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Monday, June 24, 2013

Health Care Reform Articles - June 24, 2013



Hospital CEO Bonuses Reward Volume And Growth

TOPICS: HOSPITALS, HEALTH COSTS, STATES, MARKETPLACE
By JAY HANCOCK
KHN Staff Writer
JUN 16, 2013
Like hospital leaders everywhere, the people running Valley Medical Center in Renton, Wash., talk frequently about the need to control soaring medical costs.
"We are working to reduce the overall cost of health care and to transform health care delivery," Lisa Jensen, chairwoman of the hospital's board of trustees, said last year.
Experts believe that's a good prescription for the entire U.S. health industry, which costs the economy far more than systems in other developed countries, delivers mediocre results and is widely seen as unsustainable at its current growth rate.
But even as Valley officials talk about change, they're paying hospital CEO Richard Roodman tens of thousands of dollars in bonuses for driving the kind of profits and expansion many say are no longer affordable for patients, employers and taxpayers.
Across the nation, boards at nonprofit hospitals such as Valley are often paying bosses much more for boosting volume rather than delivering value, according to interviews with compensation consultants and an examination of CEOs' employment contracts and bonus packages. Such deals undermine measures in the 2010 health law that aim to cut unnecessary treatment and control costs, say economists and policy authorities.
Officials Prepare For 'Biggest Open-Enrollment Season We've Ever Seen'


TOPICS: HEALTH REFORM, MARKETPLACE, INSURANCE
By PHIL GALEWITZ and JAY HANCOCK
KHN Staff Writers
JUN 23, 2013
At the Silver State Health Insurance Exchange in Carson City, Nev., workers have been counting down the days until Oct. 1 on an office corkboard. Sunday is a big milestone --- 100 days to the deadline for opening the online marketplaces that are a linchpin of the federal health law known as Obamacare.
"We certainly will need every one of the days that we have left," said Jon Hager, executive director of the Nevada exchange. "But I am confident we will be ready to go."
Nevada is one of 15 states racing to launch their own marketplaces where consumers can compare plans’ prices and benefits, and find out if they are eligible for a federal subsidy or Medicaid. The other states are relying on the federal government. Those marketplaces, also called exchanges, are key to expanding insurance coverage to an estimated 25 million Americans over the next decade.
'The next hundred days are the sprint to the biggest open-enrollment season we’ve ever seen in this country," said Ceci Connolly, managing director of PricewaterhouseCoopers' Health Research Institute. "We know that this will be a real crunch period."
Opening the marketplaces on time represents the Obama administration’s biggest opportunity to fulfill the law’s promise to extend coverage to uninsured Americans, including those who have been denied coverage in the past because of health conditions. Since the Supreme Court upheld the law last June, though, officials have had to overcome many hurdles, from states’ reluctance to participate, to critics’ predictions of unaffordable coverage, to unexpectedly tight money.
A quirk in the law gave generous funding for consumer outreach in states with their own marketplaces, but little for states with a federal exchange. That could be a problem since polls show that most Americans know little about how the law affects them.


http://www.kaiserhealthnews.org/Stories/2013/June/23/100-Days-Until-health-insurance-marketplaces.aspx



June 22, 2013

Profiting From Pain

By 
THE use of narcotic painkillers, or opioids, has boomed over the past decade as drug makers and doctors have promoted them for a new use: treating long-term pain from back injuries, headaches, arthritis and conditions like fibromyalgia. Insurers have also grown to see pills as a cheaper way to treat chronic pain than other methods.
Some patients are greatly helped by opioids, a large family of medications. Among the more widely used opioids are oxycodone, which is found in Percocet and OxyContin, and hydrocodone, which is used in Vicodin. Other potent opioids include fentanyl and methadone. Narcotic painkillers are now the most widely prescribed class of medications in the United States, and prescriptions for the strongest opioids, including OxyContin, have increased nearly fourfold over the past decade.
There is increasing evidence, however, that such drugs, along with being widely abused, are often ineffective in treating long-term pain and can have serious consequences, particularly when used in high doses. Along with the risk of addiction, side effects can include psychological dependence, reduced drive, extreme lethargy and sleep apnea.
The economic costs associated with the painkiller boom have also proved enormous, giving rise to a host of unanticipated medical, legal and social costs. Over the past decade, the legal — and illegal — use of these drugs has given birth to new businesses and expanded existing ones. These include urine-screening tests to make sure patients are taking the drugs properly, added sales of addiction treatment drugs, growing emergency-room expenses, law-enforcement budgets and skyrocketing costs for insurers.
In the short run, treating a patient with an opioid like OxyContin, which costs about $6,000 a year, is less expensive than putting a patient through a pain-treatment program that emphasizes physical therapy and behavior modification. But over time, such programs, which run from $15,000 to $25,000, might yield far lower costs.
Here is a brief guide to the economics of opioids.
Barry Meier is a reporter who covers business and medicine for The New York Times and the author of the Times e-book “A World of Hurt: Fixing Pain Medicine’s Biggest Mistake.”

Employers Test Plans That Cap Health Costs

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Hoping to cut medical costs, employers are experimenting with a new way to pay for health care, telling workers that their company health plan will pay only a fixed amount for a given test or procedure, like a CT scan or knee replacement. Employees who choose a doctor or hospital that charges more are responsible for paying the additional amount themselves.
Although it is in the early stages, the strategy is gaining in popularity and there is some evidence that it has persuaded expensive hospitals to lower their prices.
In California, a large plan for public employees has been especially aggressive in using the tactic, and the results are being watched closely by employers and hospital systems elsewhere.
Under the program, some employees are being given the choice of going to one of 54 hospitals, including well-known medical centers like Cedars-Sinai and Stanford University Hospital, that have agreed to charge no more than $30,000 for a hip or knee replacement. Prices for the operation normally vary widely in the state, with hospitals billing from $15,000 to $110,000 for the same operation, a spread that is typical for much of the nation.
“It’s a symptom of the completely irrational pricing structure hospitals have,” said Ann Boynton, a benefits executive for the California Public Employees’ Retirement System, known as Calpers, which worked with the insurer Anthem Blue Cross, a unit of WellPoint, to introduce the program.
Overall costs for operations under the program fell 19 percent in 2011, the program’s first year, with the average amount it paid hospitals for a joint replacement falling to $28,695, from $35,408, according to an analysis by WellPoint’s researchers that was released Sunday at a health policy conference.
The study found no impact on quality of care.
“It’s a race to value,” said Dr. Samuel R. Nussbaum, the chief medical officer for WellPoint. One of the nation’s largest health insurers, WellPoint operates Blue Cross plans in 14 states.

State Rewards Home Care Firms Once Rebuked

By 
Hunting for ways that the incoming governor could close a $2 billion budget deficit late in 2010, New York State officials scrutinized Medicaid spending on home health care, and made some startling discoveries.
The cost of caring for frail elderly and disabled people at home had more than doubled from 2003 to 2010, to $1.3 billion, even though fewer people were being served. And that huge cost increase had been driven by just a half-dozen certified home health agencies out of 140, most located in Brooklyn.
Two names stood out: Excellent Home Care and Extended Home Care. During a broad investigation of Medicaid fraud he conducted as attorney general, Gov. Andrew M. Cuomo had showcased his role in reclaiming $3.7 million from Excellent and $9.5 million from Extended in a settlement of false-claims suits against them. The agencies admitted no wrongdoing.
Now a transformation of the state’s long-term care system is in high gear, as the state has extended invitations to agencies to be a part of the new system. Among those chosen: Excellent and Extended.
“I don’t know what an organization would have to do to be disqualified,” said Susan Regan, a longtime member of the state’s public health planning council who was outraged to discover, on Page 221 of a meeting agenda, that the Health Department had endorsed Excellent for an expanded license.
State officials view the new system as a national model for permanently curbing Medicaid costs. They said Excellent and Extended had both improved and had been approved to take on bigger roles through a standard application process.
But both companies’ ties to policy makers run deep. Excellent’s owners have contributed and raised money for both parties, and its lawyer has been a fund-raiser for Mr. Cuomo, a Democrat.
As for Extended, which paid $150,000 to the lobbying firm of former Senator Alfonse M. D’Amato of New York last year, and whose owners until recently included Joseph Zappala, a longstanding Republican fund-raiser, it was recommended for a new, potentially more lucrative role in the revamped system by Dean G. Skelos, the Republican leader in the State Senate. Under state law, the leaders of the Legislature can each nominate four agencies for such roles.
Extended was seeking a coveted role as a managed long-term care plan, and three months ago, the health commissioner awarded that H.M.O. status to the company after a yearlong review, according to its chief executive, Vincent Achilarre, who donated $10,000 last year to the Senate Republican Campaign Committee of New York.
“We earned this approval, and the support we received for our application, on the merits,” Mr. Achilarre said in an e-mail that cited “high-quality care, delivered with compassion and understanding for our patients’ needs.”

Maine hospital system rewards doctors for keeping patients healthier at lower cost

By Jackie Farwell, BDN Staff
Posted June 23, 2013, at 10:17 a.m.
When Otis Small of Hampden recently found himself suffering from a “horrendous” headache, he didn’t call his doctor. After a week of pain, the 81-year-old retired teacher finally mentioned to Cynthia Herrick, a nurse who calls him regularly to monitor his health, that his head was pounding.
Herrick, well versed in Small’s history of diabetes and heart and breathing problems, asked him about his blood sugar levels, blood pressure, and whether he’d experienced any chest pain. He was otherwise fine, he said, so Herrick, unable to pinpoint the source of his discomfort, told Small it might be time to call his doctor.
Just then, Small mentioned offhand that he’d recently given up coffee.
“She said, ‘Forget the doctor. How much coffee do you drink?’” Small recalled. Six or seven cups a day, he told Herrick, before stopping cold turkey. “She said, ‘I want you to drink two cups a day.’ I cheated, I drank three,” he said, grinning.
As it turned out, Small was suffering from run-of-the-mill caffeine withdrawal. He took Herrick’s advice, the headache went away and he never had to visit the doctor’s office.
By avoiding an unnecessary visit to his physician, Small helped his health care provider to achieve a small victory in a much larger effort to transform health care in Maine and across the country.
Small’s doctor’s office, Husson Internal Medicine in Bangor, is part of a new experiment in health care undertaken by its parent organization, Eastern Maine Healthcare Systems of Brewer. The goal is to keep patients healthier and happier by rewarding doctors and nurses for keeping them well rather than for ordering more visits and procedures.
One way health systems throughout the U.S. are working toward that goal is by forming alliances of doctors and hospitals called “accountable care organizations.” ACOs are a cornerstone of the federal health reform law that many hold up as the country’s best hope for hitting the brakes on rising health care costs that are eating up more and more of Americans’ paychecks.
Others fear that ACOs — by requiring hospitals to band together, further consolidating their already considerable market power — will free health providers to hike prices. Carnegie Mellon economist Martin Gaynor went to far as to say ACOs have the potential to be “an anti-competitive sham.”
“Nobody defines an ACO quite the same way, so it’s very much experimental,” said Trish Riley, senior fellow in health policy at the University of Southern Maine’s Muskie School for Public Service and former health policy advisor to Gov. John Baldacci. “It’s about getting the incentives right, instead of paying for widgets you pay for care and you pay for keeping people well.”

When insurance is too expensive no matter what

By Dan Gorenstein
Marketplace, American Public Media, June 21, 2013
Sunday marks 100 days until millions of Americans can start signing up for subsidized health insurance for the first time in their lives.
The whole point of the Affordable Care Act is to expand health insurance. But here’s the thing, even after the law has taken effect, about 30 million people -- almost all of them U.S. citizens -- still won’t be covered.
Dr. Steffie Woolhandler, who co-authored a recent report about the uninsured under the new health care law in the journal Health Affairs, explains who will be out of luck.
“The majority are white. Eighty percent are citizens. The majority are employed,” she says. Woolhandler notes most of the 30 million people would get federal money to help pay for insurance. But, she says, with salaries averaging $22,000 for most of them, that won’t be enough.
“Even if you are subsidized, you still have to pay thousands of dollars out of pocket and lots of low- and middle-income people won’t be able to do that,” she says. Woolhandler says many of these people work in industries that don’t offer insurance, such as agriculture, forestry, and the service sector. She says between premiums, co-pays and deductibles, health costs will easily run into the thousands.
“That would be hard,” says Russ, a New York-based musician who says he already has trouble paying his medical bills.
Russ has a bad heart. He says because he only brings in $30,000 a year, some months he skips his blood thinners, other months it’s the cholesterol pills.
“When you have very few alternatives, you tend to take the choice you have to take. The best of a lousy bunch,” he says.
For people like Russ, less insurance means less care. According to the Urban Institute, the uninsured get about half the care they would get if they had insurance.


Cure for affordable medical devices
By: Jonathan Blum
June 23, 2013 09:06 PM EDT
For years, Medicare has been paying sky-high prices for basic equipment like wheelchairs and walkers based on outdated and overpriced payment rates. It was a great deal for the industry, but not a great one for taxpayers and people with Medicare. These inflated Medicare payment rates also helped fuel the rampant proliferation fraud, waste and abuse of durable medical equipment, prosthetics, orthotics and supplies — or DMEPOS — benefit.
In 2011, as required by law, CMS implemented a DMEPOS competitive bidding program to bring prices for certain medical equipment and supplies in line with the current market, and to help limit fraud and abuse in the Medicare program. The program has saved more than $400 million in its first two years of operation in only nine areas of the country without diminishing beneficiary access to quality equipment or resulting in negative health outcomes for beneficiaries. This program is a great example of a successful bipartisan initiative passed by a Republican Congress in 2003 and ultimately implemented by the Obama administration to put the brakes on runaway DMEPOS spending.
In The Washington Post on June 16, the editorial board pointed out, “Between 2000 and 2010, Medicare spent $69.4 billion on outdated — and inflated — DMEPOS reimbursement rates” and it urged CMS not to delay this important program.
Now this successful program is expanding to 91 additional areas on July 1, allowing more beneficiaries across the country to benefit from fair prices on quality medical equipment and supplies. In addition, we are implementing a national mail-order program for diabetic testing supplies. For the second round of the program, CMS is projecting savings of 45 percent below the current fee schedule for DMEPOS items, and savings for the national mail-order program are estimated at 72 percent below the current fee schedule. The program is estimated to save nearly $43 billion over the next 10 years. Medicare and taxpayers will save as much as $25.8 billion, and people with Medicare are projected to save $17.2 billion in reduced co-insurance and premiums.



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