Health Care Reform Articles - September 2, 2015

In a setback for Mass., health care costs spike in state

4.8% rise tied to plan for poor, drug prices

By Priyanka Dayal McCluskey GLOBE STAFF  SEPTEMBER 02, 2015

The soaring costs of insuring the state’s poorest residents drove health care spending in Massachusetts up 4.8 percent last year, double the rate of growth in 2013, dealing a setback to the state’s efforts to contain medical costs.

The increase far exceeds inflation, which was 1.6 percent last year, and blows past a state goal of holding health care spending growth to 3.6 percent annually, according to a report to be issued Wednesday by the state Center for Health Information and Analysis.

Health care spending rose 2.4 percent in 2013.

“It is terribly disappointing for all of us who have been working on health care cost control,” said Brian Rosman, research director of Health Care For All, a consumer advocacy group. “But I’m not sure if this is a temporary fluke or if we’ve strayed from the path.”

The report is the latest example of the challenges of bringing health care costs under control as state and federal laws expand access to medical services, expensive new drugs hit the market, and the population ages, analysts said. The federal government projects that per capita spending on health care will rise 4.9 percent a year nationally through 2024.

In Massachusetts, the growth in costs had slowed over the past few years but recently has begun to accelerate. Last month, state regulators approved an average health premium increase of more than 6 percent next year for small business and individual policies, triple the increase of 2014.

The new state report shows that last year’s spending increase was concentrated in the state’s Medicaid program, known as MassHealth, where spending surged 19 percent after rising less than 5 percent in 2013. MassHealth, funded by taxpayers, provides insurance to 1.8 million low-income residents.

The federal Affordable Care Act extended the program to cover a bigger share of the population, but MassHealth numbers also ballooned in 2014 when the state’s online insurance exchange crashed. About 300,000 were placed in the program temporarily, regardless of their income, as state officials sorted out problems with the exchange, called the Health Connector, according to the state report.

Also, the state in 2014 stopped checking whether members of MassHealth were eligible for the program, a process known as redetermination.

“It is tremendously concerning that we pay for so much health care for people who are turning out to not be eligible for the program,” said Joshua Archambault, a senior fellow on health care policy at the Pioneer Institute, a Boston think tank.

Governor Charlie Baker’s administration has resumed the redetermination process this year and so far has removed 205,000 people who were not eligible for MassHealth, saving about $250 million. The state budget limits MassHealth spending growth to 6 percent this year, said Billy Pitman, a Baker spokesman.

“Governor Baker is addressing the inherited problems at the Health Connector and continues to implement the redetermination process, ensuring the long-term sustainability of MassHealth to provide care for the Commonwealth’s most vulnerable,” Pitman said.

Analysts said they don’t know whether the spike in MassHealth spending was a blip or the beginning of a trend.

“We’re going to need to dig deeper,” said Stuart Altman, chairman of the Health Policy Commission, the state agency that monitors costs. 

“If it’s the result of a temporary growth in enrollment, if it’s the result of more structural issues — at this point, we just don’t know.”

http://www.bostonglobe.com/business/2015/09/01/healthcosts/W470z61YbrKIhrS7xuDyVI/story.html?s_campaign=email_BG_TodaysHeadline&s_campaign=

Executive pay at Blue Shield of California shot up $24 million, audit reveals

Eric Risberg / AP

Blue Shield of California is the state's third-largest health insurer with about 3.4 million members and $13.6 billion in annual revenue. Above, the company's headquarters in San Francisco. (Eric Risberg / AP)

Nonprofit insurer Blue Shield of California boosted executive compensation by $24 million in 2012 — a 64% jump over the previous year — according to a confidential state audit reviewed by The Times.

The health insurance giant won't say who got the money or why. But Blue Shield's former public policy director, Michael Johnson, who left this year and is now a company critic, said senior officials at the insurer told him that former Chief Executive Bruce Bodaken received about $20 million as part of his 2012 retirement package, on top of his annual pay.

Half a dozen other top executives also left the company near the end of 2012, which could have accounted for some of the spike in compensation. Some of this severance or retirement money may be paid out over time, extending beyond 2012.

The San Francisco insurer declined to confirm the total compensation for Bodaken, who was chairman and CEO from 2000 to 2012.

The audit's tally of $61 million in pay for nearly 60 executives in 2012 appears to include Bodaken and others who left. But Blue Shield omitted their pay from a separate state filing that required 2012 compensation data on the company's 10-highest paid employees.

http://www.latimes.com/business/la-fi-blue-shield-pay-20150901-story.html#navtype=outfit

The Problem With G.O.P. Plans to Sell Health Insurance Across State Lines

AUG. 31, 2015

by Margot Sanger-Katz

At the Fox News Republican debate last month, Donald Trump offered a way to lower health care costs: allow insurers to sell their policies across state lines.

“What I’d like to see is a private system without the artificial lines around every state,” he said. “I have a big company with thousands and thousands of employees. And if I’m negotiating in New York or in New Jersey or in California, I have like one bidder. Nobody can bid.” Erasing those lines, he said, would result in “great plans.”

The idea of developing a more national market for health insurance has become a major part of Republican health reform orthodoxy. A bill to allow interstate insurance sales was introduced in Congress in 2005, and, since then, has been a part of the platform of every Republican presidential nominee. Mr. Trump is not alone in his view: Scott Walker, Marco Rubio, Ted Cruz, Rand Paul, Rick Santorum and Bobby Jindal have all endorsed it. Aside from repealing the Affordable Care Act, allowing insurers to sell their products across state lines appears to be the most popular health policy idea among the G.O.P.candidates.

It’s such a perennial suggestion that when Len Nichols, a health policy professor at George Mason University and the author of a 2009 paper on the subject, was asked for comment, he said: “Are you kidding me? We’ve been through this about 30 decades ago.”

The idea is that by eliminating the red tape associated with state insurance regulation, insurers will be able to offer national plans with lower administrative costs. That would expand consumers’ choices and reduce the price of insurance. The proposals also all assume that, in place of expensive regulations in some states, insurers would have the option of choosing to base their companies in a state with fewer rules. In some versions of the plan, they would have to comply only with basic federal requirements that would apply everywhere.

“You would have a lot more people coming into the market,” said Brittany La Couture, a health policy counsel at the conservative American Action Forum, who has written about the idea in a largely positive light. A national market would “give people options, help them choose the best plan for them,” she said.

Both critics and enthusiasts of the idea agree that this could be true. Some states require much more of insurers than others, and following the many and varied state rules may drive up the cost of insurance in some markets. Customers in a state requiring insurance to pay for chiropractic care or infertility treatments, for example, might prefer to buy a cheaper policy in a state that doesn’t require such benefits.

The trouble is that varying or numerous state regulations aren’t the main reason insurance markets tend to be uncompetitive. Selling insurance in a new region or state takes more than just getting a license and including all the locally required benefits. It also involves setting up favorable contracts with doctors and hospitals so that customers will be able to get access to health care. Establishing those networks of health care providers can be hard for new market entrants.

http://www.nytimes.com/2015/09/01/upshot/the-problem-with-gop-plans-to-sell-health-insurance-across-state-lines.html?em_pos=small&emc=edit_up_20150901&nl=upshot&nlid=1311158&ref=headline

High Drug Prices Are Killing Americans

by

Bernie Sanders

All across the country, Americans are finding that the prices of the prescription drugs they need are soaring. Tragically, doctors tell us that many of their patients can no longer afford their medicine. As a result, some get sicker. Others die.

A new Kaiser Health poll shows that most Americans think prescription drug costs in this country are unreasonable, and that drug companies put profits before people. Want to know something? They're right.

Americans pay the highest prices for prescription drugs in the world -- by far. Drug costs increased 12.6 percent last year, more than double the rise in overall medical costs. (Inflation in this country was 0.8 percent that year.)

Even before that, we spent nearly 40 percent more per person on prescriptions in 2013 than they did in Canada, the next most expensive industrialized country. Prescription drugs cost nearly five times more per person in this country than they did in Denmark that year.

This is not a partisan issue. Most Americans -- Republicans, Democrats, and independents -- want Congress to do something about drug prices. 86 percent of those polled, including 82 percent of Republicans, think drug companies should be required to release information to the public on how they set their prices. Large majorities support other solutions to the drug cost problem as well.

The Kaiser poll also showed that Republican voters care more about drug prices than they do about repealing Obamacare. They should. Republicans in Congress have tried to repeal that law so many times that it's an embarrassment. It's also a distraction from the very real health care problems our country faces. Millions of Americans still can't see a doctor when they need one. Another poll showed that nearly one in five Americans didn't fill a prescription because of cost.

That should not be happening in the United States of America -- but it is. And it's not likely to end anytime soon, unless we do something. Medicare is predicting that drug costs will continue to rise by nearly 10 percent per year for the next 10 years. Tens of thousands of Americans now spend more than $100,000 a year on prescription medication. One drug costs $1,000 per pill.

http://www.commondreams.org/views/2015/08/31/high-drug-prices-are-killing-americans

As Heroin Addiction Grows, Maine Focuses On Drug Enforcement

AUGUST 29, 2015 8:05 AM ET

A cap on the number of opiate addiction patients that doctors can treat means many who want to take Suboxone can't get access to it. In Maine, the governor has reduced funding for the treatment.

SCOTT SIMON, HOST: 

This is WEEKEND EDITION from NPR News. I'm Scott Simon. Like so many other states, Maine is in the grip of an opiate epidemic. Other states have expanded drug treatment as part of the response. Maine has not. There are fewer treatment options than just a few years ago. The Republican Governor Paul LePage is pursuing instead a drug-enforcement strategy. Maine Public Radio's Susan Sharon reports.

SUSAN SHARON, BYLINE: A major blow came in May when one of Maine's largest treatment providers announced it was closing. Mercy Recovery Center placed much of the blame on cuts in state funding. There was already a shortage of long-term residential treatment beds. And then last week, a methadone clinic in southern Maine also announced it was shutting its doors.

For those who want to safely get off heroin, the first step toward recovery is often detox, if you can get in.

LAUREN WERT: Yesterday we had someone count, and we had turned away 113 people this month because the program was full.

SHARON: Lauren Wert is the director of nursing at Milestone Foundation in Portland. This is Maine's largest city, the epicenter of the heroin crisis, and Milestone is the only residential detox around. It has just 16 beds available for three- to seven-day stays. At the small nurses station, Wert says she and her staff gently inform a steady stream of callers that they can't help them out.

WERT: Oftentimes people cry. They're asking questions like, where else do we go? What do I do? He feels like he's going to die.

SHARON: Wert says there used to be places to refer clients, but now all the staff can say is, I'm so sorry.

MARY DOWD: It's frustrating not to be able to get people services who desperately want it.

SHARON: Dr. Mary Dowd, medical director for Milestone, says the challenge is that most heroin addicts can't get sober without replacement medications, like methadone and Suboxone. At a roundtable discussion in Maine this week, U.S. Drug Control Policy director Michael Botticelli said, increasing access to them in Maine and elsewhere is essential because they work.

http://www.npr.org/2015/08/29/435741124/as-heroin-addiction-grows-maine-focuses-on-drug-enforcement