Fwd: qotd: NAIC Senior Issues Task Force rejects cost sharing under Medigap plans

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-------- Original Message --------
Subject: qotd: NAIC Senior Issues Task Force rejects cost sharing under
Medigap plans
Date: Fri, 30 Nov 2012 11:25:24 -0800
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



National Association of Insurance Commissioners (NAIC)
2012 Fall National Meeting
November 30, 2012
Senior Issues Task Force

Patient Protection and Affordable Care Act
SEC. 3210. DEVELOPMENT OF NEW STANDARDS FOR CERTAIN MEDIGAP PLANS.
(a) '(y) '(1) IN GENERAL- The Secretary shall request the National
Association of Insurance Commissioners to review and revise the
standards for benefit packages described in paragraph (2) under
subsection (p)(1), to otherwise update standards to include requirements
for nominal cost sharing to encourage the use of appropriate physicians'
services under part B. Such revisions shall be based on evidence
published in peer-reviewed journals or current examples used by
integrated delivery systems...


11-5-12 Draft of proposed letter from NAIC to HHS Secretary Kathleen
Sebelius

(Excerpts of draft)

Pursuant to section 3210 of the Patient Protection and Affordable Care
Act (ACA) you have requested the National Association of Insurance
Commissioners (NAIC) to review and revise the NAIC Medicare
Supplement insurance (Medigap) model regulation to include nominal cost
sharing in Medigap Plans C and F to encourage the use of appropriate
physicians' services.

The NAIC has performed its requested review of the standards for Plans C
and F under Section 3210 of the ACA. We were unable to find evidence in
peer-reviewed studies or managed care practices that would be the basis
of nominal cost sharing designed to encourage the use of appropriate
physicians' services. Therefore, our recommendation is that no nominal
cost sharing be introduced to Plans C and F. We hope that you will agree
with this determination.
Medigap is a product that has served our country's Medicare eligible
consumers well for many years, offering them security and financial
predictability with regard to their Medicare costs. Medigap's
protections are now inappropriately being held responsible for
encouraging the overuse of covered services and increasing costs in the
Medicare program.

The statute requires the NAIC to base nominal cost sharing revisions on
"peer-reviewed journals or current examples of integrated delivery
systems". However, the Subgroup discovered that there is a limited
amount of relevant peer-reviewed material on this topic. None of the
studies provided a basis for the design of nominal cost sharing that
would encourage the use of appropriate physicians' services. Many of the
studies caution that added cost sharing would result in delayed
treatments that could increase Medicare program costs later (e.g.,
increased expenditures for emergency room visits and hospitalizations)
and result in adverse health outcomes for vulnerable populations (i.e.,
elderly, chronically ill and low-income).

The Subgroup also gathered information from integrated delivery systems
(Medicare Advantage plans) but concluded that, because these managed
care plans make medical necessity determinations for Medicare, that any
such practices were not directly relevant for Medigap.

In summary, based on our thorough review and deliberation on this topic,
we believe, and hope that you will agree, that no changes should be made
to Plans C and F to add beneficiary cost sharing at this time.

Respectfully submitted,

http://www.naic.org/documents/committees_b_senior_issues_2012_fall_nm_materials.pdf?1


Comment: From a health policy perspective, this is a big deal. A very
big deal! The National Association of Insurance Commissioners (NAIC) is
perhaps the most credible and authoritative organization involved with
private health insurance. Although this decision by their Senior Issues
Task Force is limited to Medigap coverage of Medicare cost sharing, the
principles involved challenge the wisdom of trying to control health
spending by creating consumer sensitivity to health care prices through
deductibles, coinsurance and other forms of cost sharing.

One very fundamental issue with cost sharing is that now we have enough
studies to show that there is absolutely no doubt that exposing patients
to up-front costs causes many of them to avoid obtaining health care
services or products that are beneficial. Cost sharing should be
rejected on this basis alone, as the highly flawed policy that it is.

Another crucial point is that the policy community tremendously
overestimates the savings that could be achieved by expanding cost
sharing. They base their estimates primarily on the findings of the RAND
Health Insurance Experiment (RAND HIE). This was a large study of a
healthy workforce and their young, healthy families, during a few
healthy years of their lives. When they were faced with significant cost
sharing they did modestly reduce their use of health care. Obviously
that was selective since they would not be parsimonious when it came to
disease or injury that threatened life or limb (where most health care
spending is).

Since the subjects in the RAND HIE were fundamentally healthy, most of
them used little health care during the year and so care forgone because
of the cost sharing proved to be a significant percentage of the total
spending on their health care. As an example, if $1000 of care were
recommended for a person who decided to forgo $300 worth of it but
accepted the other $700 worth, then the policy people conclude that cost
sharing reduces spending by 30%. They then apply this to total health
spending and conclude that we can save 30% of health care costs by
requiring deductibles, copayments, and coinsurance.

The defect with this reasoning is that these healthy people consume only
a minute fraction of our total health care. The 20% of people with more
serious problems consume about 80% of all health care. Because of their
serious problems, these people quickly use up their deductibles, and
then cost sharing plays only a very minor role. As a percentage of their
care received, forgone care rapidly approaches 0%. Thus the percentage
savings to the system for this high cost sector is almost negligible.

So the alleged 30% savings applies only to a very small portion of our
total health expenditures. Even there, the NAIC conclusion is that
forgone care can "result in delayed treatments that could increase
Medicare program costs later and result in adverse health outcomes for
vulnerable populations." The NAIC is right to reject this flawed cost
sharing policy that saves little and can have serious adverse outcomes.
After all, it is the patient that really counts.

Now, as far as the Medigap plans are concerned, they are outrageously
overpriced, largely because of their profoundly wasteful administrative
excesses. It would be much less expensive to roll the benefits over into
the traditional Medicare program. There would be zero extra
administrative costs, and even a net reduction since processing the cost
sharing has its own administrative costs.

Folding Medigap benefits into Medicare should be a no brainer,
especially since it is one of the steps that we want to take in order to
improve Medicare as we convert it into a single payer national health
program covering all of us - an improved Medicare for all.

Fwd: qotd: AMA pushing for defined contribution for Medicare

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-------- Original Message --------
Subject: qotd: AMA pushing for defined contribution for Medicare
Date: Thu, 29 Nov 2012 12:43:50 -0800
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



AMA
November 2012
Interim Meeting of the AMA House of Delegates
Report 5 of the Council on Medical Service
Strengthening Medicare for Current and Future Generations
(Reference Committee J)

The Council recommends that the AMA support transitioning Medicare to a
defined contribution program that would enable beneficiaries to purchase
coverage of their choice through a Medicare exchange of competing health
insurance plans. Traditional Medicare would be an option in the Medicare
exchange.

In addition to supporting transitioning Medicare to a defined
contribution program, the AMA should continue to strongly advocate for
related Medicare reforms. Policies related to balance billing, private
contracting, and the repeal of the Medicare Independent Payment Advisory
Board remain particularly relevant and should be reaffirmed. Similarly,
the AMA should continue to support incentives to encourage people to
contribute to health savings accounts, and to promote their use as a
means to ensure access to high quality medical care. It is also critical
that the AMA continue to advocate for the other Medicare reforms
articulated in Policy H-330.896, particularly restructuring beneficiary
cost-sharing in order to provide incentives for appropriate utilization
while discouraging unnecessary or inappropriate care, and increasing the
Medicare eligibility age to reflect increases in the average life
expectancy in the United States.

http://www.ama-assn.org/resources/doc/cms/i12-cms-report5.pdf

And...

The Medicare NewsGroup
November 27, 2012
Newsmakers
Ardis Hoven, President-Elect, American Medical Association

For Dr. Ardis Hoven and other veteran policymakers within the American
Medical Association (AMA), the nation's largest medical organization's
move to support transitioning Medicare away from a defined-benefit to a
defined-contribution system has been a long time coming.

"(The) AMA has been working on Medicare policy to improve the program
about 25 years, on an off," said Hoven, who was first elected to the AMA
board of trustees in 2005, following many years as a member and chair of
the AMA Council on Medical Service. That council was where AMA's policy
to move to a defined contribution began.

As Congress and the White House look in the coming weeks for new ideas
to reduce the deficit and avoid the so-called fiscal cliff, Hoven sees
promise. She believes the AMA's newly approved set of policy principles
for a Medicare defined contribution will receive serious consideration
in Washington.

http://medicarenewsgroup.com/news/newsmakers/individual-newsmaker?Id=f6181c69-86ab-4dbd-ab49-bc7d31f95b9b


Comment: In recent years it appeared that the AMA had an epiphany and
began to transition from an organization that defended the interests of
physicians to an organization advocating for the interests of patients.
They supported the Affordable Care Act as an improvement over the status
quo, and they even elected as their president, Jeremy Lazarus, a very
fine gentleman noted for patient advocacy, especially as a spokesman on
behalf of the uninsured.

Judging from the interim meeting this month of the AMA House of
Delegates, the epiphany fizzled. Ardis Hoven, the AMA President-elect,
and her co-conspirators from the Council of Medical Services succeeded
in advancing AMA's official support of the conversion of Medicare from a
defined benefit to a defined contribution. This gradually transfers risk
from the taxpayers who fund Medicare to the pockets Medicare
beneficiaries themselves. Many Medicare patients already face financial
hardship, and this will only make their problems worse.

Why would the AMA do this? As a Life Member of AMA, I can present my own
subjective observations. During my medical career, membership in the AMA
dramatically declined. Those leaving did not find the AMA to be
particularly relevant, whereas those remaining tended to be politically
conservative, wishing to advance policies that would conform with their
conservative ideology. But it wasn't just political ideology that drove
the AMA. Some physicians with more progressive views also remained,
hoping to improve AMA policies from within, but they remained in the
minority.

I hate to say it, but there does seem to be a more nefarious agenda than
that dictated by their political ideology. This may sound like an
oversimplification, but I don't think it is: they want patients to pay
their full fees in cash. They do not want an intermediary to control
fees or to establish any other rules on how their services are to be
reimbursed.

Just look at the report they approved this month (excerpt above).
Defined contribution shifts more of the responsibility for health care
spending to the patients' pockets. Balance billing allows physicians to
collect directly from the patient the balance of their full fees
regardless of what any intermediary authorizes. Private contracting
allows the physician to contract directly with the patient for full
fees, again with no third party intervention. Health savings accounts
are cash accounts which the physicians can tap directly. "Restructuring
beneficiary cost-sharing in order to provide incentives for appropriate
utilization" is code language for requiring patients to pay more in cash
for any care they receive. Increasing Medicare eligibility age is a
scheme to postpone the day that their patients become eligible for a
public program that limits cash payments from patients. And there is
much to be said about the Medicare Independent Payment Advisory Board
(IPAB), good and bad, but the AMA fears this most of all since it would
place control of their fees in the hands of an independent government
board. (Much more needs to be said about IPAB, but not here.)

We saw what happened at the start of the Medicare program. Physicians
were able to set their own fees, and fees skyrocketed. As much as the
AMA House of Delegates wants physicians to have full control of fees, we
can't allow it. We also don't want to leave that control in the hands of
private insurers that have pressing interests which have priority over
patients. No, we need to place control in the hands of our own public
administrators who will always place patients first, understanding that
a quality health care system also requires adequate funding.

Ardis Hoven says that she believes "the AMA's newly approved set of
policy principles for a Medicare defined contribution will receive
serious consideration in Washington." Do PNHP members have something to
say about this? It's time for op-eds, letters to the editor, community
forums, and direct communication with your elected representatives. The
topic is hot in D.C. Do it now.

Fwd: qotd: excuse the duplicate

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-------- Original Message --------
Subject: qotd: excuse the duplicate
Date: Wed, 28 Nov 2012 07:57:55 -0800
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



Excuse the duplicate message. I made a minor editing change in the 7:41
AM version and meant to discard it, but inadvertently sent it out
instead (a single click sent out both versions). The 7:47 AM version is
the correct one.

Sorry.

Don

Fwd: qotd: Health care and education are key to economic recovery

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-------- Original Message --------
Subject: qotd: Health care and education are key to economic recovery
Date: Wed, 28 Nov 2012 07:47:06 -0800
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



New America Foundation
Demos
November 2012
Economic Recovery and Social Investment
A Strategy to Create Good Jobs in the Service Sector
By Robert Kuttner

Today's prolonged economic slump is fundamentally different from an
ordinary recession. In the aftermath of a severe financial collapse, an
economy is at risk of succumbing to a prolonged deflationary undertow.
With asset prices reduced, the financial system damaged, unemployment
high, consumer demand depressed, and businesses reluctant to invest, the
economy gets stuck well below its full employment potential.

What's needed is aggressive fiscal policy – and not the kind of fiscal
policy promoted by the austerity lobby to "restore confidence" and allay
supposed fears of inflation. The problem isn't low confidence in
deficit-reduction. Banks are now sitting on about $1.8 trillion in cash
or government securities – because they can't imagine where to
profitably invest it. Businesses are delaying investment in expansion
not because they are fretting about deficit projections for 2023. They
are waiting to see customers with money to spend, and general austerity
will only reduce that spending power.
But where should this fiscal policy be directed? One, obviously, is
investment in a green economy and modern public infrastructure. The
other – too little appreciated – is increased outlay in human services,
of the sort that can create good, non-exportable jobs and improve the
life prospects of the next generation, as well as provide stable,
counter-cyclical sources of employment and demand. Government also has
the power to structure other service-sector work as decent jobs.

Public investment, including public investment in the service sector,
can help the economy climb out of the current deflationary trap – and
establish a foundation for a stronger middle class in the future.

The Case for Investing in People
The economic collapse triggered by the financial crisis that exploded in
September 2008 represented the collision of three trends. One was the
license given to speculative finance resulting from increasingly
reckless deregulation.

The second trend was the worsening income distribution.

Third, since the early 1980s, the economy has been losing good, middle
class jobs, especially in manufacturing.

So where will the sources of increased demand and good, middle class
jobs come from? One obvious candidate is the creation of good,
professional service jobs improving the quality of education and care
for the young, the old, and the sick.

We are shifting irrevocably to a service economy. But there are
political choices to be made (or evaded). One path leads to an economy
of minimum-wage fast food workers and security guards, many of them with
temporary or part time jobs, on one extreme – and billionaire hedge fund
managers and takeover artists, on the other. The other leads to a
commercial sector of decent wages and terms of work and a human service
sector of middle class professionals that serve social needs – which in
turn make for a more productive economy and decent society.

Good Human Services as Social Investment and Economic Stimulus

Millions of jobs serving the very young, the very old and the very sick
are low-wage jobs. This is a social decision, not the product of private
supply and demand, because the qualifications and earnings for these
occupations are set socially. A person caring for three-year-olds, for
instance, can be a glorified baby sitter with minimum certification as a
day care worker – or a well trained professional in child development.
The job can pay minimum wage, or it can be a middle-class occupation and
career. This social choice governs not just the quality of the job, but
the quality of the early education given – especially to young children
who begin life with fewer inherited advantages than the children of the
professional class and the business elite.

A nursing home worker, likewise, can be a nurse-aide making $8 an hour,
or a licensed practical nurse or trained recreation aide earning almost
twice that, closer to $30,000 a year. Well-qualified and trained nursing
home personnel produce not just better career opportunities and economic
stimulus, but better quality of life for the elderly. Having competent
staff is more efficient in the long run because there is less turnover,
less need for outlays on recruitment, better morale, and fewer incidents
of neglect that require far more expensive medical treatment.
I've done a rough, order-of-magnitude calculation and found that for an
annual expenditure of about $100-$150 billion (or under one percent of
GDP), we could set a national policy goal of guaranteeing that all human
service jobs are professional jobs that pay at least $25,000 a year
(which is itself a lower minimum bar than others have suggested). This
requires professionalizing some occupations, as well as universalizing
the availability of some categories of woefully underfunded services
such as early education. As long as the current deflationary economy
persists, this funding could come from additional government borrowing.
As the economy recovers thanks to the additional stimulus, the normal
increase in revenues could pay for part of the cost, supplemented by
increased progressive taxation.

One of the great problems of the manufacturing economy, and of some
services such as software engineering, accounting, call center work, and
repair of jet engines, is that globalization allows these jobs to be
done offshore by lower-paid workers. Human service jobs, by contrast,
must be performed at home. If we have a national policy of guaranteeing
that they are good jobs, there is no risk that they move overseas. We
get the quadruple benefit of macro-economic stimulus, better jobs,
better quality services, and (in the case of the young) improved
lifetime opportunity and productivity.

The shift to upgrading work in the service sector, especially work in
the human services, can be part of a deficit-financed macro-economic
recovery strategy to address the nation's current unemployment crisis
and slow recovery. But this is not enough. It should also be part of a
long-term effort to upgrade both the quality of work and of social
services. The mistaken slogan of the February 2009 Recovery Act was
"timely, targeted, and temporary." That precluded any medium or long
term planning. To adapt to the needs of an economy of the future,
efforts to improve service sector employment need to be planned,
pro-active, and permanent.

http://www.demos.org/sites/default/files/publications/Kuttner_Robert_Service_Sector_Recovery_November_2012.pdf


Comment: Framing is important. Right now our nation's fiscal problems
are being framed as a budget deficit requiring austerity measures such
as a decrease in spending on Medicare and Medicaid. Instead, we should
be framing the problem as a need to improve our economy by establishing
policies that promote and expand our service economy, especially in
education and health care, and, of course, investing in a green economy
and in public infrastructure.

What does this have to do with single payer? Simply that an expanded and
improved Medicare program covering everyone would provide an excellent
avenue to expand and improve the type of health care service jobs that
are discussed in this paper.

Robert Kuttner's 11 page paper on economic recovery and social
investment should be downloaded, read in its entirety, and shared with
others - especially members of Congress who can't seem to get the
framing right.

Fwd: qotd: Health care and education are key to economic recovery

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-------- Original Message --------
Subject: qotd: Health care and education are key to economic recovery
Date: Wed, 28 Nov 2012 07:41:36 -0800
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



New America Foundation
Demos
November 2012
Economic Recovery and Social Investment
A Strategy to Create Good Jobs in the Service Sector
By Robert Kuttner

Today's prolonged economic slump is fundamentally different from an
ordinary recession. In the aftermath of a severe financial collapse, an
economy is at risk of succumbing to a prolonged deflationary undertow.
With asset prices reduced, the financial system damaged, unemployment
high, consumer demand depressed, and businesses reluctant to invest, the
economy gets stuck well below its full employment potential.

What's needed is aggressive fiscal policy – and not the kind of fiscal
policy promoted by the austerity lobby to "restore confidence" and allay
supposed fears of inflation. The problem isn't low confidence in
deficit-reduction. Banks are now sitting on about $1.8 trillion in cash
or government securities – because they can't imagine where to
profitably invest it. Businesses are delaying investment in expansion
not because they are fretting about deficit projections for 2023. They
are waiting to see customers with money to spend, and general austerity
will only reduce that spending power.
But where should this fiscal policy be directed? One, obviously, is
investment in a green economy and modern public infrastructure. The
other – too little appreciated – is increased outlay in human services,
of the sort that can create good, non-exportable jobs and improve the
life prospects of the next generation, as well as provide stable,
counter-cyclical sources of employment and demand. Government also has
the power to structure other service-sector work as decent jobs.

Public investment, including public investment in the service sector,
can help the economy climb out of the current deflationary trap – and
establish a foundation for a stronger middle class in the future.

The Case for Investing in People
The economic collapse triggered by the financial crisis that exploded in
September 2008 represented the collision of three trends. One was the
license given to speculative finance resulting from increasingly
reckless deregulation.

The second trend was the worsening income distribution.

Third, since the early 1980s, the economy has been losing good, middle
class jobs, especially in manufacturing.

So where will the sources of increased demand and good, middle class
jobs come from? One obvious candidate is the creation of good,
professional service jobs improving the quality of education and care
for the young, the old, and the sick.

We are shifting irrevocably to a service economy. But there are
political choices to be made (or evaded). One path leads to an economy
of minimum-wage fast food workers and security guards, many of them with
temporary or part time jobs, on one extreme – and billionaire hedge fund
managers and takeover artists, on the other. The other leads to a
commercial sector of decent wages and terms of work and a human service
sector of middle class professionals that serve social needs – which in
turn make for a more productive economy and decent society.

Good Human Services as Social Investment and Economic Stimulus

Millions of jobs serving the very young, the very old and the very sick
are low-wage jobs. This is a social decision, not the product of private
supply and demand, because the qualifications and earnings for these
occupations are set socially. A person caring for three-year-olds, for
instance, can be a glorified baby sitter with minimum certification as a
day care worker – or a well trained professional in child development.
The job can pay minimum wage, or it can be a middle-class occupation and
career. This social choice governs not just the quality of the job, but
the quality of the early education given – especially to young children
who begin life with fewer inherited advantages than the children of the
professional class and the business elite.

A nursing home worker, likewise, can be a nurse-aide making $8 an hour,
or a licensed practical nurse or trained recreation aide earning almost
twice that, closer to $30,000 a year. Well-qualified and trained nursing
home personnel produce not just better career opportunities and economic
stimulus, but better quality of life for the elderly. Having competent
staff is more efficient in the long run because there is less turnover,
less need for outlays on recruitment, better morale, and fewer incidents
of neglect that require far more expensive medical treatment.
I've done a rough, order-of-magnitude calculation and found that for an
annual expenditure of about $100-$150 billion (or under one percent of
GDP), we could set a national policy goal of guaranteeing that all human
service jobs are professional jobs that pay at least $25,000 a year
(which is itself a lower minimum bar than others have suggested). This
requires professionalizing some occupations, as well as universalizing
the availability of some categories of woefully underfunded services
such as early education. As long as the current deflationary economy
persists, this funding could come from additional government borrowing.
As the economy recovers thanks to the additional stimulus, the normal
increase in revenues could pay for part of the cost, supplemented by
increased progressive taxation.

One of the great problems of the manufacturing economy, and of some
services such as software engineering, accounting, call center work, and
repair of jet engines, is that globalization allows these jobs to be
done offshore by lower-paid workers. Human service jobs, by contrast,
must be performed at home. If we have a national policy of guaranteeing
that they are good jobs, there is no risk that they move overseas. We
get the quadruple benefit of macro-economic stimulus, better jobs,
better quality services, and (in the case of the young) improved
lifetime opportunity and productivity.

The shift to upgrading work in the service sector, especially work in
the human services, can be part of a deficit-financed macro-economic
recovery strategy to address the nation's current unemployment crisis
and slow recovery. But this is not enough. It should also be part of a
long-term effort to upgrade both the quality of work and of social
services. The mistaken slogan of the February 2009 Recovery Act was
"timely, targeted, and temporary." That precluded any medium or long
term planning. To adapt to the needs of an economy of the future,
efforts to improve service sector employment need to be planned,
pro-active, and permanent.

http://www.demos.org/sites/default/files/publications/Kuttner_Robert_Service_Sector_Recovery_November_2012.pdf


Comment: Framing is important. Right now our nation's fiscal problems
are being framed as a budget deficit requiring austerity measures such
as a decrease in spending on Medicare and Medicaid. Instead, we should
be framing the problem as a need to improve our economy by establishing
policies that promote and expand our service economy, especially in
education and health care.

What does this have to do with single payer? Simply that an expanded and
improved Medicare program covering everyone would provide an excellent
avenue to expand and improve the type of health care service jobs that
are discussed in this paper.

Robert Kuttner's 11 page paper on economic recovery and social
investment should be downloaded, read in its entirety, and shared with
others - especially members of Congress who can't seem to get the
framing right.

Fwd: qotd: The administrative challenge of the health insurance exchanges

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-------- Original Message --------
Subject: qotd: The administrative challenge of the health insurance
exchanges
Date: Tue, 27 Nov 2012 10:49:02 -0800
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



The Hill
November 25, 2012
Obama faces huge challenge in setting up health insurance exchanges
By Elise Viebeck

The Obama administration faces major logistical and financial challenges
in creating health insurance exchanges for states that have declined to
set up their own systems.

Since different states have different insurance markets and different
eligibility requirements for Medicaid, Obama's Health and Human Services
Department can't simply take a system off the shelf as a
one-size-fits-all fail-safe.

"You can't simply deploy one federal exchange across the board," said
Jennifer Tolbert, director of state health reform at the Kaiser Family
Foundation.

"Each state is different — their eligibility systems are different,
their insurance markets are different. [HHS is] going to have to build
these exchanges to fit into the context of each state."

Experts have predicted that the department will soon have to tap budgets
from its other programs to cover exchange costs. Other have said it
might charge fees on the insurance purchased in its exchanges once they
are launched.

The idea behind the exchanges is to match the uninsured with plans that
meet their needs and reflect their eligibility (or lack thereof) for
government help.

In practice, the process will require websites that can process massive
amounts of personal information from users and yield search results for
everyone.

Each portal will require a front end — the interface consumers will use
to submit their information and shop for plans — and a specialized back
end that is customized based on the state.

HHS will also construct a range of other systems: a federal data hub for
verifying user identity; programs for user assistance; a way to certify
that health plans meet federal standards; a way to navigate the
exchanges via phone or apply for coverage by mail; and so on.

Experts expressed one main concern across the board — that people
eligible for Medicaid but not for the exchanges might fall through the
cracks in federally run systems, since enrollment in the program is run
by states.

http://thehill.com/blogs/healthwatch/health-reform-implementation/269137-obama-faces-huge-challenge-in-setting-up-health-exchanges


Comment: One unique feature of health care financing in the United
States is our shameful administrative excesses. The new state insurance
exchanges required by the Affordable Care Act (ACA) add to that waste,
whether run by the states or by the federal government by default.

To begin with, since the plans offered by the exchanges will be in the
individual and small group markets, under ACA they will be allowed to
keep 20 percent of the insurance premiums for their own administration
and profits.

Next, the exchanges will be much more complex than a mere website from
which to compare and choose plans. These portals (exchanges) will
require a complex front end to determine eligibility or lack thereof for
Medicaid or for the premium subsidies which vary based on the actuarial
values of the plans and the incomes of the applicants. Also the managers
of the exchanges will have considerable work on the back end in
establishing plan eligibility to participate in the exchanges,
evaluating the essential health benefits of each plan, confirming that
each metal level (bronze, silver, gold, platinum) meets actuarial
standards, meeting regulatory requirements that vary from state to
state, and providing a mechanism for the purchaser to intelligently
navigate the maze established by the exchanges.

Obviously there will be considerable administrative costs associated
with these exchanges - costs that are beyond the 20 percent retained by
the insurers. ACA requires that the exchanges be self-sustaining,
meaning that these administrative costs must be paid by the insurers
(beyond the 20 percent) or by the purchases of the plans. Either way,
those enrolling in plans through the exchanges will ultimately bear the
costs of these administrative excesses.

Finally, physicians, hospitals and other providers of care will continue
to bear the costs of the excessive administrative burden placed on them
by this fragmented, complex financing system. Instead of providing
administrative relief, the exchanges further increase the administrative
burden and excess costs of allocating our health care dollars.

Readers already know how over 99 percent of this portion of our
administrative waste could be eliminated. Enroll each individual once,
at birth, in a single national health program - an improved Medicare
that includes everyone. So why aren't we doing it?

Fwd: qotd: Proposed religious exemption from health insurance mandate

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-------- Original Message --------
Subject: qotd: Proposed religious exemption from health insurance mandate
Date: Mon, 26 Nov 2012 12:44:43 -0800
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



H.R. 6597
November 16, 2012
Rep. Judy Biggert and 57 cosponsors

SECTION 1. SHORT TITLE.

This Act may be cited as the "Equitable Access to Care and Health Act"
or the "EACH Act".

SEC. 2. ADDITIONAL RELIGIOUS EXEMPTION TO HEALTH COVERAGE MANDATE.
(a) IN GENERAL.—Paragraph (2) of section 5000A(d) of the Internal
Revenue Code of 1986 is amended by adding at the end the following new
subparagraph:

"(C) ADDITIONAL RELIGIOUS EXEMPTION.—
"(i) IN GENERAL.—Such term shall not include an individual for any month
during a taxable year if such individual files a sworn statement, as
part of the return of tax for the taxable year, that the individual was
not covered under minimum essential coverage at any time during such
taxable year and that the individual's sincerely held religious beliefs
would cause the individual to object to medical health care that would
be covered under such coverage.
"(ii) NULLIFIED IF RECEIPT OF MEDICAL HEALTH CARE DURING TAXABLE
YEAR.-Clause (i) shall not apply to an individual for any month during a
taxable year if the individual received medical health care during the
taxable year.
"(iii) MEDICAL HEALTH CARE DEFINED.—For purposes of this subparagraph,
the term 'medical health care' means voluntary health treatment by or
supervised by a medical doctor that would be covered under minimum
essential coverage and—
"(I) includes voluntary acute care treatment at hospital emergency
rooms, walk-in clinics, or similar facilities, and
"(II) excludes—
"(aa) treatment not administered or supervised by a medical doctor, such
as chiropractic treatment, dental care, midwifery, personal care
assistance, or optometry,
"(bb) physical examinations or treatment where required by law or third
parties, such as a prospective employer, and
"(cc) vaccinations.".
(b) EFFECTIVE DATE.—The amendment made by subsection (a) shall take
effect as if included in the amendments made by section 1501 of the
Patient Protection and Affordable Care Act.

http://thomas.loc.gov/cgi-bin/thomas


Comment: H.R. 6597, the "Equitable Access to Care and Health Act," is a
proposed amendment to the Affordable Care Act that would provide a
religious exemption to an individual from a penalty for being uninsured,
providing that the individual files a sworn statement, as part of the
tax return, that "the individual's sincerely held religious beliefs
would cause the individual to object to medical health care that would
be covered" under health plans mandated by the Affordable Care Act.

If any medical care were obtained, that would nullify the exemption, and
penalties for being uninsured would apply. Theoretically, that would
separate those whose religious beliefs regarding abstaining from health
care were sincere, from those who would submit a sworn statement merely
to avoid the penalty while remaining uninsured. In actuality, even with
such religious beliefs, individuals might find it difficult to refuse
care in some instances such as major trauma.

If you check the list of cosponsors, you will see that this act does
have very broad bipartisan support. It seems like a reasonable
amendment, though it still doesn't protect the rest of us from the costs
of care that the person might receive when the medical imperative is
greater than the religious conviction.

Is there a better way of doing this? Of course. Include everyone in a
single national health program. Do not fund it based on medical need,
but fund it through equitable, progressive tax policies. Under such a
system, anyone can decline medical care for whatever reason, religious
or otherwise (except if the person's disorder constitutes a genuine
threat to public health).

Should a person be required to pay taxes into a universal health care
system? I can answer that by stating, as a pacifist, I vehemently object
to paying taxes to fight wars. Yet I cannot be allowed the option of
withholding my allocated tax assessment assigned to our nation's
military ventures. Nor can anyone be allowed to opt out of paying taxes
for any public service that, through our democratic process, we decide
to provide for the public good. That includes health care.

Fwd: qotd: Health insurance exchanges may be too small to succeed

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-------- Original Message --------
Subject: qotd: Health insurance exchanges may be too small to succeed
Date: Fri, 23 Nov 2012 08:30:53 -0800
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



The New York Times
November 23, 2012
Health Insurance Exchanges May Be Too Small to Succeed
By Dana P. Goldman, Michael Chernew and Anupam Jena

With the re-election of President Obama, the Affordable Care Act is back
on track for being carried out in 2014. Central to its success will be
the creation of health-insurance exchanges in each state. Beneficiaries
will be able to go to a Web site and shop for health insurance, with the
government subsidizing the premiums of those whose qualify. By
encouraging competition among insurers in an open marketplace, the
health care law aims to wring some savings out of the insurance industry
to keep premiums affordable.

Certainly, it is hard to be against competition. Economic theory is
clear about its indispensable benefits. But not all health care markets
are composed of rational, well-informed buyers and sellers engaged in
commerce. Some have a limited number of service providers; in others,
patients are not well informed about the services they are buying; and
in still others, the quality of the service offerings vary from provider
to provider. So the question is: What effect does insurer competition
have in a marketplace with so many imperfections?

The evidence is mixed, but some of it points to a counterintuitive
result: more competition among insurers may lead to higher
reimbursements and health care spending, particularly when the provider
market – physicians, hospitals, pharmaceuticals and medical device
suppliers – is not very competitive.

In imperfect health care markets, competition can be counterproductive.
The larger an insurer's share of the market, the more aggressively it
can negotiate prices with providers, hospitals and drug manufacturers.
Smaller hospitals and provider groups, known as "price takers" by
economists, either accept the big insurer's reimbursement rates or forgo
the opportunity to offer competing services. The monopsony power of a
single or a few large insurers can thus lead to lower prices. For
example, Glenn Melnick and Vivian Wu have shown that hospital prices in
markets with the most powerful insurers are 12 percent lower than in
more competitive insurance markets.

So health insurance exchanges are probably welcome news for hospitals,
physicians, and pharmaceutical and medical device companies throughout
the United States. If health insurance exchanges divide up the market
among many insurers, thereby diluting their power, reimbursement rates
may actually increase, which could lead to higher premiums for consumers.

There is some evidence on how insurer market power affects premiums.
Leemore Dafny, Mark Duggan, and Subramaniam Ramanarayanan have found
that greater concentration resulting from an insurance merger is
associated with a modest increase in premiums — suggesting that
concentration may not help consumers so much — although they did report
a reduction in physician earnings on average. Over all, however, the
evidence is limited and mixed.

Greater competition in the insurance industry — either through health
insurance exchanges or other measures — may not lower insurance
premiums. Weakening insurers' bargaining power could instead translate
into higher costs for all of us in the form of higher premiums.

In financial markets, we ask if banks are too big to fail. When it comes
to health care, perhaps we should ask if insurers are too small to succeed.

****

NYT Reader Comments:

Don McCanne
San Juan Capistrano, CA
Nov. 23, 2012

It is true that very large insurers within the exchanges can use their
monopsony power (controlling the market as exclusive buyers) by
demanding lower prices for health care services, but only for their own
plans. Most health care costs will still be covered by
employer-sponsored plans, Medicare, Medicaid and other programs. Thus
plans offered by the exchanges cannot have much impact on our total
national health expenditures.

Another difficulty with the monopsony power of private insurers is that
when they are investor owned (WellPoint, UnitedHealth, Aetna, etc.),
their first priority must be to use their leverage to benefit their
investors. That results in insurance innovations that often are not
particularly transparent, but have adverse consequences for the patients
they insure. The private sector exercising power as a monopsony can be
as evil as a monopoly.

In contrast, a public monopsony can be very beneficial in getting prices
right - high enough to ensure adequate capacity in the delivery system,
yet low enough to ensure value in health care.

The ultimate beneficent monopsony would be a single public program
covering absolutely everyone ("single payer"). We could achieve this
easily by improving Medicare and then making it universal. Health policy
studies have proven that this would not only cover everyone, but it
would finally bring us that elusive goal of health care reform - bending
the cost curve to sustainable levels.

http://economix.blogs.nytimes.com/2012/11/23/health-insurance-exchanges-may-be-too-small-to-succeed/

Fwd: qotd: AHIP response to new rules on essential health benefits

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-------- Original Message --------
Subject: qotd: AHIP response to new rules on essential health benefits
Date: Wed, 21 Nov 2012 12:03:16 -0800
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



HealthCare.gov (HHS)
November 20, 2012
Essential Health Benefits, Actuarial Value, and Accreditation Standards:
Ensuring Meaningful, Affordable Coverage

On November 20, 2012, the Department of Health and Human Services (HHS)
published a proposed rule that helps consumers shop for and compare
non-grandfathered private health insurance options in the individual and
small group markets by promoting consistency across plans, and
protecting consumers by ensuring that plans cover a core package of
items and services.

Specifically, this rule outlines health insurance issuer standards
related to the coverage of essential health benefits (EHB) and the
determination of actuarial value (AV), while providing significant
flexibility to states to shape how EHB are defined.

The Affordable Care Act sets forth that EHB be equal in scope to
benefits offered by a "typical employer plan." To meet this requirement
in every state, the proposed rule defines EHB based on a state-specific
benchmark plan, including the largest small group health plan in the
state. The rule proposes that states select a benchmark plan from among
several options identified in the proposed rule, and that all plans that
cover EHB must offer benefits that are substantially equal to the
benefits offered by the benchmark plan. This approach balances
consumers' desires for an affordable and comprehensive benefit package,
our legal requirement to reflect the current marketplace, and issuer
flexibility to offer innovative benefit designs and a choice of health
plans.

http://www.healthcare.gov/news/factsheets/2012/11/ehb11202012a.html

And...

America's Health Insurance Plans (AHIP)
November 20, 2012
AHIP Statement on ACA Implementation

America's Health Insurance Plans (AHIP) President and CEO Karen Ignagni
released the following statement on proposed rules released today by the
U.S. Department of Health and Human Services on implementation of the
Affordable Care Act (ACA):

"As implementation of the ACA moves forward, the focus needs to be on
affordability for consumers and employers.

"For health insurance exchanges and new insurance market rules to work,
coverage needs to be affordable and there needs to be broad
participation in the system. While additional flexibility on essential
health benefits (EHB) is a positive step, we remain concerned that many
families and small businesses will be required to purchase coverage that
is more costly than they have today. It also is important to recognize
that the new EHB requirements will coincide with the new restrictions in
age rating rules that also go into effect on January 1, 2014. Both of
these provisions may incentivize young, healthy people to wait to
purchase insurance until they are sick or injured, driving up costs for
everyone with insurance."

http://www.ahipcoverage.com/2012/11/20/ahip-statement-on-aca-implementation/


Comment: The Department of Health and Human Services has provided
states with considerable flexibility in establishing essential health
benefits (EHB) in the individual and small group insurance markets. The
states will not have to require benefits that are typical of large
employer health benefit programs, but rather the benefits will
correspond to existing small group plans, as long as some services in
each of ten required categories are included. These plans will be
inadequate for those who require benefits that are not covered, not to
mention the limitations of excess cost sharing and insufficient provider
networks.

Yet the insurance lobby group, AHIP, complains that many families and
small businesses would have to purchase coverage that is more costly
than they have today. The reason that plans with the minimal essential
benefits would be more costly is that the current individual and small
group market is saturated with plans that are so substandard that they
fail to provide adequate financial security in the face of medical need.
With the new essential health benefits requirement, the insurance
industry would lose the right to sell these highly profitable, but
substandard plans. They will have to raise their standards to the level
of mediocrity, as required by the new EHB rule.

Once again they state that "coverage needs to be affordable." They have
previously stated that health care costs need to be controlled, but, in
the absence of any truly effective method of doing that, they need to be
able to use innovative product design to keep their premiums competitive
in the insurance market. The new EHB rule along with the actuarial value
rule allows them the flexibility to be quite innovative. The bottom line
is that in the conflict between affordable insurance premiums and
adequate protection for patients, they will always choose to protect
their market rather than protect patients.

The insurance industry understandably is interested in its own welfare.
If that means compromising the adequacy of their plans, then so be it.
But does that mean that we have to accept compromise in our health and
in our financial security? We wouldn't if we dismissed the private
insurers and established our own improved Medicare program for everyone.

Fwd: qotd: Uninsured have higher mortality after surgery for brain tumors

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-------- Original Message --------
Subject: qotd: Uninsured have higher mortality after surgery for brain
tumors
Date: Tue, 20 Nov 2012 10:36:30 -0800
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



Archives of Surgery
November 2012
Postoperative Mortality After Surgery for Brain Tumors by Patient
Insurance Status in the United States
By Eric N. Momin, MD; Hadie Adams, MD; Russell T. Shinohara, PhD;
Constantine Frangakis, PhD; Henry Brem, MD; Alfredo Quiñones-Hinojosa, MD

Among patients with brain tumors with no other major medical condition,
uninsured patients (but not necessarily Medicaid recipients) have higher
in-hospital mortality than privately insured patients, a disparity that
was pronounced in teaching hospitals. These findings further reinforce
prior data indicating insurance-related disparities in medical and
surgical settings.

These insurance-related disparities might be explained by 1 of 3
possible mechanisms. Insurance status could influence health outcomes by
affecting (1) a patient's overall state of health, (2) the ability to
access care (affecting the acuity of disease presentation), or (3) the
quality of treatment that is provided.

Insurance-related disparities are not unique to the field of
neurosurgery. Uninsured patients fare worse than privately insured
patients in the settings of critical illness (higher chance of having
life support withdrawn), ischemic or hemorrhagic stroke (higher
mortality and neurologic impairment), myocardial infarction (higher
mortality), and physical trauma (higher mortality). However, it is not
clear that enrolling in a state-funded health plan would help the
uninsured because Medicaid recipients also seem to experience a similar
disparity in other settings, including pneumonia, appendicitis,
abdominal aortic aneurysm repair, limb-threatening ischemia, and surgery
for colorectal carcinoma. Of note, this Medicaid disparity was also
present in our full cohort but was not convincingly present in the
adjusted analysis of patients with no comorbid disease, especially in
teaching hospitals.

http://archsurg.jamanetwork.com/article.aspx?articleid=1392156


Comment: Uninsured patients operated on for brain tumors have a higher
in-hospital mortality than do insured patients. Regardless of the
reasons why, this study adds to the abundance of studies that
demonstrate that being uninsured can be bad for your health. Even
patients with Medicaid may experience similar adverse outcomes.

The Affordable Care Act will leave 30 million uninsured, and it relies
partially on Medicaid to expand coverage. Thus the Affordable Care Act
may still be bad for the health of many of us.

We need a single program that provides all of us with high quality care
- an improved Medicare for all. We should not put up with a deficient
health care program that leaves some of us sick or even dead.

Fwd: qotd: Primary care physicians' experiences in ten countries; U.S. stands out

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-------- Original Message --------
Subject: qotd: Primary care physicians' experiences in ten countries;
U.S. stands out
Date: Mon, 19 Nov 2012 12:18:41 -0800
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



Health Affairs
November 15, 2012
A Survey Of Primary Care Doctors In Ten Countries Shows Progress In Use
Of Health Information Technology, Less In Other Areas
By Cathy Schoen, Robin Osborn, David Squires, Michelle Doty, Petra
Rasmussen, Roz Pierson and Sandra Applebaum


To explore the experiences of physicians as health reform policies
unfold, we surveyed primary care physicians in the following ten
countries in 2012: Australia, Canada, France, Germany, the Netherlands,
New Zealand, Norway, Switzerland, the United Kingdom, and the United States.

***

Swiss and US patients often face substantial deductibles as well as cost
sharing, although Swiss health insurance standards reduce rates for
low-income people and limit out-of-pocket liability to levels well below
those in the United States.

***

The United States is alone among the study countries in segmenting the
population by income and age for government-sponsored health insurance
and in its lack of coordinated policies across multiple private and
public insurers.

***

US and Canadian physicians' responses to questions regarding after-hours
arrangements mirror patients' experiences: In the 2010 international
population survey on patient experience with health care services,
Canadian and US patients were more likely than those in other countries
to have used emergency departments and among the most likely to say that
it was difficult to obtain health care after hours.

***

In 2012, 59 percent of US physicians said that their patients often have
difficulty paying out-of-pocket costs for medical care - a percentage
well above that in any other country.

***

In the United States, physicians' perceptions of affordability or
difficulties getting specialized care varied by patient insurance mix.
Doctors with high proportions of uninsured or Medicaid patients were the
most likely to say that their patients often faced long waits for
specialized care.

***

To gauge primary care physicians' perspectives overall, the survey asked
about their views of their country's health system, their satisfaction
with the practice of medicine, and their perceptions of change in recent
years. Repeating a pattern observed in earlier surveys, US and German
physicians were the most negative about their health care systems, with
only 15 percent and 22 percent, respectively, saying that the system
needs only minor changes versus fundamental change or rebuilding. German
and US physicians were also the least likely to say that they were
satisfied or very satisfied with practicing medicine.

***

As countries aim to reduce health care costs, some countries have looked
to coverage restrictions on treatments or medications or to reviews of
physician care decisions. Although such interventions may target the
appropriateness of care, they can also have the unintended consequence
of imposing time and administrative burdens on physicians. Among the
study countries, US physicians were the most likely to say that such
time concerns are a major problem: More than half of US respondents said
that they or their staff spend too much time getting patients care
because of coverage restrictions on treatment or medications.

Notably, the share of Dutch doctors expressing concern about this issue
has more than doubled since the 2009 survey (increasing from 10 percent
to 26 percent). This suggests that problems are emerging with the
growing complexity of health insurance practices in the Netherlands.

***

Regarding after-hours access to primary health care services, all of the
study countries except the United States and Canada have policies for
after-hours coverage. The low rates of after-hours arrangements reported
by Canadian and US physicians indicate that such arrangements are slow
to develop if they must depend on the actions of individual practices.

***

Insurance design also matters. US physicians stand out, as they have in
past surveys, for saying that their patients often have difficulty
paying for care and that insurance restrictions on care decisions
consume substantial doctor and staff time. The other countries in the
study all provide universal coverage and, with the exception of
Switzerland, have little or no cost sharing for primary care and
essential medications. All of the other countries limit out-of-pocket
expenses to levels well below those typical in US insurance.

In contrast to other countries with multiple insurers, US private
insurers often use prior authorization and employ varying drug
formularies and complex benefit designs, with little standardization.
Recent studies confirm that the resulting insurance-related complexity
adds substantially to US practice costs as a result of increased
paperwork and time demands.

In patient surveys, the United States also stands out for
insurance-related time concerns. US experiences provide a cautionary
example for other countries regarding the time and resource costs of
complexity.

***

In general, US primary care physicians' views and experiences endorse
the need for reform, including enhanced access. US physicians who
reported that their patients often faced cost or other access barriers
were the most likely to say that the system required major change.

http://content.healthaffairs.org/content/early/2012/11/13/hlthaff.2012.0884.abstract


Comment: We spend by far the most money per capita on health care. Yet,
compared to primary care physicians in other nations, U.S. physicians
are by far the most negative about our health system, with only 15
percent saying that "the system needs only minor changes" (versus
fundamental change or rebuilding).

The perspective provided by the excerpts posted above should drive the
citizens of our nation to demand comprehensive reform. Are we up to it?

Fwd: qotd: Divorce and women's risk of health insurance loss

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-------- Original Message --------
Subject: qotd: Divorce and women's risk of health insurance loss
Date: Fri, 16 Nov 2012 05:11:05 -0800
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



Journal of Health and Social Behavior
November 12, 2012
Divorce and Women's Risk of Health Insurance Loss
By Bridget Lavelle and Pamela J. Smock

Abstract

This article bridges the literatures on the economic consequences of
divorce for women with that on marital transitions and health by
focusing on women's health insurance. Using a monthly calendar of
marital status and health insurance coverage from 1,442 women in the
Survey of Income and Program Participation, we examine how women's
health insurance changes after divorce. Our estimates suggest that
roughly 115,000 American women lose private health insurance annually in
the months following divorce and that roughly 65,000 of these women
become uninsured. The loss of insurance coverage we observe is not just
a short-term disruption. Women's rates of insurance coverage remain
depressed for more than two years after divorce. Insurance loss may
compound the economic losses women experience after divorce and
contribute to as well as compound previously documented health declines
following divorce.

From the Discussion

Not all women are equally likely to lose health insurance after divorce.
Those insured as dependents on husbands' employer-based insurance plans
are most vulnerable to insurance loss, while stable, full-time
employment buffers against it. Women from moderate-income (200–300% FPL)
families are particularly vulnerable. Many of these women fall into the
ranks of the near-poor after divorce, with too much money to qualify for
Medicaid but not enough to purchase private health insurance coverage.

Our findings also add to the body of evidence that the current health
care and insurance system in the United States is inadequate for a
population in which multiple family and job changes over the life course
are not uncommon. It remains to be seen how effectively the Affordable
Care Act (ACA) of 2010 — expected to be fully implanted by 2014 — will
remedy the problem of insurance loss after divorce.

Moving forward, policy makers should be aware that a system that induces
a de facto linkage between marital status and health insurance may have
unintentional adverse consequences.

http://hsb.sagepub.com/content/early/2012/11/09/0022146512465758.full.pdf+html


Comment: For a wide variety of reasons, our bizarre, fragmented, though
expensive system of financing health care leaves many people vulnerable
to financial hardship and impaired access to care. This study shows that
women who divorce are at great risk of becoming uninsured and
consequently may compound both economic losses and health declines.

Even within the population of divorced women multiple factors play a
role in whether or not the person is insured, or in what form of
insurance the person may have - whether it is public or private,
employer-sponsored or purchased in the individual market. Even if
insured, the variations in coverage can disrupt established
relationships with health care professionals because of non-congruent
networks, and can expose the individual to a wide range of potential
financial barriers because of the differences in cost sharing with the
various forms of coverage.

Will the Affordable Care Act (ACA) correct these deficiencies? Some
lower-income individuals may be eligible for Medicaid, but many states
have indicated that they will not use the provisions of ACA to expand
eligibility for the program. Divorced women with modest incomes may find
that their incomes are too high to qualify for Medicaid, yet still too
low to be able to pay their share of the premium after any subsidies.
Some may be exempt from the requirement to purchase insurance, while
others may be subject to a penalty for not having insurance, even though
they simply do not have adequate funds to pay the premiums. In either
instance, they will remain uninsured.

As the authors of this report state, "policy makers should be aware that
a system that induces a de facto linkage between marital status and
health insurance may have unintentional adverse consequences." That
statement can apply to the innumerable other factors that determine
whether or not a person is covered, and, if so, by which of the highly
variable public and private forms of coverage that differ in their
ability to ensure both access and financial security.

Everyone should automatically have full coverage for life. Divorce, and
all of the other variables throughout life, should have absolutely
nothing to do with a program designed to prevent greater financial
insecurity in the face of health care needs. We need to improve Medicare
and provide it for everyone, automatically, for life.

Fwd: qotd: Why employers' health benefit cost growth of 4.1% is a fraud

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-------- Original Message --------
Subject: qotd: Why employers' health benefit cost growth of 4.1% is a fraud
Date: Thu, 15 Nov 2012 11:31:57 -0800
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



Mercer
November 14, 2012
Employers Held Health Benefit Cost Growth to 4.1% in 2012, the Smallest
Increase in 15 Years

Decisive action by employers in 2012 – in particular, moving more
employees into low-cost consumer-directed health plans and beefing up
health management programs – was rewarded with the lowest average annual
cost increase since 1997. According to the National Survey of
Employer-Sponsored Health Plans, conducted annually by Mercer and
released today, growth in the average total health benefit cost per
employee slowed from 6.1% last year to just 4.1% in 2012. Cost averaged
$10,558 per employee in 2012.

With a growing number of employers now positioning a high-deductible,
account-based consumer-directed health plan as their primary plan – or
even their only plan – employee enrollment jumped from 13% to 16% of all
covered employees in 2012. Many employers see these plans as central to
their response to health care reform provisions that will raise
enrollment. Over the past two years, offerings of CDHPs have risen from
17% to 22% of all employers, and from 23% to 36% of employers with 500
or more employees. Well over half (59%) of very large organizations
(20,000 or more employees), which typically offer employees a choice of
medical plans, now offer a CDHP.

Moving even a small number of employees out of a more expensive plan
into a CDHP can result in significant savings for an employer. The cost
of coverage in a CDHP with a health savings account is about 20% lower,
on average, than the cost of PPO coverage – $7,833 per employee compared
to $10,007.

"PPACA requires that health plans cover, at a minimum, 60% of eligible
health plan expenses," says Ms. Cunninghis (Sharon Cunninghis, US
business leader for health and benefits). "Some employers are resetting
their health plan value to move closer to that minimum, and saving money
as a result."
Offering a lower-cost CDHP is one way employers "reset" plan value in
2012. Others simply raised the deductible of an existing PPO plan. The
average PPO in-network deductible reached $1,427 for an individual in 2012.

"Over the past decade, employers have figured out how to stabilize
health benefit cost increases through cost-shifting and other cost
management techniques. Now we're seeing a move toward even greater
control through defined contribution strategies," says Ms. Cunninghis.
An example of a defined contribution strategy is determining in advance
what the employer contribution to the cost of coverage will be, and
requiring employees to pay anything above that amount. If the employer
offers a range of plans, employees can save money by choosing a
lower-cost plan. Nearly half of employers – 45% – say they currently use
or are considering using a defined contribution strategy.

http://www.mercer.com/press-releases/1491670


Comment: Pop the champagne corks! Businesses have held the rate of
health benefit cost increases to only 4.1%! Though that is still twice
the rate of inflation, it's the smallest increase in 15 years!

How did they achieve this success? By moving employees into lower cost
consumer-directed health plans. By increasing deductibles for the plans.
By other forms of cost shifting. By lowering actuarial values of plans
to 60% - the minimum required by the Affordable Care Act. By adopting
defined contribution strategies. By shifting to private insurance
exchanges. By herding employees into narrower provider networks.

So have the employers finally learned how to slow the escalation of
health care costs? No! They have dumped their costs onto the backs of
their employees!

So while they enjoy the bubbly in their executive suites, they have left
too many of their employees without even any beer money.

If you didn't read yesterday's message that included the work of Thomas
Piketty and Emmanuel Saez, you should. You will see that the solution is
quite simple. Tax the crap out of the plutocrats and spend the proceeds
on a public insurance program for all of us - an Improved Medicare for
All. (I would use less inflammatory language except that wealthy
employers who have such a low regard for their own employees do not
deserve elegant language.)

Please note that this message does not apply to the multitude of small
businesses which are struggling to maintain a modicum of success. These
businesses are also victims of the burdensome health insurance costs.
They too would benefit from an equitable public insurance program, if
only they would make an effort to understand what it would mean for
them. It's our job to try to educate them.

Fwd: qotd: The fiscal cliff and single payer (with thanks to Piketty, Saez & Stantcheva)

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-------- Original Message --------
Subject: qotd: The fiscal cliff and single payer (with thanks to
Piketty, Saez & Stantcheva)
Date: Wed, 14 Nov 2012 14:58:23 -0800
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



The New York Times
November 14, 2012
Transcript of President Obama's Press Conference

Q (Jessica Yellin): Mr. President, on the fiscal cliff — two years ago,
sir, you said that you wouldn't extend the Bush-era tax cuts, but at the
end of the day, you did. So respectfully, sir, why should the American
people and the Republicans believe that you won't cave again this time?

PRESIDENT OBAMA: Well, two years ago the economy was in a different
situation. We were still very much in the early parts of recovering from
the worst economic crisis since the Great Depression...

But what I said at the time is what I meant, which is this was a
one-time proposition. And you know, what I have told leaders privately
as well as publicly is that we cannot afford to extend the Bush tax cuts
for the wealthy. What we can do is make sure that middle-class taxes
don't go up...

And what we can then do is shape a process whereby we look at tax
reform, which I'm very eager to do. I think we can simplify our tax
system. I think we can make it more efficient. We can eliminate
loopholes and deductions that have a distorting effect on our economy.

Q: You've said that the wealthiest must pay more. Would closing
loopholes instead of raising rates for them satisfy you?

PRESIDENT OBAMA: I think that there are loopholes that can be closed,
and we should look at how we can make the process of deductions, the
filing process easier, simpler.

But when it comes to the top 2 percent, what I'm not going to do is to
extend further a tax cut for folks who don't need it, which would cost
close to a trillion dollars. And it's very difficult to see how you make
up that trillion dollars, if we're serious about deficit reduction, just
by closing loopholes in deductions. You know, the math tends not to work.

http://www.nytimes.com/2012/11/14/us/politics/running-transcript-of-president-obamas-press-conference.html?pagewanted=all

And...

Vox
December 8, 2011
Taxing the 1%: Why the top tax rate could be over 80%
By Thomas Piketty, Emmanuel Saez, Stefanie Stantcheva

Top income tax rates on upper income earners have declined significantly
since the 1970s in many OECD countries, again particularly in
English-speaking ones. For example, top marginal income tax rates in the
United States or the United Kingdom were above 70% in the 1970s before
the Reagan and Thatcher revolutions drastically cut them by 40
percentage points within a decade.

At a time when most OECD countries face large deficits and debt burdens,
a crucial public policy question is whether governments should tax high
earners more. The potential tax revenue at stake is now very large.

There is indeed a strong correlation between the reductions in top tax
rates and the increases in top 1% pre-tax income shares from 1975–79 to
2004–08 across 18 OECD countries for which top income share information
is available. For example, the United States experienced a 35 percentage
point reduction in its top income tax rate and a very large ten
percentage point increase in its top 1% pre-tax income share. By
contrast, France or Germany saw very little change in their top tax
rates and their top 1% income shares during the same period. Hence, the
evolution of top tax rates is a good predictor of changes in pre-tax
income concentration. There are three scenarios to explain the strong
response of top pre-tax incomes to top tax rates. They have very
different policy implications and can be tested in the data.

First, higher top tax rates may discourage work effort and business
creation among the most talented – the so-called supply-side effect. In
this scenario, lower top tax rates would lead to more economic activity
by the rich and hence more economic growth. If all the correlation of
top income shares and top tax rates were due to such supply-side
effects, the revenue-maximising top tax rate would be 57%. This would
still imply that the United States still has some leeway to increase
taxes on the rich, but that the upper limit has already been reached in
many European countries.

Second, higher top tax rates can increase tax avoidance. In that
scenario, increasing top rates in a tax system riddled with loopholes
and tax avoidance opportunities is not productive either. However, a
better policy would be to first close loopholes so as to eliminate most
tax avoidance opportunities and only then increase top tax rates. With
sufficient political will and international cooperation to enforce
taxes, it is possible to eliminate most tax avoidance opportunities,
which are well known and documented. With a broad tax base offering no
significant avoidance opportunities, only real supply-side responses
would limit how high top tax rate can be set before becoming
counter-productive.

Third, while standard economic models assume that pay reflects
productivity, there are strong reasons to be sceptical, especially at
the top of the income distribution where the actual economic
contribution of managers working in complex organisations is
particularly difficult to measure. In this scenario, top earners might
be able to partly set their own pay by bargaining harder or influencing
compensation committees. Naturally, the incentives for such
'rent-seeking' are much stronger when top tax rates are low. In this
scenario, cuts in top tax rates can still increase top income shares,
but the increases in top 1% incomes now come at the expense of the
remaining 99%. In other words, top rate cuts stimulate rent-seeking at
the top but not overall economic growth – the key difference with the
first, supply-side, scenario.

To tell these various scenarios apart, we need to analyse to what extent
top tax rate cuts lead to higher economic growth. There is no
correlation between cuts in top tax rates and average annual real
GDP-per-capita growth since the 1970s. For example, countries that made
large cuts in top tax rates such as the United Kingdom or the United
States have not grown significantly faster than countries that did not,
such as Germany or Denmark. Hence, a substantial fraction of the
response of pre-tax top incomes to top tax rates may be due to increased
rent-seeking at the top rather than increased productive effort.

Naturally, cross-country comparisons are bound to be fragile, and the
exact results vary with the specification, years, and countries. But by
and large, the bottom line is that rich countries have all grown at
roughly the same rate over the past 30 years – in spite of huge
variations in tax policies. Using our model and mid-range parameter
values where the response of top earners to top tax rate cuts is due in
part to increased rent-seeking behaviour and in part to increased
productive work, we find that the top tax rate could potentially be set
as high as 83% – as opposed to 57% in the pure supply-side model.

In the end, the future of top tax rates depends on the public's beliefs
of whether top pay fairly reflects productivity or whether top pay,
rather unfairly, arises from rent-seeking. With higher income
concentration, top earners have more economic resources to influence
social beliefs (through think tanks and media) and policies (through
lobbying), thereby creating some reverse causality between income
inequality, perceptions, and policies.

http://www.voxeu.org/article/taxing-1-why-top-tax-rate-could-be-over-80


Comment: An important result of the election is that now both
Republicans and Democrats agree that an increase in tax revenues will be
one requirement to avoid plunging off the fiscal cliff (i.e., avoiding
the trap that Congress set for itself that would result in spending cuts
that neither side wants).

There does remain a sharp divide over what should be the source of those
increased revenues.

The Republicans prefer to broaden the tax base primarily by reducing tax
expenditures (reducing deductions for home loan interest, charitable
contributions, state taxes, etc.), but they are adamantly opposed to any
increase in income tax rates. In fact, they want a further reduction in
tax rates, obviously creating more deficit that must be made up by
further broadening the tax base, even though there really isn't much
leeway, if any.

Democrats have supported allowing the temporary Bush tax cuts to expire
for those with over $250,000 in income. They have indicated that they
are willing to negotiate, suggesting that they might leave the rates at
35% instead of the reversion to 39.6%, if they could achieve similar
results through the broadening of the tax base.

This is why the work of Piketty, Saez and Stantcheva is so important.
They show that we should do both. We should broaden the tax base by
eliminating tax avoidance opportunities, and we should increase tax
rates to a level that will fully fund all important public functions. We
could set top tax rates as high as 57% without having any adverse impact
on the economy, or we could set rates even higher at 83% if we wanted to
compensate for rent-seeking (simply stated, the means by which the
wealthy extract large amounts of money from the rest of us without
providing any substantial value in return).

Although we could easily eliminate our budget deficits through these two
tax policies - eliminating tax avoidance opportunities and increasing
tax rates for the highest income bracket - our politicians are also
proposing spending reductions. Of particular concern to health reform
advocates is that some politicians want to reduce "entitlement" spending
for Medicare. It is not just the Republicans since President Obama
already had agreed to significant Medicare reductions in his tentative
"grand bargain" he made with Speaker Boehner. This attack on Medicare
should be opposed vigorously since we need to protect Medicare until we
are able to replace it with a better program.

So what does this all have to do with single payer? Quite simply, it
provides an answer to those who say that we cannot afford the taxes that
would be required to fund equitably a single payer system. Clearly, not
only could we collect enough taxes to fund the system without having a
negative impact on other sectors of the economy (and health care is one
of the most important sectors), but we would also accomplish two other
important economic goals: 1) establish a transfer from the wealthy to
fund health care for low- and moderate-income individuals and families
who can not longer bear their full equally-divided share of our national
health expenditures, and 2) finally begin to reverse the unfair and
inequitable distribution of excess wealth to the rent-seekers.

Fwd: qotd: Employers expanding use of higher deductibles

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-------- Original Message --------
Subject: qotd: Employers expanding use of higher deductibles
Date: Tue, 13 Nov 2012 05:51:38 -0800
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



Kaiser Family Foundation
November 2012
The Prevalence and Cost of Deductibles in Employer Sponsored Insurance:
A View from the 2012 Employer Health Benefit Survey

The percent of covered workers enrolled in a plan with a general annual
deductible has increased significantly over time. In 2006, just over
half (52%) of covered workers had a deductible for single coverage,
compared with almost three-quarters (72%) in 2012.

Overall, the average general annual deductible is $1,097 for covered
workers enrolled in a single coverage plan requiring a deductible; an
increase of 88% since 2006.

Deductibles are much higher for workers enrolled in HDHP/SO plans
(savings options), with 25% of workers enrolled in a plan with a
deductible between $1,000 and $1,400, and 25% of workers in a plan with
a deductible greater than $2,500.

Although workers at small firms are no more likely to be enrolled in
health coverage that includes a deductible, they typically face much
higher deductibles than workers at large firms. The average deductible
for covered workers enrolled in single coverage at a small firm is
nearly twice as much as the deductible for covered workers at larger firms.

Covered workers enrolled in PPO and POS plans with many higher-wage
workers tend to have lower deductibles than their counterparts at firms
with fewer higher-wage workers. Covered workers in HMO, PPO and HDHP/SO
plans at firms with some unionized workers have lower general annual
deductibles than workers at firms without unions.

Conclusion

In addition to contributing more towards premiums, covered workers are
increasingly faced with higher cost sharing. A larger proportion of
workers are required to meet a deductible prior to utilizing services
and these deductibles are increasing in size. It has become commonplace
for covered workers to be enrolled in a plan with a deductible of $1,000
or more. While many working families have sufficient savings and
coverage in case of a medical emergency, the growth in workers'
contributions and cost sharing may increasingly become a financial
strain on some households.

http://www.kff.org/insurance/snapshot/chcm110212oth.cfm


Comment: Ever higher deductibles have now become the standard for
employer-sponsored plans. The new state exchange plans to be offered to
individuals and small businesses will have to have higher deductibles as
well because of their comparatively low actuarial values.

The conclusion in this report states that "the growth in workers'
contributions and cost sharing may increasingly become a financial
strain on some households." This is an overly conservative statement
since innumerable studies have shown that high deductibles already do
cause both financial hardship and impairment of access to appropriate
health care.

A single payer system controls costs without the necessity of imposing
financial barriers such as high deductibles. Let's change to policies
that take care of patients first rather than policies that shift costs
from employer or government budgets to individual patients, especially
since ultimately we're all funding those budgets anyway, whether as
consumers or taxpayers.

Fwd: qotd: Burns and Pauly take a critical look at accountable care organizations

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-------- Original Message --------
Subject: qotd: Burns and Pauly take a critical look at accountable care
organizations
Date: Mon, 12 Nov 2012 11:20:12 -0800
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



Health Affairs
November 2012
Accountable Care Organizations May Have Difficulty Avoiding The Failures
Of Integrated Delivery Networks Of The 1990s
By Lawton R. Burns and Mark V. Pauly

Abstract

Accountable care organizations are intended to improve the quality and
lower the cost of health care through several mechanisms, such as
disease management programs, care coordination, and aligning financial
incentives for hospitals and physicians. Providers employed several of
these mechanisms in forming the integrated delivery networks of the
1990s. The networks failed, however, because of heavy financial losses
stemming from hospitals' purchase of physician practices and their
inability to align incentives, garner capitated contracts, and develop
the infrastructure to manage risk. Although the current mechanisms
underlying accountable care organizations continue to evolve, whether
and how they will have an impact on quality and costs remains open to
question. Care coordination and information technology are proving more
complicated and expensive to implement than anticipated, providers may
lack the ability to implement these mechanisms, and primary care
providers are in short supply. As in the 1990s, success depends on
targeting specific populations, such as people with multiple chronic
conditions who need and may benefit from coordinated care.

Future Directions

What does that imply for the emergence, performance, and success of
accountable care organizations? It requires a reconsideration of our
earlier conjecture that the organizations will be more likely to improve
quality than to lower costs. With intense financial pressure from
Medicare generated by lower Medicare payments, the organizations may be
forced to limit costs — and, if they cannot do so by ridding their
systems of waste, perhaps to do so by achieving fewer quality improvements.

More generally, Medicare may wish to use accountable care organizations
to contain costs. In effect, the organizations will be told, "Here is
how much money you will get per patient, and you are not allowed to
charge any more; do the best you can with that."

This draconian incentive system will truly constitute a test of how much
waste there is in the system.

http://content.healthaffairs.org/content/31/11/2407.abstract


Comment: The Affordable Care Act includes several measures supposedly
to control health care spending, but analysis of the health policy
literature to date suggests that none of these will have more than a
negligible impact. Most hope is held out for accountable care
organizations (ACOs), but this report by Burns and Pauly suggests that
these new entities include many of the flaws of previous similar
efforts, primarily the failed integrated delivery networks of the 1990s.

In reading their full article you will understand better why we cannot
expect dramatic results from ACOs and the mechanisms that they would use
such as disease management, care coordination, realignment of financial
incentives, health information technology, electronic health records,
computerized physician order entry, clinical decision support systems,
and especially the Medicare shared savings program.

As opposed to well established integrated health systems like Kaiser
Permanente, these new systems will be formed from the existing health
care community. The authors explain that there is no guidebook to
develop and implement a coherent system by combing the existing
professionals and institutions. Efforts will require considerable money
and time. New personnel such as care coordinators and information
technology staff will be required. As they state, "We have seen no model
of a 'flat' accountable care organization — one requiring no increase in
numbers or layers of staffing." And it will be difficult "to ensure that
all changes are internally congruent."

Although most agree that there is a need for reinforcement of our
primary care infrastructure, the authors provide evidence that the
demands of care coordination under ACOs will cause a reduction in time
spent on direct patient care. One study indicated that care coordination
would require an additional 3.2 weeks per year of physician time.

The successful Kaiser and Group Health models took many decades to
develop. You cannot suddenly take the existing fragmented delivery
system and create competing, truly integrated systems in each community.
That is what was wrong with Enthoven's managed competition model, and
that is what is wrong with the incipient accountable care organization
model.

The greatest risk of ACOs seems to be that Medicare will use them to
help meet the political goal of "reducing entitlement spending,"
sacrificing the emphasis on quality because of cost considerations, and
applying pressure to ratchet down spending. The latter is particularly a
problem because private health systems are not very adept at identifying
and ferreting out waste, rather they reduce spending primarily by
impairing access. Selectively limiting Medicare spending will further
compound access problems by a reduction in the numbers of willing
providers, likely diminishing public support of Medicare.

In contrast, a single payer system is designed to reduce the abundance
of identifiable waste, especially administrative, while improving both
quality and access. It would be fine to continue with a demonstration
project studying integration of health care to see if such delivery
system reform could improve quality, but we don't want to allow that to
displace the much needed financing and health system reforms of single
payer. That's where we would have the greatest return on quality, access
and costs.