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Thursday, April 17, 2014

Health Care Reform Articles - April 17, 2014

The business interests behind America’s costly medical care

By Dr. Philip Caper, Special to the BDN
Posted April 17, 2014, at 3:38 p.m.
The United States spends far more on medical care than other wealthy countries, due mostly to higher prices for health care goods and services. There is a reason for this. In U.S. politics, social progress comes at a high price if it threatens business interests.
In 1965, at the insistence of the American Medical Association, Lyndon B. Johnson agreed to insert language into the Medicare law that prohibited the government from interfering in the practice of medicine, and assuring doctors that they would continue to receive their usual, customary and reasonable fees.
In creating the Medicare prescription drug benefit in 2003, Congress inserted a provision prohibiting Medicare from negotiating prices for drugs to placate pharmaceutical companies, costing the government billions of dollars.
In 2009, with the Affordable Care Act, the political price paid for expanding access to federally funded health care was coercing young and healthy Americans to buy private health insurance and directing billions of federal dollars to subsidies for private insurance companies. Not satisfied with that, pharmaceutical and medical device manufacturers insisted on weakening cost controls. Even the modest tax on medical devices and supplies included to help pay for the law is very likely to be repealed, with support from both parties, to mollify medical device manufacturers.
The complexity of the ACA and the poor quality of some of the most popular coverage has created new business opportunities. Accounting firms are now jumping into the fray, offering their services as tax advisers and consultants to help folks navigate their way through the ACA maze. The ongoing shift in the burden of health-care costs from insurance companies to individuals through larger out-of-pocket payments creates new opportunities for banks to offer credit card services for medical debt, often at usurious levels of fees and interest. All of this further raises health-care costs.
Unlike most other wealthy countries, the U.S. lacks any central mechanism to constrain overall health-care spending. This has led us instead to rely on piecemeal, half-hearted and largely ineffective regulation of fees by Medicare, and micromanagement of medical decision-making by private insurers at a level unheard of, and that would not be tolerated in other wealthy countries.
Those attempts at health care cost control have failed.
When government requires individuals and businesses to purchase private health insurance, it must also assure that insurance costs remain affordable, or the law will unravel. The federal government will soon have to abandon its “hands off” approach to restraining the overall costs of medical care. Every country that has moved toward making health care a human right as a matter of public policy has quickly turned its attention to ways to control its overall costs, private as well as public.
We’re already seeing more attention being paid by government, the media, and professional organizations not only to the prices charged by health-care providers, but to ways to restrain the use of unnecessary services and administrative costs, fraud, waste and abuse, and preventing illness in the first place. It should come as no surprise that Medicare data about payments to doctors has recently been released showing some very large payouts, and huge variations across the country. Although this data is incomplete and should be treated cautiously, it raises troubling questions.
The ACA is a work in progress. There is almost universal agreement that it has to be fixed, but plenty of disagreement about how to fix it. The architects of the law anticipated that likelihood. Section 1332 of the ACA provides great latitude for future experimentation by states, beginning in 2017. It allows them to discard most of the ACA’s key requirements if they can come up with something better at no additional cost.
Vermont has already taken a number of important steps toward replacing the ACA with a single-payer system. Such a system would allow them to expand coverage to everybody, reduce total spending, and restrain the growth of future health-care costs to a sustainable level through budgeting.
Earlier this month, the Maine Legislature passed a resolve by a wide bipartisan margin that takes the first step toward following Vermont’s example. The handwriting is on the wall. If the Legislature is unable to effectively deal with this problem, we in Maine can always express ourselves through a ballot initiative.
Physician Philip Caper of Brooklin is a founding board member of Maine AllCare, a nonpartisan, nonprofit group committed to making health care in Maine universal, accessible and affordable for all. He can be reached at pcpcaper21@gmail.com.

By Bill Berkrot, Reuters
Posted April 15, 2014, at 7:45 a.m.
Americans used more health services and spent more on prescription drugs in 2013, reversing a recent trend, though greater use of cheaper generic drugs helped control spending, according to a report issued on Tuesday by a leading healthcare information company.
Spending on medicines rose 3.2 percent in the United States last year to $329.2 billion. While that was far less than the double-digit increases seen in previous decades, it was a rebound from a 1 percent decline in 2012, the report by IMS Health Holdings Inc. found.
Among factors driving the increased spending were the cost of new medicines, price increases on some branded drugs, a $10 billion reduced impact of patent expirations compared with 2012, and the first rise in the use of healthcare services in three years, IMS found.
IMS compiles and provides data on prescription drug use and trends for the pharmaceutical and healthcare industry.
The relatively small spending increase was helped in part by greater use of cheap generic drugs, which edged up to 86 percent of all prescriptions filled in the United States from 84 percent in 2012, despite fewer major new generic drug introductions compared with the impact seen in 2012.
Healthcare utilization was up across the board, with rises in doctor office visits, hospitalizations and volume of prescriptions filled, IMS said.
The increased use of healthcare services does not reflect those newly insured under the Affordable Care Act and Medicaid expansion, which did not fully kick in until this year. But it could be reflective of declines in unemployment, with more people gaining employer-based health insurance, and recent gains in consumer confidence.
“The recession was officially over a long time ago, but what has taken a much longer time is for the [healthcare services] demand to recover,” Michael Kleinrock, director of research development for IMS Institute for Healthcare Informatics, said in a telephone interview.
“In late fall of 2012, we started to see a beginning of the recovery in terms of new therapy starts,” Kleinrock said.
New medicines for cancer, hepatitis C, multiple sclerosis, diabetes and rare diseases has led to a shift in some patient spending tendencies, the report found.
Patients gained access to 36 novel new medicines in 2013, including a record 17 so-called orphan drugs that treat small patient populations at typically very high cost.
“We saw patients see more specialists than primary care for the first time,” Kleinrock said. “Incurring a primary care visit co-pay in order to be referred to see a specialist certainly doesn’t feel like value for money, so many patients may be self referring,” he suggested.
Those trends could well continue over the next two years as several promising new cancer drugs come to market, as well as new oral hepatitis C treatments with extremely high cure rates and few side effects.


For Diabetics, Health Risks Fall Sharply

By  and 
Federal researchers on Wednesday reported the first broad national picture of progress against some of the most devastating complications of diabetes, which affects millions of Americans, finding that rates of heart attacks, strokes, kidney failure and amputations fell sharply over the past two decades.
The biggest declines were in the rates of heart attacks and deaths from high blood sugar, which dropped by more than 60 percent from 1990 to 2010, the period studied. While researchers had had patchy indications that outcomes were improving for diabetic patients in recent years, the study, published in The New England Journal of Medicine, documents startling gains.
“This is the first really credible, reliable data that demonstrates that all of the efforts at reducing risk have paid off,” said Dr. David M. Nathan, director of the Diabetes Center at Massachusetts General Hospital, who was not involved in the study. “Given that diabetes is the chronic epidemic of this millennium, this is a very important finding.”
The number of Americans with diabetes more than tripled over the period of the study and is now nearly 26 million. Nearly all the increase came from Type 2 diabetes, which is often related to obesity and is the more common form of the disease. An additional 79 million Americans have pre-diabetes, which means they are at high risk of developing the disease.
Researchers from the Centers for Disease Control and Prevention, who wrote the study, estimate that diabetes and its complications account for about $176 billion in medical costs every year. The study measured outcomes for both Type 1 and Type 2.
Researchers said the declines were the fruit of years of efforts to improve the health of patients with Type 2 diabetes. Doctors are much better now at controlling the risk factors that can lead to complications — for example, using medications to control blood sugar, cholesterol and blood pressure — health experts said. What is more, a widespread push to educate patients has improved how they look after themselves. And a major effort among health care providers to track the progress of diabetes patients and help steer the ones who are getting off track has started to have an effect.


Healthcare costs in U.S. far exceed costs in other countries, report says

By Stuart Pfeifer
5:00 AM PDT, April 17, 2014
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An average one-day hospital stay in the United States cost $4,293 last year, six times more than it did in Argentina and nearly 10 times the cost in Spain, an industry group reported Thursday.
Medical procedures, tests, scans and prescription medicine cost far more in the United States than in eight other countries, the International Federation of Health Plans said Thursday in its annual report.
“The price variations bear no relation to health outcomes; they merely demonstrate the relative ability of providers to profiteer at the expense of patients, and in some cases reflect a damaging degree of market failure,” said Tom Sackville, the group’s chief executive.
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The group examined healthcare costs in Argentina, Australia, Canada, England, the Netherlands, New Zealand, Spain, Switzerland and the United States. The data were gathered by a survey of health plans in each country. Costs in the United States were based on prices negotiated between private health plans and healthcare providers.
Here are some of the group’s findings:
Heart bypass surgery cost an average of $75,345 in the United States, compared with $15,742 in the Netherlands and $16,492 in Argentina.
The average cost of an MRI ranged from $138 in Switzerland to $1,145 in the United States.
Knee replacement surgery cost an average of $25,398 in the United States, more than three times as much as the $8,100 cost in Spain.
Medicine was more expensive for U.S. patients too.
The commonly prescribed pain drug Celebrex cost an average of $225 in the United States, twice as much as it did in Britain ($112) and more than four times as much as it did in Canada ($51).
Gleevec, a cancer drug, cost an average of $6,214 in the United States and $989 in New Zealand.
Not only did it cost more to get sick in the United States, it was far more expensive to have babies. A normal childbirth cost $10,002 in the United States, compared with $2,237 in Argentina and $2,251 in Spain. Birth by C-section ranged from $2,844 in Spain to $15,240 in the United States.
There was one bright spot for U.S. residents: They pay less than Australians for cataract surgery --  $3,762 compared with $3,841.
http://www.latimes.com/business/money/la-fi-mo-healthcare-costs-in-us-far-exceed-other-countries-report-says-20140416,0,3270327,print.story

Doctors Overlook Lucrative Procedures When Naming Unwise Treatments

TOPICS: DELIVERY OF CARE, HEALTH COSTS, HOSPITALS, HEALTH REFORM, PUBLIC HEALTH
By JORDAN RAU
KHN Staff Writer
APR 14, 2014
This KHN story was produced in collaboration with the 
When America’s joint surgeons were challenged to come up with a list of unnecessary procedures in their field, their selections shared one thing: none significantly impacted their incomes.
The American Academy of Orthopaedic Surgeons discouraged patients with joint pain from taking two types of dietary supplements, wearing custom shoe inserts or overusing wrist splints after carpal tunnel surgery. The surgeons also condemned an infrequently performed procedure where doctors wash a pained knee joint with saline. 
"They could have chosen many surgical procedures that are commonly done, where evidence has shown over the years that they don't work or where they're being done with no evidence," said Dr. James Rickert, an assistant professor of orthopedic surgery at Indiana University. "They chose stuff of no material consequence that nobody really does."
The medical profession has historically been reluctant to condemn unwarranted but often lucrative tests and treatments that can rack up costs to patients but not improve their health and can sometimes hurt them. But in 2012, medical specialty societies began publishing lists of at least five services that both doctors and patients should consider skeptically. So far, 54 specialty societies have each offered recommendations and distributed them to more than a half-million doctors.
Hospitals that have deployed the lists, including Cedars-Sinai Medical Center in Los Angeles, report that the frequency of superfluous procedures has dropped. Consumer Reports, AARP and Univision are some of the influential organizations that have been part of a broad campaign to educate patients about the questionable items. Dr. Donald Berwick, a former head of Medicare, heralded the "Choosing Wisely" campaign as "a game-changer" because the "advice comes not from payers or politicos, but from pedigreed physician groups."
Yet some of the largest medical associations selected rare services or ones that are done by practitioners in other fields and will not affect their earnings. "They were willing to throw someone else’s services into the arena, but not their own," said Dr. Nancy Morden, a researcher at the Dartmouth Institute for Health Policy & Clinical Practice in New Hampshire.
Some specialists did target their own money-makers. Gastroenterologists, radiologists and clinical pathologists all placed their own tests on their lists. The Society of General Internal Medicine recommended against the annual physical exam, a mainstay of American health care.
Other specialty groups said they did not include their own procedures where there are concerns of overuse, such as stents for heart patients and spine surgery, because the evidence is murky and the procedures are right for some patients. "What we did when we made up the list was to start with more straightforward situations and hopefully expand that later," said Dr. F. Todd Wetzel, a member of the board of directors of the North American Spine Society.

This Medicaid expansion episode has come to a close — and logic didn’t prevail

Posted April 12, 2014, at 1:59 p.m.
As the Maine Senate returned to a familiar debate Friday about expanding Medicaid coverage to more than 70,000 low-income residents, state Sen. Emily Cain said the 35-member body had a chance to “celebrate April 2014 as the best month for health care ever in Maine.”
On Wednesday, lawmakers from both parties on the budget-writing Appropriations Committee had agreed to a budget-balancing plan that includes funds to shrink the size of state waitlists of people with intellectual disabilities awaiting state services.
The plan also provided funding to boost payments to Maine nursing homes, which have long been underpaid by MaineCare, the state’s Medicaid program.
Lawmakers, however, didn’t complete the trifecta. The Senate came up two votes short of overriding Gov. Paul LePage’s damaging veto of a bill to expand Medicaid coverage to thousands of low-income parents and adults without children.
The Medicaid expansion plan that lawmakers voted on was itself something worth celebrating. It was a deliberate effort by Republican Sens. Roger Katz and Tom Saviello to craft a bill that included something for both sides of the aisle and that did something important for the state.
It expanded Medicaid. It included measures to control costs in an often unwieldy MaineCare program. The expansion it proposed wasn’t permanent, allowing Maine to end expanded coverage the moment federal funding for those newly eligible for coverage dropped below 100 percent.
The bill proposed a deliberate course of action to design the most effective managed care program possible for MaineCare. And it laid out a similarly deliberate course of action to address the high costs of serving Maine residents with intellectual disabilities.
The reasons for rejecting the expansion just don’t add up.
“The fiscal savings promised by Medicaid expansion and managed care are merely mirages,” LePage wrote in his veto message. “Proponents of the bill tout ‘free’ federal money and unspecified state ‘savings’ with no backup for these claims.”
Review all that has been said about Medicaid expansion in recent months — in Maine and across the country. The only references you’ll find to “free” money from the federal government come fromopponents of the expansion putting words in proponents’ mouths.
Of course, the infusion of federal funds Maine could expect to see from expanding Medicaid is not “free.” And that’s precisely a reason why rejecting the expansion is foolish.
Medicaid coverage is expanding to low-income residents in more than half the states as a result of the Affordable Care Act and state policymakers who acted sensibly. As a result, about 2.6 million low-income people are gaining health care coverage.
People in Maine — and every state — are paying for it. Hospitals, in particular, are paying for it. The tax hikes and hospital payment cuts that fund the Affordable Care Act affect every state. The difference in states that aren’t expanding Medicaid is, they’re sharing in the pain without realizing the gain.
But that bit of logic doesn’t matter to LePage. Even if there’s a gain — beyond providing coverage to thousands who need it — there’s no way it can last, apparently. “It is shortsighted to think federal funds will always be available, especially after watching the federal deficit climb and witnessing continual delays and changes from Washington,” his veto message continued.
No one can predict the future, but history can inform it. And there’s no historical precedent for the federal government to reduce state Medicaid funding rates. In fact, federal match rates over time have increased in the aggregate as expansions of the program have permanently raised rates for specific groups of people. During the most recent recession, the federal government temporarily raised rates.
And when the federal government needs to trim Medicaid spending, it hasn’t touched reimbursement rates because governors have demanded the cuts come from elsewhere.
Plus, according to the Urban Institute, the costs of expanding Medicaid represent 1.7 percent of all Medicaid spending by the federal government. To predict that future federal spending cuts will come from that tiny sliver of a $300 billion program, and to use that as a reason to reject expansion, just doesn’t compute.
For now, the Senate’s vote to uphold LePage’s Medicaid expansion veto closes an especially disappointing episode in Maine politics. The bigger disappointment, though, is the thousands of Maine residents who could have had access to health care but will go without due to reasons that don’t hold water.

Calais hospital cuts hours for 90 employees

By Tim Cox, BDN Staff
Posted April 17, 2014, at 1:22 p.m.
CALAIS, Maine — Calais Regional Hospital has reduced hours for 90 employees and laid off a handful of workers as part of an effort to rein in a deficit of more than $500,000 in the first two months of the fiscal year.
The reduction in hours is the equivalent of 20 full-time positions or 8 percent of the hospital’s workforce of 265 people, Nancy Glidden, chief financial officer, said Thursday. Four employees were laid off, she said.
The reduction in hours varied by department and position, Glidden said, and some employees lost only an hour per week.
A March 31 memorandum from hospital CEO Michael Lally to employees noted the hospital has a deficit of more than $500,000 just two months into the fiscal year.
“Lower than expected volume in many departments is the most significant contributing factor,” he wrote.
In addition to reducing hours for some employees, the hospital also announced the elimination of a special care unit for patients with serious medical conditions.
“We must bring our staffing into alignment with how our community is utilizing our services,” said Lally. The hospital is staffed at higher levels than others of similar size and volume, he said.
Lally is on vacation this week and was not available for comment, but he referred questions to Glidden.
The personnel actions will save the hospital about $1 million annually, said Glidden.
When asked how else the hospital would make up a deficit that has averaged $250,000 a month or $3 million annually, Glidden said hospital officials do not expect patient volume to continue to decline. In fact, March showed improvement, she said.
The hospital has recruited three physicians — replacing two pediatricians who recently left the area and a physician’s assistant with a doctor — in order to build up patient volume, she said. The new hires will be coming on board in May and later this year.
In a March 6 memorandum from chief nursing officer Cheryl Zwingman-Bagley to medical providers and management staff, Zwingman-Bagley said the inpatient care unit would no longer be able to accept patients at the special care level of care — those with more serious medical conditions.
“This decision was made based on a dwindling number of patient days and the cost of maintaining a program that is so marginally used,” she said. In addition, effective immediately, the IPCU would no longer admit pediatric patients younger than 12, she added.
The elimination of the special care unit means the hospital will not be required to have a nurse who is trained for intensive care to be available around the clock, and it also did away with the need for some training, explained Glidden.
The hospital has “well-defined protocols” for caring for patients and determining those who need to be transferred to another medical care facility, said Glidden. “There’s not a mass exodus that’s going on here,” she said.
“We’re been a very busy in-patient hospital. … We’re not diverting patients because we can’t take care of them in any big numbers,” said Glidden.


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