Health Care Reform Articles - January 6, 2015

Lessons from Vermont

by Merrill Goozner

Sorting through the shards of Vermont's discarded single-payer health insurance scheme reveals the plan was undone by its generosity toward patients, hospitals and physicians, not its core assumptions. 

It's worth a closer look at the particular circumstances that led to its demise, since single-payer advocacy, despite its setback in Vermont, could return this year as a political force if the U.S. Supreme Court undermines Obamacare's reliance on private insurance markets to provide universal coverage.

Like single-payer schemes in Canada and much of the rest of the advanced industrial world, the Vermont plan was not “socialized medicine.” It left the provision of care to private physicians, not-for-profit hospitals and for-profit companies. Like Medicare, it created a single insurance pool for state residents.

The plan's architects, who included MIT healthcare economist Jonathan Gruber, then devised a health plan for Vermont's 625,000 residents (exempting those on Medicare or the military's Tricare), which covered fully 94% of actuarial costs. Vermonters covered by the plan would pay only 6% of their medical expenses out-of-pocket.

Compare that to Obamacare's silver-tier plan, which covers 70% of costs and has much higher copays and deductibles for patients. An unsubsidized Blue Cross and Blue Shield silver plan being sold this month on Vermont Health Connect costs $15,696 a year. That places the actuarial value of the Green Mountain Care's single-payer family plan at nearly $21,077. That would qualify for the Cadillac tax under Obamacare.  

The plan was generous toward providers, too. A single payer paid a single rate—no more cost-shifting. Medicaid rates would be lifted to more than 105% of Medicare rates under the discarded plan.

Prior to passage of the Patient Protection and Affordable Care Act, Vermont already offered Medicaid to people earning up to 300% of the poverty level. Though the state's median household income of about $55,000 a year is above the national average, Medicaid and the Children's Health Insurance Program cover nearly 185,000 Vermonters, or close to 30% of the population.

Paying 105% of Medicare rates would have represented a hefty pay increase for many physicians and hospitals, although it would reduce payments from patients who previously were privately insured. Combined with the increase in utilization sure to accompany a plan with such generous benefits, the increased payments to providers wiped out all of the reduced administrative costs associated with moving to a single payer.

Even so, many if not most Vermont employers providing a typical BCBS policy to their employees would have benefited from the plan as long as they were willing to drop their own coverage—something large national firms such as IBM, the state's single biggest employer, are unlikely to do. The “outrageous” 11.5% employer payroll tax for a family earning a combined $55,000 a year comes to $6,325. Compare that to the actuarial value of Green Mountain Care.

http://www.modernhealthcare.com/article/20150103/MAGAZINE/301039984?utm_source=AltURL&utm_medium=email&utm_campaign=am%3Fmh

Green Mountain Care: Coverage and Financing Report

Green Mountain Care: A Comprehensive Model for Building Vermont's Universal Health Care System 

Submitted to the Vermont Legislature by Governor Peter Shumlin December 30, 2014

Full text of the GMC Coverage and Financing Report (pdf, 3.78MB) 

Complete Appendices (pdf, 15.3MB)

 http://hcr.vermont.gov/GMC_Report_2014

Harvard Ideas on Health Care Hit Home, Hard

By ROBERT PEARJAN. 5, 2015

WASHINGTON — For years, Harvard’s experts on health economics and policy have advised presidents and Congress on how to provide health benefits to the nation at a reasonable cost. But those remedies will now be applied to the Harvard faculty, and the professors are in an uproar.

Members of the Faculty of Arts and Sciences, the heart of the 378-year-old university, voted overwhelmingly in November to oppose changes that would require them and thousands of other Harvard employees to pay more for health care. The university says the increases are in part a result of the Obama administration’s Affordable Care Act, which many Harvard professors championed.

The faculty vote came too late to stop the cost increases from taking effect this month, and the anger on campus remains focused on questions that are agitating many workplaces: How should the burden of health costs be shared by employers and employees? If employees have to bear more of the cost, will they skimp on medically necessary care, curtail the use of less valuable services, or both?

“Harvard is a microcosm of what’s happening in health care in the country,” said David M. Cutler, a health economist at the university who was an adviser to President Obama’s 2008 campaign. But only up to a point: Professors at Harvard have until now generally avoided the higher expenses that other employers have been passing on to employees. That makes the outrage among the faculty remarkable, Mr. Cutler said, because “Harvard was and remains a very generous employer.”

In Harvard’s health care enrollment guide for 2015, the university said it “must respond to the national trend of rising health care costs, including some driven by health care reform,” in the form of the Affordable Care Act. The guide said that Harvard faced “added costs” because of provisions in the health care law that extend coverage for children up to age 26, offer free preventive services like mammograms and colonoscopies and, starting in 2018, add a tax on high-cost insurance, known as the Cadillac tax.

http://www.nytimes.com/2015/01/06/us/health-care-fixes-backed-by-harvards-experts-now-roil-its-faculty.html?hp&action=click&pgtype=Homepage&module=first-column-region®ion=top-news&WT.nav=top-news&_r=1

Harvard’s Health Benefits Unfairness

By JERRY R. GREEN, ALISON F. JOHNSON, MARC W. KIRSCHNER, MARK KISIN, CHARLES H. LANGMUIR, MARY D. LEWIS, JAMES J. MCCARTHY, LISA M. MCGIRR, RICHARD F. THOMAS, MARY C. WATERS, and CHRISTOPHER WINSHIP November 12, 2014

Last week, the Faculty of Arts and Sciences voted unanimously in favor of a motion asking the President and Fellows to suspend changes to the health benefits offered faculty and non-union staff for 2015. In justifying the benefits changes, the University offered four main explanations for its addition of deductibles and co-insurance: (1) the cost of benefits relative to the overall budget; (2) parity with peer institutions; (3) social science on containing health care costs and (4) the future financial health of the University. In advancing these explanations, the University has offered information that is incomplete, incorrect, deeply misleading, and ethically troubling.

According to the University’s financial report issued on Friday, Harvard’s spending on benefits (healthcare and other benefits are not disaggregated) for current employees has risen. However, the report also makes clear that, contrary to information provided in the Open Enrollment Preview Brochure and at the October FAS meeting, those costs are not rising relative to faculty and non-union staff compensation. Rather, considering the expanding employee pool at Harvard, the cost of benefits appears to be well under control.

The second argument offered in favor of the health benefits changes has been that we need to remain in line with our peers. We contend that the only peer pressure Harvard should heed is that which makes us a better research university. Increasing salaries and benefits might do this if it allowed Harvard to recruit and retain the brightest minds in our fields of research and teaching, as well as the post-doctoral fellows and staff needed to support these research and teaching endeavors.

Instead, we are told in effect that we should lower our expectations if other universities have done so or might in the future. Such a cynical vision will not advance the long-term goals of the university as a place where new and important knowledge is produced. Moreover, the argument is not only specious—it is false: While some universities have adopted co-insurance, most of our peers (our national competitors Yale, Princeton, Chicago, and Stanford as well as institutions in our region such as Boston University, MIT, or Wellesley) offer an array of benefits choices including plans with no deductibles and no co-insurance.

Perhaps the most distressing argument advanced in favor of the changes, however, has been one that draws on a social science experiment from the 1970s to suggest that a co-insurance system, where the insured must pay a percentage of after-deductible costs, is the best way to contain health-care costs. At the November FAS meeting, Provost Alan M. Garber ’76 and members of the University Benefits Committee asserted that because the RAND Health Insurance Experiment, or HIE, demonstrated a reduction in healthcare utilization without decreasing overall well-being, the new Harvard plan will do likewise.

We assert that, on the contrary, the HIE is irrelevant to the present benefits proposal before us.

The HIE randomized individuals into different insurance plans (some received health insurance free of charge, while others faced a range of co-insurance options). It found that those paying a higher percentage of costs visited primary care physicians less frequently and reduced their health-care expenditures as a result.  But copays for regular physician visits have long been standard and are already part of Harvard’s plan. What Harvard now proposes is further extending cost-sharing to hospitalizations, surgery, and diagnostic testing via co-insurance.

The HIE’s measurement of outcomes is also irrelevant to the matters that concern all of us. The study looked at indicators of general health such as blood pressure, visual acuity, and propensity to smoke. The relevant question for today’s Harvard is not whether going to one’s primary care doctor more often makes one smoke less, but whether a diagnostic test ordered by that doctor could save one’s life, or detect an illness in time to allow for a less invasive, and perhaps in the long run, less expensive treatment.

http://www.thecrimson.com/article/2014/11/12/harvards-health-benefits-unfairness/

'America's Bitter Pill' Makes Case For Why Health Care Law 'Won't Work'

JANUARY 05, 2015 2:04 PM ET

While reporting on the rollout of the Affordable Care Act, journalist Steven Brill was diagnosed with a life-threatening condition that required heart surgery.

"There I was: a reporter who had made hospital presidents and hospital executives and health care executives and insurance executives sweat because I asked them all kinds of questions about their salaries and about their profit margins," Brill tells Fresh Air's Terry Gross. "And now I was lying on a gurney in a hospital in real fear of my life."

Brill had a bubble on his heart that the doctors said had a 15 to 17 percent chance of bursting each year, he says. If it did, he would die. The experience, Brill says, helped him analyze health care from a patient's perspective.

"At that moment I wasn't worried about costs; I wasn't worried about a cost benefit analysis of this drug or this medical device; I wasn't worried about health care policy," Brill says. "It drove home to me the reality that in addition to being a tough political issue because of all the money involved, health care is a toxic political issue because of all the fear and the emotion involved."

Brill's surgery happened not long after he had written a special report for Time magazine investigating the inflated charges in hospital bills. The article Bitter Pill: Why Medical Bills Are Killing Us won a National Magazine Award. After winning the award, Brill ended up with pages and pages of his own inflated and confusing hospital charges.

http://www.npr.org/blogs/health/2015/01/05/375024427/americas-bitter-pill-makes-case-for-why-health-care-law-wont-work

Doctor, Shut Up and Listen

By NIRMAL JOSHIJAN. 4, 2015

HARRISBURG, Pa. — BETSY came to Dr. Martin for a second — or rather, a sixth — opinion. Over a year, she had seen five other physicians for a “rapid heartbeat” and “feeling stressed.” After extensive testing, she had finally been referred for psychological counseling for an anxiety disorder.

The careful history Dr. Martin took revealed that Betsy was taking an over-the-counter weight loss product that contained ephedrine. (I have changed their names for privacy’s sake.) When she stopped taking the remedy, her symptoms also stopped. Asked why she hadn’t mentioned this information before, she said she’d “never been asked.” Until then, her providers would sooner order tests than take the time to talk with her about the problem.

Betsy’s case was fortunate; poor communication often has much worse consequences. A review of reports by the Joint Commission, a nonprofit that provides accreditation to health care organizations, found that communication failure (rather than a provider’s lack of technical skill) was at the root of over 70 percent of serious adverse health outcomes in hospitals.

A doctor’s ability to explain, listen and empathize has a profound impact on a patient’s care. Yet, as one survey found, two out of every three patients are discharged from the hospital without even knowing their diagnosis. Another study discovered that in over 60 percent of cases, patients misunderstood directions after a visit to their doctor’s office. And on average, physicians wait just 18 seconds before interrupting patients’ narratives of their symptoms. Evidently, we have a long way to go.

Three years ago, my colleagues and I started a program in Harrisburg designed to improve doctors’ communication with their patients. This large urban hospital system serves a city with a population of about 50,000, together with the surrounding metropolitan area of more than 550,000 people.

The hospital faces particular challenges: The city has a high poverty rate (32 percent, compared with the state average of 13 percent), and the metro area has a high rate of childhood obesity. Over all, nearly a third of people around Harrisburg are uninsured, compared with about one in 10 for the rest of Pennsylvania.

Our project started with a simple baseline assessment of how we as doctors communicated with our patients. Observation soon revealed that physicians introduced themselves on only about one in four occasions. And without an introduction, it’s no surprise that patients could correctly identify their physician only about a quarter of the time.

http://www.nytimes.com/2015/01/05/opinion/doctor-shut-up-and-listen.html?hpw&rref=opinion&action=click&pgtype=Homepage&module=well-region&region=bottom-well&WT.nav=bottom-well&_r=0

Maine spent $53,000 in failed effort to trim Medicaid rolls

Gov. Paul LePage hired outside lawyers after the Maine attorney general declined to argue the case, saying it lacked legal merit.

BY ALANNA DURKIN THE ASSOCIATED PRESS

AUGUSTA — Gov. Paul LePage’s administration spent nearly $53,000 on private lawyers in its failed attempt to remove thousands of low-income young adults from the state’s Medicaid program after being told by Maine’s attorney general that he couldn’t win the case, according to documents obtained by The Associated Press.

The Republican governor went to the 1st U.S. Circuit Court of Appeals after the federal government denied his request to end Medicaid coverage for about 6,000 19- and 20-year-olds. He was forced to seek outside counsel after Attorney General Janet Mills, a Democrat, declined to represent the state.

Mills refused to represent the administration because the case had “little legal merit” and “wouldn’t be a good use of time and money,” she said in an interview. She even joined the federal government in fighting LePage’s effort in court.

But Mills allowed the governor to hire outside counsel because of the earnestness of his position, and because she said it’s not her “aim to prevent the governor, as the chief executive, from pursuing public policy in initiatives.”

The Maine Department of Health and Human Services paid $51,918 to the Portland law firm Roach, Hewitt, Ruprecht, Sanchez & Bischoff from June to December, according to documents provided to the AP through a Freedom of Access Act request. An additional $751 was paid to the firm through LePage’s office before the money was transferred to DHHS, documents from his office show.

All payments came from the governor’s contingency fund, which he can, for the most part, use at his discretion.

In November, a federal appeals court sided with the federal government in rejecting LePage’s request. The court agreed that Maine can’t roll back coverage for 19- and 20-year-olds because the Affordable Care Act requires states to maintain their level of coverage for children until 2019.

Jack Comart, litigation director for Maine Equal Justice Partners, which opposed the governor’s move, said the private lawyer representing the administration “made the best out of a bad case.”

“But the court found no merit in their arguments,” he said. “So it was not a good use of taxpayer dollars.”

http://www.pressherald.com/2015/01/05/maine-spent-53000-in-failed-effort-to-trim-medicaid-rolls/

Stop Subsidizing Big Pharma

By LLEWELLYN HINKES-JONESJAN. 5, 2015

WASHINGTON — ROBERT J. BEALL, the president and chief executive of the Cystic Fibrosis Foundation, called his recent decision to sell the royalty rights to his organization’s research a “game changer.” Indeed: Deals like this, in which an investment company paid the foundation $3.3 billion for its future royalties from several cystic fibrosis drugs it helped finance, could revolutionize the way medical research is funded. Rather than the staid model of government-funded institutions handing out grants to academic research facilities, a new breed of “venture philanthropies” like the Cystic Fibrosis Foundation could corral private investment into developing lifesaving drugs quickly and cheaply.

The problem is that venture philanthropy is, essentially, another term for privatizing scientific research. Instead of decisions about the fate of scientific funding being made by publicly oriented institutions, those decisions are being put in the hands of anonymous philanthropists and ostensibly benevolent nonprofits.

At the risk of oversimplification, biomedical research divides into two categories: private and public. The former is the constellation of big pharmaceutical companies and start-up labs. The latter comprises government agencies and the universities and philanthropies that rely on government support — directly, through grants, or indirectly, through tax policy. The former can charge whatever it wants for its products; the latter is limited by government rules and price controls.

http://www.nytimes.com/2015/01/06/opinion/stop-subsidizing-big-pharma.html?smprod=nytcore-iphone&smid=nytcore-iphone-share

Cancer’s Random Assault

By DENISE GRADYJAN. 5, 2015

It may sound flippant to say that many cases of cancer are caused by bad luck, but that is what two scientists suggested in an article published last week in the journal Science. The bad luck comes in the form of random genetic mistakes, or mutations, that happen when healthy cells divide.

Random mutations may account for two-thirds of the risk of getting many types of cancer, leaving the usual suspects — heredity and environmental factors — to account for only one-third, say the authors, Cristian Tomasetti and Dr. Bert Vogelstein, of Johns Hopkins University School of Medicine. “We do think this is a fundamental mechanism, and this is the first time there’s been a measure of it,” said Dr. Tomasetti, an applied mathematician.

Though the researchers suspected that chance had a role, they were surprised at how big it turned out to be.

“This was definitely beyond my expectations,” Dr. Tomasetti said. “It’s about double what I would have thought.”

The finding may be good news to some people, bad news to others, he added.

Smoking greatly increases the risk of lung cancer, but for other cancers, the causes are not clear. And yet many patients wonder if they did something to bring the disease on themselves, or if they could have done something to prevent it.

“For the average cancer patient, I think this is good news,” Dr. Tomasetti said. “Knowing that over all, a lot of it is just bad luck, I think in a sense it’s comforting.”

Among people who do not have cancer, Dr. Tomasetti said he expected there to be two camps.

“There are those who would like to control every single thing happening in their lives, and for those, this may be very scary,” he said. “ ‘There is a big component of cancer I can just do nothing about.’

“For the other part of the population, it’s actually good news. ‘I’m happy. I can of course do all I know that’s important to not increase my risk of cancer, like a good diet, exercise, avoiding smoking, but on the other side, I don’t want to stress out about every single thing or every action I take in my life, or everything I touch or eat.’ ” Dr. Vogelstein said the question of causation had haunted him for decades, since he was an intern and his first patient was a 4-year-old girl with leukemia. Her parents were distraught and wanted to know what had caused the disease. He had no answer, but time and time again heard the same question from patients and their families, particularly parents of children with cancer.

http://www.nytimes.com/2015/01/06/health/cancers-random-assault.html?emc=edit_hh_20150106&nl=health&nlid=1311158