self-service interfaces, integrated customer service, pricing transparency, and automated business intelligence (BI)/analytics and reporting via dashboards for informed decision making (see Note 1).
While payers may decide existing core administrative solutions satisfy their current expectations, by adding differentiator capabilities, payers can more effectively respond to emerging market demands and opportunities.

Market Direction

Historically, the vendor options for core claims administrative systems have been somewhat limited. A handful of legacy solutions have dominated the payer space for years. Often highly customized to a payer's unique business environment or utilized only for a specific line of business (LOB), core administration systems have been expensive and difficult to replace, upgrade, enhance or consolidate without incurring significant risk or downtime.
In the last several years, an enormous amount of change has occurred in the healthcare market and is impacting payers' requirements of their core administrative solutions. New demands include the need to comply with an increased number of regulatory requirements, manage a growing number of contractual arrangements and support new distribution channels. Payers are finding it necessary to make the shift from a historical group to a largely individual membership base and are seeking new and differentiated capabilities that will help ensure they can remain relevant and competitive.
In response, vendors in the healthcare core administrative space have begun to significantly shift their product strategy or market focus to address new payer challenges. While this has brought about innovation and choice, it has also led to a disparate market, causing confusion over what exactly the essential elements of a core administrative system are. Vendors that once dominated the market have recently merged or have been acquired, causing uncertainty around their future product road maps. Some vendors have completely dropped their product offerings for a particular LOB or have shifted their technology strategy to offer only nonlicensed software solutions.

Doctors say data fees are blocking health reform

The fees are thwarting the goals of a push to digitize health records.

As they move to exchange patient information with hospitals and other health care partners, doctors are suffering sticker shock: The vendors of the health care software want thousands of dollars to unlock the data so they can be shared.
It may take an act of Congress to provide relief.

The fees are thwarting the goals of the $30 billion federal push to get doctors and hospitals to digitize health records. The exorbitant prices to transmit and receive data, providers and IT specialists say, can amount to billions a year. And the electronic health record industry is increasingly reliant on this revenue.

The goal of the 2009 program wasn’t just to move doctors from paper chart to computer. It was also to share the information, improve the quality of patient care and ultimately bring down U.S. health care costs.
Most doctors and hospitals have now switched to electronic health records, or EHRs. But the information is often stuck in computers run by hundreds of competing health care software companies — with incompatible products and scant incentive to make them compatible, or “interoperable,” as the industry calls it.
The additional costs were not foreseen during the bipartisan congressional push to create the federal incentive program. The expense is now imperiling the broad efforts to reform health care and adding to the host of technical obstacles that already hamper the flow of information.
“I believe this to be the biggest threat to the investment the nation has made in health IT,” said David Kendrick, head of Oklahoma’s health information exchange, which links doctors, hospitals and labs in his state. “All the money spent on electronic health records has yielded only a fraction of the value of getting interoperability.”
“It’s like giving everyone cellphones and not putting up a cell tower,” he added.
GOP congressional leaders are usually reluctant to intrude on business practices. But in this case, some GOP lawmakers are considering sanctions on the software vendors.
“Interoperability is what makes an EHR useful,” said Rep. Michael Burgess (R-Texas), a physician who leads the House Energy and Commerce trade subcommittee and is drawing up a bill to enforce data sharing. “It’s unfair that practitioners have to spend money on connections they thought were part of the EHR when they bought it.”

Thursday, February 26, 2015

Health Care Reform Articles - February 26, 2015

When the System Fails

I PURCHASED a purple “My Little Pony” at Walmart. I told myself it was to bring a brief smile to a sad little girl’s face. In reality, it was for me. In the overwhelming apparatus that medicine has become, sometimes the patient gets lost. So does the doctor. As the major safety net hospital in our region, my own hospital is arguably better equipped than most to effectively handle the human side of medical care. But even the most experienced institutions face an increasingly uphill battle against the systemic shortfalls of American medicine.
The patient, whom I’ll call Mohammed, was an American citizen, fully employed with health insurance, although with limited English language skills and health literacy. I had been his primary care doctor for seven years, and he came to me about two years ago with a lesion on his scalp after hitting his head on the door. I didn’t know exactly what it was, although my best guess was some sort of post-traumatic injury. I sent him to surgery for another opinion. The surgeon concurred with my diagnosis, but scheduled a biopsy. What I didn’t know was that Mohammed didn’t return for the planned procedure. He was struggling as a new single parent to his two young children who had just arrived from a war-torn African country, while his wife was left behind, her visa delayed by bureaucratic obstacles. He had deferred the biopsy because of his life circumstances without understanding the significance, and without catching anyone’s attention. The ball was dropped, and he fell through the cracks in the mighty apparatus.

Health Secretary Says There’s No Backup Plan if Supreme Court Rules Against Law