by Chad Terhune
ising fresh questions about healthcare consolidation, a new study shows hospital ownership of physician groups in California led to 10% to 20% higher costs overall.
The UC Berkeley research, published Tuesday in the Journal of the American Medical Assn., illustrates the financial risks for employers, consumers and taxpayers as hospital systems nationwide acquire more physician practices.
"I think this consolidation wave is virtually unstoppable," said James Robinson, the study's lead author and a UC Berkeley professor of health economics. "Left to itself, it will increase the cost of healthcare."
Total spending per patient was 10.3% higher for hospital-owned physician offices compared with doctor-owned organizations, according to the study.
Costs were even higher when large health systems running multiple hospitals owned medical groups. Their per-patient spending was 19.8% higher compared with independent physician groups.
The JAMA study examined total medical spending for about 4.5 million HMO patients in California from 2009 to 2012. The data didn't include patients with commercial PPO coverage, Medicare or Medicaid.
These figures reflect the total cost of care, including hospitalizations, prescription drugs and physician visits. The data were obtained from the Integrated Healthcare Assn., which includes insurers and medical providers.
Provisions of the Affordable Care Act encourage healthcare providers to collaborate more and shift away from conventional fee-for-service medicine.Researchers adjusted for differences in patients' health and variation in costs by region.
These mergers between hospitals and physician groups are often touted as a way to better coordinate care, eliminate unnecessary tests and treatments and ultimately reduce costs.
But some health-policy experts and employers say care coordination can be achieved without consolidation and these tie-ups merely serve to reduce competition and push up prices.
Health Care Price Transparency and Economic Theory
By Uwe E. Reinhardt, PhD
JAMA
October 22/29, 2014
Citizens in most economically developed nations have health insurance coverage that results in only modest cost sharing at the time health care is used. Furthermore, physicians, hospitals, and other clinicians and entities that provide health care within most systems outside the United States are paid on common fee schedules uniformly applied to all clinicians, health care organizations, and insurers. That approach spares the insured the need to seek out lower-priced health care and obviates the need for transparency on the prices charged by individual clinicians and organizations that provide health care.
Not so in the United States, where every private health insurer negotiates prices with every health care practitioner and organization, where large public health insurance systems such as Medicaid and Medicare pay fees that do not cover the full cost of treating patients covered by these programs, and where uninsured, self-paying patients can often be asked to pay whatever can be extracted from their household budgets, sometimes with the help of debt collectors and the judiciary. Economists call the approach price discrimination, which means the identical service is sold to different buyers are different prices.
This approach to pricing health care has led in the United States to a system in which, at one end of the spectrum, hospitals and physicians are expected by society to treat low-income patients free of charge, on a charitable basis, or for modest fees that do not cover the cost of those treatments and then to finance that informal catastrophic health insurance system for the poor out of the other part of their enterprises that they can operate as profit-maximizing business firms. This is true even in some of the large segment of institutions referred to as not-for-profit. The harsh excesses that this quest for profits in health care can unleash—even among not-for-profit hospitals—have been well reported in various articles in the popular press.
Private employers in the United States have played a pivotal role in the evolution of this system. They hired as their agents in health care the private insurers who helped put that system into place, and they supported it. To gain better control over the growth of their health spending, employers have of recent resorted to a technique long recommended to them by the market devotees among health economists, namely, putting the patient’s “skin in the game,” as the jargon goes. It is done with health insurance policies imposing on the insured very high annual deductibles before insurance coverage even begins, followed by significant coinsurance, perhaps requiring patients to pay 10% to 20% of every medical bill, up to a maximum total annual out-of-pocket expenditure that can potentially exceed $10 000 for a family.
This approach of shifting more of the cost of employment-based health insurance visibly and directly into the household budgets of employees amounts to rationing parts of US health care by price and ability to pay and delegates the bulk of the hoped-for belt-tightening to low-income families. Because the word rationing is anathema in the US debate on health policy, the strategy has been marketed instead under the felicitous label of consumer-directed health care, presumably designed to empower consumers in the health care market to take control of their own health care. However, this strategy, based mainly on economic theory, so far has put the cart before the horse.
In virtually all other areas of commerce, consumers know the price and much about the quality of what they intend to buy ahead of the purchase. This information makes comparison shopping relatively easy and is the sine qua non of properly functioning markets. By contrast, consumer-directed health care so far has led the newly minted consumers of US health care (formerly patients) blindfolded into the bewildering US health care marketplace, without accurate information on the prices likely to be charged by competing organizations or individuals that provide health care or on the quality of these services. Consequently, the much ballyhooed consumer-directed health care strategy so far has been more a cruel hoax than a smart and ethically defensible health policy.
Equitable Access to Care — How the United States Ranks
Internationally
Karen Davis, Ph.D., and Jeromie Ballreich, M.H.S.
Karen Davis, Ph.D., and Jeromie Ballreich, M.H.S.
The United States has been un-
usual among industrialized
countries in lacking universal
health coverage. Financial bar-
riers to care — particularly for
uninsured and low-income peo-
ple — have also been notably
higher in the United States than
in other high-income countries.
As more Americans become in-
sured as a result of the Afford-
able Care Act (ACA), differences
in access to care between the
United States and other coun-
tries — as well as among in-
come groups within the United
States — may begin to narrow.
According to a 2013 Common- wealth Fund survey of adults in 11 high-income countries, the United States ranks last on mea- sures of financial access to care as well as of availability of care on nights and weekends.1 Unin- sured people in the United States are particularly likely to report encountering barriers to care.
In general, the survey reveals that such barriers are particularly striking for adults with incomes below or well below their coun- tries’ median income.2 But as Ta- ble 1 shows, lower-income Amer- icans are more likely than their counterparts in other countries to indicate that, in the past year, they’ve had a medical problem but did not visit the doctor be- cause of cost, did not fill pre- scriptions or skipped doses of medications because of cost, or did not get recommended tests, treatments, or follow-up care be- cause of cost. Indeed, the United States ranks last among the 11
According to a 2013 Common- wealth Fund survey of adults in 11 high-income countries, the United States ranks last on mea- sures of financial access to care as well as of availability of care on nights and weekends.1 Unin- sured people in the United States are particularly likely to report encountering barriers to care.
In general, the survey reveals that such barriers are particularly striking for adults with incomes below or well below their coun- tries’ median income.2 But as Ta- ble 1 shows, lower-income Amer- icans are more likely than their counterparts in other countries to indicate that, in the past year, they’ve had a medical problem but did not visit the doctor be- cause of cost, did not fill pre- scriptions or skipped doses of medications because of cost, or did not get recommended tests, treatments, or follow-up care be- cause of cost. Indeed, the United States ranks last among the 11
countries in terms of financial
access to care for lower-income
people. At least 30% of lower-
income adults in the United
States report encountering such
financial barriers to care; the av-
erageproportionoflower-income
adults in the other surveyed coun-
tries who reported encountering
one of these three types of finan-
cial barriers was around 10%.
The United Kingdom, France, Germany, Norway, Sweden, and Switzerland stand out as leaders in ensuring equitable financial ac- cess to care. Switzerland, which provides coverage through non- profit private insurance plans with deductibles, ensures that cost sharing is lower for lower-income individuals. The United Kingdom, Norway, and Sweden have public health care systems for the entire population with little or no pa- tient cost sharing and allow a limited role for private insurance. France has a public insurance sys- tem, and Germany has a social insurance system with competing private “sickness funds.”
Notwithstanding Americans’ impression that other countries ration care, for lower-income adults, obtaining timely primary care is a bigger problem in the United States than in other indus- trialized countries. Lower-income adults in the United States are more likely to report that they had to wait 6 or more days for an appointment the last time they needed medical attention and that it was somewhat or very difficult to get care in the evenings, on weekends, or on holidays. They
The United Kingdom, France, Germany, Norway, Sweden, and Switzerland stand out as leaders in ensuring equitable financial ac- cess to care. Switzerland, which provides coverage through non- profit private insurance plans with deductibles, ensures that cost sharing is lower for lower-income individuals. The United Kingdom, Norway, and Sweden have public health care systems for the entire population with little or no pa- tient cost sharing and allow a limited role for private insurance. France has a public insurance sys- tem, and Germany has a social insurance system with competing private “sickness funds.”
Notwithstanding Americans’ impression that other countries ration care, for lower-income adults, obtaining timely primary care is a bigger problem in the United States than in other indus- trialized countries. Lower-income adults in the United States are more likely to report that they had to wait 6 or more days for an appointment the last time they needed medical attention and that it was somewhat or very difficult to get care in the evenings, on weekends, or on holidays. They
are also more likely to have to
wait 2 or more hours before re-
ceiving care in the emergency de-
partment. Greater dissatisfaction
with care is reflected in the fact
that greater proportions of lower-
income Americans than lower-
income adults in the other sur-
veyed countries rate their doctors
and the quality of their care as
fair or poor.
http://www.nejm.org/doi/pdf/10.1056/NEJMp1406707
http://www.nejm.org/doi/pdf/10.1056/NEJMp1406707
Public Trust in Physicians — U.S. Medicine in International Perspective
The U.S. health care reform process is entering a new phase, its emphasis shifting from expanding health coverage to improving our systems for delivering patient care. One emerging question is what role the medical profession and its leaders will play in shaping future national health care policies that affect decision making about patient care.
Research suggests that for physicians to play a substantial role in such decision making, there has to be a relatively high level of public trust in the profession's views and leadership. But an examination of U.S. public-opinion data over time and of recent comparative data on public trust in physicians as a group in 29 industrialized countries raises a note of caution about physicians' potential role and influence with the U.S. public.
In a project supported by the Robert Wood Johnson Foundation and the National Institute of Mental Health, we reviewed historical polling data on public trust in U.S. physicians and medical leaders from 1966 through 2014, as well as a 29-country survey conducted from March 2011 through April 2013 as part of the International Social Survey Programme (ISSP), a cross-national collaboration among universities and independent research institutions (ISSP 2011–2013) (see Opinion Polls on Public Trust in Physicians for poll information). We found that, as has been previously reported, public trust in the leaders of the U.S. medical profession has declined sharply over the past half century. In 1966, nearly three fourths (73%) of Americans said they had great confidence in the leaders of the medical profession. In 2012, only 34% expressed this view (Harris 1966–2012). But simultaneously, trust in physicians' integrity has remained high. More than two thirds of the public (69%) rate the honesty and ethical standards of physicians as a group as “very high” or “high” (Gallup 2013). Our review of numerous analyses of public-opinion data about public trust in institutions and professions suggests that the decline in trust is probably attributable to broad cultural changes in the United States, as well as rising concerns about medical leaders' responses to major national problems affecting the U.S. health care system. Today, public confidence in the U.S. health care system is low, with only 23% expressing a great deal or quite a lot of confidence in the system (Gallup 2014). We believe that the medical profession and its leaders are seen as a contributing factor.
This phenomenon does not affect physicians in many other countries. Indeed, the level of public trust in physicians as a group in the United States ranks near the bottom of trust levels in the 29 industrialized countries surveyed by the ISSP. Yet closer examination of these comparisons reveals findings similar to those of previous U.S. surveys: individual patients' satisfaction with the medical care they received during their most recent physician visit does not reflect the decline in overall trust. Rather, the United States ranks high on this measure of satisfaction. Indeed, the United States is unique among the surveyed countries in that it ranks near the bottom in the public's trust in the country's physicians but near the top in patients' satisfaction with their own medical treatment.
The United States is tied for 24th place in terms of the proportion of adults who agree with the statement, “All things considered, doctors in [your country] can be trusted.” About 6 in 10 U.S. adults (58%) agree with this statement, as compared with more than three fourths in Switzerland (83%), Denmark (79%), the Netherlands (78%), and Britain (76%) (ISSP 2011–2013).
‘A lot of fears’: A Richmond woman’s health problems and 3 months without coverage
Posted Oct. 24, 2014, at 10:05 a.m.
Sheila Scott has lived in fear of kidney failure for 20 years. Then, for the past three months, she lived with the fear that goes along with not having health insurance. She’s still afraid her health coverage won’t last.
Scott, 52, of Richmond was diagnosed with kidney disease at age 32 and had a kidney transplant eight years later. Ever since, she has depended on medications she’ll have to take for the rest of her life to ensure her body doesn’t reject the transplanted kidney.
“One of my biggest fears in having a transplant was not being able to pay for the meds,” Scott said. “And everyone was like, ‘Oh, don’t worry.’ You know, ‘You don’t have to worry.’ And here I am worrying.”
That’s because in August, Scott joined the ranks of thousands of Maine residents who have lost their health coverage through MaineCare over the past year as a result of state budget cuts. MaineCare is Maine’s version of the federal Medicaid program, which offers health coverage for people with low incomes and disabilities.
Scott recently received notice that her coverage would be reinstated, though the notice didn’t explain why. But for three months, she joined nearly 35,000 Maine people, the majority of whom work, who lost coverage as a result of the budget cuts and Gov. Paul LePage’s vetoes of legislation that would have allowed Maine to accept federal funds set aside through the Affordable Care Act to close the “coverage gap” for people with low income. Those people are not eligible for subsidies to help them afford private insurance. Not accepting the federal funds meant many low-income adults — working people like Sheila — were cut from MaineCare and lost their health care coverage.
The people who lost coverage at the start of the year fit into two categories: parents who earned between 100 and 133 percent of the federal poverty level and adults without dependent children. None of them earned more than $11,670 annually for a household of one. Scott likely qualified for Medicaid as part of this latter category.
It’s unknown to Scott and those who advocated for her continued MaineCare coverage why the Department of Health and Human Services cut off her coverage in August, rather than in January when other childless adults lost their coverage. It’s similarly unclear why she received notice that her coverage would be reinstated.
A DHHS spokeswoman said the department can’t comment publicly on specific cases. It’s possible, however, that the department has determined Scott qualifies for coverage due to disability.
“There are a variety of reasons why an individual could lose coverage and then regain it,” DHHS spokeswoman Sarah Grant wrote in an email. “For example, if the department requests information and the client does not provide the information, their case would close. If the client subsequently provides the information, the case could then be reopened.”
Scott first qualified for MaineCare more than 20 years ago as a low-income parent with dependent children. She kept her coverage after she became disabled due to her kidney disease diagnosis. After the transplant 12 years ago, Scott returned to work and stopped collecting the Supplemental Security Income she had been receiving as a result of her disability.
Though she stopped collecting her disability-related income, she continued to qualify for MaineCare until she lost it in August. The loss of health insurance coverage presented life-threatening consequences for Scott. How would she afford the medications she needs for her kidney?
Without MaineCare, she couldn’t afford them. She was able to receive some assistance from the Kidney Foundation, but the foundation paid for a substitute medication. “I just had to swap medications because I couldn’t find anyone to cover [my previous prescription].”
She is not certain yet whether the new medication is working properly because she has not been able to have the needed blood test to check that out.
Our View: LePage sows confusion on MaineCare expansion
He understates the number of people who’d get the full federal subsidy and vastly overstates how many Mainers would need the state to pick up part of the cost.
Debates are supposed to force candidates to clarify their positions on the issues. Gov. LePage has used this year’s debates as an opportunity to create more confusion, especially on the issue of extending federally funded health care to up to 70,000 people through the MaineCare program.
In two debates, LePage insisted that his critics are wrong. Only 20,000 uninsured people would get coverage that is fully subsidized by the federal government, the governor said; the program would then be swamped by tens of thousands of others who would need the state to pay 40 percent of the cost.
LePage even said he had a letter from the federal government that proved his point, and he went as far as to bring a poster-size blow-up of the missive on stage in one televised debate, with a quote highlighted.
This was no improvised comment made in the heat of the moment. Le-Page was prepared, made his point repeatedly and came with a prop. But is he right?
No, he’s not.
Mike Tipping: Seriously ill Mainers’ lives are on the line in state’s race for governor
The best chance to save lives and end suffering lies with Rep. Mike Michaud, who has pledged to accept federal health care funding.
Rebecca Gorfin of Surry was in the middle of chemotherapy treatments for skin cancer when Republican Gov. Paul LePage vetoed the acceptance of federal health care funding to expand MaineCare eligibility, canceling her health care coverage.
Gorfin tried to get subsidized coverage through the federal health care exchanges, but found that she, like thousands of other low-income Mainers, fell into the coverage gap caused by LePage’s refusal of federal funds – denied both MaineCare and the ability to access subsidized insurance.
“I tried to apply for Obamacare at that point, but it was too late because I hadn’t been working because I had been on chemo,” Gorfin said.
A CHALLENGE TO LEPAGE
She had a similar result when she tried to access free care through a local hospital.
“The poor guy at free care said, ‘I really didn’t want to get off the phone with you saying I’m sorry, but there’s nothing we can do,’ but he had to end the call with ‘I’m sorry, but there’s nothing we can do.’ ”
Gorfin worked desperately to scrape together $42.50 three times a week for packs of chemo drugs, something she managed to do only with the help of her friends and family. The cost of medication, doctors’ visits and biopsies meant that she was quickly racking up a massive debt.
Then, on top of everything else, her house caught on fire.
“I’m really building up some good karma here,” Gorfin explained, with a dose of dark humor.
This week, Gorfin turned on the TV during a gubernatorial debate and heard something remarkable. Democratic U.S. Rep. Mike Michaud seemed to be speaking about her and her situation.
“Someone watching us right now is going without life-saving medication because of your five vetoes of the expansion under the Affordable Care Act,” Michaud said, using his single question during the debate to bring up the issue with LePage. “Governor, would you be able to look in the camera and tell that person why they were too costly for care?”
LePage, instead of acknowledging the impact of his policies, defended his health care vetoes by claiming that “at no time is there a person in the state of Maine today that needs to go without medication.”
Gorfin says her exact reaction to the governor’s remarks likely can’t be printed in a family newspaper.
NO OPTIONS FOR THE UNINSURED
She wasn’t the only one aghast at LePage’s statement, perhaps the most callous untruth of his campaign. Social media lit up with anger, especially from Mainers who are struggling, or have loved ones struggling, to pay for medication. They began calling his office to hear his health care plan, as he had suggested during the debate.
Unsurprisingly, LePage’s staff didn’t have any answers for those falling into the coverage gap. They even told some callers to try to sign up for General Assistance – a rather cynical move given LePage’s cuts to that program.
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