qotd: Pulling the safety net from under 4 million Californians

The Greenlining Institute
August 2014
Voices from the Front Lines: California's Remaining Uninsured and the
Safety Net

The Affordable Care Act (ACA) has made purchasing private health
insurance easier and more affordable for millions of Americans, but in
California, an estimated four million will remain uninsured in 2019. The
remaining uninsured population is very diverse, though often incorrectly
made synonymous with undocumented immigrants. In reality, these four
million Californians include citizens, undocumented immigrants and
documented immigrants who will continue to rely on the health care
safety net for their medical care.

Even with full ACA implementation, millions of people will remain
uninsured for a variety of reasons: a lack of an affordable offer of
health insurance, an exemption from the individual mandate due to
immigration status, unforeseen life events that may lead to temporary
periods of being without coverage, a knowing choice not to purchase
health insurance, or the reality that Medi-Cal participation rates will
not be 100 percent. A majority of these Californians will continue to
access their health care through safety net providers, whose critical
funding is rapidly diminishing in the broader context of ACA implementation.

In the 2013-14 state budget, Governor Jerry Brown moved forward with
Medi-Cal expansion in California — opening up access to health insurance
for millions of low-income Californians who were previously ineligible,
a majority of whom are people of color. As of the end of March, 1.9
million additional Californians have been determined eligible for Medi-Cal.

This initial success in Medi-Cal enrollment, made possible by the ACA,
does not come without a cost. Based on the assumption that expanded
coverage through Medi-Cal and Covered California would mean fewer
Californians relying on the safety net, the 2013-14 budget included the
requirement that counties had to relinquish significant funding
previously used to provide care for the remaining uninsured. As noted by
others, this carving out of local safety net dollars will leave millions
of remaining uninsured and underinsured Californians falling through the
cracks.

People of color disproportionately lack access to health care; prior to
the ACA, they made up 74 percent of California's uninsured and likely
will continue to be a majority of the uninsured moving forward.

http://greenlining.org/wp-content/uploads/2014/08/Voices-from-the-Front-Lines-Californias-Remaining-Uninsured-and-the-Safety-Net-spreads.pdf

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Comment by Don McCanne

After all of the health care reform measures have been fully
implemented, over four million Californians will still be uninsured. Yet
funding of the health care safety net has been sharply reduced.

Four million people! The entire population of each of the following
states is less than four million: Oregon, Oklahoma, Connecticut, Iowa,
Mississippi, Arkansas, Utah, Kansas, Nevada, New Mexico, Nebraska, West
Virginia, Idaho, Hawaii, Maine, New Hampshire, Rhode Island, Montana,
Delaware, South Dakota, Alaska, North Dakota, Vermont, and Wyoming.
Suppose nobody in any of those states had any insurance, and the funding
of their health care safety nets were significantly reduced. Although
the states are not comparable, it does give a perspective of the
magnitude of the problem that California faces, not to mention the
difficulties for the other states with large numbers of uninsured and an
inadequate safety net infrastructure.

So do we stop now that the Affordable Care Act has been enacted and
largely implemented? No? How do we expand on the ACA model? More
Medicaid? California is already fully expanding their Medi-Cal program.
Greater buy-in of the exchange plans? Where does the money come from?
Most of the uninsured certainly do not have it, and there are
insurmountable political barriers to further expanding government
contributions to these plans. Do we spend more on the safety net? ACA
was supposed to eliminate the need for a safety net by covering
everyone. More funds for federally qualified health centers could help,
but that would still fall far short of the needs.

No. Patching the ACA model is the most expensive approach to reform yet
it can never meet our needs. Each nail in each patch springs more leaks.
We do not need to perpetuate the inequities and inadequacies of our
highly flawed health care financing system. What can we do? (Trumpets
please.) Enact a single payer national health program - an improved
Medicare that covers everyone.

qotd: Compensation for health insurance executives

Kaiser Health News
August 27, 2014
Report: Health Law Ups Taxes On Insurers With Big Pay Packages
By Julie Appleby

While average compensation for top health insurance executives hit $5.4
million each last year (up from $5.1 million in 2012), a little-noticed
provision in the federal health law sharply reduced insurers' ability to
shield much of that pay from corporate taxes.

As a result, insurers owed at least $72 million more to the U.S.
Treasury last year, said the Institute for Policy Studies, a liberal
think tank in Washington D.C.

Researchers analyzed the compensation of 57 executives at the 10 largest
publicly traded health plans, finding they earned a combined $300
million in 2013. Insurers were able to deduct 27 percent of that from
their taxes as a business expense, estimates the report. Before the
health law, 96 percent would have been deductible.

UnitedHealth Group, which paid CEO and President Stephen Hemsley about
$28 million in pay and stock options in 2013, had the biggest tax bill
among the 10 companies, the report found. Hemsley's compensation
accounted for nearly $6 million of the firm's estimated $19 million in
taxes that the report says it owed on pay packages for five executives
under the health law.

"They're paying more in taxes just to protect these pay packages," said
Sarah Anderson, global economy project director at the institute.

Under the 2010 law, insurers can deduct only the first $500,000 of
annual compensation per employee from corporate taxes, down from $1
million allowed before the law's passage. The law also requires
insurers to include so-called "performance pay," such as stock options,
which often represent a hefty portion of an executive's pay.

http://capsules.kaiserhealthnews.org/index.php/2014/08/report-health-law-ups-taxes-on-insurers-with-big-pay-packages/

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San Francisco Business Times
August 22, 2014
Covered California's Peter Lee nets bonus, Obamacare site nets 1.2
million enrollees
By Chris Rauber

Covered California's executive director, Peter Lee, has won a one-time
$52,528 bonus for his role in launching the Obamacare exchange in the
Golden State, which apparently netted 1.2 million enrollees all told
during its first open enrollment period.

Lee's one-time bonus is his first pay increase in three years…
"excepting general state increases," and represents a 20 percent
"incentive award" based on his annual $262,644 salary.

http://www.bizjournals.com/sanfrancisco/blog/2014/08/covered-californias-peter-lee-nets-bonus.html?page=all

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Comment by Don McCanne

There are a great many reasons that health care reform activists believe
that private, investor-owned insurers should be eliminated from our
health care financing, but one reason that is particularly offensive is
the outrageous compensation packages for their executives. For that
reason, the Affordable Care Act (ACA) included a provision prohibiting
insurers from writing off for tax purposes more than $500,000 per
executive, as a means to discourage the excessive executive pay.

Well, it didn't work. Instead of taking those taxes out of the excessive
salaries, executives were given pay increases averaging $300,000,
raising their incomes to an average of $5.4 million. Although more
corporate taxes were paid, those funds were recovered through higher
premiums charged to the purchasers of health plans.

Compare the executive pay of the private insurers to that of Peter Lee,
the head of California's ACA insurance exchange - by far the largest and
most successful ACA exchange in the nation. With his performance bonus,
his income was only about one-twentieth of the average income of the
executives of the largest publicly-traded health plans. In fact, Stephen
Hemsley of UnitedHealth Group received almost 100 times as much as Lee.

These differences reflect the priorities of invested-owned corporations
as opposed to quasi-public agencies. One is about making the most money
possible, and the other is about serving the needs of the people.

Make no mistake. The ACA exchanges are still the wrong model because
they contract with these same private insurers that perpetuate their
abusive practices, such as overpaying their executives. Under a single
payer system, administrators such as Peter Lee would be providing us
with much greater value for their services since single payer systems
eliminate much of the administrative waste while spending appropriate
amounts for health care, and, yes, spending appropriate amounts for our
public administrators.

qotd: Insurers shoving “advanced illness counselors” on us

Kaiser Health News
August 27, 2014
Operator? Business, Insurer Take On End-of-Life Issues By Phone
By Elana Gordon, WHYY

Kate Schleicher, 27, is a licensed clinical social worker, who knows
almost as little about you as you do about her. Except she knows your
phone number, your insurance provider and that you are pretty sick.

Schleicher is one of 50 social workers at a company called Vital
Decisions. After sending a letter (people rarely respond) counselors
essentially cold-call to offer what they describe as "nondirected"
end-of-life counseling.

The hope of this program, she says, is to build a relationship over the
phone, so (the patient) might be comfortable discussing his situation
and his goals. Then he'll be empowered to communicate those things with
others, including his family and his doctors. He could also choose to
allow the counselor to talk to his doctors or family directly. It's paid
for by insurers and federal privacy rules permit this for business purposes.

And when these conversations do happen, there's can be another
byproduct: reduced costs. Research is finding that when patients fully
understand aggressive care, many choose less of it.

But some people are wary of the company's approach. Dr. Lauris Kaldjian,
professor of bioethics at the University of Iowa, has concerns about the
social worker, patient and family never actually meeting. "Because if
you don't have enough knowledge about what's actually going on with the
patient, it would actually be irresponsible to pretend to have
discussion that depends upon such knowledge."

http://www.kaiserhealthnews.org/Stories/2014/August/27/insurers-new-business-end-of-life-conversations.aspx

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Vital Decisions

Vital Decisions is an innovative organization that assists patients and
families dealing with advanced illness. We help patients clarify their
values and preferences and then communicate with their family and care
team to actualize those preferences. Our clients include several leading
national, regional, and local health care plans which offer our service
free of charge to appropriate individuals within their member populations.

We are a privately held company located in the Metropark business
complex in Edison, NJ. The Company is profitable, and cash
flow-positive, and is a leader in the growing field of advanced illness
counseling.

The Company is a portfolio company of MTS Health Investors, the New
York-based healthcare private equity firm.

http://www.vitaldecisions.net/careers.asp

HHS.gov: Health Information Privacy: "Business Associates"
http://www.hhs.gov/ocr/privacy/hipaa/understanding/coveredentities/businessassociates.html

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Comment by Don McCanne

When you are faced with advanced illness, perhaps nearing the end of
life, where would you want to turn for medical advice on how to get
through this difficult time? Your personal physician and health care
team? Private health insurers, always looking for more administrative
innovations to sell us, are now using high pressure tactics to force
"advanced illness counselors" into the management of your care.

Who are these counselors? In the example given, they are employees of
Vital Decisions, a private, for-profit corporation that sells its
services to private insurance companies. They use your confidential
medical diagnoses that have been provided to them by the private
insurers to market to you an advisory service on negotiating the health
care system. After an introductory letter that is routinely ignored, the
counselors cold-call to try to convince you to accept their end-of-life
counseling. Of course, this is "at no cost to you" since your insurer
pays for this service. The services are provided over the phone from
offices in New Jersey - a definition of personal care that only the
insurers can understand. The clients of Vital Decisions are the private
insurers, not the patients, nor the physicians, nor any other members of
the health care team.

With today's emphasis on privacy, how could unrelated business entities
gain enough information about you to make a contact? In another
concession to the private insurers, HHS allows them to share this
confidential information with "business associates" - basically any
business entity that might interact with the insurer as the insurer
carries out its business functions. It is the private insurers that sic
on you these end-of-life-care marketeers just at a time that you do not
want any more extrinsic intrusions since you are suffering enough already.

Although the insurers say that they are paying for these services, they
are actually paid by plan enrollees in the form of higher premiums. What
is worse, these services are classified as health care related services
and can be included in the insurers' medical loss ratios. They do not
apply to the 15% or 20% limit on administrative costs. In fact, since
they are counted as medical losses, it allows the insurers even more
leeway in adding on yet more administrative services. Since the
percentages are fixed, more medical losses allow more administrative
services - the primary product that the private insurers are selling us.

As a portfolio company of MTS Health Investors, the New York-based
healthcare private equity firm, Vital Decisions is taking very good care
of Wall Street, while intruding in our most difficult time of life and
then walking away with our health care dollars.

Regular readers know what a single payer national health program would
do with these parasites. They'd be out the door, right now.

qotd: Jonathan Bernstein: “Public opinion is an incoherent mess”

Bloomberg View
August 25, 2014
Loving and Hating Obamacare With One Muddled Mind
By Jonathan Bernstein

E.J. Dionne has a nice column pointing out that while "Obamacare"
remains unpopular, most of the provisions are well-liked, and thus
Democrats should run on the issue. As regular readers know, I certainly
agree that the individual components of reform are far more popular than
reform overall. Actually, support for key provisions of the law,
including coverage of pre-existing conditions, health-insurance
exchanges offering subsidies to middle-income policy holders and
Obamacare's Medicaid expansion, have always polled well.

Moreover caution is always in order with issue polling. When these kinds
of polls show public opinion fractured, it's tempting to believe that
one side or the other represents voters' "true" support. That's the
wrong way to interpret such polls. Yes, the ACA polls badly while most
of its components poll well. But that doesn't mean that the ACA is
genuinely unpopular (as most opponents suggest) or that it's genuinely
popular (as most supporters contend). There is no underlying truth to be
excavated from the results; the best we can do is say that public
opinion is inconsistent.

Well, that's the best we observers can do. Campaign operatives, in
contrast, can counsel their candidates to stress whatever is popular.
What those operatives shouldn't do is to fall for their own spin, or let
their candidates fall for it.

The broader point: We can measure public opinion, but sometimes –
actually, quite often – public opinion is an incoherent mess. Voters
have plenty of things other than politics going on in their lives; it's
not surprising that they should find the strongest selling points from
both sides quite appealing and let it go at that. For those of us who
pay close attention, it may seem weird that someone could hate Obamacare
while loving almost every part of it. There must be one overriding
opinion hidden in there -- pro or con -- that good research can isolate,
no? Well, no. Sometimes, incoherence in the polls simply reflects
incoherence among voters. We just have to live with that.

http://www.bloombergview.com/articles/2014-08-25/loving-and-hating-obamacare-with-one-muddled-mind

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Comment by Don McCanne

The public reaction to the Affordable Care Act (ACA) is very instructive
as far as understanding public attitudes toward single payer reform.

Most of the specific policies in ACA have been supported for many years
by those who are relatively well informed on the issues - a minority of
our population. The negative views of the public have been formed in the
hollow echo chamber filled with empty political rhetoric devoid of
illuminating explanations - a message chamber that reaches most of our
people. The political attack has been aimed at President Obama and the
Democratic Party, but not at ACA's beneficial policies. Thus many in the
media have correctly reported that "Obamacare" continues to poll poorly
- as a political construct - whereas the specific improvements in health
care coverage - the health policies - have support of the majority.

Although the situation with the public attitude towards single payer is
similar, it has not had nearly the same intensity of exposure has had
ACA. More Americans have now heard the term "single payer," but the
majority still have a poor understanding of what a tremendous
improvement it would be over our highly dysfunctional, wasteful,
inefficient, and inequitable multi-payer system. That is, the public at
large is still very poorly informed on single payer policies.

The hollow echo chamber of empty political rhetoric targeting single
payer has been around much longer but has been maintaining a lower
profile. As long as single payer reform does not seem to be imminent,
the effort of opponents has been directed to building anti-government
memes that can be rapidly brought to the front should a single payer
reform effort gain traction.

Examples of this latter phenomenon include Proposition 186 in California
and Measure 23 in Oregon. Both of these single payer measures polled
favorably until close to the elections. In both instances, it took only
a couple of weeks of mindless trashing of the measures to result in a
tidal wave of opposition. They were defeated by empty rhetoric and not
by opposition to beneficial health policies.

In today's article, Jonathan Bernstein makes the important point that
"quite often public opinion is an incoherent mess." Look how much
difficulty the supporters of ACA are having in getting the message out
about the genuine benefits of ACA when the listeners are exposed to a
background of meaningless cacophony generated in the hollow echo chamber.

When single payer is ready for its day, the cacophony will be almost
unbearable. That is why it is so important now to pull all stops in
educating the public on single payer benefits. They will need a much
better understanding of the concept so that they can sort out the facts
from the noise.

Bernstein says, "Sometimes, incoherence in the polls simply reflects
incoherence among voters. We just have to live with that." No, we don't
have to live with that. We simply need to build our own colossal echo
chamber spewing out the facts. Education. Education. Education.

qotd: 2014 National Strategy Conference for Single Payer

August 25, 2014
2014 National Strategy Conference for Single Payer
By Don McCanne

This weekend numerous organizations dedicated to single payer reform
assembled in Oakland, California for the 2014 National Strategy
Conference. Participating organizations included Healthcare NOW!, Labor
Campaign for Single-Payer Healthcare, One Payer States, National Nurses
United, Physicians for a National Health Program, Progressive Democrats
of America, and many others. So what was accomplished?

Above all, just gathering dedicated single payer supporters together in
a single weekend meeting provided renewed energy and passion amongst the
attendees, confirming that the single payer movement is not only still
alive, it is thriving. We have a future.

Did we develop a national strategy that will culminate in enactment of
single payer reform with the installation of a new government after the
2016 elections? Well, not exactly, but nobody expected that. What we did
accomplish was the sharing of ideas on strategy, policy, politics,
single payer education, state and federal legislation, and innumerable
other components of a social movement that would lead to single payer.

In both the formal sessions and in informal conversations there was a
very broad spectrum of ideas discussed, though not all of the ideas mesh
well. And this is from a solid core of single payer activists. But all
views were expressed with the intent of advancing health care justice.

Others attending will certainly have different take-home points, but
mine was that we each should continue to do what we are doing while
helping to open new avenues in advancing the cause. Especially helpful
would be efforts to educate others, expand grassroots efforts, and work
to form coalitions with other social justice organizations.

There was a consensus that we should not waste time and squander energy
by becoming divided over process. We need to direct that energy to
making progress towards our goal of a single payer national health
program - an improved Medicare for all.

qotd: CMMI blows a billion dollars on a flawed study

Center for Medicare and Medicaid Innovation (CMMI)
Submitted 7/10/2014
Project Evaluation Activity in Support of Partnership for Patients: Task
2 Evaluation Progress Report

The Partnership for Patients (PfP) campaign was launched in April 2011
with the ambitious goals of reducing preventable hospital-acquired
conditions (HACs) by 40 percent and 30-day hospital readmissions by 20
percent. To reduce harm at this level of magnitude, the campaign
implemented a strategy to align all health care stakeholders, including
federal and other public and private health care payors, providers, and
patients, to focus on this issue concurrently. By influencing everyone
to move in the same direction at the same time, the program strove to
overcome the inherently limited reach of any single initiative operating
in a complex environment. The three major components of the campaign,
conceptualized as "engines," are the Centers for Medicare & Medicaid
Innovation (CMMI) investment engine, the federal partner alignment
engine, and the outside partner engine. The program is national in
scope, due to its level of implementation. For example, over 70 percent
of general acute care hospitals in the United States (U.S.),
representing over 80 percent of admissions, worked with PfP-funded
Hospital Engagement Networks (HENs) during 2012-2013.

Findings

The PfP campaign focuses on 11 areas of patient harm. To date, the
evaluation has found clear evidence for decreased rates of harms in five
of the eleven areas, meaning the decreases are statistically
significant, and/or meet statistical process control criteria for a
special cause decrease, and/or (in cases where only aggregated data are
available) are large in magnitude. These areas include obstetrical early
elective deliveries (OB-EED), readmissions, adverse drug events (ADE),
ventilator-associated pneumonia (VAP), and central line-associated
bloodstream infection (CLABSI). In the other six areas, to date, the
evaluation has found mixed evidence, meaning some datasets show
decreases, while others show no change, or even worsening, including
venous thromboembolism (VTE), catheter-associated urinary tract
infection (CAUTI), other OB adverse events (OB-Other), pressure ulcers,
surgical site infections (SSI), and falls.

The cost estimates available to date suggest cumulative savings of
between $3.1 to $4 billion as a result of the decreases in harms since
the baseline of 2010. Additionally, AHRQ has estimated 15,5001 deaths
averted since 2010, based on mortality rate estimates associated with
targeted harms. Tables 1 and 2 synthesize the evidence available to date
for improvement in the rate of adverse events in each of the 11 areas,
and Table 3 provides cost reduction estimates from the two available
sources of estimates to date. Since hospital payment policies and other
U.S. Department of Health & Human Services (HHS) programs that played an
important role as part of the PfP campaign were in place and making
changes over time, it is not possible at this time for the evaluation to
identify the portion of these harm reductions and savings attributable
to the PfP campaign's direct work with hospitals versus alignment of
forces for harm reduction versus other harm reduction work that would
have continued with or without PfP.

http://innovation.cms.gov/Files/reports/PFPEvalProgRpt.pdf

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CMS.gov

About the CMS Innovation Center

The Innovation Center was established by section 1115A of the Social
Security Act (as added by section 3021 of the Affordable Care Act).
Congress created the Innovation Center for the purpose of testing
"innovative payment and service delivery models to reduce program
expenditures …while preserving or enhancing the quality of care" for
those individuals who receive Medicare, Medicaid, or Children's Health
Insurance Program (CHIP) benefits.

http://innovation.cms.gov/about/index.html

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The New England Journal of Medicine
August 21, 2014
Did Hospital Engagement Networks Actually Improve Care?
By Peter Pronovost, M.D., Ph.D., and Ashish K. Jha, M.D., M.P.H.

Everyone with a role in health care wants to improve the quality and
safety of our delivery system. Recently, the Centers for Medicare and
Medicaid Services (CMS) released results of its Partnership for Patients
Program (PPP) and celebrated large improvements in patient outcomes. But
the PPP's weak study design and methods, combined with a lack of
transparency and rigor in evaluation, make it difficult to determine
whether the program improved care. Such deficiencies result in a failure
to learn from improvement efforts and stifle progress toward a safer,
more effective health care system.

CMS launched the PPP in December 2011 as a collaborative comprising 26
"hospital engagement networks" (HENs) representing more than 3700
hospitals, in an effort to reduce the rates of 10 types of harms and
readmissions. The HENs work to identify and disseminate effective
quality-improvement and patient-safety initiatives by developing
learning collaboratives for their member facilities, and they direct
training programs to teach hospitals how to improve patient safety. In a
February 2013 webcast, CMS announced that the rates of early elective
deliveries had dropped 48% among 681 hospitals in 20 HENs and that the
national rate of all-cause readmissions had decreased from 19% to 17.8%,
though it is unclear which HENs were included for each measure and what
time periods were the pre- and post-intervention periods.

These numbers appear impressive, but given the publicly available data
and the approach CMS used, it's nearly impossible to tell whether the
PPP actually led to better care. Three problems with the agency's
evaluation and reporting of results raise concerns about the validity of
its inferences: a weak design, a lack of valid metrics, and a lack of
external peer review for its evaluation. Though the evaluation of many
other CMS programs also lacks this basic level of rigor, given the large
public investment in the PPP, estimated at $1 billion, and the strong
public inferences about its impact, the lack of valid information about
its effects is particularly troubling.

The design of a quality-improvement program influences our ability to
make reasonable inferences about its benefits to patients. Although
individual HENs may have used more rigorous methods, the overall PPP
evaluation had three important weaknesses: it used a pre–post design
with only single points in the pre and post periods, did not have
concurrent controls, and did not specify the pre and post periods a
priori. Such an approach is highly subject to bias.

There are alternatives available, including a randomized or even a
cluster-randomized trial. If such trials were not feasible, CMS could
have used other robust design approaches, such as an interrupted
time-series study with concurrent controls. Rather than having a single
pre time period and a single post time period, this design entails
repeated measurements of the safety indicators before and after the
intervention in both HEN and non-HEN hospitals. Such an approach would
have provided more valid inferences about the effects of the program,
with few additional costs.

Beyond using a poor design, CMS did not use standardized and validated
performance measures across all participating hospitals — further
hampering inferences about the program's effects. To support engagement,
CMS allowed each HEN to define its own performance measures, with little
focus on data quality control.

CMS also required HENs and participating hospitals to submit a large
number of process measures of unknown validity. It is essential to use
validated measures — ideally those endorsed by the National Quality
Forum — unless there is a compelling reason not to. In instances where
validated measures are unavailable, instead of using poor quality
metrics, CMS can have an agency such as the Agency for Healthcare
Research and Quality (AHRQ) or the CDC develop measures rapidly.

Finally, CMS made — and presented publicly — inferences about its
program's benefits without having subjected its work to independent
evaluation or peer review. Peer review, though imperfect, is a powerful
quality control.

The PPP involved an investment of nearly $1 billion to improve care —
three times the annual budget of the AHRQ, the lead federal funding
agency for implementation science, which often lacks resources for
promising projects. With such a sizable investment, CMS could have
supported a better evaluation. It could have randomized HENs or
hospitals to receive interventions earlier or later; used standardized,
validated measures across the HENs; built in basic data quality
controls; and independently collected qualitative information alongside
quantitative data to learn not just whether the interventions worked but
also how and why they did, thereby advancing our understanding of the
mechanisms and context of improvement science. These changes would have
allowed the country to learn so much more.

The lack of a careful evaluation is symptomatic of a broader problem:
some members of the quality-improvement community eschew even modestly
rigorous methods, believing that one can simply "know" if an
intervention worked. Though maintaining hope and optimism among
clinicians is important, when untested interventions are implemented
widely, they often fail to improve care. The confidence we can have in
an intervention's efficacy is directly related to the rigor with which
it is designed, implemented, and evaluated. Given the strong desire to
improve care and the conflicts of interest we all face in evaluating our
own work, subjecting all evaluations to external examination is critical.

The field of improvement science is still in its infancy. Given the
magnitude of the quality and cost problems in health care and the amount
of money invested in mitigating these problems, the public, providers,
and policymakers need to have confidence that money used to improve care
is being well spent. It's true that improvement science requires mixed
methods and is difficult, but all good science is difficult. Failing to
attend closely to issues of design, methods, and metrics leaves us with
little confidence in an intervention. For the PPP, which required
thousands of hours of clinicians' time and large sums of money, that
lack of confidence is particularly unfortunate. More important, the
failure to generate valid, reliable information hampers our ability to
improve future interventions, because we are no closer to understanding
how to improve care than we were before the PPP. And that is the biggest
cost of all.

http://www.nejm.org/doi/full/10.1056/NEJMp1405800?query=TOC#t=article

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Comment by Don McCanne

Another creation of the Affordable Care Act (ACA) is the Center for
Medicare and Medicaid Innovation (CMMI) - an entity established to test
innovations in payment and service delivery models designed to reduce
costs and improve quality. How is it doing?

After spending almost a billion dollars on a study designed to reduce
hospital-acquired conditions - a budget three times the total annual
budget of AHRQ (Agency for Healthcare Research and Quality) - we have
almost nothing to show for that effort and expense. As the CMMI report
states, "Since hospital payment policies and other U.S. Department of
Health & Human Services (HHS) programs that played an important role as
part of the PfP campaign were in place and making changes over time, it
is not possible at this time for the evaluation to identify the portion
of these harm reductions and savings attributable to the PfP campaign's
direct work with hospitals versus alignment of forces for harm reduction
versus other harm reduction work that would have continued with or
without PfP."

In their article on the flaws in this program, Peter Pronovost and
Ashish Jha make an observation that typifies what has been wrong with
the entire reform process centered on ACA. They state, "some members of
the quality-improvement community eschew even modestly rigorous methods,
believing that one can simply "know" if an intervention worked. Though
maintaining hope and optimism among clinicians is important, when
untested interventions are implemented widely, they often fail to
improve care."

Think of some of the prominent personalities involved in crafting and
implementing ACA and how outspoken they were and continue to be on what
they simply "know" will work - accountable care organizations, bundled
payments, pay for performance, competing exchange plans bringing us
higher quality at lower cost, placing the empowered consumer in charge
through deductibles and other cost sensitivity, and improving payment
policies through the Center for Medicare and Medicaid Innovation.

The tragedy is that much of this was to avoid adopting a program that
every informed person knows really would work - an improved Medicare for
all. It would have been far better to have directed that billion dollars
towards implementing single payer.

qotd: Is Austin Frakt right that Medicare Advantage may be worth the extra cost?

The New York Times
August 18, 2014
Medicare Advantage Is More Expensive, but It May Be Worth It
By Austin Frakt

Medicare Advantage plans — private plans that serve as alternatives to
the traditional, public program for those that qualify for it —
underperform traditional Medicare in one respect: They cost 6 percent more.

But they outperform traditional Medicare in another way: They offer
higher quality. That's according to research summarized recently by the
Harvard health economists Joseph Newhouse and Thomas McGuire, and it
raises a difficult question: Is the extra quality worth the extra cost?

In contrast to studies in the 1990s, more recent work finds that
Medicare Advantage is superior to traditional Medicare on a variety of
quality measures. For example, according to a paper in Health Affairs by
John Ayanian and colleagues, women enrolled in a Medicare Advantage
H.M.O. are more likely to receive mammography screenings; those with
diabetes are more likely to receive blood sugar testing and retinal
exams; and those with diabetes or cardiovascular disease are more likely
to receive cholesterol testing.

Contemplating these more recent findings on quality alongside the higher
taxpayer cost of Medicare Advantage plans invites some cognitive
dissonance. On the one hand, we shouldn't pay more than we need to in
order to provide the Medicare benefit; we should demand that
taxpayer-financed benefits be provided as efficiently as possible.
Medicare Advantage doesn't look so good from this perspective.

On the other hand, we want Medicare beneficiaries — which we all hope to
be someday, if we're not already — to receive the highest quality of
care. Here, as far as we know from research to date, Medicare Advantage
shines, at least relative to traditional Medicare.

Is Medicare Advantage worth its extra cost? A decade ago when quality
appeared poor, the answer was easy: No. Today one must think harder and
weigh costs against program benefits, including its higher quality. The
research base is still too thin to provide an objective answer. Mr.
Newhouse and Mr. McGuire hedge but lean favorably toward Medicare
Advantage, saying cuts in its "plan payments may be shortsighted."

http://www.nytimes.com/2014/08/19/upshot/medicare-advantage-is-more-expensive-but-it-may-be-worth-it.html?rref=upshot&abt=0002&abg=1

****

The Milbank Quarterly
June 3, 2014 (online)
How Successful Is Medicare Advantage?
By Joseph P. Newhouse and Thomas G. McGuire

Quality of Care in TM (traditional Medicare) and MA (Medicare Advantage)

The plans' medical management methods could, in principle, improve the
quality of their care relative to that of TM. Unfortunately, it is
difficult to compare the quality of care in TM and MA because the data
necessary to do so are sparse (John Ayanian et al). A few comparisons
can be made, however, from the data reported by beneficiaries in the
Consumer Assessment of Healthcare Providers and Systems (CAHPS) surveys,
although the beneficiaries' ability to assess the technical quality of
their care clearly is limited.

http://onlinelibrary.wiley.com/doi/10.1111/1468-0009.12061/full

Joseph P. Newhouse is a member of Aetna's Board of Directors:
http://www.aetna.com/about-us/corporate-governance/board-of-directors.html

Thomas McGuire coauthored the paper, "Making Medicare advantage a
middle-class program":
http://www.hcp.med.harvard.edu/publications/making-medicare-advantage-a-middle-class-program

****

Health Affairs
July 2013
Medicare Beneficiaries More Likely To Receive Appropriate Ambulatory
Services In HMOs Than In Traditional Medicare
By John Z. Ayanian, Bruce E. Landon, Alan M. Zaslavsky, Robert C.
Saunders, L. Gregory Pawlson and Joseph P. Newhouse

Our results suggest that the positive effects of more-integrated
delivery systems on the quality of ambulatory care in Medicare HMOs may
outweigh the potential incentives to restrict care under capitated payments.

From the Conclusion

The Affordable Care Act authorized CMS to begin contracting with
accountable care organizations that will share financial risk with CMS
for the costs and quality of care received by the traditional Medicare
beneficiaries they serve.23 Through the Medicare Pioneer Accountable
Care Organizations and Shared Savings Programs, these organizations are
eligible to receive bonus payments, initially related to reporting
quality measures and subsequently to achieving higher quality of care.

These recent parallel expansions of financial incentives for achieving
better quality of care in Medicare Advantage and traditional Medicare
heighten the need for performance measures that can be compared between
these two major components of the Medicare program. Such measures will
enable policy makers, health care providers, and Medicare beneficiaries
to assess whether the quality of care in Medicare Advantage health plans
differs from that provided within accountable care organizations and
from that provided outside these organizations in the traditional
Medicare program.

http://content.healthaffairs.org/content/32/7/1228.full

****

PNHP Blog
July 17, 2013
Pioneer Accountable Care Organizations disappoint
By Don McCanne

The Pioneer Accountable Care Organizations (ACOs) were already existing
health care organizations that were selected as potentially exemplary
models that could show the rest of the nation how well ACOs can work to
achieve higher quality at lower costs. We now have a report from CMS of
the initial "successes" of this model.

Considering the added administrative hassle, the savings were
negligible, with only 13 of the 32 organizations saving enough to
receive "shared savings" from CMS, and 2 actually lost money.

Even the supposed quality gains were unimpressive since they represented
only 15 measurements which the organizations were told in advance would
be used to determine whether or not they met quality standards. These
teach-to-the-test gains can hardly represent the overall quality status
of each organization.

http://pnhp.org/blog/2013/07/17/pioneer-accountable-care-organizations-disappoint/

****


Comment by Don McCanne

The private Medicare Advantage plans promised higher quality at lower
cost. They clearly have failed on the promise of lower costs, but are
they actually providing improved quality that is worth the extra cost?

Austin Frakt cites the Milbank Quarterly article by Joseph Newhouse and
Thomas McGuire as providing the evidence for higher quality. In their
article they state, "it is difficult to compare the quality of care in
TM (traditional Medicare) and MA (Medicare Advantage) because the data
necessary to do so are sparse." They cite as their source a Health
Affairs article by John Ayanian et al (Joseph Newhouse being a coauthor)
which states, "These recent parallel expansions of financial incentives
for achieving better quality of care in Medicare Advantage and
traditional Medicare heighten the need for performance measures that can
be compared between these two major components of the Medicare program."
Yes, performance measures that we do not have.

The ideological preferences of Newhouse and McGuire can be gleaned from
the links above - a bias which shines through in their Milbank Quarterly
article.

The point is that, other than for a few primitive teach-to-the-test
measurements, measurement of quality is still in the dark ages. The
Medicare Advantage plans would be expected to do better on these few
measurements since they use them for marketing purposes (Medicare star
ratings) and to gain bonuses. Even Austin Frakt writes, "The research
base is still too thin to provide an objective answer."

The case for higher quality in Medicare Advantage plans has not been made.


An excellent article that concurs with this view: "No, We Still Don't
Have Proof That Private Medicare Plans Are Better," by Thomas Huelskoetter:

http://thinkprogress.org/health/2014/08/20/3473823/medicare-advantage-costs/

qotd: Smaller primary care practices have lower rates of preventable admissions

Health Affairs
August 13, 2014 (online)
Small Primary Care Physician Practices Have Low Rates Of Preventable
Hospital Admissions
By Lawrence P. Casalino, Michael F. Pesko, Andrew M. Ryan, Jayme L.
Mendelsohn, Kennon R. Copeland, Patricia Pamela Ramsay, Xuming Sun,
Diane R. Rittenhouse and Stephen M. Shortell

The Affordable Care Act and initiatives by private health insurance
companies are driving major changes in the ownership of physician
practices, the incentives practices face to improve the care they
provide, and the processes practices use to improve care. Many practices
are consolidating into larger medical groups. Many others are shifting
from physician ownership to hospital ownership. Practices are
increasingly subjected to pay-for-performance and public reporting
programs and are being encouraged to implement processes used in
patient-centered medical homes.

Ambulatory care–sensitive admissions are defined by the Agency for
Healthcare Research and Quality (AHRQ) as admissions for conditions such
as congestive heart failure for which good primary care may prevent
admission.

In our large national study of small and medium-size primary care–based
practices, practices with 1–2 physicians had ambulatory care–sensitive
admission rates that were 33 percent lower than those of the largest
small practices (having 10–19 physicians). Practices with 3–9 physicians
also had rates that were lower than the rates for the largest small
practices, although slightly higher than the rates for practices with
1–2 physicians. These findings were unexpected, since small practices
presumably have fewer resources to hire staff to help them implement
systematic processes to improve the care they provide. Larger practices
did have higher patient-centered medical home scores than the practices
with 1–2 physicians (though not higher than those with 3–9 physicians)
and so appear to use more such processes, but these higher scores were
not associated with lower ambulatory care–sensitive admission rates in
multivariate analyses.

It is possible that small practices have characteristics that are not
easily measured but result in important outcomes, such as fewer
ambulatory care–sensitive admissions. For example, there is evidence
that patients in smaller practices are better able to get appointments
when they want them and better able to reach their physician via
telephone, compared to larger practices. It is also possible that
physicians, patients, and staff know each other better in small
practices, and that these closer connections result in fewer avoidable
admissions.

We cannot fully exclude the possibility that the largest practices,
which had a somewhat higher percentage of specialists, had patients who
were sicker and, therefore, more likely to have an ambulatory
care–sensitive admission. However, we controlled for the percentage of
specialists in practices and for patients' demographic characteristics
and comorbidities, and we found that the smallest practices cared for a
significantly higher percentage of dual-eligible patients and for
patients with more comorbidities.

Physician-owned practices had lower ambulatory care–sensitive admission
rates than hospital-owned practices in both bivariate and multivariate
analyses—approximately 13 percent lower in multivariate analysis.

Hospital ownership would be expected to result in a lower ambulatory
care–sensitive admission rate if hospitals provided additional resources
to practices to hire staff and implement systematic processes to improve
care. In fact, consistent with prior studies, we found that
hospital-owned practices used more patient-centered medical home
processes than physician-owned practices. But these practices
nevertheless had higher ambulatory care–sensitive admission rates.
Hospital acquisition of a practice might disrupt longstanding referral
relationships between the practice's physicians and specialists outside
the practice and might lead to other changes that result in worse
performance by the practice and higher ambulatory care–sensitive
admission rates.

We did not find an association between the ambulatory care–sensitive
admission rate and the use of patient-centered medical home processes or
between that rate and pay-for-performance or public reporting
incentives. Prior research has resulted in inconsistent findings
regarding the relationship between patient-centered medical homes and
physician practice performance and between incentives and physician
practice performance.

Physicians in small practices have no negotiating leverage with health
insurers, so insurers typically pay them much lower rates for their
services than they pay to physicians who practice in larger groups or
are employed by hospitals. This policy might be penny wise and pound
foolish if it drives small practices out of existence and if further
research confirms that small practices have lower ambulatory
care–sensitive admission rates, and possibly lower overall costs for
patients' care, than larger groups.

Small practices have many obvious disadvantages. It would be a mistake
to romanticize them. But it might be an even greater mistake to ignore
them, and the lessons that might be learned from them, as larger and
larger provider organizations clash to gain advantageous positions in
the new world of payment and delivery system changes catalyzed by health
care reform.

http://content.healthaffairs.org/content/early/2014/08/08/hlthaff.2014.0434.abstract

****


Comment by Don McCanne

It is believed that consolidation of the health care delivery system
through the formation of larger groups of physicians and through
hospital ownership of physician practices is anti-competitive and drives
up health care spending, especially through non-competitive pricing.
Nevertheless this consolidation is being encouraged under the assumption
that closer integration of the health care delivery system will improve
processes and outcomes, one rapidly expanding model being accountable
care organizations. This important study casts doubt on this concept.

One important measure of the quality of care being provided is
ambulatory care-sensitive admissions - admissions that can be prevented
through good primary care. This study shows that small primary care
practices had lower preventable admission rates than did larger
practices. Further, although larger practices did have higher
patient-centered medical home scores, the scores were not associated
with lower ambulatory care–sensitive admission rates. Also,
hospital-owned practices used more patient-centered medical home
processes than physician-owned practices, yet these hospital-owned
practices had higher ambulatory care–sensitive admission rates. Neither
pay-for-performance nor public reporting incentives improved the rate of
ambulatory care-sensitive admissions.

The policy and political communities are pushing innovations such as
more closely integrated groups through consolidation and accountable
care organizations, pay-for-performance, and patient-centered medical
homes, when there is sparse evidence that these measures will improve
quality or reduce costs. On the other hand, studies such as this
demonstrate that traditional Marcus Welby, MD-type primary care
practices serve us very well (as long as they do see more than one
patient a week).

Patients have better access through a long standing relationship with a
health care professional they know and trust and who knows and respects
them, while receiving their care at a lower cost. Although this
traditional model is now being threatened, a single payer system would
revitalize it as long as it serves patients well.

qotd: Insurers continue to discriminate against the sick

Letter
July 28, 2014
To: Sylvia Burwell, Secretary of Health and Human Services
From: Over 300 patient advocacy groups

Based on reports of enrollee experiences during the first year of
Marketplace implementation, we have identified a number of concerns.
These include discriminatory benefit designs that limit access, such as
restrictive formularies and inadequate provider networks; high
cost-sharing; and a lack of plan transparency that may deprive consumers
of information that is essential to making informed enrollment choices.

Limited Benefits:

Due to the manner in which Essential Health Benefits (EHBs) are defined
for plan years 2014 and 2015, select plans do not include all the
medications that enrollees may be prescribed to address their health
care needs. Plans are further restricting access to care by imposing
utilization management policies, such as prior authorization, step
therapy and quantity limits. Tying plan formulary requirements to the
number of drugs in each class in the state benchmark has resulted in
some plans not covering critical medications, including combination
therapies. Additionally, there is no requirement for plans to cover new
medications and plans can remove medications during the plan year as
long as the plan continues to meet the state's benchmark requirements.
Narrow provider networks and a lack of access to specialists are also
negatively impacting access to quality care for enrollees.

These design elements appear to affect certain patient populations
disproportionately – many of the same populations that were subject to
pre-existing condition restrictions prior to ACA implementation.

High Cost-Sharing:

Despite enrollee out-of-pocket limits that are included in the ACA and
reduced cost-sharing for people with very low income levels, some plans
are placing extremely high co- insurance on lifesaving medications, and
putting all or most medications in a given class, including generics, on
the highest cost tier. This creates an undue burden on enrollees who
rely on these medications. Unlike employer-sponsored plans, where
enrollees usually experience reasonable co- pays, enrollees in the
Marketplace are being subject to plans that impose 30%, 40% and even 50%
co-insurance per prescription. Such high co-insurance is shocking
enrollees and will lead to reduced medication adherence and medical
complications as people are unable to afford to begin or stay on
medications. Some plans are also imposing high deductibles for
prescription medications and high cost-sharing for accessing specialists.

We believe these practices are highly discriminatory against patients
with chronic health conditions and may, in fact, violate the ACA
non-discrimination provisions.

Transparency and Uniformity:

Individuals must have access to easy-to-understand, detailed information
about plan benefits, formularies, provider networks, and the costs of
medications and services. Unfortunately, individuals cannot access this
information easily through an interactive web tool such as a plan finder
or benefit calculator that matches an individual's prescriptions and
provider needs with appropriate plans (such as the one utilized by the
Medicare Part D program). Most troubling is the practice of requiring
co-insurance without information for an individual to understand what
their actual cost-sharing will be. Transparent, easy-to-navigate
grievances and appeals processes are needed, along with special
enrollment procedures when patients lose access to a medication due to
formulary changes during a plan year.

http://www.theaidsinstitute.org/sites/default/files/attachments/IAmStillEssentialBurwellltr_0.pdf

****


Comment by Don McCanne

In spite of regulations defining the essential health benefits to be
covered, actuarial values of the health plans, and adequacy of plan
descriptions, the private insurers continue to use deceit in
implementing these regulations to avoid enrolling individuals with
greater health care needs. Even if some of the current deceptions are
patched, they will always use the marketplace tool of innovation in
order to advantage themselves over patients.

Though the government may try to revise regulations as problems arise,
no regulation can ever alter the innate amorality of the industry - no,
make that immorality. The private insurers need to be replaced with a
single payer national health program.

qotd: FDA proposes allowing off-label claims of risk reduction

JAMA Internal Medicine
August 15, 2014
Proposed US Food and Drug Administration Guidance for Industry on
Distributing Medical Publications About the Risks of Prescription Drugs
and Biological Products
A Misguided Approach
By Sidney M. Wolfe, MD

In June 2014, the US Food and Drug Administration (FDA) for the first
time issued draft guidance for the pharmaceutical industry on
distributing scientific and medical publications about the risks of
approved prescription drugs and biological products. In my view, the
draft guidance, which is open for public comment until August 25, 2014,
has the potential to undermine the FDA's drug safety laws and
regulations and should be substantially changed.

As written, the draft guidance would allow pharmaceutical companies who
believe that the FDA-approved drug-labeling information overstates the
risks of their drug to tell physicians that the risks are, in fact,
lower. Companies could inform physicians of the purportedly lower risks
by distributing peer-reviewed articles and instructing their sales
representatives to discuss the information they contain about the lower
risks. Laws and regulations requiring FDA approval of the drug label
would have little meaning if a company, without the agency either
reviewing the data or approving it, can detail this information. In
analogy to the off-label promotion of unapproved uses of drugs, this
activity might be referred to as "off-label risk reduction."

The draft guidance states that
"FDA does not intend to object to the distribution of new risk
information that rebuts, mitigates, or refines risk information in the
approved labeling, and is distributed by a firm in the form of a reprint
or digital copy of a published study, if the study or the analysis and
the manner of distribution meet the [specified] principles…."

The agency guidance was issued in response to petitions from 11
pharmaceutical companies seeking clarification and expansion of the
limits on industry for communications with physicians and others without
risking FDA enforcement action for off-label promotion of unapproved
indications. Since 1991, pharmaceutical companies have paid tens of
billions of dollars to the United States for criminal and civil legal
violations. Two of the common forms of illegal activity have been
off-label promotion of unapproved uses of drugs and understating the
risks of approved uses.

The draft guidance suggests that the agency has now tilted toward
protecting industry's commercial speech and away from protecting
patients from the risks of prescription drugs and biological products.

Unfortunately, the draft guidance strikes the balance more toward the
industry's view of its First Amendment right to commercial speech than
toward the agency's mandate for patient protection.

The longer a drug is marketed, the historical pattern is for information
to develop about an increase in the risk to patients, not a decrease in
risk. FDA-approved labeling changes about risk are rarely about
reductions in risk. More commonly, labeling changes incorporate
information about increased risk, including many new boxed warnings. For
example, a 2005 FDA guidance that is frequently referred to in the 2014
draft guidance discusses, almost in its entirety, the various kinds of
post-marketing surveillance that result in information about increased
risks. Between 1975 and 2009, the FDA approved 748 new drugs; 114
(15.2%) received 1 or more boxed warnings after approval, and 32 (4.3%)
were withdrawn from the market for safety reasons.

To protect patients and the public health, the FDA should substantially
revise its draft guidance for industry on distributing medical
publications about the risks of prescription drugs and biological
products. When new information supports a reduction in risk, the company
should inform the FDA and provide the evidence, as is required under
current regulations; if the agency is convinced, the label can be
changed. Off-label risk reduction is a misguided approach.

http://archinte.jamanetwork.com/article.aspx?articleid=1897291

****

Health Affairs
August 2014
Era Of Faster FDA Drug Approval Has Also Seen Increased Black-Box
Warnings And Market Withdrawals
By Cassie Frank, David U. Himmelstein, Steffie Woolhandler, David H.
Bor, Sidney M. Wolfe, Orlaith Heymann, Leah Zallman and Karen E. Lasser

After approval, many prescription medications that patients rely on
subsequently receive new black-box warnings or are withdrawn from the
market because of safety concerns. We examined whether the frequency of
these safety problems has increased since 1992, when the Prescription
Drug User Fee Act, legislation designed to accelerate the drug approval
process at the Food and Drug Administration, was passed. We found that
drugs approved after the act's passage were more likely to receive a new
black-box warning or be withdrawn than drugs approved before its passage
(26.7 per 100.0 drugs versus 21.2 per 100.0 drugs at up to sixteen years
of follow-up).

The Prescription Drug User Fee Act (PDUFA)—first enacted in 1992 and
renewed in 1997, 2002, 2007, and 2012—authorizes the FDA to collect fees
from drug companies to expedite the drug approval process. Congress
enacted the PDUFA in response to widespread concerns that the process
was taking too long.

New drugs have a one-in-three chance of acquiring a new black-box
warning or being withdrawn for safety reasons within twenty-five years
of approval. We believe that the ultimate solution is stronger US drug
approval standards.

http://content.healthaffairs.org/content/33/8/1453.full

****

JAMA Internal Medicine
August 15, 2014
Trends in Boxed Warnings and Withdrawals for Novel Therapeutic Drugs,
1996 Through 2012
By Christine M. Cheng, PharmD1; Jaekyu Shin, PharmD, MS; B. Joseph
Guglielmo, PharmD

Our study demonstrates that boxed warnings are common, affecting more
than one-third of recent drug approvals. While nearly three-quarters of
boxed warnings had been applied to novel therapeutics at the time of
approval, more than 40% acquired the warning after a median market
period of 4 years. Clinicians should be aware of the prevalence and
growing numbers of boxed warnings and the importance of continued
adverse event reporting for identifying new safety concerns.

http://archinte.jamanetwork.com/article.aspx?articleid=1897290

****


Comment by Don McCanne

The Food and Drug Administration (FDA) protects the public from
pharmaceutical firms that increase their drug sales by not being totally
forthcoming about both the effectiveness and safety of their drug
products. The required drug labeling is based on the best information
available. History has repeatedly confirmed that such oversight is
essential even now with the pharmaceuticals firms having paid tens of
billions of dollars in penalties for these continuing violations.

Yet the FDA seems to be allowing the pharmaceutical firms more leeway.
An example is that the FDA allows the firms to pay fees for the purpose
of expediting the consideration of new drug applications. Allowing them
to buy their way to the front of the queue is not only a compromise of
justice, much more importantly it has allowed new products to be
introduced to markets prematurely. This has resulted in an increased
need to add post-marketing black box warnings about more serious adverse
effects of the drugs. Of even greater concern has been the increased
need to withdraw drugs from the market, raising concern that the
accelerated approval process may have allowed the release of drugs that
never should have been on the market in the first place.

The current request pending before the FDA to allow pharmaceutical firms
to distribute studies that have not been cleared by the FDA that show
that their products are safer than the required labeling would indicate
should raise concerns since the first draft of this FDA guidance would
allow such activity. Although it proposes some guidance on how this
information would be distributed, based on previous behavior of the
pharmaceutical firms, there is absolutely no doubt that they would abuse
this process by supporting studies done by researchers who are friendly
to the industry, and by selecting only the favorable studies and burying
those that are less favorable.

Those who are concerned about this ill-advised FDA guidance, and we all
should be, can read the full draft of the guidance and then submit a
comment to the FDA. Public comments are open only until Aug. 25.

Draft Guidance;
http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM400104.pdf

Submit a comment on the guidance:
http://www.regulations.gov/#!submitComment;D=FDA-2014-D-0758-0002

qotd: Health navigators for everyone

Kaiser Health News
August 13, 2014
More Employers Limit Health Plan Networks But Seek To Preserve Quality,
Says Adviser
By Mary Agnes Carey

Dr. Robert Galvin is chief executive officer of Equity Healthcare (a
wholly owned subsidiary of Blackstone, a global investment and advisory
firm), where he works with executives of nearly 50 companies that
purchase health coverage for 300,000 people. Galvin says the 2010
Affordable Care Act has made employers more engaged in health benefits
while encouraging their workers to be savvier health care consumers.

"I think what the ACA has done more than anything is it has made every
employer examine their strategy and in every case it's bringing the CFO
and the CEO" into decisions about the company's health care, which often
didn't use to happen, he said.

Q: We're hearing a lot these days about narrow networks. While they
existed before the ACA, how are employers using tools like narrow
networks or high-deductible plans to control costs?

A: Those employers who are going to stay in the game – which is the
majority of them – in many cases have to [improve] what they're
covering. They now have to use the managed care tools that they all
abandoned 15 years ago.

So the answer is narrow networks – we now call them "performance
networks" – they are definitely increasing in popularity. And I think
what we're trying to do differently this time is to make them
performance [based] and not just narrow.

The second change from the '90s is always offering options outside of
the narrow network. So rather than "Here's your narrow network, that's
it," it's, "Here's your performance network that is going to be less
expensive for you. If you want to, [you have the option] of paying
considerably more money, and getting to another network, or another
physician."

I think what we learned in the '90s was that Americans want choice, even
if it's the wrong choice.

On the high deductible side, there's absolutely a move in that
direction. The way we think about it, we're trying to make more
informed consumers.

This is a more intelligent way of getting people more involved in their
health decisions. I think the thing to watch, honestly, is the full
replacement high deductible. [There's] no [preferred provider option],
no point-of-service. All you have is a high deductible. There's still
in and out of network but what it means as an employee is you can't
choose between a PPO where you pay $20 to see your doctor or a high
deductible where you'll have to pay $120. The only option you have is
the high deductible. About 20 percent of the commercial companies have
that. The key thing to watch is how many companies basically only offer
high deductibles. It's about 20 percent now but I think that's going to
grow double-digits every year.

Q: Does the ACA need the employer mandate to work?

A: My bottom line feeling about that is no.

I think people in government have absolutely no idea what kind of work
and complexity [employers face] for what seems like a simple regulation.
In terms of who's eligible, who's tracking hours, doing the look back,
what you have for HR systems to manage the reporting requirements,
actually administering that is a nightmare.

Q: How do employers help their employees understand more about the
health care they're purchasing?

A: The first thing is they need to make employees price sensitive.
Time has shown that all the education you can give someone really only
impacts a small percent of employees who are interested anyway.

With more price sensitivity is an obligation, if you want the market to
work, for information. And information that works for individuals. More
companies are giving [employees] access to health navigators, or health
coaches. So that if you look at information on the computer or you
don't have broadband or you don't know what it means, you have someone
to call who can walk you through it.

It's a real need in the market to be able to call a navigator or a
coach, not through an insurance company, but a free-standing company and
have that person help employees figure things out.

Along with price sensitivity has to come the support.

http://www.kaiserhealthnews.org/Stories/2014/August/13/More-Employers-Limit-Health-Plan-Networks-But-Seek-To-Preserve-Quality.aspx

****

Equity Healthcare (a subsidiary of Blackstone)

Equity Healthcare works with private equity firms and their portfolio
companies to bring innovative solutions to manage health care costs.

http://www.equityhealthcare.com/default.aspx

****

Blackstone

At Blackstone, we apply our strengths as a leading global investment and
advisory firm to deliver solutions, unlock value and propel growth.

Above all, we have made it our No. 1 priority to serve the needs of our
investors and clients.

http://www.blackstone.com/the-firm/overview/why-blackstone

****


Comment by Don McCanne

Follow the logic. To receive greater value in health care, we need to
put the patients in charge of purchasing decisions by exposing them to
price sensitivity - requiring out-of-pocket payment of high deductibles.
We also have to use the managed care tools of 15 years ago - provider
networks - but which are now narrower, so we are renaming them
"performance networks." But this does increase the complexity of a
system already infamous for its administrative excesses. So what can we
do to improve the patient's ability to negotiate this complex maze of
market-oriented health care?

Simple. Let's provide each patient with a "health navigator" or "health
coach." They can help patients figure out how this thing works. Of
course, they can't give medical advice, but they can provide additional
administrative services to assist the patient. Equity Healthcare
promotes free-standing companies that provide health navigator services
- more administrative services, but no health care services, but at
least these entities can help fulfill the mission of serving the needs
of Blackstone's investors.

We gain more administrative services and greater investor opportunity at
a cost of reducing patient choices in health care while exposing them to
potential financial hardship. Is that how markets are supposed to work?
Making things worse for patients while imposing on them the costs of yet
more superfluous administrative services? Adam Smith would be perplexed.
Producers gain by serving consumers, yet today producers are abusing
consumers to achieve their gains. Isn't it time to replace the invisible
hand of the market with the opaque hand of government by establishing
our own single payer national health program?

qotd: Both Medicaid and uninsured patients face disparities in care of deadly cancers

Journal of Clinical Oncology
August 4, 2014
Disparities in Stage at Diagnosis, Treatment, and Survival in Nonelderly
Adult Patients With Cancer According to Insurance Status
By Gary V. Walker, Stephen R. Grant, B. Ashleigh Guadagnolo, Karen E.
Hoffman, Benjamin D. Smith, Matthew Koshy, Pamela K. Allen and Usama Mahmood

Abstract

Purpose
The purpose of this study was to determine the association of insurance
status with disease stage at presentation, treatment, and survival among
the top 10 most deadly cancers using the SEER database.

Patients and Methods
A total of 473,722 patients age 18 to 64 years who were diagnosed with
one of the 10 most deadly cancers in the SEER database from 2007 to 2010
were analyzed. A Cox proportional hazards model was used for
multivariable analyses to assess the effect of patient and tumor
characteristics on cause-specific death.

Results
Overall, patients with non-Medicaid insurance were less likely to
present with distant disease (16.9%) than those with Medicaid coverage
(29.1%) or without insurance coverage (34.7%; P < .001). Patients with
non-Medicaid insurance were more likely to receive cancer-directed
surgery and/or radiation therapy (79.6%) compared with those with
Medicaid coverage (67.9%) or without insurance coverage (62.1%; P <
.001). In a Cox regression that adjusted for age, race, sex, marital
status, residence, percent of county below federal poverty level, site,
stage, and receipt of cancer-directed surgery and/or radiation therapy,
patients were more likely to die as a result of their disease if they
had Medicaid coverage (hazard ratio [HR], 1.44; 95% CI, 1.41 to 1.47; P
< .001) or no insurance (HR, 1.47; 95% CI, 1.42 to 1.51; P < .001)
compared with non-Medicaid insurance.

Conclusion
Among patients with the 10 most deadly cancers, those with Medicaid
coverage or without insurance were more likely to present with advanced
disease, were less likely to receive cancer-directed surgery and/or
radiation therapy, and experienced worse survival.

http://jco.ascopubs.org/content/early/2014/08/01/JCO.2014.55.6258.abstract

****


Comment by Don McCanne

Clearly, insured patients with one of the most deadly cancers have
better outcomes than uninsured patients. Of concern is that this study
shows that patents on Medicaid do not do much better than uninsured
patients. What can we make of this?

Medicaid coverage is limited to low-income populations. These people
have many other problems that can result in impaired access and impaired
outcomes - conceivably enough to explain these differences. However,
Medicaid also may result in impaired access because of a lack of an
adequate number of physicians who are willing to care for Medicaid
patients. This is particularly true of specialists, such as oncologists
who would otherwise care for these patients with the most deadly
cancers. Impaired access due to a lack of willing providers applies to
both uninsured and Medicaid patients. That is not true for either
privately insured or Medicare patients.

Under a well designed single payer system - an improved Medicare for all
- physicians would not cull patients out of their practices merely
because they were on Medicaid or uninsured. Enacting single payer would
allow us to remove barriers based simply on the type of insurance
coverage or lack thereof. That would then allow us address other
important societal issues that result in impaired access, delayed or
forgone management, and impaired survival.

Although this study will be used by opponents as an excuse not to fund
Medicaid based on the fact that Medicaid patients did not do much better
than the uninsured, we cannot allow them to discount the other factors
faced by low-income patients that undoubtedly played a greater role in
these disparate outcomes. Many other studies have shown that Medicaid
patients definitely fare better than the uninsured. Until we can enact
and implement a single payer system, it is imperative that Medicaid
continue to be offered as an interim measure.

qotd: Most uninsured will be exempt from penalties

The Wall Street Journal
August 6, 2014
Fewer Uninsured Face Fines as Health Law's Exemptions Swell
By Stephanie Armour

Almost 90% of the nation's 30 million uninsured won't pay a penalty
under the Affordable Care Act in 2016 because of a growing batch of
exemptions to the health-coverage requirement.

The architects of the health law wanted most Americans to carry
insurance or pay a penalty. But an analysis by the Congressional Budget
Office and the Joint Committee on Taxation said most of the uninsured
will qualify for one or more exemptions.

The Obama administration has provided 14 ways people can avoid the fine
based on hardships, including suffering domestic violence, experiencing
substantial property damage from a fire or flood, and having a canceled
insurance plan. Those come on top of exemptions carved out under the
2010 law for groups including illegal immigrants, members of Native
American tribes and certain religious sects.

Factoring in the new exemptions, the congressional report in June
lowered the number of people it expects to pay the fine in 2016 to four
million, from its previous projection of six million.

http://online.wsj.com/articles/fewer-uninsured-face-fines-as-health-laws-exemptions-swell-1407378602

****

Congressional Budget Office
June 5, 2014
Payments of Penalties for Being Uninsured Under the Affordable Care Act:
2014 Update

Under the Affordable Care Act, most legal residents of the United States
are required to obtain health insurance or pay a penalty.

CBO and JCT have estimated that about 30 million nonelderly residents
will be uninsured in 2016 but that the majority of them will be exempt
from the penalty. Those who are exempt include:

* Unauthorized immigrants, who are prohibited from receiving almost all
Medicaid benefits and all subsidies through the insurance exchanges;
* People with income low enough that they are not required to file an
income tax return;
* People who have income below 138 percent of the federal poverty
guidelines (commonly referred to as the federal poverty level) and are
ineligible for Medicaid because the state in which they reside has not
expanded eligibility by 2016 under the option provided in the ACA;
* People whose premium exceeds a specified share of their income (8
percent in 2014 and indexed over time); and
* People who are incarcerated or are members of Indian tribes.

CBO and JCT estimate that 23 million uninsured people in 2016 will
qualify for one or more of those exemptions. Of the remaining 7 million
uninsured people, CBO and JCT estimate that some will be granted
exemptions from the penalty because of hardship or for other reasons.

All told, CBO and JCT estimate that about 4 million people will pay a
penalty because they are uninsured in 2016 (a figure that includes
uninsured dependents who have the penalty paid on their behalf).

http://www.cbo.gov/publication/45397

****


Comment by Don McCanne

The Affordable Care Act was designed with incentives for almost everyone
to obtain insurance. A financial penalty was to be assessed against any
individual who remained uninsured, but now almost 90 percent of the
uninsured will be exempt from the penalty. Larger employers were to be
penalized if their employees remained uninsured, but now there is
bipartisan support to eliminate the employer mandate. The expansion of
Medicaid was to occur in all states but it has now been declined by
about half of the states. Even with legislative patches, this fragmented
system can never ensure that everyone has adequate health care coverage.

Compare this to a single pager system in which absolutely everyone would
have been automatically enrolled in a better plan than any of those
currently available, including Medicare. Why is there no clamoring for
change?

qotd: Free Medicaid? Gotcha!

Bloomberg View
August 4, 2014
You Qualify for Medicaid: Don't Sign Up
By Christopher Flavelle

The debate over Obamacare's Medicaid expansion divides states into two
broad categories -- those that expand their program and those that
don't. New research suggests we should talk more about a third group:
States that agree to expand Medicaid, then impose premiums whose only
purpose seems to be keeping people out of the program.

A paper released today in the journal Health Affairs, written by
researchers from the federal government's Agency for Healthcare Research
and Quality, seeks to quantify the effect of premium increases on
children's enrollment in Medicaid or its sister plan, the Children's
Health Insurance Program. They found that even small premiums lead to
big drops in sign-ups.

Using data from 1999-2010, the researchers -- Salam Abdus, Julie Hudson,
Steven C. Hill and Thomas M. Selden -- found that for children in
families making from 101 percent to 150 percent of the federal poverty
line, a $10 increase in monthly premiums was associated with a 6.7
percent reduction in enrollment. For the subset of families not eligible
for health coverage through their jobs, that grew to 7.3 percent.

The authors of the Health Affairs study don't examine the effect of
premium increases on adults. But Laura Dague, a professor at Texas A&M
University, has. In an article published in the Journal of Health
Economics in May, Dague looked at three years of data from the Wisconsin
BadgerCare Plus program, which offers subsidized health coverage to
families with low incomes. She found that moving from $0 to $10 a month
reduced enrollment among children and adults by 12 percent to 15 percent.

What struck Dague about those results was that it's not just the
magnitude of the premium that matters, but the existence of a premium.

"The biggest effects in my data were at the margin where folks start
having to pay premiums at all," she told me by phone last week. She
wasn't sure why that was -- perhaps the difficulty of paying another
monthly bill or the psychology of having to pay in the first place.

What makes these papers relevant is that at least four states --
Indiana, Iowa, Michigan and Pennsylvania -- have expanded or are trying
to expand Medicaid access in a way that imposes premiums on those making
from 101 percent to 138 percent of poverty. Those premiums aren't high:
$25 a month in Indiana, $10 in Iowa, $25 in Pennsylvania ($35 for a
household) and 2 percent of income in Michigan. But these new studies
show that even those small amounts can significantly reduce the number
of people who sign up.

That seems to be the point. After all, Medicaid spending per beneficiary
will reach almost $6,400 in 2014, against which $120 in premiums each
year generates additional revenue that's barely significant. And as
Dague notes, imposing a premium at all means spending money to obtain
and process those payments.

"If the administrative costs of collecting premiums are high relative to
revenue collected," she wrote, "small premiums seem difficult to justify
as anything other than a measure to discourage enrollment."

If the states that have already imposed premiums were the outliers, then
this would be a frustrating story but a limited one. However, 24 states
still refuse to expand their Medicaid programs, and there's a strong
chance that some of those will change their minds on the condition that
they can impose premiums, too. There's an equally good chance that the
Centers for Medicare and Medicaid Services, which faces pressure to
bring those states into the fold, will go along with it.

Unquestionably, access to Medicaid for a small premium is better than no
access at all. But this new research says we shouldn't mince words about
the point of those premiums. They're designed to get fewer people to
sign up.

http://www.bloombergview.com/articles/2014-08-04/you-qualify-for-medicaid-don-t-sign-up

****

Health Affairs
August 2014
Children's Health Insurance Program Premiums Adversely Affect
Enrollment, Especially Among Lower-Income Children
By Salam Abdus, Julie Hudson, Steven C. Hill and Thomas M. Seedless

In this article we have examined the effects of public premiums on
insurance coverage of children who were eligible for Medicaid or CHIP
and whose family incomes were above 100 percent of the federal poverty
level in 1999–2010. Higher public premiums are associated with lower
public coverage and with increases in private coverage and uninsurance.
The magnitudes of these premium effects vary considerably by poverty
level and by parental coverage offers.

Among lower-income children, premium increases are associated with
larger reductions in enrollment in public coverage, and a larger share
of the decline in enrollment takes the form of increased uninsurance.
The association between premiums and uninsurance is particularly strong
among lower-income children who lack access to employer-sponsored
insurance through parental offers.

http://content.healthaffairs.org/content/33/8/1353.abstract

****

Journal of Health Economics
September 2014
The effect of Medicaid premiums on enrollment: A regression
discontinuity approach
By Laura Dague

This paper estimates the effect that premiums in Medicaid have on the
length of enrollment of program beneficiaries. Whether and how low
income-families will participate in the exchanges and in states'
Medicaid programs depends crucially on the structure and amounts of the
premiums they will face.

http://www.sciencedirect.com/science/article/pii/S0167629614000642

****


Comment by Don McCanne

The obsession of the policy and political communities with requiring
even low income families to experience consumer sensitivity to costs has
crossed the bounds into blatant psychopathology, as these studies confirm.

The Medicaid and CHIP programs were specifically designed to provide
health care coverage for low income families - a goal with which most
caring individuals agree. The very modest Medicaid and CHIP premiums
extracted from these families are so small that they have no impact on
the overall financing of the programs. Yet they are enough that these
families with no discretionary income find these programs to be
unaffordable, and so they remain uninsured.

The screwball idea that these premiums somehow make these low income
families better consumers is totally void of reason. These premiums
merely defeat the purpose of the programs - getting these people the
coverage that they need. The psychopathology rests with those who insist
that cash payments, no matter how small, are absolutely essential for
these families to appreciate the benefits of actively participating in
markets rather than passively accepting a government handout. This is
ideology gone mad!

Under a well designed single payer system, premiums and cost sharing are
eliminated. People simply get the heath care they need when they need
it. Paying for the system is totally removed from the delivery of care
since it is financed through progressive taxes that everyone can afford.

qotd: Correction: Reinsurance and risk corridors

In today's Quote of the Day on California's 4.2% premium increase, the
following statement was incorrect: "And what about the next year when
they no longer have protection against losses?" The next year after
2015, that is 2016, reinsurance and risk corridors are still in effect.
The protection ceases in 2017.

qotd: What does California’s 4.2% premium increase mean?

Los Angeles Times
July 31, 2014
Obamacare premiums to rise a modest 4.2% in 2015
By Stuart Pfeifer, Chad Terhune, Soumya Karlamangla

Defying an industry trend of double-digit rate hikes, California
officials said the more than 1.2 million consumers in the state-run
Obamacare insurance exchange can expect modest price increases of 4.2%
on average next year.

"We have changed the trend in healthcare costs," said Peter Lee, Covered
California's executive director. "This is good news for Californians."

State officials and insurers credited the strong turnout during the
first six-month enrollment window that ended in April for helping to
keep 2015 rates in check. But others cautioned it's still too early to
gauge the health law's impact, suggesting several factors may be
temporarily holding rates down in the individual market.

"We don't really know what the real cost of Obamacare is yet because
insurance companies are heavily subsidized for the first three years" of
the law's implementation, said Robert Laszewski, a healthcare consultant
in Virginia who has closely tracked the overhaul. "The insurance
companies essentially can't lose money."

California Insurance Commissioner Dave Jones said the modest uptick in
premiums was a positive sign, but he said insurers were likely motivated
by a November ballot initiative, Proposition 45, that would give his
office new authority to regulate health insurance rates.

"This is merely a pause in the double-digit rate increases we've seen
historically," Jones said.

Consumer Watchdog, the Santa Monica advocacy group pushing Proposition
45, said insurers held back this year to avoid that kind of voter backlash.

WellPoint Inc., Anthem Blue Cross' parent company, Kaiser and other
insurers have contributed more than $25 million to defeat the ballot
measure.

http://www.latimes.com/business/la-fi-obamacare-2015-rates-20140801-story.html

****


Comment by Don McCanne

Before we discuss some of the possible reasons that the 2015 increase in
premiums for California's ACA exchange were held down to 4.2 percent, we
should mention the bad news that is not being covered by the media. We
are celebrating an artificially low increase that is still twice the
rate of inflation - 2.1 percent (Consumer Price Index, June 2014 -
Bureau of Labor Statistics), as workers continue to fall behind over the
last three decades of increasing income inequality.

Although ACA enthusiasts are touting success in controlling health
insurance premiums, there are many reasons why their celebration is
premature, but two stand out.

Proposition 45, which will be on the November ballot, would provide
authority to California's insurance commissioner to regulate health
insurance premiums. The last thing the insurers want to do is to anger
voters with high rate increases just before this election. The insurers
have already contributed over $25 million to defeat this measure.

The other important reason is that the insurers are still protected by
reinsurance and insurance rate corridors. In fact, the Obama
administration adjusted this coverage to be sure that the insurers were
fully protected again next year should they not receive enough premium
revenue to meet their expenses. They can't lose! Of course they are
going to come in with low bids when they are under the threat of voter
revolt.

And what about the next year when they no longer have protection against
losses? We already know the routine. "The patients enrolled in our plans
were older and sicker while the younger, healthier individuals were
covered by plans at work, or bought the cheap catastrophic plans, and
the new drugs that cost tens of thousands of dollars or more placed a
strain on our budgets, and our contingency reserves were depleted with
the market crash of 2015, and we've lost our rate flexibility with the
termination of government reinsurance, and…" Well, you know.

Although there are many other uncertainties as the implementation of ACA
plays out, one certainty that we can rely on is that insurers will be
requesting much larger premium increases for 2016, possibly double
digits. That would not be happening under a single payer national health
program.