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Wednesday, December 17, 2014

Health Care Reform Articles - December 17, 2014

The Odd Math of Medical Tests: One Scan, Two Prices, Both High

By 
PRINCETON, N.J. — Len Charlap, a retired math professor, has had two outpatient echocardiograms in the past three years that scanned the valves of his heart. The first, performed by a technician at a community hospital near his home here in central New Jersey, lasted less than 30 minutes. The next, at a premier academic medical center in Boston, took three times as long and involved a cardiologist.
And yet, when he saw the charges, the numbers seemed backward: The community hospital had charged about $5,500, while the Harvard teaching hospital had billed $1,400 for the much more elaborate test. “Why would that be?” Mr. Charlap asked. “It really bothered me.”
Testing has become to the United States’ medical system what liquor is to the hospitality industry: a profit center with large and often arbitrary markups. From a medical perspective, blood work, tests and scans are tools to help physicians diagnose and monitor disease. But from a business perspective, they are opportunities to bring in revenue — especially because the equipment to perform them has generally become far cheaper, smaller and more highly mechanized in the past two decades.
And echocardiograms, ultrasound pictures of the heart, are enticing because they are painless and have no side effects — unlike CT scans, blood draws, colonoscopies or magnetic resonance imaging tests, where concerns about issues like radiation and discomfort may be limiting. Though the machines that perform them were revolutionary and expensive when they first came into practice in the 1970s, the costs have dropped considerably. Now, there are even pocket-size devices that sell for as little as $5,000 and suffice for some types of examinations.
“Old technology should be like old TVs: The price should go down,” said Dr. Naoki Ikegami, a health systems expert at Keio University School of Medicine in Tokyo, who is also affiliated with the University of Pennsylvania’s business school. “One of the things about the U.S. health care system is that it defies the laws of economics, and of gravity. Once the price is high, it just stays there.”


Uninsured rates fell under Obamacare, but who's reaping the benefit?
By CHAD TERHUNE

Hospitals and health insurers have reaped a financial windfall from the 2014 rollout of the federal health law, even beyond what was expected.
Now, employers and consumers are seeking a share of the Obamacare dividend.
For years, insurance companies and hospitals told Americans that one reason their insurance bills were so high was because they were paying the hidden cost of medical care for the uninsured.
The Affordable Care Act sought to remedy much of that by unleashing the biggest expansion of insurance coverage in half a century. Ten million Americans became newly insured, and federal officials estimate that $5.7 billion in uncompensated care was wiped out this year as hospitals received more paying patients.
Now it's time to share the bounty from Obamacare, said Bill Kramer, director of national health policy at the Pacific Business Group on Health, which represents big employers like Wells Fargo and Chevron.
"Consumers and businesses have been absorbing this cost shift for decades," he said. "Employers need to step up and put pressure on hospitals and health plans. Show us the money."
In a similar vein, consumer groups are questioning why these savings aren't showing up in health insurers' latest rates. By some estimates, the cost shifting in recent years typically has raised the average family premium by $1,000 or more annually.
But there have been benefits for employers and consumers — even though they may not be readily apparent, industry officials say. They point to historically low increases in overall medical spending and affordable premiums in government-run exchanges.
"The dividend is being shared," said Charles Kahn, chief executive of the Federation of American Hospitals, an industry trade group in Washington. "There are a lot of factors indicating the costs to many are coming down or moderating. But all the problems that brought about cost shifting aren't being washed away."
Providers say government reimbursements for patients on Medicare and in particular Medicaid don't always cover their costs. The health law also imposes funding cuts to hospitals.
Health insurers insist they always bargain for the best deal from medical providers, and they say other factors are pushing up costs at the same time. They fault pharmaceutical companies for charging exorbitant amounts for some specialty drugs and worry that a wave of hospital consolidation will drive up prices even further.
"While this cost shifting is decreasing, theoretically that should drive down healthcare costs," said Dr. J. Mario Molina, chief executive of Molina Healthcare Inc., a health insurer based in Long Beach. "People are going to scratch their head and say, 'What happened?'"

‘Grubergate’ shows the sad state of debate on Obamacare

By Theda Skocpol, Special to the Los Angeles Times
Posted Dec. 11, 2014

On Tuesday, the Republican-led House Committee on Oversight took obvious pleasure in raking MIT economist Jonathan Gruber over the coals about foolish and uninformed comments he made regarding the politics of health reform.

Gruber was deeply apologetic, acknowledging that he is not an expert on politics and that his off-hand comments about the politics of health reform were uninformed and at times offensive. In public appearances, he called American voters “stupid” and suggested that politicians had deliberately obscured aspects of the Affordable Care Act.
But as Gruber noted in his testimony, he was never an insider on the politics of the health care proposal. Like many people, he sometimes claimed to know more than he really did about fields far from his expertise.
But here is the important thing to know about Gruber: He is not the “architect” of the Affordable Care Act. Yes, he served as a technical expert, modeling health insurance benefits and subsidies, for the 2006 Massachusetts health reforms signed into law by Republican Gov. Mitt Romney, then the state’s governor. And yes, he was consulted frequently on similar issues when Romneycare became the model for Obamacare. But the architects who fashioned the Affordable Care Act were elected representatives and senators serving in Congress in 2009 and 2010, along with the president of the United States.
In November 2008, 63 percent of American voters went to the polls — in the highest voter turnout in decades (and far above the puny 36 percent of voters who turned out in 2014). By huge margins, that high tide of voters elected a Democratic-majority Congress, which then spent more than 14 months in public debates about the new health reform law. During the presidential primaries and in the general election President Barack Obama had made his intention to reform health care clear, and he was handily elected. Democrats then fashioned an effective health reform that realized a decades-long dream.

Affordable Care Act swelling ranks of self-employed, report says

BY JOE LAWLOR 
Lisa Mae Parker loves baking and had long desired to launch a home-based business, but for most of the last two decades, she kept her aspirations at bay to work jobs so she could have health insurance.
“I was miserable, and I was making everyone else around me miserable,” said Parker, 54, of Parsonsfield, who had worked in retail and at grocery stores since the 1990s. “It was hard for me to go to work for somebody else, punch a time clock and not be creative.”
But this fall, Parker began Cakes for All Seasons – her home baking venture – and she’s now busy designing elaborate gingerbread houses and wedding cakes.
Parker says the Affordable Care Act gave her the freedom to leave her job and join the ranks of the self-employed.
Some economists and health experts say the ACA is spurring people to quit their jobs to pursue self-employment – and the trend is already starting to reap benefits for the economy as people feel free to pursue their desired careers. While the numbers are just starting to roll in because key ACA reforms have been in place less than a year, a 2014 report says 7,000 more Mainers will be self-employed in the coming years, in large part due to the new law. Also, more people in 2014 are choosing to work part time, for similar reasons, according to another study.
“Baking is my passion,” said Parker, who acquired insurance this year through the ACA. “This is always what I’ve really wanted to do.”
Parker said 21 years ago she also started up a home baking business, but with a young daughter at home, she had to shut it down in order to take a job that offered insurance benefits.
This time, she said, she can focus on her business and not be concerned about health insurance.
Health policy experts say being released from “job lock” – a phenomenon in which people work at a job not because they want to, but primarily to maintain health benefits – will help make the economy more efficient by more closely matching employers and employees. Those who prefer to become self-employed – or convert to a part-time position – can do so without having to pay for expensive individual policies or go without insurance.

In Final Spending Bill, Salty Food and Belching Cows Are Winners

By 

WASHINGTON —  Health insurance companies preserved their tax breaks. Farmers and ranchers were spared having to report on pollution from manure. Tourist destinations like Las Vegas benefited from a travel promotion program.
Also buried in the giant spending bill that cleared the Senate on Saturday and is headed to President Obama for his signature were provisions that prohibit the federal government from requiring less salt in school lunches and allow schools to obtain exemptions from whole-grain requirements for pasta and tortillas.
The watered-down standards for school meals were a setback for the first lady, Michelle Obama, who had vowed to fight “until the bitter end” for tougher nutrition standards. But they were a victory for food companies and some local school officials, who had sought changes in regulations that are taking effect over several years.
When an omnibus spending bill pops onto the floor of the House or the Senate in the waning days of a congressional session, some lawmakers invariably express surprise and outrage at special-interest provisions stuffed into the package.
Representative Marcy Kaptur, Democrat of Ohio and a senior member of the House Appropriations Committee, criticized the $1.1 trillion spending measure as “a Christmas tree bill,” decorated with “dangerous and unwelcome, nongermane riders.”
Such favors often have a long lineage. Lobbyists and lawmakers have, in many cases, been working on them for months or years. Some of this year’s provisions originated as free-standing bills, languished on their own and were then revived in the spending package. Others block regulations that have been proposed, adopted and sometimes upheld in court.
The School Nutrition Association, representing cafeteria directors, welcomed the bill’s language on sodium and whole grains. The lower sodium standards would have been “extremely difficult to achieve,” and the government needs more research before compelling schools to make such costly changes, said the association, which receives financial support from food companies.
Republicans like Representative Harold Rogers of Kentucky, the committee chairman, said the riders were needed to halt wasteful spending and “overreach” by agencies that generate rules harmful to the economy.
A typically arcane provision of the bill provides relief to nonprofit Blue Cross and Blue Shield plans, which have special tax breaks that were threatened by the Affordable Care Act.
Blue Cross is not mentioned by name in the relevant section of the 2015 spending bill, titled “Modification of treatment of certain health organizations.” But the deduction in question is available only to Blue Cross and Blue Shield plans, which have been lobbying Congress for a clarification since the Affordable Care Act was signed in 2010.

Health spending — under control?

by Robert J. Samuelson - Washington Post

Has the monster of exploding health costs finally been slain? After five years of slow spending growth, it’s tempting to think so. This would be a momentous development, because rising health spending has had damaging side effects. It has reduced workers’ take-home pay, as employers devoted more compensation dollars to insurance and fewer to wages and salaries. Growing government health spending (mainly through Medicare for the elderly and Medicaid for the poor) has had a similar effect. It has squeezed other public programs.
The trend lines seem favorable. Recently, the Centers for Medicare and Medicaid Services (CMS) reported that from 2009 to 2013 annual increases in health spending averaged only 3.9 percent — well below historical experience. As recently as 2007, the gain was 6.3 percent. The result: Since 2009, health care’s share of the economy has stabilized at 17.4 percent of gross domestic product. Although that’s $2.9 trillion ($9,255 for every American), health care is no longer siphoning more resources from the economy’s other sectors. 
Can this continue?
Unfortunately, experts disagree. Differing on what’s caused the slowdown, they split on how long it will last. 
One theory is that a weak economy translates into weak health spending. A study last year by the Kaiser Family Foundation — a nonpartisan research group — attributed three-quarters of the slowdown to the economy. The trouble is that there’s no simple explanation of why. The conclusion reflects a “statistical analysis of 50 years of health spending and economic trends.” Larry Levitt, one of the study’s authors, says these relationships predicted a continued slowdown in 2013. Now, spending is expected to accelerate.
Other analysts argue that the spending slowdown began before the recession, suggesting that the causes lie elsewhere. One underappreciated change has been the rise of high-deductible insurance policies coupled with health savings accounts (HSAs). The HSAs allow workers and companies to make tax-free contributions that can be used for out-of-pocket health expenses. 
When people spend their own money — not insurance funds — they’re usually more careful in how they use health care, says Grace-Marie Turner of the Galen Institute, a HSA advocate. The CMS report agreed, finding that consumers “in high-deductible plans tend to use [health] services at a lower rate than those enrolled in plans with lower or no cost-sharing.”
http://www.washingtonpost.com/opinions/robert-samuelson-health-spending--under-control/2014/12/14/f7ee0dbe-8221-11e4-81fd-8c4814dfa9d7_story.html?hpid=z3

Vivek Murthy, the New Surgeon General, Isn’t Afraid to Take a Stand

By 

WASHINGTON — Dr. Vivek H. Murthy, a Boston internist who at the age of 37 has become one of the youngest surgeons general of the United States, is a self-described dreamer and grass-roots organizer.
He has professed a deep fondness for mangoes, and his interests include studying ways to increase global happiness. But his lighthearted style should not be taken as a lack of seriousness. In fact, his stance on a divisive issue — he has been an outspoken supporter of gun control laws — put him in a professional limbo that lasted months.
Dr. Murthy’s appointment was confirmed Monday night, more than a year after he was nominated — a delay that said as much about the American political cycle as it did of his views. His remarks on guns, including a Twitter posting in 2012 that “guns are a health care issue,” enraged the National Rifle Association and frightened politically vulnerable Democrats ahead of the midterm election.
But Dr. Murthy, who treats acutely ill patients at Brigham and Women’s Hospital and teaches at Harvard Medical School, slid through in one of the last acts of the Democratic-controlled Senate. He becomes the country’s youngest surgeon general since John B. Hamilton, who left the office in 1891.
In an age when health care is a politically contentious topic and doctors often shy away from getting involved, Dr. Murthy takes positions. He is a founder of Doctors for America, a nonprofit group of 16,000 physicians and medical students whose stated mission is to improve the country’s health care system and make sure everyone has access to quality health care.
The group advocated passage of the Affordable Care Act (and the election of President Obama — it was originally called Doctors for Obama, a fact that rankled Republicans and even some Democrats), training members to educate people about enrollment, organizing a bus tour in Florida and holding athletic races for fund-raising across the country.
Republicans have criticized Dr. Murthy, saying he is more advocate than doctor. Even some health experts said that his advocacy could hurt his ability to be taken seriously as an independent voice — something that is crucial for the position, which lacks any real power beyond its potential as a bully pulpit.
But his supporters say it is precisely his willingness to take a stand on real issues — so rare in today’s political environment — that is his primary strength. Dr. Jerry Avorn, a colleague of Dr. Murthy’s at Brigham and Women’s, pointed out that past surgeons general took strong and unpopular positions — on smoking in 1964 and on AIDS in the 1980s — and were remembered as courageous fighters for what was right for public health.

Mass. doctor Vivek Murthy OK’d as surgeon general

Views on guns, advocacy led to Senate delay

By GLOBE STAFF  

WASHINGTON — Dr. Vivek Murthy, the Harvard professor whose nomination for surgeon general was held up because of his support for gun control and his political activity in President Obama’s campaign, was confirmed Monday by the Senate, more than a year after he was nominated.
As surgeon general, Murthy will be the nation’s chief public health advocate. Prior surgeons general have used the position to bring attention to health threats, particularly smoking and AIDS.

Murthy, 37, has said he will focus on preventing chronic diseases, efforts to curb smoking, and programs to improve diets and combat obesity. Surgeons general do not serve on the president’s Cabinet but they do advise the White House and use their platform to champion public health causes.
“We need a voice that we can trust who can explain these diseases to the American people, and Dr. Murthy is absolutely the man with the medical expertise, the academic background, and the policy experience to do that,” said Senator Edward J. Markey, a Massachusetts Democrat.
Obama said in a statement that Murthy would help the administration’s effort to combat the Ebola virus.
“As ‘America’s doctor,’ Vivek will hit the ground running to make sure every American has the information they need to keep themselves and their families safe,” he said.
Murthy, a Brigham and Women’s Hospital internal medicine physician, ran into opposition because of comments he has made on Twitter favoring gun control and because he founded an organization called Doctors for Obama in 2008 that advocated for Obama’s election and later morphed into a group called Doctors for America that supported the president’s health care law.

Encouraging news on health care spending

IT’S STILL too early for a thorough evaluation of the effects of the federal Affordable Care Act, since some major provisions have only recently gone into effect. Still, a deep dive into the data on national health care spending through 2013 offers some reasons for optimism. The data show that even with the economy steadily recovering, overall US health care spending has been increasing only moderately. The 3.6 percent rise in 2013 is the lowest since the federal government started tracking that statistic in 1960. 
That’s half a percentage point below the increase in 2012. All told, the annual rise in health care costs has been in the range of 3.6 to 4.1 percent for five years now. Further, the share of gross domestic product devoted to health care spending has held steady at 17.4 percent since 2009; that means that the percentage of national income spent on health care has remained constant over that period.

As Obamacare critics are quick to note, one circumstance restraining costs is an economy that still isn’t operating on all cylinders. That is true, though with this important qualifier: The use of health services is actually nudging up again, but the effect on total spending has been moderated by lower growth in medical prices.
Now to the news on the private health insurance front, where most Americans under 65 get their health coverage. The 2013 data come from a year before the individual health-insurance requirement, which didn’t go into effect until this year. Still, other Affordable Care Act rules, such as the one requiring health plans to devote 80 percent of each premium dollars to health care, were in effect.
The rate of increase in private premiums dropped from 4 percent in 2012 to 2.8 percent in 2013. The amount insurers spent on care increased by 2.8 percent in 2013, compared to a 4.4 percent increase in the previous year. 
“The slow growth in 2013 was driven primarily by low spending growth for hospital services and physician and clinical services and a decline in retail prescription drugs,” according to a team of federal statisticians and economists who dissected the latest data in Health Affairs, the well-known health policy journal.

Stop Wasting Doctors’ Time

Board-Certification Has Gone Too Far

By DANIELLE OFRI

IT’S hard to believe that another 10 years have passed, but the proof is the 11-volume stack of medical review books at my bedside. It’s time for the decennial rite of cramming a thousand pages of facts for an eight-hour-long multiple choice test.
Doctors are licensed by their states to practice medicine, but they’re also expected to be “board-certified” in their particular field — surgery, obstetrics, pediatrics, etc. This certification comes from the professional organization of each field. In my case, it’s the American Board of Internal Medicine.
It used to be that you tackled those monstrous board exams just once after residency. Then you went into practice and never looked at a No. 2 pencil again. But in 1990, the boards decided that doctors should recertify every 10 years. This seemed reasonable, given how much medicine changes. Over time, though, the recertification process has become its own industry. The exam has been supplemented with a growing number of maintenance-of-certification, or M.O.C., requirements. Some are knowledge-based exercises, but many are “practice assessments” meant to improve care in your own practice that end up being just onerous paperwork. And the recertification process and associated materials cost doctors thousands of dollars.
This year the internal medicine board announced that doctors who didn’t participate would be publicly tagged as “not meeting M.O.C. requirements.” Many jobs require board-certification, so a number of doctors felt that this tactic amounted to extortion. More than 19,000 signed a petition in protest. They complained that the specialty boards are monopolies that control who can practice medicine and use this power to compel compliance and exorbitant fees. Worse, they argued that the recertification process might not even be effective.

Obamacare deadline extended in California for Jan. 1 coverage

California’s health insurance exchange extended its deadline for consumers wanting Obamacare coverage in effect by Jan. 1.
Peter Lee, executive director of Covered California, said people who start the application process or make some “good faith effort” by Monday will have until Dec. 21 to finish signing up. Monday at midnight had previously been the hard deadline.
“We are providing this window to get people across the finish line,” Lee said at an exchange board meeting Monday. “We know many of the people applying have never had insurance before, and these are individuals who need to sit down and talk with someone.”
Lee said many insurance agents and enrollment counselors were already fully booked with applicants Monday. He said the deadline extension will allow people to make appointments through Dec. 21.
The previous deadline applied to people signing up for health insurance for the first time and the more than 1 million Californians with existing policies who may want to switch health plans in Covered California.
http://www.latimes.com/business/healthcare/la-fi-covered-california-deadline-20141215-story.html

Why Canadian hospitals outperform US hospitals

If US hospitals ran as efficiently as Canada's the average family of four would save $2,000 annually on healthcare

By Steffie Woolhandler and David Himmelstein
Troy Media (Calgary, AB, Canada), Dec. 12, 2014
In many countries, bereaved families get condolence cards and flowers. In the U.S., the survivors are also deluged with hospital bills and insurance paperwork.
That paperwork isn’t merely an insult. It costs U.S. society a fortune. Take hospitals, for instance. According to research we recently published in Health Affairs, U.S. hospitals spent $215 billion in 2011 on billing and administration, a striking 1.43 per cent of GDP.
Canadian hospitals spend only $158 per capita on admin
Put another way, about $1 of every $4 of U.S. hospital spending goes to bureaucracy rather than patient care.
Other countries manage modern, first-rate hospital systems for far less. While administration devoured $667 per capita annually in the U.S., we found that Canada spent only $158, Scotland $164, England $225 and the Netherlands $325.
If U.S. hospitals ran as efficiently as Canada’s, the average U.S. family of four would save $2,000 annually on healthcare.
Moreover, U.S. hospital paperwork costs have risen sharply since 2000, even after adjusting for inflation. In contrast, administration’s share of hospital budgets in Canada has actually fallen since 1999.
A generation ago, it took just one or two managers to run a U.S. hospital. Now, the CEO has been joined by “chief officers” for operations, finance, compliance, information, quality management, and more.
Each chief commands his/her own legions – hundreds of billing and registration clerks, referral managers, upcoding specialists (to translate doctors’ diagnoses into the most profitable billing codes), and massive IT departments whose first commandment is “get the bill right.”
Why are U.S. hospitals so inefficient? Our multiple-payer insurance system forces every hospital to negotiate rates with dozens of insurance plans, each with its own coverage rules, billing procedures and documentation requirements. And each hospital must collect deductibles, co-payments and co-insurance from tens of thousands of patients.
In contrast, Canada and Scotland – where bureaucratic costs are lowest – have single-payer systems that reject this kind of red tape and the need to bill for every Band-Aid. They pay hospitals simple lump-sum budgets, the way we fund local fire stations. And like fire departments, their hospitals don’t need to collect from each victim of misfortune.
But the complexity of hospital billing isn’t the only thing driving bureaucracy. Hospitals have been forced to add layers of business expertise in order to survive in our market-driven system.
A hospital that doesn’t show an operating profit can’t fund essential new investments in new equipment and cutting-edge services, or modern buildings. That means administrators have to devote resources to financial gaming like marketing lucrative services (e.g. sports medicine); billing units to squeeze every penny from insurers and patients; and strategies to recruit profitable (well-insured) patients, and avoid unprofitable (e.g. uninsured) ones.
The dismal record of for-profit hospitals illustrates the problem with running hospitals as businesses. The for-profits have higher death rates and employ fewer clinical personnel like nurses than their non-profit counterparts. But care at for-profits actually costs more, and they spend much more on the bureaucracy, a reflection of the high cost of implementing shrewd financial strategies.
Canadian and Scottish hospital administrators don’t have to play financial games to assure their survival. Government grants – rather than operating profits – pay for new buildings and equipment. Even in France and Germany, where hospitals bill multiple payers, bureaucratic costs are modest because government directly funds most hospital investments.
Market-oriented policies wrong approach
England and the Netherlands provide unfortunate counter-examples. Pro-market reforms initiated during the Thatcher era have driven English hospital administrative costs sharply higher. And only U.S. hospitals have higher administrative costs than those in the Netherlands, where radical market-oriented reforms now pressure hospitals to show a profit.
Economics textbooks hold that subjecting medicine to market forces will stimulate efficiency and root out waste. But reality stubbornly refuses to obey. In healthcare, market-oriented policies encourage hospitals to shift resources to business strategies that boost the bottom line, but contribute nothing to care.
Dr. Steffie Woolhandler is an advisor with EvidenceNetwork.ca and co-founder of Physicians for a National Health Program. She is professor of public health at the City University of New York and lecturer in medicine at Harvard Medical School. She is also an internist at the Montefiore Medical Center in New York. Dr. David Himmelstein is an advisor with EvidenceNetwork.ca and co-founder of Physicians for a National Health Program. He is professor of public health at the City University of New York and lecturer in medicine at Harvard Medical School. He is also an internist at the Montefiore Medical Center in New York.


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