Friday, February 28, 2014

Fwd: qotd: Fallacy of global cost containment through "bundled payments"

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Fallacy of global cost containment through "bundled
Date: Fri, 28 Feb 2014 13:01:46 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

National Institute for Health Care Reform
February 2014
Inpatient Hospital Prices Drive Spending Variation for Episodes of Care
for Privately Insured Patients
By Chapin White, James D. Reschovsky, Amelia M. Bond

When including all care related to a hospitalization — for example, a
knee or hip replacement — the price of the initial inpatient stay
explains almost all of the wide variation from hospital to hospital in
spending on so-called episodes of care, according to a study by
researchers at the former Center for Studying Health System Change (HSC)
based on 2011 claims data for 590,000 active and retired nonelderly
autoworkers and dependents. For example, average spending for
uncomplicated inpatient knee and hip replacements ranged across 36
hospitals from less than $17,500 to $37,000 for an episode of care that
included all services during the inpatient stay and all follow-up care
within 30 days of discharge. The pattern of spending variation for knee
and hip replacements held true for other conditions, with hospital
inpatient price differences accounting for the vast majority of spending
variation rather than differences in spending on physician and other
non-hospital services during and after discharge or spending on
readmissions. Moreover, hospitals' case-mix-adjusted relative spending
per episode for different service lines — for example, orthopedics and
cardiology — tend to be highly correlated with each other. Understanding
why spending for episodes of care varies so much among hospitals can
help private purchasers accurately target ways to control spending. This
study's findings — inpatient prices drive the bulk of episode-spending
variation and hospitals with high spending for one service line tend to
have high spending for other service lines — indicate that private
purchasers can focus on hospitals' overall inpatient price levels rather
than pursue bundled payments for episodes of care or
service-line-specific purchasing strategies.

To Bundle or Not to Bundle...

In Medicare, there is a compelling case for bundled payments — wide
variations in post-acute care use are the main factor behind differences
between high- and low-spending geographic regions and between high- and
low-spending hospitals. Moreover, Medicare patients often have multiple
chronic conditions that are complex to manage. But the results of this
analysis show that the case for bundled hospital payments for the
privately insured is much weaker — post-acute care and other ancillary
services account for a relatively small share of overall spending on
hospitalization episodes, and they account for almost none of the
variation in episode spending from one hospital to another.

Implications for Private Purchasers

It remains to be seen whether, going forward, the tools available to
private purchasers — tiered benefits, reference pricing, and so on — can
counteract hospitals' significant market power. Other more dramatic
interventions, such as state-based hospital rate setting, or offering a
"public option" that uses administered pricing through the state health
insurance exchanges are options, albeit unlikely in most states to gain


Comment by Don McCanne, MD

Rather than relying on proven methods of controlling health care costs
through government administered pricing, the Affordable Care Act (ACA)
relies on private sector integration of the health care delivery system
through entities such as accountable care organizations. One of the
mechanisms promoted by ACA is bundled payments - paying a single pre-set
amount for all services associated with a single hospital episode of
care such as a joint replacement. Will bundled payments adequately
control our health care spending?

This study shows that, for private patients, the upper end of the wide
variation in spending between hospitals is driven by high prices which
permeate all of the hospitals' service lines. For those services
amenable to bundling, such as joint replacement, most of the services
provided are related to the specific episode and thus do not vary much
between hospitals. Post-acute care and other ancillary services which
might otherwise be pared back with bundling are such a small part of the
overall services that bundling cannot save money by reducing the volume
of services connected to the episode.

Since it is the high prices of the standard services that are a problem,
attacking only those services that are bundled will not save much since
high prices throughout the rest of the hospital are left undisturbed or
even increased some to offset any price concessions for the bundled

This article mentions that there is a case for bundled payments under
Medicare since these more complex patients have wide variations in acute
and post-acute care, providing more flexibility in controlling the
volume of services. Prices are already controlled through the Medicare
prospective payment system, which, to a limited degree, represents a
form of bundling (think DRGs).

Other nations, even if using private insurers, utilize rigid government
price setting through one form or another. The authors of this report
suggest that state-based hospital rate setting or government
administered pricing would not likely gain traction. Yet "bundling" all
hospital spending through global hospital budgets (like fire or police
department budgets), as part of a single payer system, is precisely what
we need. Let's give it traction.

Wednesday, February 26, 2014

Fwd: qotd: Is the medical home a business model or a patient-service model?

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-------- Original Message --------
Subject: qotd: Is the medical home a business model or a
patient-service model?
Date: Wed, 26 Feb 2014 11:21:12 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

February 26, 2014
Association Between Participation in a Multipayer Medical Home
Intervention and Changes in Quality, Utilization, and Costs of Care
By Mark W. Friedberg, MD, MPP; Eric C. Schneider, MD, MSc; Meredith B.
Rosenthal, PhD; Kevin G. Volpp, MD, PhD; Rachel M. Werner, MD, PhD


Importance: Interventions to transform primary care practices into
medical homes are increasingly common, but their effectiveness in
improving quality and containing costs is unclear.

Objective: To measure associations between participation in the
Southeastern Pennsylvania Chronic Care Initiative, one of the earliest
and largest multipayer medical home pilots conducted in the United
States, and changes in the quality, utilization, and costs of care.

Design, Setting, and Participants: Thirty-two volunteering primary care
practices participated in the pilot (conducted from June 1, 2008, to May
31, 2011). We surveyed pilot practices to compare their structural
capabilities at the pilot's beginning and end. Using claims data from 4
participating health plans, we compared changes (in each year, relative
to before the intervention) in the quality, utilization, and costs of
care delivered to 64 243 patients who were attributed to pilot practices
and 55 959 patients attributed to 29 comparison practices (selected for
size, specialty, and location similar to pilot practices) using a
difference-in-differences design.

Exposures: Pilot practices received disease registries and technical
assistance and could earn bonus payments for achieving patient-centered
medical home recognition by the National Committee for Quality Assurance

Main Outcomes and Measures: Practice structural capabilities;
performance on 11 quality measures for diabetes, asthma, and preventive
care; utilization of hospital, emergency department, and ambulatory
care; standardized costs of care.

Results: Pilot practices successfully achieved NCQA recognition and
adopted new structural capabilities such as registries to identify
patients overdue for chronic disease services. Pilot participation was
associated with statistically significantly greater performance
improvement, relative to comparison practices, on 1 of 11 investigated
quality measures: nephropathy screening in diabetes (adjusted
performance of 82.7% vs 71.7% by year 3, P < .001). Pilot participation
was not associated with statistically significant changes in utilization
or costs of care. Pilot practices accumulated average bonuses of $92 000
per primary care physician during the 3-year intervention.

Conclusions and Relevance: A multipayer medical home pilot, in which
participating practices adopted new structural capabilities and received
NCQA certification, was associated with limited improvements in quality
and was not associated with reductions in utilization of hospital,
emergency department, or ambulatory care services or total costs over 3
years. These findings suggest that medical home interventions may need
further refinement.


Patient-Centered Primary Care Collaborative
January 2014
The Medical Home's Impact on Cost & Quality
An Annual Update of the Evidence, 2012-2013
By Marci Nielsen, PhD, MPH, J. Nwando Olayiwola, MD, MPH Paul Grundy,
MD, MPH, Kevin Grumbach, MD

A summary of key points from this year's report include:

1. PCMH (Patient-Centered Medical Home) studies continue to demonstrate
impressive improvements across a broad range of categories including:
cost, utilization, population health, prevention, access to care, and
patient satisfaction, while a gap still exists in reporting impact on
clinician satisfaction.

2. The PCMH continues to play a role in strengthening the larger health
care system, specifically Accountable Care Organizations and the
emerging medical neighborhood model.

3. Significant payment reforms are incorporating the PCMH and its key

Although the evidence is early from an academic perspective, and this
report does not represent a formal peer-reviewed meta-analysis of the
literature, the expanding body of research provided here suggests that
when fully transformed primary care practices have embraced the PCMH
model of care, we find a number of consistent, positive outcomes.


Comment by Don McCanne, M.D.

Imagine doing away with all primary care professionals. Patients would
select a specialist depending on their specific presenting symptoms: an
otolaryngologist for a cold, a surgeon for a minor laceration, a
neurologist for a headache, or a gastroenterologist for an acute
diarrhea. Of course, that's ridiculous. Primary care is not a concept
that we have to sell to the public. Virtually everyone accepts it as a

So what is the Patient-Centered Medical Home (PCMH) and how does it
differ from primary care? This RAND study published in the current issue
of JAMA provides enough information that we can say that, for practical
purposes, there is no difference.

The primary care practices studied by RAND received a stamp of approval
from the National Committee for Quality Assurance (NCQA) and received
bonuses for accomplishing that goal. Other than that, when compared to
similar practices, they proved to be slightly better on only one of
eleven quality measures and showed no reductions in utilization of
hospital, emergency department, or ambulatory care services or in total
costs over the 3 years of the study.

Various commentaries on this study have suggested that the reason that
the study group did not do better was that the PCMH is more appropriate
for people with complex, chronic problems. Only then would we expect to
see improved outcomes. Really? If this effort to reinforce our primary
care infrastructure is to be designed to take care of the sickest
patents only, then where do the relatively healthy go? Directly to the

It has also been speculated that the practices volunteering for the
study were already high-performing practices and thus did not have much
room for further improvement. If that were the case, then why did the
control practices do just as well?

Rather than criticizing the disappointing performance of the
NCQA-recognized primary care practices, we should acknowledge that the
comparison practices were providing the same efficiency and quality of
care that was being provided by these selected practices. Although some
might quibble with the terminology, our primary care practices are
already functioning as patient-centered medical homes!

It is true that we need to reinforce primary care. The latest report
from the Patient-Centered Primary Care Collaborative suggests that we
can strengthen primary care, though the improvements that they report
have not been subjected to "a formal peer-reviewed meta-analysis of the
literature." But more important, the reinforcement that we urgently need
is to expand the primary care infrastructure, both geographically to
provide better access, and through the greater use of non-physician
primary care professionals, especially nurse practitioners.

Another interesting observation about this RAND study is that it was
conducted using our multi-payer system - a system well documented to be
inefficient, and one that is driven more by business interests rather
than patient-service interests. Although we need more than just a single
payer system to improve our primary care infrastructure, it would be a
gigantic and crucially important first step in establishing a single
public system that would enable further improvements in primary care,
where patients come first.

Tuesday, February 25, 2014

Fwd: qotd: New CMS quality data on ACOs

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: New CMS quality data on ACOs
Date: Tue, 25 Feb 2014 10:19:22 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

Kaiser Health News
February 21, 2014
Medicare Data Show Wide Differences In ACOs' Patient Care
By Jordan Rau

Networks of doctors and hospitals set up under the Affordable Care Act
to improve patients' health and save money for Medicare are having
varying rates of success in addressing their patients' diabetes and
heart disease, according to government data released Friday.

About 4 million Medicare beneficiaries are being cared for by one of the
more than 250 ACOs that Medicare has approved. Each ACO is responsible
for taking care of a group of at least 5,000 Medicare beneficiaries;
although patients can go to any doctor they choose. Medicare counts as
part of an ACO the patients who mostly go to doctors and facilities
within that coalition. Patients generally do not choose an ACO.

The release is the first public numbers from Medicare of how patient
care is being affected by specific networks. These accountable care
organizations, or ACOs, are among the most prominent of Medicare's
experiments in changing the ways physicians and health care facilities
work together and are paid.

To make sure the ACOs are not stinting on care in their quests to earn
bonuses, Medicare is tracking 33 different quality measures.

On Friday, the Centers for Medicare & Medicaid Services (CMS) released
data on five of these measures for 141 ACOs during 2012. Four evaluate
how well the ACOs helped patients with diabetes. The fifth examined how
many patients with arteries packed with plaque received appropriate
medicines to relax their blood vessels. Medicare said it did not release
more measures because it did not think some of them could be easily
understood by consumers or would be useful. Other measures, such as ones
about cholesterol levels, were not released because the clinical
standards have changed.


Comment by Don McCanne, M.D.

Single payer reform continues to be dismissed in favor of
insurer-friendly reform - reform led by accountable care organizations
(ACOs) initiated by the Affordable Care Act (ACA). This new report
should make it clear that we are following the wrong path.

Of tens or hundreds of thousands of potential measurements to determine
quality, only thirty-three were selected. Of those thirty-three, only
five are being reported because the other twenty-seven were not useful,
or could not be understood, or were measuring out-of-date standards.

It is an outrage that our government continues to take us down this
expensive ACA pathway that wastes our resources while impairing access
for far too many people with health care needs. They keep promising us
that ACOs will improve efficiency and quality, when they have already
proven otherwise. Five lousy measures! Is that all that we have to show
for it!?

We need to dismiss our politicians and have them take with them their
ACA with its ACOs so that we can bring in leaders who will establish for
us a truly American program - an improved Medicare single payer program
that covers everyone.

Five measurements, and four of them are for only one disease! Get outta

Friday, February 21, 2014

Fwd: qotd: Private exchanges are sending us in dangerous directions

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Private exchanges are sending us in dangerous directions
Date: Fri, 21 Feb 2014 12:47:51 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

February 19, 2014
Employers Turn to Private Health Exchanges to Cut Costs
By Caroline Chen

One-third of U.S. employers plan to move their workers' health-care
coverage to a private exchange in the next few years, a survey found,
following the lead of companies like Walgreen Co. seeking to reduce costs.

While 95 percent of employers said they would continue to offer health
care in the next three to five years, 33 percent may use a private
exchange to provide the benefit up from 5 percent currently, according
to a survey released today by a unit of Aon Plc.

Traditionally, most large employers are self-insured, meaning they take
on the financial risk of their employees' health costs. Under a private
exchange, workers are given a subsidy to pick from a limited number of
health plans and the insurer takes on the risk.

"Employers are telling us they are losing confidence in their
traditional approaches, like vendor changes or employee cost-sharing,"
which only deliver "incremental" improvement, Jim Winkler, Aon's chief
innovation officer for health benefits, said in a telephone interview.
"Employers are saying, 'I need to do something different.'"

About 38 percent of the companies surveyed by Aon said they would offer
no benefits to part-time workers within the next three to five years.

Retiree benefits are also being reworked. International Business
Machines Corp. (IBM) said last year that it would send 110,000 retirees
to Towers Watson's Extend Health, the largest private Medicare exchange.

The Aon survey found that two-thirds of employers who wanted to make
changes in retiree benefits were looking to follow IBM's lead.

Only 25 percent of large employers offer subsidized retiree health
benefits, Aon said, down from about 50 percent in 2004.


February 19, 2014
Aon Hewitt Research: Employers Will Continue Sponsoring Health Benefits
for Employees and Retirees, but Deliver Those Benefits in New Ways

According to Aon Hewitt's soon-to-be-released Health Care Survey of more
than 1,230 employers covering more than 10 million employees, 95 percent
of employers say they plan to continue providing health care benefits to
active employees in the next three-to-five years. However, a growing
number plan to move away from their traditional "managed trend"
approach, which includes aggressively managing costs through vendor
management and employee cost sharing.

Thirty-three percent said offering group-based health benefits to active
employees through a private health exchange will be their preferred
approach in the next three-to-five years.

Despite having the ability to direct part-time employees to purchase
health coverage through the public marketplaces, Aon Hewitt's survey
shows very few employers plan to do so in the near future. Almost
two-thirds plan to continue to offer the same level of benefits to
part-time employees as they do to full-time employees, with or without
an employer subsidy. Just 38 percent plan to offer no benefits to
part-time workers in the next three-to-five years.

According to Aon Hewitt's annual Retiree Health Care survey of 424
employers covering 3.8 million retirees, 20 percent said they are
favoring moving all or a portion of their pre-65 retiree population to
the individual market/state exchanges to purchase coverage in the next
three-to-five years. Today, just 3 percent of employers do so.

According to Aon Hewitt, the number of employers offering subsidized
retiree health benefits has slowly declined over the past decade, with
just 25 percent of large employers doing so today, compared with
approximately 50 percent in 2004.

Of those companies that offer health benefits to post-65 retirees, a
growing number of organizations now provide or are seriously considering
providing health benefits coverage through the individual Medicare plan
market. Aon Hewitt's annual Retiree Health Care Survey found that 30
percent of companies have already sourced benefits through the
individual market―most through a multi-carrier private health exchange.
Of those companies contemplating future changes to their post-65 retiree
strategies, two-thirds are considering this approach.

"A growing number of employers are leveraging multi-carrier private
exchanges for Medicare beneficiaries because they see the value in both
the competitive mix of plans offered and the Medicare-specific
navigation and advocacy offered by these private exchanges," said John
Grosso, leader of Aon Hewitt's Retiree Health Care Task Force.


Towers Watson
OneExcahnge (previously Extend Health)

OneExchange has helped more than 300,000 retirees find the perfect
Medicare plan for their needs and budget. We are the trusted leader in
private Medicare exchanges.


February 20, 2014
Private exchange sees surge in health care enrollment
By Kelly Kennedy

The number of customers on the nation's largest private health insurance
exchange increased by 50% in the final three months of 2013, a direct
result of demand created by the Affordable Care Act, the company's CEO
said Thursday.

Gary Lauer, CEO of eHealth Insurance, said individual memberships rose
50% in the fourth quarter of 2013 compared with the same period in 2012,
from 113,600 applications in the last three months of 2012 to 169,800 in

The site operates much like the federal and state exchanges, and now
that people have a better understanding of what "exchange" means,
they're drawn to the private sites, as well. In fact, many employers
offer private exchange coverage, so employees may pick a plan, and many
insurers are creating their own private "exchange" sites, so they can
offer more products to consumers.

Those shopping on private exchanges might include business owners who
make more than 400% of the federal poverty level, but who couldn't get
insurance before; retirees who are not eligible for Medicare; or people
who simply disagree with the Affordable Care Act and choose to find
insurance outside the federal and state exchanges — even if those plans
are also through private insurers.

Premium rates, Mast said, dropped 25% when the law went into effect, as
more people chose the less expensive bronze-level plans.


Comment by Don McCanne, M.D.

The activity around the implementation of the Affordable Care Act and
the initiation of federal and state insurance exchanges has seemed to
stimulate much interest in private insurance exchanges, in all of their
various forms. While some may praise the private sector for coming to
the fore, we should take a closer look at what this means for patients.

Perhaps the greatest concern is the fact that this Aon survey shows that
about 33 percent of employers will be eliminating their own health
benefit programs within the next three to five years and start sending
their employees to private exchanges to shop for their plans. This gives
their employees greater choices in health care coverage, so why should
we be concerned?

By providing their employees with what amounts to a voucher, employers
are able to control their future health benefit costs by limiting the
rate at which the value of the voucher increases. As health care costs
continue to increase at rates greater than inflation, the employees will
have to bear the additional costs, either through higher premiums or
through further cost sharing and limitations in benefits offered by the

This extends the national trend of converting employee benefit programs
from defined benefit to defined contribution programs in which both risk
and higher costs are shifted from employers to employees. The nation's
workforce is being left behind while the productivity gains are now all
going to the top.

eHealth is the largest private insurance exchange, and many are now
turning to it to purchase their plans now required by the individual
mandate, but there is an important difference between the public and
private exchanges. Most people purchasing plans in the federal and state
exchanges are purchasing silver plans to qualify for the government
subsidies - subsidies which are not provided for bronze plans. But what
are people purchasing in the private exchanges?

Silver plans have an actuarial value of 70 percent, leaving 30 percent
of costs to be paid by the patient (though adjusted down for credits and
out-of-pocket caps, but up for out-of-network care). Bronze plans have
an actuarial value of only 60 percent, but these are the plans selected
by those shopping the eHealth market simply because they are the
cheapest (i.e., they have the lowest premiums). So the concern about the
surge in eHealth sales is that far too many individuals will be
underinsured - having a plan that will leave them with excessive medical
debt should they need significant amounts of health care.

Another form of private exchanges is represented by Towers Watson's
OneExchange - the largest private Medicare exchange - which has found a
great market created by employers' termination of employee retirement
health benefit programs. Employers can now send their over-65 retirees
to OneExchange where they can select from a variety of Medigap, Medicare
Advantage and Part D Medicare drug plans. If you go to their website
(link above) you will find that most Medigap plans charge a significant
premium whereas most of the Medicare Advantage plans have no premium at
all. Just as eHaelth shoppers buy the cheapest plans, no doubt the
Medicare shoppers on the private Medicare exchanges will buy the
cheapest plans as well - forgoing traditional Medicare and buying the
private Medicare Advantage plans instead. Privatization of Medicare
marches on.

So these various private exchanges are shifting us to defined
contributions, to lower actuarial value plans with greater exposure to
health costs, to privatization of Medicare, and to compounding the great
divide between the few super-wealthy and the rest of us. This is what we
want out of the private market!?

When you think about it, all of this is because we continue to insist
that we have a health care financing system in which each individual is
shoved into a slot with a given insurance program - a system that has
proven to be so expensive and complex that the sources of the funds to
pay for health care are looking for ways out. They are taking what
deceptively appear to be the cheapest exits when, in reality, total
costs just keep going up.

How about getting rid of the concept of a separate plan for each
individual. It would be less wasteful, far less complex, and would
provide us with much greater value if we had just one comprehensive plan
for everyone - an improved Medicare for all. And it would actually work.

Wednesday, February 19, 2014

Fwd: qotd: Bipartisan support of Medicare Advantage overpayments

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Bipartisan support of Medicare Advantage overpayments
Date: Wed, 19 Feb 2014 12:56:59 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

United States Senate
February 14, 2014
To: Ms. Marilyn Tavenner, Administrator, CMS
From: 40 Senators - 21 Republicans and 19 Democrats


We write to raise serious concerns about the Medicare Advantage (MA)
2015 rate notice and the impact further cuts may have on the millions of
individuals enrolled in the program. We are strongly committed to
preserving the high quality health plan choices and benefits that our
constituents receive through the MA program. Given the impact that
payment policies could have on our constituents, we ask that you
prioritize beneficiaries' experience and minimize disruption in
maintaining payment levels for 2015.

MA has been a great success and should remain a competitive choice for
our constituents. Unfortunately, continued regulatory changes that
affect the program's funding, year after year, create disruption and
confusion among beneficiaries who are looking for consistency and

While we are very supportive of your decision to assume a "doc fix" in
the 2014 MA rate calculation and urge you to continue it this year, the
MA program still experienced a real payment cut in 2014, not simply
reductions in rates of projected growth.

We urge you to maintain payment levels that will allow MA beneficiaries
to be protected from disruptive changes in 2015.

(Signatures of 40 Senators - click link to see names)

Comment: AHIP, the health insurance lobby organization, has been
conducting an intensive campaign to prevent the reductions in
overpayments to the private Medicare Advantage plans - reductions
required by the Affordable Care Act. A hint at how successful their
campaign has been can be inferred from the fact that this letter from 40
senators, calling for perpetuation of the overpayments, but using AHIP
rhetoric, was downloaded from the AHIP website.

If you read the entire letter you will see that it is filled with AHIP
marketing phraseology touting the Medicare Advantage plans - distorting
the benefits of these private plans. Democrats can't blame Republicans
for this one. Democratic politicians are very much a part of this

Last year the scheduled reductions were countered by increasing quality
rewards to MA plans that had not earned them. This year, the reductions
were partially countered by an accounting gimmick assuming a "doc fix"
to scheduled reductions in Medicare payments, even though no such fix
has been enacted. AHIP wants these "doc fix" increases to continue.

In a press release, AHIP President and CEO Karen Ignagni said, "CMS
should protect seniors in the program by maintaining current payment
levels next year," even though there is no basis for them. Private
insurers have promised lower costs, they have claimed lower costs, yet
their costs are higher than for comparable patients in the traditional

Why should we care? The most obvious reason is that it is our tax funds
that are being given to these private health plans, paying them more
than it costs us to provide care in the traditional Medicare program. A
much more important reason is that enrollment in these plans continues
to expand, opening the door to converting Medicare into a "premium
support" program (vouchers) for a market of private plans. Traditional
Medicare will then be allowed to wither as an underfunded welfare
program, and perhaps eventually be abolished. Then the value of the
premium support vouchers will be allowed to diminish, shifting more
health care costs to the beneficiaries.

If these 40 senators really cared about their Medicare beneficiaries,
instead of asking CMS to overpay the private insurers, they would pass
legislation to increase coverage for those in the traditional Medicare
program in order to protect them from excessive out-of-pocket costs that
currently require medigap or employee retiree health benefit coverage.
Why should those in the private plans receive greater benefits when
we're all paying for them?

For single payer supporters who like to use the "Improved Medicare for
All" designation, it is imperative that the traditional Medicare program
be protected so that the public can understand that it is nominally a
framework on which single payer improvements can be built.

For the time being, instead of Congress insisting on paying more to the
private MA plans, we should demand that they move those overpayments to
the traditional Medicare program where they'll be put to better use in
reducing financial hardship, rather than giving them to the private
insurers to squander on gym memberships or whatever else might be used
to market their plans.

Monday, February 17, 2014

Fwd: qotd: Why are physicians becoming hospital employees?

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Why are physicians becoming hospital employees?
Date: Mon, 17 Feb 2014 09:25:36 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

The New York Times
February 13, 2014
Apprehensive, Many Doctors Shift to Jobs With Salaries
By Elisabeth Rosenthal

American physicians, worried about changes in the health care market,
are streaming into salaried jobs with hospitals.

Last year, 64 percent of job offers filled through Merritt Hawkins, one
of the nation's leading physician placement firms, involved hospital
employment, compared with only 11 percent in 2004.

Today, about 60 percent of family doctors and pediatricians, 50 percent
of surgeons and 25 percent of surgical subspecialists — such as
ophthalmologists and ear, nose and throat surgeons — are employees
rather than independent, according to the American Medical Association.

Many of the new salaried arrangements have evolved from hospitals
looking for new revenues.

Health economists are nearly unanimous that the United States should
move away from fee-for-service payments to doctors, the traditional
system where private physicians are paid for each procedure and test,
because it drives up the nation's $2.7 trillion health care bill by
rewarding overuse. But experts caution that the change from private
practice to salaried jobs may not yield better or cheaper care for patients.

"In many places, the trend will almost certainly lead to more expensive
care in the short run," said Robert Mechanic, an economist who studies
health care at Brandeis University's Heller School for Social Policy and

Dr. Joel Jacowitz, a cardiologist in New Jersey, and his 20 or so
partners decided to sell their private practice to a hospital.

Dr. Jacowitz said that the economics drove the choice and that the only
other option would have been to bring in more revenue by practicing bad
medicine — ordering more heart tests on patients who did not need them
or charging exorbitant rates to people with private insurance.

"Some people are operators and give the rest of us a bad name," he said,
adding that he had changed his opinion about America's fee-for-service
health care system. "I'm fed up — I want a single-payer system."

Comment: Follow the money. Hospitals consolidate to increase market
power, moving more patients into higher priced hospital outpatient
services. Doctors have joined hospitals because "economics drove the
choice." Current national policies encourage physicians and hospitals to
organize in order to provide "accountability," but this oligopolistic
power grab results in "accountability" that only their chief financial
officers would admire, certainly not the people who pay the medical bills.

Under a well designed single payer system, excess spending would
diminish by improving pricing and by reducing incentives to use
worthless or harmful health care services. Many physicians have grown
weary of having to attend to the business side of their practices when
what they really want is simply to take care of their patients.

More and more physicians will be echoing the words of Dr. Jacowitz, "I'm
fed up — I want a single-payer system." When the patients start
repeating those words, the politicians will have to follow.

Thursday, February 13, 2014

Fwd: qotd: Private insurers go where the money is

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-------- Original Message --------
Subject: qotd: Private insurers go where the money is
Date: Thu, 13 Feb 2014 12:03:10 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

The Wall Street Journal
February 12, 2014
For Many, Few Health-Plan Choices, High Premiums on Online Exchanges
By Timothy W. Martin and Christopher Weaver

Hundreds of thousands of Americans in poorer counties have few choices
of health insurers and face high premiums through the online exchanges
created by the health-care law, according to an analysis by The Wall
Street Journal of offerings in 36 states.

Consumers in 515 counties, spread across 15 states, have only one
insurer selling coverage through the online marketplaces, the Journal
found. In more than 80% of those counties, the sole insurer is a local
Blue Cross & Blue Shield plan. Residents of wealthier, more populated
counties in the U.S. receive lower-priced choices than those living in
counties with a single insurer.

The price differences reflect the strategy of insurers to pick markets
where they believe they can turn a profit—and avoid areas of high
unemployment and a concentration of unhealthy residents they deem more

Aetna Inc. and UnitedHealth Group Inc., for instance, have limited their
participation in the new health-insurance marketplaces, where consumers
shop for coverage, to a much smaller map than their traditional
business. They offer coverage in more counties outside of the
marketplaces, where plans are sold directly to consumers and federal
subsidies aren't available.

Aetna targeted areas with stable levels of employment and income to
attract desirable customers to its marketplace offerings, Chief
Executive Mark Bertolini said last fall. "We were very careful to pick
the markets" where the insurer could succeed, he said.

Reversing the trend presents a challenge because low-population areas
are unlikely to draw more insurers, said Glenn Melnick, a health-care
economist at RAND Corp: "I don't think the health law can overcome those

Comment: We've always know that insurers market their plans in areas
where there is the greatest potential for business success. As USC
Health Finance Professor Glen Melnick explains, the Affordable Care Act
cannot overcome those economics.

Clearly we have the wrong model for reform. Private insurers respond to
business opportunities. Public insurance, such as a single payer
national health program, simply enrolls everyone; there are no market
decisions to be made.

So is it going to continue to be about private insurance markets, or
will it be about patients - all patients? An improved Medicare for all
would be about the latter.

Wednesday, February 12, 2014

Fwd: qotd: Physician outcry on EHR functionality and costs

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-------- Original Message --------
Subject: qotd: Physician outcry on EHR functionality and costs
Date: Wed, 12 Feb 2014 13:51:42 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

Medical Economics
February 10, 2014
Physician outcry on EHR functionality, cost will shake the health
information technology sector
By Daniel R. Verdon

Despite the government's bribe of nearly $27 billion to digitize patient
records, nearly 70% of physicians say electronic health record (EHR)
systems have not been worth it. It's a sobering statistic backed by
newly released data from marketing and research firm MPI Group and
Medical Economics that suggest nearly two-thirds of doctors would not
purchase their current EHR system again because of poor functionality
and high costs.

* Nearly 45% of physicians from the national survey report spending
more than $100,000 on an EHR.

* Nearly 79% of respondents in practices with more than 10 physicians
said their EHR investment was not worth the effort, resources and cost.

* 73% of the largest practices would not purchase their current EHR
system. The data show that 66% of internal medicine specialists would
not purchase their current system. About 60% of respondents in family
medicine would also make another EHR choice.

* 67% of physicians dislike the functionality of their EHR systems.

* 45% of respondents say patient care is worse since implementing an EHR.

* 65% of respondents say their EHR systems result in financial losses
for the practice.

* About 69% of respondents said that coordination of care with
hospitals has not improved.

The national survey underscores the major disconnect between the current
state of EHR software and the needs of physicians.

Comment: Congress keeps coming up with schemes to try to control health
care costs. Establishing financial incentives for electronic health
records (EHRs) appears to be just one more example where Congress has
again fallen short, based on this report of physician outcry over EHR
functionality and costs.

It's too bad. Members of Congress have before them a model that has been
proven to be effective in controlling costs - a single payer national
health program or "Improved Medicare for All." If we had such a system
in place then other improvements such as a health information technology
system (HIT) could be developed in a coordinated manner that would
better serve patients and their physicians.

The Office of the National Coordinator for Health Information Technology
was established under President George W. Bush, but existed primarily to
only encourage the private sector to work together to coordinate their
systems. That is asking a lot of competitors that each want to have the
dominant system in the market while making sure that competitors'
systems would not be compatible, so they could have the whole thing. The
profit incentives in the private, fragmented EHR marketplace are
considerably different from the patient care incentives that led to the
successful VistA EHRs for the VA Health system - a concept developed by
the National Center for Health Services Research and Development of the
U.S. Public Health Service (now AHRQ).

Some may cite the boondoggle with the startup of the ACA insurance
exchanges as an example of the incompetence of the government in such
matters, but it was the government's reliance on the private sector that
resulted in the problems that we saw and are still seeing. Congress
should enact a single payer system now so that we'll have something to
work with for the betterment of efficient patient care.

Tuesday, February 11, 2014

Fwd: qotd: Lancet/Oslo Commission: The political origins of health inequity

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Lancet/Oslo Commission: The political origins of health
Date: Tue, 11 Feb 2014 07:12:33 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

The Lancet
February 11, 2014
The Lancet—University of Oslo Commission on Global Governance for Health
The political origins of health inequity: prospects for change
By Ole Petter Ottersen and 23 other co-authors

Executive summary

Despite large gains in health over the past few decades, the
distribution of health risks worldwide remains extremely and
unacceptably uneven. Although the health sector has a crucial role in
addressing health inequalities, its efforts often come into conflict
with powerful global actors in pursuit of other interests such as
protection of national security, safeguarding of sovereignty, or
economic goals. This report examines power disparities and dynamics
across a range of policy areas that affect health and that require
improved global governance: economic crises and austerity measures,
knowledge and intellectual property, foreign investment treaties, food
security, transnational corporate activity, irregular migration, and
violent conflict.

Global health inequities

* About 842 million people worldwide are chronically hungry, one in six
children in developing countries is underweight, and more than a third
of deaths among children younger than 5 years are attributable to
malnutrition. Unequal access to sufficient, safe, and nutritious food
persists even though global food production is enough to cover 120% of
global dietary needs.

* 1·5 billion people face threats to their physical integrity, their
health being undermined not only by direct bodily harm, but also by
extreme psychological stress due to fear, loss, and disintegration of
the social fabric in areas of chronic insecurity, occupation, and war.

* Life expectancy differs by 21 years between the highest-ranking and
lowest-ranking countries on the human development index. Even in 18 of
the 26 countries with the largest reductions in child deaths during the
past decade, the difference in mortality is increasing between the least
and most deprived quintiles of children.

* More than 80% of the world's population are not covered by adequate
social protection arrangements. At the same time, the number of
unemployed workers is soaring. In 2012, global unemployment rose to
197·3 million, 28·4 million higher than in in 2007. Of those who work,
27% (854 million people) attempt to survive on less than US$2 per day.
More than 60% of workers in southeast Asia and sub-Saharan Africa earn
less than $2 per day.

* Many of the 300 million Indigenous people face discrimination, which
hinders them from meeting their daily needs and voicing their claims.
Girls and women face barriers to access education and secure employment
compared with boys and men, and women worldwide still face inequalities
with respect to reproductive and sexual health rights. These barriers
diminish their control over their own life circumstances.


The overarching message of the Commission on Global Governance for
Health is that grave health inequity is morally unacceptable, and
ensuring that transnational activity does not hinder people from
attaining their full health potential is a global political
responsibility. The deep causes of health inequity are not of a
technical character, devoid of conflicting interests and power
asymmetries, but tied to fairness and justice rather than biological
variance. Health equity should be a cross-sectoral political concern,
since the health sector cannot address these challenges alone. A
particular responsibility rests with national governments. We urge
policy makers across all sectors, as well as international organisations
and civil society, to recognise how global political determinants affect
health inequities, and to launch a global public debate about how they
can be addressed. Health is a precondition, outcome, and indicator of a
sustainable society, and should be adopted as a universal value and a
shared social and political objective for all.

The political origins of health inequity: prospects for change (38 pages):

Comment: In reviewing the enormity of the global health inequities and
the problems that perpetuate them, our compromised status in the United
States seems to be minuscule in comparison. Yet when you think of the
difficulties that we do have with addressing our own health inequities,
it is mind-boggling to contemplate the international scene.

In a related Lancet article, Professor Ole Petter Ottersen is noted to
be at pains to point out that this is far from "a doom and gloom
report." Yet they conclude, "Health equity should be a cross-sectoral
political concern, since the health sector cannot address these
challenges alone. A particular responsibility rests with national

Judging from the difficulties that we have had with merely tweaking some
of our injustices without addressing effectively the major problems, it
is difficult to see how nations will be able to work together in making
real progress in improving the health of all - but we have to try.

As this is being written, Prof. Ottersen, in closing remarks in a live
webcast from the University of Oslo at which this report was presented,
reemphasized that that the improvement in global health will require the
involvement of national political systems. And we thought single payer
was tough.

Monday, February 10, 2014

Fwd: qotd: Blue Cross and Blue Shield of Louisiana dodges HIV/AIDS patients

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Blue Cross and Blue Shield of Louisiana dodges HIV/AIDS
Date: Mon, 10 Feb 2014 12:05:20 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

February 9, 2014
CMS may require Obamacare insurers to accept Ryan White payments
By Bill Berkrot and Sharon Begley

The 1990 Ryan White Act offered people with HIV/AIDS federal financial
help in paying for AIDS drugs and health insurance premiums, especially
in state-run, high-risk pools. Obamacare, which bans insurers from
discriminating against people with preexisting conditions, was designed
to replace these high-risk pools.

Hundreds of HIV/AIDS patients are dependent on Ryan White payments for
Obamacare because they fall into a coverage gap. They are not eligible
for Medicaid, the joint federal-state health insurance program for the
poor, because Louisiana did not expand the low-income program, and
Obamacare federal subsidies don't kick in until people are at 100
percent of the federal poverty level.

Hundreds of people with HIV/AIDS in Louisiana trying to obtain coverage
under President Barack Obama's healthcare reform are in danger of being
thrown out of the insurance plan they selected in a dispute over federal
subsidies and interpretation of rules about preventing Obamacare fraud,
Reuters reported on Saturday.

Blue Cross and Blue Shield of Louisiana, the state's largest health
insurer, is rejecting checks from a federal program designed to help
these patients pay for AIDS drugs and insurance premiums, and has begun
notifying customers that their enrollment in its Obamacare plans will be

The insurer insists it is not trying to keep people with HIV/AIDS from
enrolling in one of its policies under the Affordable Care Act, but is
instead rejecting third party premium payments in an effort to prevent
potential fraud.

Comment: One of the advantages of the Affordable Care Act (ACA) is that
private insurers can no longer reject the applications of individuals
with serious, expensive disorders, such as HIV/AIDS. But the response of
Blue Cross and Blue Shield of Louisiana - the largest insurer in
Louisiana - is another example of how private insurers are not inclined
to change from their business model to a patient service model.

For HIV/AIDS patients, the need was so great that Congress passed the
Ryan White Act in 1990 in order to provide funds to pay premiums for
them in high-risk pools. Since ACA requires insurers to accept all
applicants, many of the high-risk pools are transferring their
beneficiaries to the exchange plans. These are expensive patients yet
the premiums the insurers receive are the same as for everyone else in
the individual risk pools.

Clearly, the insurers do not want these patients, yet the Ryan White
funds are still available to pay the premiums, especially for those with
incomes below poverty in a state that has refused to expand its Medicaid

So what did Blue Cross and Blue Shield of Louisiana do? They refused to
accept Ryan White checks to pay for the premiums on the basis that such
payments could expose the insurer to fraud. What? A federal government
check creates a greater potential for fraud?

The fraud is obviously on the part of Blue Cross and Blue Shield of
Louisiana which is using this ruse to keep high-cost HIV/AIDS patients
out of their health plans - patients which they are required to cover.

HHS's response? They are going to encourage insurers and Marketplaces to
accept Ryan White payments. They offer what doesn't even amount to a
tweak when what we need is get rid of the private insurers and cover
everyone with our own improved version of Medicare. The goal should be
optimal patient service, not optimal business success for private insurers.

Friday, February 7, 2014

Fwd: qotd: ACOs provoke pointless war between insurers and hospitals

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: ACOs provoke pointless war between insurers and hospitals
Date: Fri, 7 Feb 2014 11:40:12 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

Wall Street Journal
February 6, 2014
Insurers face new pressure over limited doctor choice
By Anna Wilde Mathews and Christopher Weaver

Insurers are facing pressure from regulators and lawmakers about plans
that offer limited choices of doctors and hospitals, a tactic the
industry said is vital to keep down coverage prices in the new health
law's marketplaces.

This week, federal regulators proposed a tougher review process for the
doctors and hospitals in plans to be sold next year through, a shift that could force insurers to expand
those networks.

Meantime, regulators in states including Washington and New Hampshire
are ramping up their own scrutiny, and lawmakers in Mississippi and
Pennsylvania, among others, are weighing bills that could force plans to
add more hospitals and doctors.

The moves come amid complaints by some consumers that they don't have
access to a broad enough range of care—such as specialists at top
academic medical centers…

The New York Times
February 4, 2014
Health law goals face antitrust hurdles
By Eduardo Porter

[I]n a remote courthouse in Idaho ... less than two weeks ago a district
judge sided with the Federal Trade Commission and ordered the unwinding
of the merger between one of the state's biggest hospital systems and
its biggest independent network of doctors.

The ruling against St. Luke's Health System's 2012 purchase of the
Saltzer Medical Group underlined a potentially important conflict
between the nation's antimonopoly laws and the Affordable Care Act. The
new law has encouraged the creation of big, broad accountable care
organizations, which are paid to keep patients healthy rather than for
individual services.

"We want to be providing a more coordinated product that delivers health
care at a lower overall cost to the community we serve," Christine
Neuhoff, general counsel at St. Luke's, told me. ....

Paradoxically, Judge B. Lynn Winmill seemed to agree. In his decision,
he noted that the merger, had he let it stand, would probably have
improved patient outcomes: "St. Luke's is to be applauded," he wrote,
"for its efforts to improve the delivery of health care in the Treasure
Valley," which stretches west from Boise.

Still, he slapped it down because the merged group, he reasoned, would
be able to demand higher reimbursement rates from health insurers and
raise rates for services like X-rays, pushing up health care costs for
consumers. "There are other ways" to obtain the desired efficiencies
that "do not run such a risk of increased costs," he concluded.


Wall Street Journal
January 24, 2014
FTC wins challenge against Idaho hospital deal
By Brent Kendall

Lawyer David A. Ettinger, who represented a competing Idaho hospital
that opposed the St. Luke's transaction, said the judge's ruling
effectively rebuts "the notion that all these transactions are
appropriate because of the Affordable Care Act."


Comment by Kip Sullivan JD

The Affordable Care Act has set off another wave of mergers among
hospitals, and it has induced insurance companies to kick doctors out of
their "networks." Both hospitals and insurers are justifying their
behavior by claiming it is exactly what the authors of the Affordable
Care Act wanted them to do. Hospitals claim they are merely trying to
create "accountable care organizations" (a new synonym for HMO endorsed
by the ACA) that will better "coordinate care" and thereby reduce costs.
The insurance industry is claiming they are narrowing their networks in
order to lower costs and winnow out doctors who don't care about "quality."

The emperor here is stark naked. The hospital and insurance industries
are building up market power as fast as they can in order to maintain
countervailing power against each other. By reducing the size of their
networks, insurers create more power over the remaining providers and
use it to negotiate lower reimbursements. By merging with other
hospitals and buying up clinics, hospitals making it harder for insurers
refuse to include them in their networks and to squash their fees.
Neither the insurers nor the hospitals can afford to disarm unilaterally.

Proponents of the ACO provisions within the ACA should have predicted
that their handiwork would set off the equivalent of an arms race. The
least they can do now is admit that's what happened and that the
consequences – smaller networks and bigger hospital-clinic chains – need
to be unraveled. But ACA proponents either ignore the issue or suggest
solutions that make no sense. In the New York Times article quoted
above, Jonathan Skinner, a leading ACO proponent, argues that empire
building by hospitals won't lead to higher prices because insurance
companies are also building up countervailing power by creating narrower
networks. The Times quotes Skinner as follows: "It's certainly true that
the consolidation of physician groups and hospitals can lead to greater
market power and higher charges to insurance companies. But the
insurance companies are creating narrower networks of providers. So
providers who try to charge more risk getting dropped entirely from the
now narrower network." What Skinner is saying is that we needn't worry
about giant hospital chains because giant insurance companies will react
by reducing consumer choice and all will be well. In this battle between
Godzilla and King Kong, patients will lose choice of provider, but
that's not anything we should worry our little minds about. What's
important is that the ACO experiment should play out across the country.

The Times also quotes Obama ally David Cutler saying that if
hospital-clinic monopolies do evolve, that's fine because they are
probably the "only way to obtain good care," and if that turns out to be
the case, then we'll have to "regulate [their] prices or total
spending." Like Skinner, Cutler is assuming that enormous
hospital-clinic chains confer such obvious benefits that society must
give up choice of provider and learn to tolerate enormous
hospital-centered monopolies. The only difference between Cutler's
"solution" and Skinner's is that the government will play Godzilla to
the hospital's King Kong, not the insurance industry.

But the claim that enormous health "systems," dressed up as ACOs or
anything else, can improve care and lower costs remains unproven. Until
it is proven, the FTC, the Justice Department, and state attorneys
general should not stand idly by and watch the empire builders. And
judges should not treat the claims made by ACO proponents as true as the
judge in the St. Luke's case apparently did. When the FTC or Justice
brings the empire builders into court and the empire builders claim they
are merely trying to "integrate care" per the ACA, judges should demand
evidence that ACOs or "integrated systems" work as advertised. That
evidence does not exist today and probably never will exist.

In ruling against St. Luke's, the Idaho judge made a valuable
observation. He said "there are other ways" to achieve the goals ACO
advocates claim they want to achieve. Imagine that. May I suggest one
way: Why don't ACO proponents state concretely and specifically what
they want ACOs to do, and if evidence indicates what they're proposing
is good for patients, then let's pay clinics and hospitals (not ACOs) to
provide those services. When I say ACO proponents should speak
"concretely and specifically," I mean in everyday language, not
"coordinated" this and "integrated" that and other fatuous labels
invented by the illuminati at 80,000 feet.

For example, if ACO proponents were to say that what they really want is
nurses to visit heart failure patients at home after discharge and to
monitor them remotely thereafter, I believe all of us – ACO proponents
and skeptics alike – would agree the evidence indicates that is good for
patients In that
event, we could write a code for those services and order public and
private insurers to pay for them. Why funnel un-earmarked "capitation"
payments through the headquarters of enormous hospital-clinic chains and
hope they'll use the money to pay nurses to take better care of heart
failure patients rather, than, say, more advertising or more mergers?

Paying clinics and hospitals directly would remove much of the incentive
to build empires and it would give society a much better record of where
our money went.

Of course, the ultimate antidote to empire-building is a single-payer

Thursday, February 6, 2014

Fwd: qotd: CMS's shocking rules on QHP networks and ECPs

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: CMS's shocking rules on QHP networks and ECPs
Date: Thu, 6 Feb 2014 13:11:58 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

Centers for Medicare & Medicaid Services
February 4, 2014
Draft 2015 Letter to Issuers in the Federally-facilitated Marketplaces

This Letter provides issuers seeking to offer Qualified Health Plans
(QHPs), including stand-alone dental plans (SADPs), in a Federally-
facilitated Marketplace (FFM) and/or Federally-facilitated Small
Business Health Options Program (FF-SHOP), with operational and
technical guidance to help them successfully participate in the

Chapter 2

Section 3. Network Adequacy

Pursuant to 45 C.F.R. 156.230(a)(2), an issuer of a QHP that has a
provider network must maintain a network that is sufficient in number
and types of providers, including providers that specialize in mental
health and substance use disorder services, to assure that all services
will be accessible to enrollees without unreasonable delay.

For the 2015 benefit year, issuers will be required to submit a provider
list that includes all in-network providers and facilities for all plans
for which a QHP certification application is submitted. CMS will review
the collected provider list to evaluate provider networks using a
"reasonable access" review standard, and will identify networks that
fail to provide access without unreasonable delay. In order to determine
whether an issuer meets the "reasonable access" standard, CMS will focus
most closely on those areas which have historically raised network
adequacy concerns. These areas may include the following:

• Hospital systems,
• Mental health providers,
• Oncology providers, and
• Primary care providers.

If CMS determines that an issuer's network is inadequate under the
reasonable access review standard, CMS will notify the issuer of the
identified problem area(s) and will consider the issuer's response in
assessing whether the issuer has met the regulatory requirement and
prior to making the certification or recertification determination.

Section 4. Essential Community Providers

Essential community providers (ECPs) include providers that serve
predominantly low-income and medically underserved individuals (includes
federally qualified health centers, Ryan White HIV/AIDS Providers, Title
X Family Planning Clinics, Tribal and Urban Indian Organization
Providers, Disproportionate Share Hospital (DSH) and DSH-eligible
Hospitals, Children's Hospitals, Rural Referral Centers, Sole Community
Hospitals, Free-standing Cancer Centers, Critical Access Hospitals, STD
Clinics, TB Clinics, Hemophilia Treatment Centers, Black Lung Clinics,
and other entities that serve predominantly low-income, medically
underserved individuals).

i. Evaluation of Network Adequacy with respect to ECP

Because the number and types of ECPs available vary significantly by
location, CMS intends to propose in rulemaking an approach to evaluating
QHP Applications for sufficient inclusion of ECPs for the 2015 benefit year.

If finalized, we intend for certification year 2015 to utilize a general
ECP standard whereby the application would first have to demonstrate
that at least 30 percent of available ECPs in each plan's service area
participate in the provider network.

Comment: In an effort to improve the function of health plans being
offered through the Federally-facilitated Marketplaces (insurance
exchanges), CMS has issued a Draft Letter providing guidance to
Qualified Health Plans (QHPs) as they apply for certification or
recertification of their plans. From CMS's 51 page letter, two of the
issues presented warrant our special attention: 1) network adequacy for
the QHPs, and 2) network inclusion of Essential Community Providers (ECPs).

The Affordable Care Act (ACA) very intentionally included limited
provider networks as a tool to reduce health care spending. QHPs could
negotiate lower payment rates by offering physicians and hospitals
exclusivity - exchanging lower fees for higher volume, while excluding
the other physicians and hospitals in the community. The insurers seemed
to think that they were given carte blanche and trimmed these back to
narrow networks or even ultra-narrow networks. The insurers' bargaining
leverage with the few providers that sign on is even greater, plus these
narrow networks further reduce spending since patients have greater
difficulties accessing care because of transportation problems and
difficulties obtaining appointments with overbooked providers. Patients
losing their established health care providers not only have the right
to be angry, but that can also be disruptive to the care of those in
ongoing treatment programs for more serious problems. Disruption of
care, impairing access, and depriving patients of choice of their care
are opposite of the policies that reform should bring us.

The CMS Letter states that "a provider network must maintain a network
that is sufficient in number and types of providers," and that "issuers
will be required to submit a provider list that includes all in-network
providers and facilities" so that CMS can "evaluate provider networks
using a 'reasonable access' review standard."

Well, that's a nice process. Sufficient providers? Reasonable access
standard? Every community is different. How many hospitals and
physicians would be needed in each network, and, furthermore, how do you
choose which ones are to be anointed? Is this another one of those
public-private partnerships burying corruption under the banner of
market efficiency? Further, what about the next year when it turns out
that the selected providers were not so hot after all? Do you then turn
to the providers who were rejected? Not if they closed shop and left
town. Disrupting the community health care infrastructure is the
opposite of the policies that reform should bring us.

Since tens of millions will remain uninsured it is essential that ECPs
be supported. The uninsured will have to rely largely on federally
qualified health centers, disproportionate share hospitals, critical
access hospitals, rural referral centers and other institutions that
have traditionally provided care to the poor and uninsured. In many
communities, these institutions also provide services to insured
individuals, including especially those with Medicaid. Sometimes these
sites are chosen by patients because of impaired access to mainstream
providers, sometimes for convenience, and sometimes because of patient
preference, especially when these sites have always been the
individual's source of care.

So what is the new proposed CMS rule on ECPs? For 2015, CMS would
require that "at least 30 percent of available ECPs in each plan's
service area participate in the provider network." The reciprocal? The
health plans can exclude up to 70 percent of essential community
providers from its networks! ACA reduced the funding for safety-net
institutions since "everybody would be insured" so their care could be
paid for through the plans. Yet when the beneficiaries use these
essential community providers, the insurers do not have to pay for care
provided by 70 percent of these ESSENTIAL institutions. Defunding
essential community providers is the opposite of the policies that
reform should bring us.

The few good polices contained in ACA do not begin to offset all of the
terrible policies that already characterize our dysfunctional health
care system - policies that were left in place because of the highly
flawed design of ACA.

There is something we can do about it. First, it is essential that
everyone has a solid foundation in knowledge about social insurance.
Once we have that, it will be so obvious that we need a universal,
publicly financed and publicly administered program of social insurance
for health care, something like an improved Medicare that covers
everyone. For those who missed yesterday's Quote of the Day on "Social
Insurance" by Marmor et al, click on the link below, read the message,
and then buy the book.

Tuesday, February 4, 2014

Fwd: qotd: Medicaid patients did improve in the Oregon Health Insurance Experiment

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Medicaid patients did improve in the Oregon Health
Insurance Experiment
Date: Tue, 4 Feb 2014 14:08:15 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

Health Affairs
February 2014
New Medicaid Enrollees In Oregon Report Health Care Successes And Challenges
Heidi Allen, Bill J. Wright and Katherine Baicker

In 2008 Oregon used a lottery to expand its Medicaid program for
low-income adults, Oregon Health Plan Standard (OHP).

For this study we conducted 120 qualitative interviews among Oregon
residents who had recently gained Medicaid coverage. Our purpose was to
better understand how newly insured patients did—and did not—interact
with the health care system

Group 1: Minimal Interactions With Health Care

Forty percent of the newly insured enrollees whom we interviewed did not
use their coverage much, if at all. Low users gave one of the following
four main reasons for not using their Medicaid benefits very often.

* Perception Of Good Health
* Confusion About Coverage
* Dissatisfaction With Care
* Access Barriers

Group 2: Regular Or Frequent Interactions With Health Care

The remaining 60 percent of respondents (called regular users) used
their insurance more than a time or two but reported varying degrees of

* Regular Preventive Care And Minor Needs:

About one-tenth of the regular users took advantage of access to
preventive care and also received treatment for occasional illnesses or

* Immediate Health Improvement:

Another tenth of the regular users described an immediate transformation
in their health after they received insurance. These people all had
serious health problems that could be improved quickly, such as by
getting back on a previously effective medication or having an operation
that had been postponed because of lack of coverage. The members of this
group saw their new insurance coverage as directly related to an
improvement in their quality of life.

* Mixed Success:

Forty-four percent of regular users continued to experience challenges.
Some interviewees were able to get partial treatment—such as
prescriptions for chronic conditions—but had serious needs remaining.
Some reported feeling misunderstood by physicians or being unable to
build a relationship with a primary care provider. Others struggled with
very poor health that continued to deteriorate even with regular treatment.

* Success Over Time:

Finally, 39 percent of regular users reported that their health had
improved with insurance, but that it had taken time. They experienced
incremental benefits once they found and built a relationship with the
right doctor.

Often these users' problems were addressed in order of severity or
impairment. Lifestyle changes, such as modifications to diet and
exercise, were not discussed until their acute symptoms had improved.
Many of the positive changes that they reported were relatively recent.

Comment: The "Oregon Health Insurance Experiment" made possible the
comparison of uninsured patients with Medicaid patients by the natural
experiment in which Medicaid patients were selected by lottery from a
single population. The initial study reported was not powered to detect
changes in health outcomes, but opponents of reform used the lack of
demonstrable outcome differences to claim that Medicaid provides no
health benefits for the patients enrolled. This new study of these
Oregon Medicaid beneficiaries confirms that the claim of no health
benefit was an outrageous extrapolation on the part of the opponents of
ACA and Medicaid.

The majority of the 60 percent of the Medicaid beneficiaries who were
regular users of care significantly benefited from the program.
One-tenth experienced immediate health improvement, one-tenth benefited
from preventive care and occasional acute care, 39 percent experienced
incremental benefits over time, and 44 percent continued to experience
challenges though many of them were able to receive partial treatment.

Some of the reasons given by the 40 percent of the Medicaid
beneficiaries who did not use much health care are of concern. Some
reasons relate to well-known problems with Medicaid being considered a
second-rate welfare program, that is chronically underfunded, and that
has access problems due to an insufficient participation by health care

We can conclude that Medicaid has some definite problems, but we also
can refute the opponents of Medicaid and state that it is far better to
be insured, even with Medicaid, than not to be insured at all. At the
same time, we can also state that mixed results for a portion of the
study group should be motive enough for us to advocate emphatically for
a higher quality program for everyone - an improved Medicare for all.

Sunday, February 2, 2014

Fwd: qotd: Ted Marmor and Ellen Shaffer respond on the political feasibility of single payer

Quote-of-the-day mailing list

-------- Original Message --------
Subject: qotd: Ted Marmor and Ellen Shaffer respond on the political
feasibility of single payer
Date: Sat, 1 Feb 2014 16:41:20 -0800
From: Don McCanne <>
To: Quote-of-the-Day <>

The Quote of the Day yesterday, by Kip Sullivan, asked the question,
"Was the ACA 'politically feasible'?"

Following are responses by Ted Marmor and Ellen Shaffer, with a reply by
Kip Sullivan:

Theodore R. Marmor, PhD, Professor Emeritus of of Public Policy and
Management and Professor Emeritus of Political Science, Yale University

The plea for a serious discussion about political feasibility by Kip
Sullivan takes us back to the really limited debate about that in
2009-10. The argument attributed to both Harold Pollack and Richard
Kirsch is just circular rather than convincing. The ACA was the best
that we could have in 2010. How do we know that? Because that is what
was produced in 2010. No, the test is what else could have been
proposed--or done--that was feasible politically and would have had a
better trajectory than the ACA, a reform package designed to win
Republican support that never emerged and consists of complex patches on
the patchwork of American medical care as of 2010. Kip raises the right
evaluative question, but the defensive circularity goes on and on. (by
the way, the 'yes but' attributed to me may have confused description
with my convictions).

I think a good case--not a perfect one--can be made that we would be
better off now if Obama had decided the economic stimulus was the key to
his first term and that expanding Medicare to those 55 and older was
within either the feasible set or would have left Obama in a strong
position to fight for that as Kennedy had pushed the original Medicare
bill every year of his Presidency. The ACA is not universal health
insurance in practice, whatever was said in theory. It is a source of
devil-like complexity, one that does not have a straight-forward picture
of how to expand financing coverage, let alone deal with the
second-order effects that provide the Republicans the basis for
criticism and lying about their own earlier inducements of private
health insurance expansion.

Any evaluation of a political outcome must consider the counter-factual
question of what else was doable then. One should not expect easy
agreement of course, but ruling out the question by repeating what
transpired is not defensible intellectually. And, worse, we are left
with an administratively costly and complex arrangement in which it is
hard to see what can be done to make it easy to work, let alone to

We have more to learn from German modes of administration of multiple
plans, but keep in mind that there the benefit package is for most
purposes common, not differentiated. And there are overall constraints
on the budget through limits on the contributions. We lack both.
Don--it really should be possible to treat the feasibility question
both historically and turn it to use for where we are now.


Ellen R. Shaffer, PhD, MPH, Co-Director, Center for Policy Analysis, San

To the contrary, the single payer movement has failed to successfully
educate the public about what is wrong with the health care system, and
why we need a single authority with the power of the federal government
to set prices if we are to escape the disastrous cycle of bad access to
crummy health care that costs too much. It is not an easy set of
concepts to convey compellingly to people who don't work in the health
care system, or are so ill that they are regular patients, still a small
fraction of the US public. Nevertheless.
Having presented this argument consistently and assiduously for decades,
including to explain legislation I have helped to write, and including
in articles about the Affordable Care Act analyzing pro's and con's, I
can report a 99% - 100% rate of failure showing up at any public
gathering of single payer supporters and asking them to describe what
the system would do and why they support it.
Did we not advance the idea and substance of Medicare for All? Did we
not attempt to capture the essence of the price-fixing power of the
public sector, while hedging our predictions for its success, in
advocacy for the public option?
Insurance companies are bad. (We got that across.) Profit in medical
care is dodgy at best. Physician reimbursement is too high and
ineffectively distributed, but this can only be understood in the
context of a political economy that is way out of whack re: income
distribution and political engagement. It is well beyond wishful to
contend in this day and age e.g. that a single payer system would
magically reimburse health care professionals and institutions in a way
that would incentivize quality, respect and engage patients, and control
Single payer advocates did testify in Congress, and many including
myself wrote, spoke and organized. We did not succeed. Our opponents
were better financed and staffed, and history was not on our side. That
the ACA passed at all was in fact a testament to some very nimble and
extraordinary moves by Congressional leaders. It might have made a
difference if we'd had better arguments; better strategies (like
cross-issue alliances); better tactics; or lived somewhere else (with
more dense population and less geographic spread, a culture and practice
of social solidarity, a more vibrant intellectual community, different
socioeconomic demographics). Maybe not. Attributing our failure entirely
to the energy and/or bad faith of those who differed gives them entirely
too much credit. And dooms us to continuing to fail.


Kip Sullivan, JD

I agree with each of Ted's points: the feasibility question is an
important one, Kirsch's argument is circular, and Obama probably would
have been better off concentrating first on jobs and putting off health
care reform until later in his first term or until his second term.

I don't understand much of what Ellen is saying, and disagree with those
comments that I do understand.

Let me preface my reply to Ellen's comment by noting that her political
trajectory resembles Kirsch's. Like Kirsch she was deeply involved in
the campaign for single-payer in the early 1990s, then crossed over to
the multiple-payer camp and became a severe critic of the single-payer
movement while simultaneously claiming that she would support
single-payer if only it were politically feasible.

She opens her reply to me with the classic "yes but" double standard: A
strict standard for single-payer advocates and a loose or nonexistent
standard for multiple-payer advocates. She states that the single-payer
movement has "failed to convince the public" that we need a
single-payer. Note that she said nothing similar about what ACA
proponents did or failed to do. Did HCAN and Max Baucus "convince the
public" that we needed an individual mandate, accountable care
organizations, and a one-trillion-dollar-per-decade bailout of the
health insurance industry before shoving those provisions through
Congress? Of course not. But, in the worldview of "yes buts," that's
neither here nor there. Only single-payer advocates have to demonstrate
60 votes in the US Senate and majority support among the public before
they're allowed even to be at the table, much less write a bill and get
hearings on it.

In fact, large majorities of the public have agreed with the
single-payer movement since at least the 1980s

Her second paragraph makes no sense. She seems to be saying single-payer
advocates don't know how to make the case for single-payer. If that's a
correct interpretation, I have no idea what she's talking about.

Her third paragraph suggests she's lost touch with the single-payer
movement. She asks, Didn't we do a good job promoting the "public
option"? Wrong question. The "public option" that Democrats supported in
2009 (as opposed to the original version of the "option" proposed by
Jacob Hacker) was a sickly little thing that didn't remotely resemble a
But Ellen called the "option" absolutely essential.

In her fourth paragraph in her reply to me she states rather clearly why
she has lost interest in single-payer and has become a managed care
advocate. She repeats the standard managed care canard about the
fee-for-service payment method (it cannot "incentivize quality") and
then invents accusations I've never heard of (FFS causes doctors not to
"respect and engage patients"). In the interest of brevity, let me just
say these claims are nonsense.

Her last paragraph is hard to follow. She seems to say the single-payer
movement had as much access to Congress, and to the back-room planning
sessions, as, say, SEIU, AHIP, the drug industry, or the hospitals. I
really can't tell you what the rest of the paragraph says, other than it
promotes the usual "yes but" thesis: Our opponents were just too
powerful, what else could a good Democrat do but vote for an insurance
industry bailout?

It would have been helpful if Ellen had addressed the main point of my
comment: That discussing political feasibility would have been helpful
prior to 2009. I hope her disdain for the subject is not typical of all
ACA advocates.


Brief note about the PNHP Blog:

This is a provocative subject. If others wish to respond, rather than
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be made at the PNHP Blog webpage. (Unfortunately, we have had to require
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Blog, "Was the ACA 'politically feasible'?":

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Don McCanne