Tackling gun control as a public health problem
by David Hemenway - The Boston Globe - October 2, 2017
The Las Vegas massacre is another in the long and horrific litany of mass shootings in the United States.
The shooting underlines some things we should already know: (1) Guns make it easy to kill at a distance, with too little regard for the actual humans who are being affected. (2) The claim that the only way to stop a bad guy with a gun is with a good guy with a gun is nonsense — how could arming the victims have helped in this case? (3) Allowing these shooters easy access to gun suppressors will make the mass shooting worse — the main way potential victims knew anything was happening was because of the noise.
Frighteningly, our national gun laws make it easy for almost anyone to obtain almost any firearm they want. The Harvard Injury Control Research Center, which I direct, estimates that over 20 percent of guns recently acquired were obtained without a background check. And background checks in the United States are the least strong among high-income countries. One may be considered too dangerous to fly on a commercial airline but may still be able to pass a background check.
In some states one can legally carry a concealed firearm without a permit, and in most states (but not Massachusetts), police are required to give you a permit as long as you pass the background check, even if the chief knows you, and has been called to your home many times for violent behavior.
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Fortunately, there have been successes in reducing mass killings; the successes show that we need not despair of ever reducing the problem. After the horrific Port Author massacres two decades ago, Australia decided to try to prevent these killings. Led by their conservative prime minister, they effectively said, “Enough is enough.” They bought back the weapons most commonly used in their mass shootings — semiautomatic and pump-action rifles — and they strengthened their gun laws. Whereas they had 13 gun massacres in the two decades leading up to the law change, in the two decades since, they have had none. They have also seen a dramatic drop in both firearm homicide and firearm suicide.
In the United States, in the 1930s, in response to the wave of gangland violence that occurred during Prohibition (e.g., the Saint Valentine’s Day massacre), Congress tried to stop the flow of traffic in “gangster weapons”— including machine guns, sawed-off shotguns, and silencers. While there are still may be hundreds of machine guns in the United States, regulation has helped ensure that they are almost never used in crime, let alone mass killings.
After the Oklahoma City bombing in 1995 that left 168 people dead, the federal government instituted a series of controls that reduced and tightened access to dangerous chemicals in common consumer products and tightened access to precursor chemicals, explosives, and detonators. Since then, although there have been bombings on America soil, there has been no mass-fatality bombing. The Boston Marathon bombing, for example, succeeded in killing only three people. We have successfully reduced the problem by making it more difficult for potential perpetrators to gain access to the lethal weapons. This did not make the perpetrators less bad, but it made them less dangerous.
What can readily be done to reduce deaths in mass shootings in America? The experience of the other high-income countries suggests that stronger background checks, combined with background checks for all gun transfers, could help. Reducing the militarization of the civilian stock of firearms (e.g., military assault weapons with high-capacity magazines) couldn’t hurt — some evidence suggests that bans on large-capacity magazines are effective. What might also help is reducing a common way guns get into wrong hands — gun theft — by improving gun storage, or having smart guns that don’t work when stolen.
A lesson from almost all public health successes is that it is most effective to change the environment and the product — to improve the conditions for health — rather than trying exclusively to get people to abstain from all bad behavior. The least effective way to prevent the problem is for those in power simply to repeat homilies rather than proposing actions to effectively prevent further occurrences.
David Hemenway is professor of health policy at the Harvard T.H. Chan School of Public Health.
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We need higher taxes
by Robert Samuelson - The Washington Post - October 2, 2017
Can we get real about “tax reform,” the Republican promise to enact deep tax cuts that will spur economic growth? Probably not, but let’s give it a try.
For starters, we can stop calling it “reform.” That’s a charged word, implying that the new tax system will be superior to the old. We don’t know that for a fact; the new system might be worse. Better to call what we’re doing the “tax debate” or “tax overhaul.” (The point is a general one. Advocates of policy changes routinely label their proposals “reform.” This suggests improvement, which may be nonexistent.)
Second, we cannot afford a net tax cut. If we are to lower tax rates and simplify complex tax provisions, we must offset the revenue losses by plugging loopholes, raising other taxes or cutting spending. Under current policies, the Congressional Budget Office has projected $10 trillion in deficits from 2018 to 2027. Trump’s tax plan, including provisions that would raise revenue, would add an additional $3.5 trillion in deficits over a decade, estimates the nonpartisan Tax Policy Center (TPC).
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Third, if tax cuts were initially financed by more deficit spending, the costs of today’s lower taxes would be transferred to future generations. “Tax cuts often look like ‘free lunches’ for taxpayers, but they eventually have to be paid for with other tax increases or spending cuts,” says a new report from the TPC. (The report is based on a broad outline of Trump’s plan, subject to change.) This is not “reform.” Social Security and Medicare — paid mainly by workers’ payroll taxes — already involve huge intergenerational transfers. Deficits are both a cause and consequence of those transfers.
Still, the superficial appeal of Trump’s tax plan is undeniable. For individuals, taxes would be reduced and simplified. There would be only three personal rates — 10, 25 and 35 percent — compared with today’s top rate of 43.4 percent. The top corporate rate would fall from about 35 to 15 percent. To help pay for these cuts, most itemized deductions would be ended (exceptions: the deductions for charitable contributions and mortgage interest payments).
President Trump unveiled his tax plan on April 26, after months of pledging to make drastic changes to the tax code. The Post's Damian Paletta explains why tax reform is so complicated. (Jenny Starrs/The Washington Post)
Roughly 71 percent of households would receive a tax cut, estimates the TPC. The trouble is that the tax cuts are regressive: That is, compared to household incomes and existing tax burdens, they favor the rich and upper middle class as opposed to the poor and lower middle class. The cuts for the richest fifth of Americans would average $19,510, with the cuts for the top 1 percent averaging $196,420, estimates the TPC. Meanwhile, the fifth of Americans in the middle of the income distribution would get an average cut of $1,320.
Actually, nothing would be wrong with this if there were convincing evidence that lower tax rates stimulate significantly faster economic growth. But there isn’t. Tax cuts may cushion a recession and improve the business climate, but they don’t automatically raise long-term growth. A 2014 study by the Congressional Research Service put it this way: “A review of statistical evidence suggests that both labor supply and savings and investment are relatively insensitive to tax rates.”
The truth is that we need higher, not lower, taxes. When the economy is at or near “full employment,” the budget should be balanced or even show a slight surplus. At 4.3 percent, the jobless rate is surely close to full employment, while the deficit for fiscal 2017 is reckoned to approach $700 billion, about 3.6 percent of the economy (gross domestic product). Both figures are expected to increase, despite continuous (assumed) economic growth. The gap can’t be blamed on the business cycle.
We are undertaxed. Government spending, led by the cost of retirees, regularly exceeds our tax intake. In the past, I have advocated a carbon tax — introduced gradually to minimize any recession risk — as a pragmatic way to pay for the government we want, while trying to cope with global climate change. Letting the federal debt buildup continue is an exercise in self-serving optimism. It presumes that the possibly adverse consequences (the crowding out of private investment, a currency crisis) will never materialize.
Given the complexities, the best we can probably expect from a tax overhaul is a modest reduction in tax rates paid by tightening or eliminating some tax preferences. This would not be undesirable; the fewer tax preferences, the less lobbying to keep or expand them. Washington’s “swamp” would be a tad drier.
But we should not delude ourselves that we are fixing the economy, the budget or the tax system. Mostly, through deficits, we would be shifting the costs of today’s lower taxes and higher benefits onto tomorrow’s Americans through higher taxes and lower benefits. Admitting this would require a more honest debate than most Americans are willing to abide.
The High Price of Failing America’s Costliest Patients
by Dhruv Khullar - NYT - September 28, 2017
Even patients with whom I have the best rapport would probably rather not see me so often.
Sometimes I readmit a patient I cared for just weeks before in the hospital. “Nice to see you again,” I offer with a smile. The usual response, loosely paraphrased: I’d rather be anywhere else.
This reflects not some deep deficiency in my bedside manner (I think), but rather an essential truth about medicine: People want health, not health care. And those who require the most health care and get the least health — high-need, high-cost patients with multiple or severe medical conditions — feel this most acutely.
Leaving aside the moral compulsion to improve the quality and efficiency of their care, there is an overwhelming financial imperative to do so. It’s well known that the country’s staggering health care costs are not evenly distributed. Just 1 percent of patients account for 20 percent of costs, and 5 percent of the population accounts for nearly half the nation’s health care spending.
But exactly who these patients are — and how we can better meet their needs — is less clear.
Misaligned Financial Incentives
One emerging definition, based on research, focuses on people with three or more chronic conditions who have a functional limitation, such as difficulty dressing, bathing, feeding themselves, walking, taking medications or using transportation.
Functional impairment seems to be a critical distinction between being chronically ill and being chronically ill with “high needs.” Patients with multiple chronic illnesses but without functional limitations have only modestly increased medical costs, and they have incomes similar to the general population. But those with chronic illnesses and a functional limitation have four times higher medical costs — more than $21,000 annually — and spend twice as much out of pocket, despite having much lower incomes. They visit the doctor more often, use more home health services, and are three times as likely to be hospitalized.
There are 12 million such Americans. They are veterans with disabilities, grandparents with Alzheimer’s, young women with lupus, kidney transplant recipients, factory workers with cancers that rage through rounds of chemo.
Three-fourths are white, two-thirds are women, half are over 65, and more than a quarter did not finish high school. They have more social stressors like housing insecurity and social isolation, and many have serious mental illness and substance use issues that contribute to higher rates of emergency department visits, hospitalizations and difficulty navigating the health system. More than 80 percentare publicly insured through Medicare or Medicaid.
“We can’t make the system work unless we do better with this population,” said David Blumenthal, a health policy expert and president of the Commonwealth Fund. “It’s important from a humane standpoint — these are our friends, our family. But it’s also important from a cost standpoint, and the effect on taxpayers.”
Dr. Blumenthal says misaligned financial incentives pose a critical barrier. In fee-for-service medicine, doctors and hospitals are paid for each service, and have little reason to invest in programs that reduce the number of medical interventions or keep people healthy. The more frequently a patient is seen, admitted, scanned, biopsied or prescribed medication, the better. This is especially problematic for high-need patients, who require an abundance of services, and whose social and medical complexity makes it hard to streamline and coordinate care.
“In our current system, being inefficient means higher revenue,” Dr. Blumenthal said. “It’s hard to do the right thing in fee-for-service. But value-based payment reverses the incentives so they’re aligned with patient and societal goals. When you get the incentives right — when you reward high value instead of high volume — you see a burst of creativity among providers finding ways to do better.”
A California Company With a Plan
One such burst has come at CareMore Health, a California-based health system and Medicare Advantage plan that specializes in caring for chronically ill patients.
Like other such Medicare Advantage plans, CareMore receives an overall payment from the government for the expected costs of its beneficiaries, instead of separate payments for each service. If it provides care more efficiently compared with predetermined benchmarks, it keeps the difference. (To prevent skimping on care, these plans are required to meet quality standards, cover all traditional Medicare services, and invest savings in additional benefits for members, or lower premiums to attract new enrollees.) Unlike most Medicare Advantage plans, though, CareMore also directly provides the medical care it pays for.
Every CareMore enrollee has an initial visit where a team of doctors, nurse practitioners, dietitians, social workers and behavioral health specialists performs an evaluation of their medical and social needs. The team then tailors its resources — chronic disease programs, nutritional counseling, social support referrals, behavioral therapy — to those needs with the express goal of keeping patients out of the hospital.
In one example, heart failure patients — for whom weight gain can mean fluid retention and hospital admission — get a wireless scale to weigh themselves at home, which sends data to a CareMore team. If team members see a worrisome trend, they can remotely adjust the patient’s medications, or if necessary, schedule a same-day visit.
“In hospitals, we’re great at customizing care,” said Sachin H. Jain, president of CareMore. “We have different intensities for patients with different needs: an observation unit, a general medical ward, an intensive care unit. But on the outpatient side, we haven’t done that. In your average clinic, all patients get scheduled for 15 or 30 minutes, regardless of whether their problem list is empty or 10 pages long. Our model tries to fix that.”
CareMore says it spends about twice as much as traditional Medicare on prevention and disease management programs for its sickest patients — but only half as much over all. In 2015, CareMore patients had 20 percent fewer hospitalizations and spent 23 percent fewer days in the hospital compared with fee-for-service Medicare patients of similar health status.
Other systems have shifted their focus in similar ways. Geisinger Health Plan in Pennsylvania, for instance, pays for extra nurses in primary care offices to help patients manage their chronic diseases: filling prescriptions, checking blood pressure, ensuring regular checkups. It employs case managers devoted to overseeing tenuous, often costly, transitions between the hospital and home for complex patients. A single prevented heart attack, amputation or stroke can more than offset the extra cost of another set of eyes.
Another program, known as the Program of All-Inclusive Care for the Elderly, gets fixed payments from Medicare and Medicaid to keep patients out of nursing homes and living in their communities.
Although the program serves people who are generally frailer than other Medicare patients, it has led to lower costs, fewer hospital stays, higher patient satisfaction, and possibly, longer lives. Over the past decade, it has grown to over 100 sites in 32 states from about 40 sites in 22 states. And it recently received a flood of fundingfrom private equity and venture capital firms betting these providers can cut costs by keeping patients in homes and out of institutions.
Better care for high-need patients will probably require accelerating these types of innovations, with an emphasis on paying for more effective services instead of intensive services. Another important step would be aligning payment models across the health system — Medicare, Medicaid, private insurers — so providers don’t have to design different care models for differently insured patients.
More fundamentally, progress may hinge on expanding our cultural conception of medical triumph beyond robotic surgeries and genome sequencing to include keeping a 74-year-old woman with heart failure, emphysema and breast cancer — with eight medications, four subspecialists and zero next of kin — out of the hospital for the next year.
What’s often lost in talk of dollars and drugs is a core that those of us providing and receiving care feel every day: No one wants to be in a hospital. Patients want independence. They want dignity. They want to do what they love and be with whom they love. If the goal of medicine is to promote health — not health care — maybe we’ve been doing it wrong. And we’re all paying the price.
https://www.nytimes.com/2017/09/28/upshot/the-high-price-of-failing-americas-costliest-patients.html?hpw&rref=upshot&action=click&pgtype=Homepage&module=well-region®ion=bottom-well&WT.nav=bottom-well
Trump’s Next Move on Health Care? Choice for Secretary May Offer Clue
by Peter Baker and Robert Pear - NYT - September 30, 2017
WASHINGTON — President Trump’s selection of a secretary of health and human services could be a turning point in a health care debate that has polarized Washington, as he faces a choice of working with Democrats to fix the current system or continuing his so-far failed efforts to dismantle his predecessor’s program.
The resignation of Tom Price as secretary late Friday over his use of costly chartered jets capped a week of setbacks on health care for a president who made the issue a centerpiece of his campaign and his first eight months in office. Mr. Trump’s decision on a successor could be an opportunity to shift the debate, but he faces the prospect of an arduous confirmation battle.
The president has sent mixed signals since the latest effort to repeal and replace President Barack Obama’s Affordable Care Act collapsed in the Senate. He asserted that he had the votes to pass the repeal legislation in early 2018, while offering to negotiate with Democrats who are adamantly against it. One adviser said on Saturday that Mr. Trump was serious about compromising with Democrats and would pick a secretary who would help make that happen.
Democrats urged him to pursue such a course. “Let’s get a new H.H.S. secretary who’s finally devoted to improving health care, move past these debates and come to bipartisan agreement on how to stabilize markets and make health care cheaper,” said Senator Christopher S. Murphy of Connecticut.
Senator Ron Wyden of Oregon, the senior Democrat on the Senate Finance Committee, said the departure of Mr. Price could begin “a new chapter for the Trump administration’s health care agenda.”
The White House had no comment on Saturday, but two advisers who asked not to be identified discussing internal matters said two top candidates were Scott Gottlieb, the commissioner of the Food and Drug Administration, and Seema Verma, the administrator of the Centers for Medicare and Medicaid Services. Both have previously been vetted by the White House, nominated by the president and confirmed by the Senate to their current jobs within recent months, a significant selling point.
Other names have been floated as well, including David Shulkin, the secretary of veterans affairs and a favorite of the president’s. But he has been criticized for a European trip with his wife that mixed business and sightseeing and was partially financed by taxpayers, and Mr. Trump may be reluctant to move him because he has been critical to fixing veterans’ care.
Some reports floated former Gov. Bobby Jindal of Louisiana, an assistant secretary of health and human services under President George W. Bush. But he was a caustic critic of Mr. Trump during his own brief campaign for the White House that ended in late 2015 after he called the future president a “narcissist” and “egomaniacal madman.”
Mr. Trump may not necessarily fill the post quickly. He has left the Department of Homeland Security in the hands of an acting secretary since John F. Kelly left in July to become White House chief of staff. The president appears to be in no rush to fill that post despite a series of hurricanes and a roiling immigration debate, issues managed by the Department of Homeland Security. He said on Friday that he would make a decision on that nomination “probably within a month.”
If Mr. Trump picks Ms. Verma to succeed Mr. Price at the Department of Health and Human Services, it would be taken as a sign among many that he wants to continue vigorous opposition to the Affordable Care Act, with the government doing the minimum required by the law to implement its provisions. Ms. Verma, an ally of Vice President Mike Pence, worked closely this year with Republicans in Congress on their proposals to undo the law and to cut Medicaid, the program for more than 70 million low-income people.
Still, some progressives have interpreted her work under the health care law in Indiana, where Mr. Pence was governor, to mean that while she opposed the Affordable Care Act, she was committed to finding ways to enforce it if it remained on the books.
Mr. Gottlieb has more experience in Washington and was seen at the time of his appointment as the more moderate of candidates being considered. In his first months at the F.D.A., he has deftly balanced the concerns of patients and pharmaceutical companies, while taking steps to combat the opioid epidemic and speed access to lower-cost generic drugs. His nomination would be seen as a signal that the president might want to take a different approach to the health care debate.
“We have the votes on the substance but not necessarily on the process, which is why we’re still confident that we can move health care forward and get it done in the spring,” Sarah Huckabee Sanders, the White House press secretary, said before Mr. Price’s resignation.
After the latest legislative failure, Mr. Trump said he would sign an executive order in the coming week intended to enable Americans to buy health insurance across state lines, a sign that he did not intend to wait for Congress. But it is not clear that he has the authority to do that on his own, and states often resist federal efforts to intrude on their regulation of insurers.
Senator Lamar Alexander of Tennessee, the Republican chairman of the Senate health committee, and Senator Patty Murray of Washington, the panel’s ranking Democrat, have resumed negotiations on bipartisan legislation intended to shore up the current insurance exchanges and prevent prices from shooting up.
The uncertainty comes at a crucial moment, just as federal and state officials are preparing for the fifth annual open enrollment period under the Affordable Care Act. The open season, when people can sign up for coverage, runs from Nov. 1 to Dec. 15. Critics say that the Trump administration has destabilized insurance markets, driving up premiums for 2018 and making it harder for people to enroll.
Mr. Price was confirmed in February by a party-line vote of 52 to 47 after giving vague, noncommittal answers about how he intended to carry out the Affordable Care Act. Confirmation of his successor could be an even sharper battle. Democrats may not have the votes to block confirmation, but they could drag out the process and make it excruciatingly difficult for the nominee and the White House.
Democrats expect to press the new nominee for more specific answers to questions like these: Will the administration support bipartisan efforts to continue critically important payments to insurance companies, payments that Mr. Trump has threatened to cut off? Why has the president slashed funds for advertising, outreach and education programs and assistance to consumers who want to sign up for health insurance this fall?
Neither Ms. Verma nor Mr. Gottlieb had easy confirmations to their current posts, but neither seems as strongly determined to undermine the Affordable Care Act as Mr. Price was.
Ms. Verma, who earned a bachelor’s degree in life sciences at the University of Maryland and a master’s degree in public health at Johns Hopkins University, founded her own health policy consulting firm, SVC, and worked with state agencies to carry out the Affordable Care Act. Working with Mr. Pence when he was governor, she was the architect of the Healthy Indiana Plan, which expanded Medicaid under the Obama-era law.
Rather than simply refusing to participate, as many Republican-led states did, Indiana under the program shaped by Ms. Verma expanded eligibility while emphasizing “personal responsibility” by requiring beneficiaries to pay premiums and contribute to health savings accounts, and giving them incentives for healthy behavior.
Republicans saw that as a model for conservative enactment of the program, while Democrats criticized what they saw as roadblocks for low-income Americans. She was confirmed to her current post in March on a largely party-line 55-to-43 vote.
Mr. Gottlieb, who received a bachelor’s degree in economics from Wesleyan University and a medical degree from Mount Sinai School of Medicine, served in several posts during President George W. Bush’s administration, including deputy commissioner of the F.D.A. While in the private sector, he worked as a fellow at the American Enterprise Institute in Washington and served as a consultant for pharmaceutical companies.
Republicans said that experience would make him a formidable commissioner because he would understand the business better, while Democrats said it made him too cozy with the industry he would regulate. While a physician, Mr. Gottlieb has also experienced the industry as a patient, having been successfully treated for Hodgkin’s lymphoma.
After promising to divest himself from several health care companies and recuse himself for one year from decisions involving those businesses, he was confirmed in May on a 57-to-42 vote.
LePage: Anthem Leaving Maine ACA Market Because 'They Can't Make Money'
by Fred Bever, Irwin Gratz and Nora Flaherty - Maine Public - September 28, 2017
Maine Gov. Paul LePage told reporters Thursday morning that Anthem's decision to drop out of Maine's ACA marketplace next year has nothing to do with anything President Trump has done. Instead, LePage blamed the Affordable Care Act itself.
"They are dying in the individual market - they can't make money," LePage said Thursday, at a conference in Falmouth on natural gas.
Anthem said Wednesday that it's become increasingly hard to plan and price ACA-compliant health care plans, in part because it's not clear whether the federal government will continue to subsidize premiums for lower-income people.
If the Trump administration were to stop those payments - as it has said it may do - insurance companies would either have to pick up the costs, or pass them along to people who buy insurance.
Anthem's withdrawal leaves just two providers offering policies in Maine in 2018: Harvard Pilgrim, and Community Health Options.
What Makes Singapore’s Health Care So Cheap?
by Aaron Carroll and Austin Frakt - NYT - October 2, 2017
Singapore’s health care system is distinctive, and not just because of the improbability that it’s admired by many on both the American left and the right.
It spends less of its economy on health care than any country that was included in our recent tournament on best health systems in the world.
And it spends far, far less than the United States does. Yet it achieves some outcomes Americans would find remarkable. Life expectancy at birth is two to three years longer than in Britain or the United States. Its infant mortality rate is among the lowest in the world, about half that of the United States, and just over half that of Britain, Australia, Canada and France. General mortality rates are impressive compared with pretty much all other countries as well.
When the World Health Organization ranked health care systems in 2000, it placed the United States 37th in quality; Singapore ranked sixth.
Americans tend to think that they have a highly privatized health system, but Singapore is arguably much more so. There, about two-thirds of health care spending is private, and about one-third is public. It’s just about the opposite in the United States.
Singapore’s health system also has a mix of public and private health care delivery organizations. There are private and public hospitals, as well as a number of tiers of care. There are five classes: A, B1, B2+, B2 and C. “A” gets you a private room, your own bathroom, air-conditioning and your choice of doctor. “C” gets you an open ward with seven or eight other patients, a shared bathroom and whatever doctor is assigned to you.
But choosing “A” means you pay for it all. Choosing “C” means the government pays up to 80 percent of the costs.
What also sets Singapore apart, and what makes it beloved among many conservative policy analysts, is its reliance on health savings accounts. All workers are mandated to put a decent percentage of their earnings into savings for the future. Workers up to age 55 have to put 20 percent of their wages into these accounts, matched by an additional 17 percent of wages from their employer. After age 55, these percentages go down.
The money is divided among three types of accounts. There’s an Ordinary Account, to be used for housing, insurance against death and disability, or for investment or education. There’s a Special Account, for old age and investment in retirement-related financial products. And there’s a Medisave Account, to be used for health care expenses and approved medical insurance.
The contribution to Medisave is about 8 percent to 10.5 percent of wages, depending on your age. It earns interest, set by the government. And it has a maximum cap, around $52,000, at which point you’d divert the mandatory savings into some other account.
A second health care program is Medishield Life. This is for catastrophic illness, and while it’s not mandatory, almost all of the population is covered by it. It’s really cheap, from $16 a month for a 29-year-old in 2019 to $68 a month for a 69-year-old, without subsidies.
Medishield Life kicks in when you’ve paid the deductibles for the year, and after you’ve paid your coinsurance. Deductibles vary by your age and the class of care you choose, and range from $1,500 to $3,000. Coinsurance ranges from 3 percent to 20 percent, varying by the size of the medical bill. Medishield Life has an annual limit of $100,000 but no lifetime limit.
Medishield Life is managed so that it covers most of a hospitalization in a Class B2 or C ward. Patients would cover the rest out of their Medisave accounts. Patients also have the option to pay for additional insurance, which would cover a higher class of care. Some plans are offered by the government, and people can use Medisave money to pay for those. Other plans are purely private, and sometimes offered by employers as benefits.
A third health care program is Medifund, which is Singapore’s safety net program. Only citizens are eligible; it covers only the lowest class of wards; and it’s available only after people have depleted their Medisave account and Medishield Life coverage. The amount of help someone could get from Medifund depends on a patient’s and family’s income, condition, expenses and social circumstances. Decisions are made at a very local level.
A number of people hold up Singapore as an example of how conservative ideas of competition and consumer-directed spending work. Unfortunately, the story isn’t so clean when you look at the data. In a 1995 paper in Health Affairs, William Hsiao looked at how health spending fared in Singapore before and after the introduction of Medisave. He found that health care spending increased after the introduction of increased cost-sharing, which is not what most proponents of such changes would expect. Michael Barr had similar thoughts in his “critical inquiry” into Singapore’s medical savings account, published in The Journal of Health Politics, Policy and Law in 2001.
But why is Singapore so cheap? Some think that it’s the strong use of health savings accounts and cost-sharing. People who have to use their own money usually spend less. But that’s not the whole story here. There’s a lot of government regulation as well.
Through the tiered care system and its public hospitals, the government has a great deal of control over inpatient care. It allows a private system to challenge the public one, but the public system plays the dominant role in providing services.
Initially, Singapore let hospitals compete more, believing that the free market would bring down costs. But when hospitals competed, they did so by buying new technology, offering expensive services, paying more for doctors, decreasing services to lower-class wards, and focusing more on A-class wards. This led to increased spending.
In other words, Singapore discovered that, as we’ve seen many times before, the market sometimes fails in health care. When that happened in Singapore, government officials got more involved. They established the proportion of each type of ward hospitals had to provide, they kept them from focusing too much on profits, and they required approval to buy new, expensive technology.
Singapore heavily regulates the number of physicians, and it has some control over salaries as well. The country uses bulk purchasing power to spend less on drugs.
The most frustrating part about Singapore is that, as an example, it’s easily misused by those who want to see their own health care systems change. Conservatives will point to the Medisave accounts and the emphasis on individual contributions, but ignore the heavy government involvement and regulation. Liberals will point to the public’s ability to hold down costs and achieve quality, but ignore the class system or the system’s reliance on individual decision-making.
Singapore is also very small, and the population may be healthier in general than in some other countries. It’s a little easier to run a health care system like that. It also makes the system easier to change. We should also note that some question the outcomes on quality, or feel that the government isn’t as honest about the system’s functioning.
There is a big doctor shortage, as well as a shortage of hospital beds. As Mr. Barr noted in a longer discussion of Singapore’s system, “It seems to be highly likely that if one could examine the Singapore health system from the inside, one would find a fairly ordinary health system with some strong points and many weaknesses — much like health systems all over the developed world.” This concern about how much we can really know about Singapore’s true outcomes is one of the reasons it didn’t fare so well in our contest.
Charles Lawton: Maine has more at stake on health care than most other states
by Charles Lawton - Portland Press Herald - Most of the attention commanded by the health care debate over the past several months has rightly centered on the questions of who has access to care and how do they pay for it. Concerns about cost, insurance, subsidies and individual choice have dominated the debate, and all eyes regularly look to the Congressional Budget Office for estimates of how many people will and won’t be covered in the latest proposal. Somewhat lost in this battle over how to divvy up the pie is the fact that the pie itself continues to get larger and larger every year.
According to the most recent state-by-state figures from the Centers for Medicare and Medicaid Services, total personal health care spending in the U.S. totaled nearly $2.6 trillion in 2014. This included spending for doctors, dentists and other health care providers; for hospitals, nursing homes, in-home care, residential mental health and substance abuse facilities; for drugs and health-related supplies and equipment; for ambulance services; and for a variety of clinical services provided in workplaces, community facilities and schools.
Since 1990, this spending has more than quadrupled, far outpacing the mere tripling of our nation’s total gross domestic product. As a result, health care spending now accounts for nearly 15 percent of the nation’s total economic activity.
In Maine, this growing economic dependence on health care is even more exaggerated. In 2014, personal health care spending in Maine amounted to just over $12.3 billion. Personal spending on health care amounted to more than 22 percent of our total state product, ranking us first among the 50 states and District of Columbia. In 2000, by comparison, health care spending in Maine accounted for just under 16 percent of our economy, ranking us third nationally. In 1990, our health care spending share was just over 12 percent, ranking us 13th nationally.
The growing dependence on health care as part of the Maine economy is occurring not because health care spending is growing much faster than the national average – it’s only growing slightly faster – but because the rest of our economy is growing so slowly.
Between 1990 and 2009, Maine’s gross state product grew at only 72 percent of the national average. And between 2009 and 2014 – a period of so-called economic “recovery” – our economic growth fell to just 67 percent of the national average.
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And therein lies the danger of this growing economic dependence on health care: It puts not just the physical health of our people in the hands of those deciding the fate of health care reform, but also our economic health. The failure to enact fundamental reform of our health care system puts Maine at substantially greater risk than other states because we are so dependent on that system for our economic well-being. Failure to find a way to provide and pay for health care will endanger both the ill and the healthy in Maine.
It is interesting, in this regard, to compare the fate of manufacturing employment and health care employment in Maine over the past 20 years. Manufacturing employment fell from 93,000 to 56,000 – nearly 40 percent. Over the same period, employment in health care and social assistance rose from 81,000 to 119,000 – a gain of 46 percent. In the rural parts of the state, this comparison was even more stark. Outside of the Portland area (York, Cumberland and Sagadahoc counties), manufacturing employment fell by 46 percent while health care employment rose by 34 percent.
In Maine (as is true for much of rural America), health care facilities have, for all practical purposes, become the new mills – the one reliable source of continuing employment. The nation as a whole depends on health care for 15 percent of total employment. In the Portland area, that share is 16 percent, and in the rest of Maine it is 18 percent. And the health care employment total here does not include the people in grocery stores and pharmacies whose jobs depend on the retailers who sell prescription drug and health care supplies, nor the others whose jobs in actuality depend on indirectly serving health care needs.
Maine Sen. Susan Collins has rightly been praised for her courage in standing up both for the needs of those hurt by hasty “repeal and replace” legislation and for the full and open debate of both parties in any true reform process. She should be equally praised for recognizing that such stands represent not just good politics, but also good economics. And in no state is that more true than in her own home state of Maine.
Charles Lawton, Ph.D., is a consulting economist. He can be contacted at:
Study: Nursing Shortage To Hit Maine Hard, Especially In Coastal Communities
by Jennifer Mitchell - Maine Public - September 28, 2017
Maine’s nursing shortage is becoming critical, with some regions poised to lose about half of their nursing staff to retirement in the next 10 years, according to a new analysis released Thursday by the Maine Nursing Action Coalition.
Lisa Harvey-McPherson, a registered nurse and co-chair of the coalition, says that during the 2008 recession, many nurses due to retire chose to keep working. Now she says they’re getting out of the workforce, along with others nearing retirement age, contributing to a projected shortage of 3,200 nurses in the next eight years.
“We have this accelerated retirement rate that’s projected out into 2025. We have a cohort of nursing faculty that are amongst the oldest nurses in Maine. So 32 percent of nursing faculty are over the age of 60,” she says.
And Harvey-McPherson says, as Maine’s 14 nursing schools face shortages of veteran staff, educating more nurses will become more of a challenge. At the same, Maine is aging rapidly.
“We have almost a perfect storm,” she says.
Some areas of particular need, according to the report, are the coastal regions of Washington, Hancock, Knox, Lincoln, Sagadahoc and Waldo counties, with almost half of nurses in those areas due for retirement in 10 years. Nearly a third of the residents in those areas will have reached age 65 in five years’ time.
By comparison, Aroostook County’s population is aging more slowly, and also has a higher percentage of younger nurses, with about 70 percent below age 50.
Proposal Would Provide Universal Home Health Care to Mainers
by Jennifer Mitchell - Maine Public - September 27, 2017
The Maine People’s Alliance has launched a campaign to put a universal home health care initiative before voters in 2018.
“There are far too many Maine families right now that are going broke because they can’t afford to care for their elders,” says Mike Tipping with the Maine People’s Alliance.
Tipping says the citizen’s initiative would establish a program to provide in-home services and support for those with disabilities, and for those over age 65. He says the program would be funded through a 1.9 percent payroll tax on incomes over $127,000.
“The wealthy don’t like to pay more in taxes and I think they will definitely mount an opposition campaign to this,” he says.
Matt Gagnon with the Maine Heritage Policy Center says the proposal will discourage those with higher incomes at a time when the state needs more investment.
“If you’re disincentivizing people who are wealthy to live here, you’re also disincentivizing business — particularly small business — to be here, which does not help the people that are left in the state. So as with I think all of these proposals from them, it’s a very bad idea,” he says.
Initiative supporters say something must be done to fill gaps in Medicare and provide for better home health service, as Maine’s senior population is set to double by 2030.
Supporters must submit more than 61,000 valid signatures by Jan. 2018.
With Affordable Care Act’s Future Cloudy, Costs for Many Seem Sure to Soar
by Reed Abelson - NYT - October 3, 2017
Health insurers are aggressively increasing prices next year for individual policies sold under the federal health care law, with some raising premiums by more than 50 percent.
By approving such steep increases for 2018 in recent weeks, regulators in many states appeared to be coaxing companies to hang in there, despite turmoil in the market and continuing uncertainty in Congress about the future of the law, the Affordable Care Act.
In Georgia, the state insurance commissioner, Ralph T. Hudgens, an outspoken critic of the law, often referred to as Obamacare, said the rates he approved would be up to 57.5 percent higher next year. The state had already lost Anthem, the large insurer that offers for-profit Blue Cross plans in several states, which left many markets in Georgia.
“Obamacare has become even more unaffordable for Georgia’s middle class,” Mr. Hudgens said in a statement. “I am disappointed by reports that the latest Obamacare repeal has stalled once again and urge Congress to take action to end this failed health insurance experiment.”
In Florida, the average rate increase will be about 45 percent, according to state regulators. And in New York, where officials said prices would still be below where they were before the law took effect, premiums were expected to increase by an average of about 14 percent. Many states have not made insurers’ rate increases public, and experts said the rise in costs for consumers could run from 10 percent to nearly 60 percent.
There are exceptions. Minnesota, which sought a federal waiver to address the high cost of premiums, said this week that prices for plans sold on the state exchange there would remain stable or drop significantly in 2018.
Those who qualify for federal subsidies, a group that accounts for about 85 percent of the roughly 10 million people who buy insurance through the marketplaces created under the health law, will largely be shielded from the higher prices.
Regulators in Florida and New York said that residents of those states who qualified for the most generous subsidies could see lower prices next year, depending on which plan they buy. In some places, the least expensive plans could become free after customers apply their subsidies. (Deficit hawks will probably complain about the higher federal outlays for subsidies.)
People who earn too much to qualify for financial assistance will feel the brunt of any increases. Because many insurers raised prices most sharply on plans that are attractive to people who receive the most generous subsidies, those unable to get subsidies may have to shop for plans that are not affected or look beyond their state marketplaces for lower-priced options.
The final prices and policies available for all plans may not be public until Nov. 1, leaving many consumers confused about coverage costs as a shortened period of open enrollment for health care insurance under the Affordable Care Act begins.
The insurance companies have defended the rate increases, saying they were unavoidable under the current circumstances. After the latest Senate effort to repeal the health law collapsed, insurers still have no commitment about whether the government will continue to allocate millions of dollars in critical financing. Some lawmakers have renewed talk of a bipartisan solution to guarantee that the money keeps flowing, but there is no resolution — forcing insurers to set rates without an agreement.
The Trump administration has sent mixed signals about whether it will enforce key elements of the law like the individual mandate, which encourages healthy people to sign up for insurance or be charged a tax penalty. If insurers cannot spread out the cost of coverage for people with high medical bills over a large enough group, they may be inclined to raise premiums even higher.
“We’re all pricing up for it,” said Dr. Martin Hickey, the chief executive of New Mexico Health Connections, one of the few remaining insurance start-ups created by the federal law. New Mexico Health Connections recently expanded an existing partnership with Evolent Health, a public company, which will provide additional capital.
In New Mexico, the average rate increase for plans sold on the state marketplace is about 30 percent. “Half of that increase is due to the uncertainty in Washington and the inability to lead,” said John G. Franchini, the state insurance regulator. The four insurers selling policies in the state marketplace are offering more types of plans.
After a slow start, many insurers have been making money in the individual marketfor the past year or so. Premiums have generally risen faster than underlying medical expenses, according to a recent analysis by the research firm Mark Farrah Associates. With rates set to climb much higher next year, insurers could see profits rise significantly too.
But questions about the insurance market’s future make it nearly impossible to come up with accurate projections. Regulators and actuaries said that the higher rates reflected a conservative approach as a cushion against potentially sizable losses.
“It’s very hard for a regulator to deny those rate increases when we can take a look at their bottom line and can tell they can’t continue if they can’t keep their head above water,” said Mike Kreidler, Washington State’s insurance commissioner and a supporter of the health law.
Actuaries said that the higher rates were justified. The insurers “are really struggling,” said Kurt Giesa, a partner with Oliver Wyman, a consultant that has worked with regulators to review rates. “They have been working hard to adapt to what they are faced with right now,” he said.
And although they have been raising prices aggressively, “it doesn’t mean that insurers couldn’t lose money,” said Deep Banerjee, an industry analyst for Standard & Poor’s who has been following the improved profitability of Blue Cross plans. “The trend has been improving but the market is still fragile,” he said.
The uncertainty over paying insurers for the so-called cost-sharing reductions, which limit out-of-pocket medical costs for people with low incomes, remains problematic. Most state regulators let insurers set prices to cover the cost of the required reductions, but several did not.
The Trump administration has been paying insurers on a month-to-month basis; a legal challenge over the payments by House Republicans has left the issue in limbo.
In the states that did not allow insurers to account for a loss of federal funding, the rates would be “inadequate” if that funding went away, said David M. Dillon, a fellow with the Society of Actuaries who has also worked with several state regulators. They “are just hopeful that something can be fixed later on,” he said.
Two insurers pulled out of the markets at the last minute because of the confusion. Medica stopped offering coverage in North Dakota next year because regulators said insurers had to assume the financing would continue; Anthem abandoned the Maine marketplace because the money had not been guaranteed.
Mr. Kreidler of Washington approved two sets of rates but is only allowing insurers to charge the lower set. If the government stops paying for the subsidies, he said, “It’s going to be a real challenge.”
If Congress or the administration decide to keep providing the subsidies, prices will be higher than necessary if insurers raised their rates to make up for a loss of the funding. “We’ll see if we can lower those rates with the permission” of the federal agency responsible for overseeing the marketplace, Mr. Franchini of New Mexico said.
Some insurers think a decision on the cost-sharing money could come too late.
CareFirst, a Blue Cross insurer, offers plans in Virginia and Maryland. Virginia allowed CareFirst to assume a lack of financing; Maryland regulators prohibited insurers from setting higher rates based on a loss of subsidies.
“You have this unbelievable contradiction,” said Chet Burrell, CareFirst’s chief executive. In Maryland, where the company is losing money on individual policies, it could sustain much deeper losses if the federal money stopped coming in.
“I don’t think you can work it out,” he said. “The workout is you will have to eat it this year.”
Like other insurance executives, Mr. Burrell worries that the higher prices will eventually discourage too many healthy people from enrolling. In Maryland, he said, only one-third of those buying coverage are eligible for subsidies. Everyone else pays full price. The most popular type of plan could come with premiums of $373 a month to $686 a month for a 40-year-old.
“Given the size of the rate increases, we think healthier people will continue to opt out of the risk pool,” he said, suggesting that would lead to rates being even higher in 2019. “If that occurs, then you’re in a death spiral,” he said, because as rates climb, more healthy people drop out, sending prices even higher. Mr. Burrell said he was working with regulators in Maryland to potentially create a fund that would help care for patients with the very high medical bills while possibly lowering overall premiums.
But even insurers in states that have allowed for the loss of funding are not sanguine.
“I think it’s going to be a stumbling in the dark next year because of all the uncertainties,” Dr. Hickey of New Mexico Health Connections said. The changing circumstances and inaction by Congress have forced insurers to raise rates and experiment with different plans for those who are not eligible for federal assistance.
“It’s almost like the beginning, again,” he said.
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