Tuesday, April 30, 2013

Fwd: qotd: Brookings' disappointing recommendations for bending the cost curve

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Brookings' disappointing recommendations for bending the
cost curve
Date: Tue, 30 Apr 2013 11:46:53 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>

Engelberg Center for Health Care Reform
April 29, 2013
Bending the Curve
Person-Centered Health Care Reform: A Framework for Improving Care and
Slowing Health Care Cost Growth
Authors: Joseph Antos, Katherine Baicker, Michael Chernew, Dan Crippin,
David Cutler, Tom Daschle, Francois de Brantes, Dana Goldman, Glenn
Hubbard, Bob Kocher, Michael Leavitt, Mark McClellan, Peter Orszag, Mark
Pauly, Alice Rivlin, Leonard Schaeffer, Donna Shalala, Steve Shortell

We propose a framework for health care reform that focuses on supporting
person-centered care. With continued innovation toward more personalized
care, this is the best way to improve care and health while also bending
the curve of health care cost growth.

Simplify and Standardize Administrative Requirements
The time cost to clinicians of interacting with health plans has been
estimated to be as high as $23 to 31 billion annually. Further,
clinicians, health plans, and other participants in health care reform
are currently subject to a wide range of diverse reporting requirements
that add to costs and reduce the availability of actionable information.
Some steps have been taken recently to reduce these administrative costs
through standardization. Further administrative simplification steps
should include the following, all of which can be accomplished through
existing standard-setting entities and public-private implementation
* Implementation of an updated standardized claim form.
* Standard methods for quality reporting by providers and plans,
including clinical, outcome, and patient-level measures — this would be
an administrative benefit for providers that adopt value-based payment
reforms across all of their payment systems and would lead to reduced
reliance on cumbersome coding for specific types of providers.
* Standard methods for timely data sharing by plans with health care
providers and patients who are involved in the financing reforms
described in this report. Data sharing accomplished according to
consistent standards would reduce the burden on providers and patients,
and the it vendors who serve them, for implementing the analytic tools
needed to achieve greater improvements in care.
* Support for state investments to update their Medicaid information
systems including standard quality measure reporting and access to CMS
data for quality improvement.

Reforms for Private Health Insurance Markets and Coverage

* Support employer efforts to engage employees in reducing overall
health care costs through Employment Retirement Income Security Act
(ERISA) and other health plan regulations that promote value-based
insurance designs and tiered benefit designs, narrow networks of
providers that demonstrate high performance, and employees' ability to
share in the savings from health care choices and changes in behavior
that reduce costs.

Bending the Curve (49 pages):

Comment: This newest report on recommending changes to control health
care costs is being presented as a "bipartisan" consensus representing
"broad agreement" on reform. Those who have followed the national policy
dialogue will recognize that the list of authors does, in fact, include
representatives of both major political parties. Nevertheless, the views
presented in the report confirms the presumption that these Democratic
authors have moved into the Republican camp in the policy debate.

As an example, their recommendations for reducing administrative waste
totally ignores the well documented sources of that waste, resulting in
recommendations that will have no impact at all on the problem, when
recovery of administrative waste should be front and center in reform.

As another an example of their right-wing approach, they recommend
"value-based insurance designs and tiered benefit designs, narrow
networks of providers that demonstrate high performance, and employees'
ability to share in the savings from health care choices and changes in
behavior that reduce costs." This is code language for consumer-driven
approaches that shift more costs to those needing health care - terrible
policies that defeat principles of health care justice.

The only good thing about this report is that you can quickly dump it
with the "delete" button, without the environmental consequences of
wasting 49 pages of paper.

Friday, April 26, 2013

Fwd: qotd: ACA's negative impact on employment

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: ACA's negative impact on employment
Date: Fri, 26 Apr 2013 06:09:30 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>

The Washington Post
April 24, 2013
Governments may push workers out of employer health care and into health
By Associated Press

In a quest to save money, political leaders in Washington state are
exploring a proposal that would shift some government workers out of
their current health plans and onto the insurance exchange developed
under President Barack Obama's health care law.

Lawmakers believe the change, which could affect thousands of part-time
state employees and education workers, would save the state $120 million
over the next two years.

The Washington proposal has been advanced as a way to help deal with a
$1.2 billion budget shortfall. Under it, Washington state would make
policy changes and secure agreements in which staffers who work between
20 and 30 hours a week would get extra compensation but lose their
current health coverage. They would then be eligible to get health care
in the federal plan, without any consequence for the state.

"I think it's a great way to fully take advantage of the Affordable Care
Act," said Republican Sen. Andy Hill, one of the state's top budget writers.

While few states are following Washington's path at the moment, there
has been concern about how private employers will handle the new health
care law and the possibility that some may shed insurance coverage. The
owner of Olive Garden and Red Lobster restaurants, for example, began
experimenting last year with putting more workers on part-time status.

Virginia is doing something similar, with Republican Gov. Bob McDonnell
directing that all part-time state employees work less than 29 hours
weekly. That is creating a financially crippling problem for many of
Virginia's 9,100 adjunct faculty members at the state's 23 community
colleges on 40 campuses statewide.

"I've never anticipated getting rich off being a teacher," said J.
Gabriel Scala, an adjunct English professor at J. Sargeant Reynolds
Community College in Richmond.

"But the rent has to be paid. And I have to eat. And gas has to be put
in the car — and $17,000 a year isn't going to do it," she added.


Comment: One of the most important design features of the Affordable
Care Act was that the employer-sponsored sector of health care coverage
was to be largely left alone since allegedly it was functioning so well
- not only covering the largest sector of our population, but also an
important source of health care financing that was already in place.
What could possible go wrong with this strategy?

What are employers to think when they see that the two primary features
of the Affordable Care Act - the expansion of Medicaid and the
establishment of exchanges of private insurance plans - were to be
partially or completely financed with government funds? If lower-income
employees could be shifted into the exchanges, the federal government
would provide subsidies that would help fund the health care needs of
employees. The only condition is that the employee must be part time,
not working more than 30 hours per week.

Private employers have already begun to reduce their employees' hours to
qualify them for the exchange plans, and now we see that state
governments are considering the same approach.

The important point is that employees in this sector that was to be left
intact - those with employer-sponsored plans - are not only experiencing
changes in their health insurance coverage, they are also experiencing a
major loss of income due to the requirement of sharply limiting the
hours worked per week. Since many of these individuals already have very
low incomes, the cutback will be financially catastrophic.

It is really tragic that a program theoretically designed to expand
health care coverage is having such a negative impact on employment
itself. This would never have happened had we enacted a single payer
system. We still can, you know.

Thursday, April 25, 2013

Fwd: qotd: A noted Republican physician executive talks about single payer

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: A noted Republican physician executive talks about
single payer
Date: Thu, 25 Apr 2013 07:32:22 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>

American College of Cardiology
ACC-in-Touch Blog
April 23, 2013
I Am A Republican… Can We Talk About A Single Payer System?
By David May

I am a Republican. For those who know me that is not a surprise. I live
in a red state. I have never voted for a Democratic presidential
candidate. I can field strip, clean and reassemble a Remington 12-gauge
pump blindfolded. And on top of it, I think we should talk about having
a single payer national health care plan. The reason is quite simple. In
my view, we already have one; we just don't take advantage of it.

Firstly, Medicare and the Center for Medicare and Medicaid Services
(CMS) are de facto setting all of the rules now. They are a single payer
system. When we go to lobby the Hill, we lobby Congress and CMS.
Talking to Blue Cross, Aetna, Cigna and United Health care is
essentially a waste of time. All the third party payers do is play off
the Medicare rules to their advantage and profit. They have higher
premiums, pay a somewhat higher benefit and have a significantly higher
level of regulation which impedes the care of their customers. This is
no longer consumer choice but effectively extortion, a less than hidden
shake down in which the "choice" for a family of four is company A at
$900 per month or company B at $1100 per month. The payers are simply
taking advantage of the system, playing both ends against the middle.

Secondly, in order to move forward with true health care finance we need
complete transparency in cost and expense… and we need it now. As was
noted in a recent Time magazine piece on the hidden cost of health care,
our current system is a vulgar, less than honorable construct more akin
to used car sales than medical care, cloaked under the guise of
generally accepted accounting principles and hospital cost shifting.

Thirdly, with a single payer system would potentially come real
utilization data, real quality metrics and real accountability. The
promise of ICD-10 with all of its difficulties is that of a much more
granular claims-made data. We could use some granularity in health care
data and we will never achieve it in big data quantities without a
single payer system.

Lastly, I think that the physicians should be in charge of health care
and not the insurance companies and hospital systems. With a single
price structure, it becomes all about medical decision making,
efficiency, the provision of care to our patients, and shared decision
making, all of which we do well.

How, you might say, could a Republican come to such a position? The
simple answer is I really think it is quite Republican. Oh, I know
there will be many raised eyebrows and many critics. I accept that. I
understand the fact that no single payer system is perfect, that it is
"socialist," that it is "un-American."

I would submit to you, however, that it is un-American to allow many of
our citizens to be uninsured, that it is un-American to shunt money away
from a strong military in order to support a bloated, inefficient and
fraud-laden health care system, that it is un-American not to be open
and above board with the cost of what we do, the expense of that service
and the profit that we make. Mostly, it is un-American to let this
outrageous health care injustice continue.

(David May, MD, PhD, FACC, is chair of the Board of Governors of the
American College of Cardiology. He invites responses to his comments at
the link below.)


Comment: David May provides an important lesson for those who think
that the single payer concept falls on the far left of a linear
political spectrum. Society is not linear; it's four dimensional. If we
look at all dimensions, single payer clearly prevails. We can thank Dr.
May for shattering the traditional but flawed construct of health care

Wednesday, April 24, 2013

Fwd: qotd: Workers not prepared financially for unexpected health costs

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Workers not prepared financially for unexpected health costs
Date: Wed, 24 Apr 2013 13:28:07 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>

April 24, 2013
2013 Aflac WorkForces Report

American Workers on an Uphill Road with Consumer-Driven Health Care
New Aflac survey reveals employees are not prepared for increased costs,
may not want control and lack education
The 2013 Aflac WorkForces Report is the 3rd annual Aflac employee
benefits study examining benefit trends and attitudes.

Not Prepared Financially

* Only 24 percent of workers completely agree or strongly agree they
will be financially prepared in the event of an unexpected emergency or
serious illness.

* Further, 46 percent of employees have less than $1,000 to be able to
pay for out-of-pocket expenses associated with an unexpected serious
illness or accident, and 25 percent of employees have less than $500.

* Four-in-ten (40 percent) workers would have to borrow from their
401(k), friends and family to pay for out-of-pocket expenses associated
with an unexpected serious illness or accident; 28 percent would have to
use a credit card.

Press release:

Fast Facts:


Centers for Medicare and Medicaid Services
The Center for Consumer Information & Insurance Oversight

Section 1402 of the Affordable Care Act requires reductions in the
maximum out-of-pocket limits on silver plans for individuals with
household incomes between 100 and 400 percent of the FPL. However, the
statute also requires the Secretary to ensure that the reductions in the
maximum out-of-pocket limits do not cause the AVs (actuarial values) of
these silver plan variations to exceed certain levels.

For reasons described in more detail below, we do not plan to reduce the
maximum out-of-pocket limits for individuals with income between 250 and
400 percent of FPL.


Comment: With a major trend expanding in the direction of
employer-sponsored consumer-driven health care, this new Aflac report
shows that workers are not ready for the change. If you look only at the
financial challenge, workers may never be ready. They cannot afford to
pay the out-of-pocket expenses that they would face should they or their
families develop significant medical problems.

Although the Aflac study was limited to employer-sponsored benefit
programs, most people purchasing plans in the new state insurance
exchanges also will be selecting plans that use high-deductibles - the
defining characteristic of consumer-driven health plans.

The Affordable Care Act (ACA) does require reductions in out-of-pocket
expenses for individuals with household incomes between 100 and 400
percent of the federal poverty level (FPL), but another ACA requirement
prohibits the covered silver plans from having an actuarial value over
70 percent (the percent the plan pays on average) for individuals with
household incomes over 250 percent of FPL ($27,925 for an individual).
Since it is impossible to keep the actuarial value down at 70 percent if
out-of-pocket expenses are subsidized, it was decided to eliminate
out-of-pocket support for individuals above 250 percent of FPL.

Some workers will benefit from employer contributions to health spending
accounts (HSAs and HRAs), just as some individuals will benefit from
out-of-pocket subsidies in the exchanges. In either instance, it can be
anticipated that far too many still will not be prepared financially for
unanticipated medical costs, just as the Aflac study reported.

Newer employer-sponsored plans and plans under ACA are moving in the
wrong direction. We need a program that removes financial barriers to
care, not plans that erect them. All you have to do is read the 16 page
CCIIO/CMS bulletin on actuarial value and cost-sharing reductions (link
above) to see how ridiculously complicated and irrational we made this

We really do need a single payer system. Then everyone would be prepared
financially in the event of medical need.

Thursday, April 18, 2013

Fwd: qotd: Greece's crucial lessons on austerity and health

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Greece's crucial lessons on austerity and health
Date: Thu, 18 Apr 2013 13:16:46 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>

American Journal of Public Health
Published online April 18, 2013
Economic Crisis, Restrictive Policies, and the Population's Health and
Health Care: The Greek Case
By Elias Kondilis, MD, PhD, Stathis Giannakopoulos, MD, PhD, Magda
Gavana, MD, PhD, Ioanna Ierodiakonou, MD, PhD, Howard Waitzkin, MD, PhD,
and Alexis Benos, MD, PhD

The global economic crisis has affected the Greek economy with
unprecedented severity, making Greece an important test of the
relationship between socioeconomic determinants and a population's
Suicide and homicide mortality rates among men increased by 22.7% and
27.6%, respectively, between 2007 and 2009, and mental disorders,
substance abuse, and infectious disease morbidity showed deteriorating
trends during 2010 and 2011. Utilization of public inpatient and primary
care services rose by 6.2% and 21.9%, respectively, between 2010 and
2011, while the Ministry of Health's total expenditures fell by 23.7%
between 2009 and 2011.

What to Learn from the Greek Case

It is tragic that Greece has become an important test regarding the
impact of economic and social determinants on a population's health and
well-being. Evidence presented indicates that economic recession and its
consequences (unemployment, poverty and social exclusion, homelessness,
and insecurity) exert important effects on Greece's population health
and health care services. Several causes of mortality and morbidity
related to mental health, substance abuse, and infectious disease
already show clear rising trends. Heightened needs and increased demand
on public services collide with austerity and privatization policies.



The New York Times
April 17, 2013
More Children in Greece Are Going Hungry
By Liz Alderman

Last year, an estimated 10 percent of Greek elementary- and
middle-school students suffered from what public health professionals
call "food insecurity," meaning they faced hunger or the risk of it,
said Dr. Athena Linos, a professor at the University of Athens Medical

(Principal Leonidas) Nikas has taken matters into his own hands and is
organizing food drives at (his) school. He is angry at what he sees as
broader neglect of Greece's troubles by Europe.

"I'm not saying we should just wait for others to help us," he said.
"But unless the European Union acts like this school, where families
help other families because we're one big family, we're done for."



April 2013
Child Well-Being in Rich Countries

Rank of child well-being in 29 nations of the industrialized world

25th - Greece
26th - United States



National Bureau of Economic Research (NBER)
January 2010
Growth in a Time of Debt
By Carmen M. Reinhart, Kenneth S. Rogoff

Our main findings are: First, the relationship between government debt
and real GDP growth is weak for debt/GDP ratios below a threshold of 90
percent of GDP. Above 90 percent, median growth rates fall by one
percent, and average growth falls considerably more.



University of Massachusetts Amherst
Political Economy Research Institute
April 15, 2013
Does High Public Debt Consistently Stifle Economic Growth? A Critique of
Reinhart and Rogo ff
By Thomas Herndon, Michael Ash, Robert Pollin

Herndon, Ash and Pollin replicate Reinhart and Rogoff and find that
coding errors, selective exclusion of available data, and unconventional
weighting of summary statistics lead to serious errors that inaccurately
represent the relationship between public debt and GDP growth among 20
advanced economies in the post-war period. They find that when properly
calculated, the average real GDP growth rate for countries carrying a
public-debt-to-GDP ratio of over 90 percent is actually 2.2 percent, not
-0:1 percent as published in Reinhart and Rogo ff. That is, contrary to
RR, average GDP growth at public debt/GDP ratios over 90 percent is not
dramatically different than when debt/GDP ratios are lower.

Overall, the evidence we review contradicts Reinhart and Rogoff 's claim
to have identified an important stylized fact, that public debt loads
greater than 90 percent of GDP consistently reduce GDP growth.


Comment: Greece's austerity program, accompanied with privatization of
public health services, is having tragic consequences, reflected in the
health of the people. Not only is health care impaired, the children are
going hungry! It is particularly tragic when you consider that there are
solutions to their economic crisis, other than austerity, that would
keep their children fed and in good health.

The world-wide austerity movement received a big boost with the
publication three years ago of the paper by Carmen Reinhart and Kenneth
Rogoff supposedly showing that public debt to GDP ratios over 90 percent
resulted in considerable declines in the growth rate of the economy. The
"austerians" were off and running. Paul Ryan even included the concept
in the budget passed this year by the Republican-controlled House of

The problem with the Reinhart/Rogoff thesis is that it is flat-out
wrong. The paper by Thomas Herndon and his colleagues proved to be a
bombshell that refuted the R/R doctrine and demonstrated that "average
GDP growth at public debt/GDP ratios over 90 percent is not dramatically
different than when debt/GDP ratios are lower." Economists and policy
makers are in a frenzy, and let's hope that it results in a conclusion
that transitional resolutions to economic crises require the use of debt
to prevent austerity measures that negatively impact the most basic of
needs for the people.

So when we look at the UNICEF rankings of child well-being in
industrialized nations, we are saddened by the fact that Greece ranks
25th amongst 29 nations. If the European Union had a little heart, they
would be helping their sister country pull out of the crisis without
extracting a requirement that Greece raises its misery index.

(Excuse the deliberate deception, but it is to make a point. The misery
index is a combination of high unemployment and high rates of inflation.
Yet inflation is very low, but the austerians are convinced that it
should be high even if it isn't, and so they are acting accordingly -
more austerity!)

At least in the United States we are smart enough to not let our budget
deficits shift us into an austerity mode. Or are we? President Obama is
now negotiating with Republicans to cut back on two of our most
successful social programs - Social Security and Medicare, as part of an
austerity program.

Where do we stand now? The UNICEF ranking of child well-being has placed
the United States in the 26th position, below Greece! More austerity is
the very last thing we need!

For those who have been feeling so smug as we look at Greece's tragic
circumstance, think again! Then fire the austerians! It's a matter of
social justice.

Wednesday, April 17, 2013

Fwd: qotd: Public and private payment of hospital complications

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Public and private payment of hospital complications
Date: Wed, 17 Apr 2013 11:13:52 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>

April 17, 2013
Relationship Between Occurrence of Surgical Complications and Hospital
By Sunil Eappen, MD; Bennett H. Lane, MS; Barry Rosenberg, MD, MBA;
Stuart A. Lipsitz, ScD; David Sadoff, BA; Dave Matheson, JD, MBA;
William R. Berry, MD, MPA, MPH; Mark Lester, MD, MBA; Atul A. Gawande,

We found that under private insurance and Medicare, which cover the
majority of US patients, the occurrence of surgical complications was
associated with higher hospital contribution margins. Depending on payer
mix, efforts to reduce surgical complications may result in worsened
near-term financial performance.

The financial effects of surgical complications varied considerably by
payer type. Complications were associated with more than $30 000 greater
contribution margin per privately insured patient ($16 936 vs $55 953)
compared with less than $2000 per Medicare patient ($1880 vs $3629). In
contrast, for Medicaid and self-pay procedures, those with complications
were associated with significantly lower contribution margins than those
without complications.



April 17, 2013
Making Surgical Complications Pay
By Uwe E. Reinhardt, PhD

In this issue of JAMA, Eappen et al reach the troublesome but not
surprising conclusion that hospitals in the United States can profit
handsomely from postsurgical complications, even if the hospitals could
avoid them.

Under the federal Medicare program, payment for all of the services
involved in hospital inpatient treatment has been bundled since the
mid-1980s into 1 payment per inpatient case categorized into 1 of 745
distinct diagnosis related groups (DRGs) of cases, which are categorized
by adjustments for complications and comorbidities. This approach has
made Medicare a pioneer in payment reform that has since been copied

According to the authors' propensity-adjusted estimates, a patient with
1 or more complications results in a $39 017 (95% CI, $20 069-$50 394)
greater contribution margin than a patient without complications if the
care is reimbursed by a private payer. In contrast, for Medicare, the
gain in complication-related contribution margins is only $1749 (95% CI,
$976-$3287). This observation contradicts the prevailing perspective
that private insurers are axiomatically assumed to be smarter payers
than government-run Medicare. However, if, as the authors imply, many of
the observed postsurgical complications were avoidable, then perhaps
Medicare should more appropriately be considered a smarter payer than
private insurers. By having moved to the bundled DRG payments for
inpatient care as early as the mid-1980s, Medicare appears to have
largely avoided rewarding hospitals financially for avoidable mistakes.

However, the data reported by the authors appear different for the
state-run Medicaid programs. Essentially, Medicaid did not even cover
the hospital's variable costs of treating Medicaid patients. Suggesting
to the public that fellow citizens receiving Medicaid have adequate
health insurance but then not covering even the clinicians' and
hospitals' variable costs of treating those patients might warrant the
label of "government-initiated Medicaid fraud."


Comment: In reporting this JAMA article on surgical complications and
hospital finances, headlines throughout the nation are stating that
hospitals profit from surgical errors. The story that should be reported
is that private insurers have been richly rewarding hospitals for
surgical complications, whereas Medicare has largely avoided paying
these rewards.

Specifically, private insurers pay an average of $39,000 more for
surgical complications whereas Medicare pays only $1,700 extra.
Obviously the government has done a much better job than the private
sector in ensuring value in our health care purchasing, not to mention
providing incentives to improve performance.

The government isn't always right, as the Medicaid program demonstrates.
Being chronically underfunded, Uwe Reinhardt suggests that the resulting
underpayments "might warrant the label of 'government-initiated Medicaid

Medicare's prospective payment system using DRGs (745 diagnosis-related
groups) has improved payment levels, but it still provides an incentive
for the provision of excess care. There is a better way. Hospitals
should receive global budgets based on legitimate costs, just as our
fire and police departments are budgeted. Periodic re-budgeting will
compensate for changing medical and community requirements. Of course,
incentives catering to passive investors should be removed by converting
all hospitals to nonprofit status.

Global budgeting for hospitals is just one of the features of the single
payer model of reform as advocated by Physicians for a National Health
Program, all of which together would result in an affordable system of
high-quality care for everyone. We should go for it.

Tuesday, April 16, 2013

Fwd: qotd: Fox News: Obamacare takes food off the table

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Fox News: Obamacare takes food off the table
Date: Tue, 16 Apr 2013 10:58:06 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>

April 15, 2013
Nation's biggest movie theater chain cuts workweek, blaming ObamaCare
By Perry Chiaramonte

The nation's largest movie theater chain has cut the hours of thousands
of employees, saying in a company memo that ObamaCare requirements are
to blame.

Regal Entertainment Group, which operates more than 500 theaters in 38
states, last month rolled back shifts for non-salaried workers to 30
hours per week, putting them under the threshold at which employers are
required to provide health insurance. The Nashville-based company said
in a letter to managers that the move was a direct result of ObamaCare.

One Regal theater manager told FoxNews.com the move has sparked a wave
of resignations from full-time managers who have seen their hours cut by
25 percent or more.

The manager told FoxNews.com ObamaCare has had the unintended
consequence of taking food off his table.

"Mandating businesses to offer health care under threat of debilitating
fines does not fix a problem, it creates one," he said. "It fosters a
new business culture where 30 hours is now considered the maximum in
order to avoid paying the high costs associated with this law.

Regal, which operates cinemas under the names Regal Cinemas, Edwards
Theatres and United Artists Theaters and recently purchased Oregon-based
Hollywood Theaters for $191 million, did not respond to repeated
requests for comment from FoxNews.com. The publicly-traded company's
stock has risen nearly 30 percent over the last year.


Comment: It is no surprise that Fox News would frame the 30 hour work
week requirement under the Affordable Care Act as "ObamaCare has had the
unintended consequence of taking food off (the) table."

Regal Entertainment Group is only one of many employers who have decided
to limit part time workers to 30 hours to avoid the requirement of
providing them with health insurance. That does create financial
hardships for lower-income employees. They must either find more part
time work, in which case they still wouldn't be eligible for
employer-sponsored health plans, or they must find a new, full-time job
at a time in which unemployment rates are quite high.

Fox's framing indicates that the problem is the requirement in
"ObamaCare" for larger employers to provide health insurance for their
employees, or face a penalty for not doing so. Fox is right when you
consider that legislation designed to expand health care coverage
instead has the result of causing low-income workers to lose one-fourth
of their work week hours, and still remain uninsured. But is this really
the prime issue?

The problem that needs to be framed properly is the tens of millions in
our nation who have no insurance. How do we cover those people?
Obviously a single payer national health program financed equitably
through progressive taxes would solve the problem, without taking food
off of anyone's table.

Instead, if we look only at the coverage provisions of the Affordable
Care Act, we see an administratively complex, wasteful, fragmented
system of a multitude of varying eligibilities and coverage requirements
that can never ensure that everyone has stable coverage indefinitely. In
fact, it is estimated that after the provisions are in full force, there
will still be 30 million people without any coverage at all (CBO). What
is worse, we will be paying much more than we would have if we were
instead to adopt a single payer, improved Medicare for all.

Until we start doing a better job of framing the problems, we are not
going to come up with the right solutions.

Fwd: qotd: U.S. cancer drug policy is scandalous

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: U.S. cancer drug policy is scandalous
Date: Mon, 15 Apr 2013 10:57:58 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>

Health Affairs
April 2013
Compared To US Practice, Evidence-Based Reviews In Europe Appear To Lead
To Lower Prices For Some Drugs
Joshua Cohen, Ashley Malins and Zainab Shahpurwala


In Europe drug reimbursement decisions often weigh how new drugs perform
relative to those already on the market and how cost-effective they are
relative to certain metrics. In the United States such
comparative-effectiveness and cost-effectiveness evidence is rarely
considered. Which approach allows patients greater access to drugs? In
2000–11 forty-one oncology drugs were approved for use in the United
States and thirty-one were approved in Europe. We compared patients'
access to the twenty-nine cancer drugs introduced into the health care
systems of the United States and four European countries (England and
Wales, France, Germany, and the Netherlands). Relative to the approach
used in the US Medicare program in particular, the European
evidence-based approach appears to have led to reduced prices for those
drugs deemed worthy of approval and reimbursement. The result is
improved affordability for payers and increased access for patients to
those drugs that were available. The United States lacks a systematic
approach to assessing such evidence in the coverage decision-making
process, which may prove inadequate for controlling costs, improving
outcomes, and reducing inequities in access to care.

From the Discussion

The current method in the US Medicare program of seemingly "muddling
through elegantly" appears incapable of striking a fiscally sustainable
balance between cost and access, particularly with respect to cancer
drugs. Spending on cancer treatments continues to grow at double-digit
rates annually, which in turn has led to much higher cost sharing for
patients. This has an impact on the kind of treatment that Medicare
beneficiaries get because patients with better insurance, or those who
are able to pay higher out-of-pocket costs, have better access to care.


Medicare policy makers might do well to draw lessons cautiously from the
experiences of health care systems that have integrated clinical and
economic evaluations into decision making. Should the US Medicare
program decide to move toward more systematic use of comparative
effectiveness findings, there are formidable challenges inherent in the
US system that will need to be addressed.

One challenge is payer fragmentation. The diffuse system of payers would
probably make the uptake of comparative effectiveness evidence segmented
and uneven.

A second challenge is the view of many oncologists that resources are
unlimited. In a US-based survey conducted in 2009, nearly 80 percent of
oncologist respondents said that patients should have access to
"effective" care regardless of costs. An implied cost-effectiveness
threshold was calculated at $300,000 per quality-adjusted life-year.
Needless to say, having Medicare pay for every cancer treatment that
cost up to that amount would not be feasible in the long run.

There is room in the US Medicare program for more systematic and
coordinated methods and a process for developing and implementing
evidence relative to cost and cost-effectiveness. The immediate goal
should be to encourage a more evidence-based process of decision making
by closing the gap between what providers, payers, and policy makers
know in pharmaceutical care and what they do.


Comment: Cancer drug policies in the United States, compared to other
nations, result in higher drug costs, intolerable out-of-pocket costs,
and inequitable access to the drugs - preventing many people from
receiving comparatively effective drugs, while enabling others to have
very expensive drugs of little or no value, wasting our healthcare dollars.

We can do far better in establishing drug policies that are
evidence-based and cost-effective based on quality-adjusted life-years.
First we need to elect leaders who care more about us, as patients, than
they care about kowtowing to the pharmaceutical giants and other special

When it comes down to it, it really is our fault when we fall for the
government-can't-do-anything-right malarkey, and elect those who
disseminate this false notion.

Friday, April 12, 2013

Fwd: qotd: Stanford Business Professor Jeffrey Pfeffer on Administrative Waste

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Stanford Business Professor Jeffrey Pfeffer on
Administrative Waste
Date: Fri, 12 Apr 2013 07:27:50 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>

Bloomberg Businessweek
April 10, 2013
The Reason Health Care Is So Expensive: Insurance Companies
By Jeffrey Pfeffer

As Congressional budget battles heat up—or roll along, depending on your
time perspective—the cost of health care in America receives a lot of
attention. Unfortunately most of the discussion is largely off the mark
about where the preventable, unnecessary costs really are.

The thing that few people talk about, and that no serious policy
proposal attempts to fix—the arrangement that accounts for much of the
difference between health spending in the U.S. and other places—is the
enormous administrative overhead costs that come from lodging
health-care reimbursement in the hands of insurance companies that have
no incentive to perform their role efficiently as payment intermediaries.

More than 20 years ago, two Harvard professors published an article in
the prestigious New England Journal of Medicine showing that health-care
administration cost somewhere between 19 percent and 24 percent of total
spending on health care and that this administrative burden helped
explain why health care costs so much in the U.S. compared, for
instance, with Canada or the United Kingdom. An update of that analysis
more than a decade later, after the diffusion of managed care and the
widespread adoption of computerization, found that administration
constituted some 30 percent of U.S. health-care costs and that the share
of the health-care labor force comprising administrative (as opposed to
care delivery) workers had grown 50 percent to constitute more than one
of every four health-sector employees.

What remains missing even in the discussion of the enormous
administrative burden is not just how large, both in absolute dollars
and as a percentage of health costs, it is, but also how few incentives
there are for insurance companies to stop wasting their and everyone
else's time.

Unless and until we as a society pay attention to the enormous costs and
the time wasted by the current administrative arrangements, we will
continue to pay much too much for health care.

(Jeffrey Pfeffer is the Thomas D. Dee II Professor of Organizational
Behavior at Stanford University's Graduate School of Business.)


Comment: Individuals who understand the single payer model will find
nothing new here from a policy perspective. What is important about this
article is that it is a precise statement about administrative waste,
coming from a professor at Stanford University's Graduate School of
Business, and published in Bloomberg Businessweek.

There is hope that others may finally understand how we can control
spending while improving value in health care, and then join together to
act on it. The Harvard/CUNY professors cited by Pfeffer - PNHP's David
Himmelstein and Steffie Woolhandler - stand ready to provide guidance on
the reform that we so desperately need.

Thursday, April 11, 2013

Fwd: qotd: Physician awarded damages for being excluded from insurer's network

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Physician awarded damages for being excluded from
insurer's network
Date: Thu, 11 Apr 2013 06:29:11 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>

Los Angeles Times
April 10, 2013
L.A. jury sides with doctor in Anthem Blue Cross case
By Chad Terhune

In a rare case, a Los Angeles jury awarded $3.8 million in compensatory
damages to a Porter Ranch doctor who contended insurance giant Anthem
Blue Cross retaliated against him for being a strong patient advocate.

The jury ruled late Monday in favor of Jeffrey Nordella, 58, an
urgent-care and family-practice doctor who alleged that Anthem barred
him from its network in 2010, when he applied to be a preferred
provider. The damages could climb higher Friday, when the 12-person
panel reconvenes and considers punitive damages against Anthem, a unit
of insurance giant WellPoint Inc.

The jury found that Anthem, the state's largest for-profit health
insurer, violated Nordella's right to "fair procedure," and the company
did so with "malice, oppression or fraud." That latter finding prompted
the hearing Friday in Los Angeles County Superior Court to determine
punitive damages.

This case comes as health insurers, in a bid to hold down costs, are
increasingly dropping doctors and hospitals and promoting smaller
networks. Insurers typically try to negotiate lower rates with the fewer
providers left in the network, who get higher patient volume in return.

Theresa Barta, a Newport Beach attorney who represents Nordella, said
the insurance company contended it had 137 primary-care physicians in
its network within 10 miles of Porter Ranch. At trial, Anthem could name
only seven of those doctors, Barta said.

Because of frequent changes in its list of physicians since 2010, Anthem
said, it could not retrieve all of the requested information. The
company maintains that its doctor network was adequate when Nordella

During closing arguments at trial, Barta said Anthem intentionally
limits its physician roster to make it more difficult for PPO patients
to get care, which reduces Anthem's medical costs and boosts its profits.


Comment: The intent of today's message is not so much to use this
opportunity to once again bash one of the nation's largest private
insurers (even if appropriate), but rather it is to demonstrate the
perversity of one more example of placing the business interests of the
insurer over the interests of patients.

Even though this court decision was in favor of a physician barred from
Anthem Blue Cross's network of physician providers, it confirms the
principle that private insurers should be improving patient access to
health care rather than impairing it, as in this now all too common
instance of limiting access by narrowing their networks of health care
professionals and institutions.

Once again, this demonstrates the irrationality of imposing expensive,
intrusive, private third party administrators between patients and their
health care professionals.

In a universal, publicly financed and publicly administered health care
system, such as a single payer national health program, the third party
- the government - covers all reasonable health care services and
products provided by any legitimate health care professional or
institution, with enough oversight to prevent deviancies such as fraud
or price gouging.

It is so obvious, yet...

Wednesday, April 10, 2013

Fwd: qotd: Online brokers want a cut of the action

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Online brokers want a cut of the action
Date: Wed, 10 Apr 2013 07:31:55 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>

The Washington Post
April 8, 2013
In Obamacare, online insurance brokers see potential windfall
By Sarah Kliff

Online insurance brokers see a potential windfall when the federal
government doles out billions in subsidies to buy help Americans buy
health insurance. And they are asking state governments to help them
score it.

The online brokers want millions of new insurance customers to be able
to use those subsidies to buy health coverage through their Web sites,
rather than shop exclusively on the new exchanges being set up by states
and the federal government.

"We have the expertise and already generate a tremendous amount of
volume of sales," says Gary Lauer, CEO of EHealth, the country's largest
online insurance broker. "The exchanges are spending a lot of money to
enroll people, which is all fine, but we could do the same thing at no
charge to the federal government."

EHealth CEO Lauer does acknowledge that the site has financial
motivations when it sells a health insurance plan. But he also contends
that the federal regulations are strong enough to ensure that consumers
get the same experience, no matter where they purchase coverage.

"We're a profit-making company," he said. "Our revenue source is the
commission paid to brokers. It's not an additional charge, it's built
into the premium, the same premium on the exchange. The only difference
is the carrier will pay us a commission."


Comment: As Gary Lauer, CEO of EHealth states, "We're a profit-making
company." Yes, they are a company that draws dollars (over 150 million
of them in 2012) away from our heath care funds, and yet provides
absolutely no services or products directly related to actual health care.

It is particularly irritating when he states that his firm can provide
health insurance brokerage services for the exchanges being established
under the Affordable Care Act "at no charge to the federal government,"
because the charges are "built into the premium."

Who pays those charges? The insurance companies certainly do not deduct
these expenses directly from their profits. They weren't born yesterday.
As Lauer states, the charges are built into the premiums. Thus they are
paid jointly by plan enrollees and by the federal government in the form
of premium subsidies.

The expenses of these brokerages or of the state insurance exchanges
wouldn't even exist if we had one universal program instead of a
multitude of private insurers, which in themselves generate tremendous
administrative waste while imposing greater administrative burdens and
costs on the actual providers of health care.

By insurance industry standards, maybe Gary Lauer's compensation is
modest ($1.67 million in 2012), but if he is providing us nothing of
value, then any amount is too much.

Haven't we had enough? Isn't it time for an improved Medicare that
covers everyone? Then Gary Lauer would have to get a real job.

Tuesday, April 9, 2013

Fwd: qotd: Other nations' lessons on cost containment

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Other nations' lessons on cost containment
Date: Tue, 9 Apr 2013 11:14:28 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>

Health Affairs
April 2013
Health Care Cost Containment Strategies Used In Four Other High-Income
Countries Hold Lessons For The United States
By Mark Stabile, Sarah Thomson, Sara Allin, Seán Boyle, Reinhard Busse,
Karine Chevreul, Greg Marchildon and Elias Mossialos

The past decade has been one of relative affluence for the countries we
reviewed (Canada, England, France, and Germany), particularly when
compared to the budget scenarios they face over the next few years. It
may not be surprising, therefore, that health care costs grew relatively
quickly during 2000–10 and that there is limited evidence of the success
of recent cost containment strategies.

That said, the four countries discussed here continue to make use of
public budgeting and price-setting mechanisms to contain costs in the
health care sector, as they have in previous decades. The greater use of
public budgeting and price-setting mechanisms, along with the much
higher public shares of health care financing in these countries, remain
the greatest contrasts between them and the United States.

Our review also revealed that in 2000–10 the four European countries
moved away from strategies that simply shifted costs to households
through across-the-board budget cuts, rationing of services, and
increases in user charges. We found a growing focus on the cost-benefit
ratio through the greater use of health technology assessment,
activity-based funding with centrally set prices, and value-based
approaches to paying for drugs. Although these policies may not drive
down costs, they are likely to produce more efficient use of health care
resources in the future.

Our review suggests that the four countries have had some success in
using a variety of public policy tools and that the United States may
wish to emulate their policies to reduce the growth rate in drug
spending. The policies include relatively simple levers such as
large-scale negotiations with pharmaceutical manufacturers and sellers
as well as budget caps. Our review also suggests that the United States
may wish to use more challenging tools, such as cost-effectiveness
analysis that sets prices for new technologies based on the
technologies' relative value and value-based user charges.

It seems unlikely, however, that the US system will move toward the
types of volume and price controls used in the countries examined here.
Thus, although the United States is also moving toward policies aimed at
changing the cost-benefit ratio and promoting economic efficiency, it is
likely that the large gap in health care spending between the four
countries in our study and the United States will remain.


Comment: Cost containment strategies in the four nations studied -
Canada, England, France, and Germany - depend largely on the government,
especially through public budgeting and price setting. The authors point
out that it is unlikely that the United States will move toward such
policies, thus the large gap between our health care spending and that
of these four countries will remain.

Also of note is the fact that other more recent cost containment
innovations in these four countries have shown only limited evidence of
success. It is still the government engagement that perpetuates their

Of great significance for the United States is the fact that these
nations have moved away from strategies that simply shifted costs to
households. Our emphasis on consumer-directed approaches that increase
cost sharing through high deductibles, coinsurance, more restrictive
provider networks, and our government efforts to reduce "entitlement"
spending, are all moving in the wrong direction. Costs can be controlled
without impairing access by erecting financial barriers.

The lesson is simple. We need beneficial public policies, designed to
serve patients, to displace private sector policies (enabled by
government complicity) that currently prioritize the interests of
business stakeholders over those of patients.

Monday, April 8, 2013

Fwd: qotd: Dependent verification programs. What a crime!

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Dependent verification programs. What a crime!
Date: Mon, 8 Apr 2013 05:12:51 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>

The National Bureau of Economic Research (NBER)
April 2013
Fraud in the Workplace? Evidence from a Dependent Verification Program
By Michael Geruso, Harvey S. Rosen

Many employers have implemented dependent verification (DV) programs,
which aim to reduce employee benefits costs by ensuring that ineligible
persons are not enrolled in their health plan as dependents. We evaluate
a DV program using a panel of health plan enrollment data from a large,
single-site employer. We find that dependents were 2.7 percentage points
less likely to be reenrolled in the year that DV was introduced,
indicating that this fraction of dependents was ineligibly enrolled
prior to the program's introduction. We show that these dependents were
actually ineligible, rather than merely discouraged from re-enrollment
by compliance costs.



Blue Cross Blue Shield of Hawaii
Hawaii Medical Service Association
Help Prevent Health Plan Enrollment Fraud

Health plan enrollment fraud occurs when a person or company
intentionally misrepresents facts to improperly receive health care
products and services. This includes adding a person who is not eligible
for health plan coverage as a dependent on a health plan.

It is a criminal offense under state and federal laws to fraudulently
enroll someone onto a health plan. Enrolling ineligible dependents can
lead to increased health care costs for employers. Penalties include
fines, immediate loss of health plan coverage, or imprisonment.



Dependent Eligibility Verification Project

The initial phase of the DEV project includes an amnesty period that
runs from now through June 30, 2013. If you have one or more dependents
on your health plan, you will receive a letter with further details on
the DEV project, including dependent eligibility criteria and an Amnesty
Disenrollment Document. During the amnesty period, we encourage you to
carefully review the definition on an eligible dependent and identify on
the Amnesty Disenrollment Document all ineligible dependents who should
be removed from your health plan.


Comment: There are many circumstances in which a de facto dependent is
not technically a dependent when it comes to enrollment in a health
plan. Enrolling such individuals is considered a criminal offense. Many
employers have instituted dependent verification programs in order to
ferret out this fraud. Is this really what we want to be doing?

It seems ironic that at a time in our history when theoretically we are
attempting to enroll as many individuals as possible in health insurance
programs, we are pushing a program designed to disenroll individuals
currently covered as dependents when they are not technically entitled
to such coverage.

We are expanding yet more administrative excesses which are resulting in
the opposite of our policy goals. That is, we are increasing the numbers
of uninsured through application of these dependent verification programs.

Wouldn't it be far simpler to have a system that automatically covers
everyone, regardless of dependency status or any other criteria? Instead
of advancing policies that make health care coverage a crime, shouldn't
we make health care a right for all?

Friday, April 5, 2013

Fwd: qotd: Consumer-directed enrollees do not shop prices

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Consumer-directed enrollees do not shop prices
Date: Fri, 5 Apr 2013 10:45:08 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>

Forum for Health Economics and Policy
Published online March 20, 2013
Price Shopping in Consumer-Directed Health Plans
By Neeraj Sood, Zachary Wagner, Peter Huckfeldt, Amelia M. Haviland


We use health insurance claims data from 63 large employers to estimate
the extent of price shopping for nine common outpatient services in
consumer-directed health plans (CDHPs) compared to traditional health
plans. The main measures of price shopping include (1) the total price
paid on the claim, (2) the share of claims from low- and high-cost
providers, and (3) the savings from price shopping relative to choosing
prices randomly. All analyses control for individual and zip code level
demographics and plan characteristics. We also estimate differences in
price shopping within CDHPs depending on expected health care costs and
whether the service was bought before or after reaching the deductible.
For eight out of nine services analyzed, prices paid by CDHP and
traditional plan enrollees did not differ significantly; CDHP enrollees
paid 2.3% less for office visits. Similarly, office visits was the only
service where CDHP enrollment resulted in a significantly larger share
of claims from low-cost providers and greater savings from price
shopping relative to traditional plans. There was also no evidence that,
within CDHP plans, consumers with lower expected medical expenses
exhibited more price shopping or that consumers exhibited more price
shopping before reaching the deductible.

The full article can be downloaded at this link (19 pages):

Comment: High-deductible consumer-directed health plans are designed to
make health care consumers better price shoppers, especially when they
are spending their own money below the deductible. Guess what. Health
care consumers do not shop prices to any measurable extent.

We should quite wasting our time looking for magical solutions to
controlling health care costs and move on with health care reform that
has been proven to work - a single payer national health program, an
improved Medicare for all.

Wednesday, April 3, 2013

Fwd: qotd: The Intermountain scandal that isn't

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: The Intermountain scandal that isn't
Date: Wed, 3 Apr 2013 13:16:05 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>

Fox 13 News, Salt Lake City
April 3, 2013
Intermountain Healthcare pays $25.5M to settle violations of federal law
By David Wells

Utah's largest health system self-disclosed violations of federal health
care laws and agreed to pay the United States $25.5 million to settle
its claims, according to a statement from the United States Department
of Justice.

"These issues were primarily technical in nature and involved things
such as lack of proper paperwork involving leases of physician offices
and service agreements," said a statement on Intermountain Healthcare's

The DOJ statement said Intermountain Healthcare admitted to violating
the Stark Statute by employment agreements under which the physicians
received bonuses that improperly took into account the value of some of
their patient referrals; and office leases and compensation arrangements
between Intermountain and referring physicians that violated other
requirements of the Stark Statute. These issues were disclosed to the
government by Intermountain Healthcare.

"People should expect that hospitals and doctors care more for their
patients than their bottom line profits," said Gerald Roy, Special Agent
in Charge for the Office of Inspector General of the U.S. Department of
Health and Human Services region including Utah. "So I applaud
Intermountain for recognizing their liability and coming forward to
self-disclose these violations. We will vigilantly protect
taxpayer-funded health programs against Stark violations through tight
coordination with our partners at the Department of Justice."

This link includes statements from Intermountain Healthcare and from the
United States Department of Justice:

The Settlement Agreement:

Comment: Most of us have grown weary of the scandalous behavior of our
corporate health care system, and so we are no longer surprised by the
by headlines notifying us of multimillion dollar penalties assessed
against these nefarious entities. In fact we say, "Good riddance."
However, in this instance involving Intermountain Healthcare, it is
almost refreshing to see that the story behind the headlines can renew
our faith in our health care system.

Intermountain Healthcare is a large, non-profit, highly ethical,
integrated health care system in Utah. It has an excellent reputation
for providing efficient, high quality care, and for being innovators in
improving the delivery of health care. That is why it was surprising to
see their name in the headlines reporting yet another scandal.

But a scandal it isn't. Intermountain Healthcare violated provisions of
the Stark statute designed to prevent referral arrangements that could
provide perverse incentives for personal profit in health care. The
Intermountain violations were technical, involving a flawed formula for
physician compensation, and involving improperly documented rental
arrangements for use of medical space.

Intermountain discovered these violations on their own. Instead of
trying to cover them up, they reported them to the U.S. Attorney for
Utah. Considering the total lack of criminal intent, the technical
nature of the violations, the lack of harm done, and the self-disclosure
of the errors, it can be argued that the $25.5 million penalty was

What does this have to do with single payer reform? Simply that there is
a world of difference between a health care system structured on a
business model with a primary mission to make money, and a health care
system structured on a service model designed to take care of patients.
Intermountain functions as the latter. It is a non-profit, integrated
health care system that would be an ideal component of a single payer
national health program.

Technical violations will always be with us, but they are understandable
errors when the goal is to take care of patients, but not when the goal
is to deliberately siphon off health care dollars for personal gain.

Tuesday, April 2, 2013

Fwd: qotd: Government insiders misappropriate funds to Medicare Advantage insurers

This body part will be downloaded on demand.
-------- Original Message --------
Subject: qotd: Government insiders misappropriate funds to Medicare
Advantage insurers
Date: Tue, 2 Apr 2013 09:58:11 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>

The Washington Post
April 1, 2013
U.S. to boost rather than cut payments to health insurers
By Sandhya Somashekhar

The Obama administration reversed itself Monday, scrapping plans to cut
by 2.2 percent the rates paid to health insurers that take part in the
Medicare Advantage program.

The insurance industry and more than 100 members of Congress had
objected to the cut in the per capita growth rate, which was proposed in
February. The insurers mounted a vigorous campaign, using television ads
and phone banks, to persuade lawmakers to oppose the reduction.

On Monday, the Centers for Medicare and Medicaid Services (CMS)
announced that it was changing its method of calculating reimbursement
rates. Instead of cutting payments for Medicare Advantage plans, it will
increase them by 3.3 percent.

"The policies announced today further the agency's goal of improving
payment accuracy in all our programs, while at the same time ensuring
program stability and preserving beneficiary choice," Jonathan Blum, the
CMS's acting principal deputy administrator, said in a statement.



Centers for Medicare and Medicaid Services (CMS)
April 1, 2013
CMS Ensures Greater Value for People in Medicare Drug and Health Plans

After careful consideration of public comments, key changes and updates
finalized in the Rate Announcement and final Call Letter include:

The final estimate of the combined effect of the Medicare Advantage
growth percentage and the fee-for-service growth percentage is 3.3
percent. These growth rates assume a zero percent change for the 2014
physician fee schedule (PFS) by taking into account the likely
Congressional override of the schedule physician payment reduction.



February 15, 2013
Subject: Advance Notice of Methodological Changes for Calendar Year (CY)
2014 for Medicare Advantage (MA) Capitation Rates, Part C and Part D
Payment Policies and 2014 Call Letter

Section A. MA Growth Percentage

The current estimate of the change in the national per capita MA growth
percentage for aged and disabled enrollees combined in CY 2014 is -2.3

We appreciate that plans are facing several legislatively mandated
changes affecting payment for 2014, and this may present challenges for
plans. We solicit comment on suggestions to address these challenges
within the parameters of current law.



April 1, 2013
Subject: Announcement of Calendar Year (CY) 2014 Medicare Advantage
Capitation Rates and Medicare Advantage and Part D Payment Policies and
Final Call Letter

Attachment I shows the final estimates of the increases in the National
Per Capita MA Growth Percentage for 2014 and the National Medicare
Fee-for-Service (FFS) Growth Percentage for 2014. These growth rates
will be used to calculate the 2014 capitation rates. As discussed in
Attachment I, the final estimate of the increase in the National Per
Capita MA Growth Percentage for combined aged and disabled beneficiaries
is 2.96 percent, and the final estimate of the increase in the FFS
Growth Percentage is 3.53 percent. Attachment II provides a set of
tables that summarizes many of the key Medicare assumptions used in the
calculation of the National Per Capita MA Growth Percentage.

The basis for the Growth Percentage for 2014 has been changed to
incorporate an assumption that Congress will act to prevent the
scheduled 25-percent reduction in Medicare physician payment rates from
occurring. The Office of the Actuary has been directed by the Secretary
to use this assumption, on the grounds that it is a more reasonable
expectation than the reduction required under the statutory "sustainable
growth rate" (SGR) formula. Although the Office of the Actuary agrees
that Congress is very likely to override the physician fee reduction,
the assumption conflicts with the Office's professional judgment that,
as in all past years, the determination should be based on current law,
not an assumed alternative.



America's Health Insurance Plans (AHIP)
April 1, 2013
AHIP Statement on Final 2014 Medicare Advantage Payment Rates

America's Health Insurance Plans (AHIP) President and CEO Karen Ignagni
released the following statement in response to the final Medicare
Advantage payment rates released by the Centers for Medicare & Medicaid
Services (CMS) today:

"By being responsive to the more than 160 members of Congress from both
parties who raised concerns about the impact of the proposed payment
rate on seniors, CMS has taken an important step to help stabilize
Medicare Advantage at a time when the program is facing significant
challenges. We are currently reviewing the final rate announcement and
will continue to work with policymakers in both parties to strengthen
this critically important part of Medicare that provides high-quality,
affordable coverage to more than 14 million seniors and people with



Kaiser Family Foundation
November 2011
Medicare Advantage Plan Star Ratings and Bonus Payments in 2012

In 2012, Medicare Advantage plans will begin to receive bonus payments
based on quality ratings. These payments were initially established in
the 2010 health reform law that provides for bonus payments to plans
that receive 4 or more stars and to unrated plans beginning in 2012. In
addition to the bonus payments established by the health reform law, CMS
will also be launching a 3-year demonstration to begin in 2012 that
increases the size of bonuses for these plans, and also provides bonuses
to plans rated as average (receiving 3 or 3.5 stars), using the same 1
to 5 star scale.



Payment Accuracy (Official U.S. government website)

The Department of Health and Human Services (HHS) reports an annual
Medicare Advantage (Part C) program payment error rate, which presents
the combined impact on payments from two kinds of error: errors in the
payment system and errors in risk scores used to adjust benefit payment
amounts to Medicare Advantage plans.

$96.4 billion Total Medicare Advantage payments
$13.6 billion Improper payments
14.1% Improper payment rate


Comment: The private Medicare Advantage plans, offered as options to
the traditional government-run Medicare program, were to have their
egregious overpayments reduced by provisions of the Affordable Care Act.
This year they were to have a 2.2 percent reduction in their rates, but
instead received a 3.3 percent increase. That is a rate 5.5 percent
higher than scheduled, which increases the payments to the Medicare
Advantage plans by over $5 billion! What happened?

It is easier to understand why when you realize that the program was
established as an effort to privatize Medicare. The previous effort -
private Medicare + Choice plans - didn't work since the insurers were
unable to provide profitable plans at a cost comparable to the
traditional Medicare program.

Recognizing that, Congress established the Medicare Advantage program,
authorizing payments averaging 14 percent over the costs of traditional
Medicare. This would allow the private plans to offer a more attractive
option with greater benefits and lower our-of-pocket costs. Once enough
people were enrolled in the private plans then they could start to make
the traditional Medicare program even less attractive through greater
cost sharing, through means testing that chases away the more affluent
beneficiaries, and through reducing payment rates causing a further
decline in the number of willing providers.

Originally, the private Medicare + Choice plans were successful in
enrolling healthier, lower cost patients. With time, many of those
patients required more care, and the insurers started dropping out of
markets in which they experienced losses. So the next phase - Medicare

With Medicare Advantage, risk adjustment was used to transfer funds from
insurers that cornered healthier patients to insurers that enrolled more
patients with greater needs. Soon it was evident that the insurers
became masters at enrolling patients who were not very ill but who could
be coded as having expensive problems. Although efforts have been made
to further refine the risk adjustments, our government's payment
accuracy website reveals that the insurers are still able to game the
system, such that 14 percent of payments remain improper - over $13 billion.

Another one of the methods used to improve payments - but not reduce
payments since the proposal was to be revenue neutral - was to retain
some of the funds for the Medicare Advantage plans and then use them to
reward plans with higher quality ratings, 4 or 5 star. Well, when they
were ready to start reducing the overpayments, as required by the
Affordable Care Act, the insurers protested that they couldn't afford
the reductions. So the administration revised the quality awards to
include 3 star plans, thus assuring that 80 percent of Medicare
Advantage plans would have their required reductions largely offset with
the quality awards. But this was not revenue neutral. No problem. The
administration declared these expanded awards to be a "demonstration,"
and thus drew funds from their demonstration project kitty (our tax
funds). That diversion of funds will continue through 2014.

So now we're down to this year, and, of course, the insurance industry
said that they would not be able to tolerate the scheduled reductions of
2.2 percent. They called out the forces. They even had more than 160
Representatives and Senators of both parties lobbying the administration
to reverse these cuts. Yesterday, it became evident that they were
successful - increasing payments 5.5 percent over the scheduled 2.2
percent cut - a $5 billion bonanza. How did they do it?

The sustainable growth rate (SGR) was a formula designed to slow the
growth of spending on physician care down to sustainable levels. In
response, physicians adjusted the frequency and intensity of their
services to make up for what they perceived to be a reduction in their
reimbursement rates. The formula would require a reduction in rates that
would especially impact primary care physicians. Congress has deferred
the reductions for fear of losing too many physicians from the program,
but that has resulted in a 25 percent deficit for which Congress needs
to enact a "doc fix." Here's where the shell game comes in.

In violation of the standards of the Office of the Actuary, CMS decided
that Congress inevitably would enact a doc fix, which then they could
say represents an increase in the cost of providing care to all Medicare
beneficiaries. Thus the phantom increase has been applied to the new
Medicare Advantage rates. Little does it matter that there was no
increase since Congress has continued to authorize the suspension of the
SGR reductions. It is specious for CMS to claim that payments went up
this year because of the not-yet-enacted doc fix when they have been up
the whole time. Also it seems not to matter that the doc fix which they
used in their calculations has not been fixed, and the money will have
to come from somewhere... but certainly not from the $5 billion bonus
they just gave the Medicare Advantage plans - money that never existed
but will have to be drawn from Medicare payroll taxes, from general
funds for Part B, and from increases in Part B Medicare premiums that
will be paid by Medicare beneficiaries in the traditional plan who are
not receiving any of the extra benefits that enrollees in the Medicare
Advantage plans are receiving. Unfair.

But it's worse than this. Not only is the administration bending over
backwards to take good care of the private Medicare Advantage insurers,
they are now engaged behind the scenes to further impair the traditional
Medicare program - a strategy to further push privatization.

The Ryan/Wyden and Frist/Breaux/Thomas premium support voucherization of
Medicare has proven to be too hot for the privatizers, considering the
backlash that they have experienced. So premium support is off the table
during the Obama administration's negotiations with Congress over the
next manufactured fiscal crisis. So what has replaced the vouchers?

It has been leaked, presumably deliberately, that Obama is proposing to
combine the Part A (hospital) and Part B (physician) deductibles into
one deductible for Parts A & B combined. The intent is twofold - to
reduce the amount that the federal government is paying for Medicare,
and to increase the sensitivity of Medicare beneficiaries to prices paid
for Medicare benefits - making them empowered health care shoppers. This
increase in out-of-pocket spending will especially impact the majority
who do not require hospitalization and thus have lower total costs. This
strategy will make those who have fewer health care needs wonder why
they are paying so much more than they thought they would once they were
on Medicare.

Bu that's not all. About 90 percent of Medicare beneficiaries are
protected from excessive cost sharing through Medigap plans or through
employer-sponsored retirement health benefit programs. The
consumer-directed camp has long wanted to bash the Medigap plans so
patients would be exposed more directly to the costs. Obama's team is
proposing just that. They want to prohibit the Medigap plans from
providing protection for the deductible - removing it, or at least
reducing it, as a Medigap benefit. Another option that they are
considering is to assess a 15 percent tax on Medigap premiums which
would have a similar net financial impact as prohibiting coverage of the

So what is a person to do? You can accept the traditional Medicare
program, but you will face higher deductibles, perhaps a Medigap tax, an
even higher Part B Medicare premium, and perhaps means-tested premiums
and benefits which will gradually shift down to middle-income
individuals. This will not be pleasing to the majority who have only
modest health care needs. The other option? You can enroll in a Medicare
Advantage plan with greatly reduced cost sharing plus expanded benefits,
and perhaps not even a plan premium, all thanks to Congress and the
administration who are using our tax funds to provide very generous
subsidies to the private Medicare Advantage plans.

A crummy traditional Medicare program with high out-of-pocket costs, or
a slick private plan with most costs prepaid, by the government no less?
It is presumed that the majority will rush over to the private plans,
especially when they see what extra bennies they get.

What then? Congress can then continue to ratchet down government
spending on the traditional program, causing an exodus of willing
providers - stripping the program down to worse-than-Medicaid. After the
private plans have become the standard and Medicare is in the tank, then
what? Premium support vouchers! The government gradually pares down the
support for the premium you select, so you are now really an empowered
shopper - empowered to buy whatever meager benefits you can afford with
your measly premium subsidy.

Excuse the length of today's message, but I hope you understand why.
It's not that I'm a soothsayer... but maybe I am.