Stay tuned for Insuring Resources Commentary soon.
.... in the meantime see an analysis below courtesy of the Associated Press
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Senate, House Democratic Health Bills ComparedAssociated Press
November 19, 2009
A comparison of the health care bills before Congress:
The Senate Democratic bill (Patient Protection and Affordable Care Act):
WHO'S COVERED: About 94 percent of legal residents under age 65 -- compared with 83 percent now. Government subsidies to help buy coverage start in 2014. Illegal immigrants would not receive assistance.
COST: Coverage provisions cost $849 billion over 10 years.
HOW IT'S PAID FOR: Fees on insurance companies, drugmakers, medical device manufacturers. Medicare payroll tax increased to 1.95 percent on income over $200,000a year for individuals; $250,000 for couples. New 5 percent tax on elective cosmetic surgery. Cuts to Medicare and Medicaid. Excise tax on insurance companies, keyed to premiums paid on health care plans costing more than $8,500 annually for individuals and $23,000 for families. Fees on employers whose workers receive government subsidies to help them pay premiums. Fines on people who fail to purchase coverage.
REQUIREMENTS FOR INDIVIDUALS: Almost everyone must get coverage through an employer, on their own or through a government plan. Exemptions for economic hardship. Those who are obligated to buy coverage and refuse to do so would pay a fine starting at $95 in 2014 and rising to $750.
REQUIREMENTS FOR EMPLOYERS: Not required to offer coverage, but medium and large companies would pay a fee if the government ends up subsidizing employees' coverage.
SUBSIDIES: Tax credits for individuals and families likely making up to 400 percent of the federal poverty level, which computes to $88,200 for a family of four. Tax credits for small employers.
BENEFITS PACKAGE: All plans sold to individuals and small businesses would have to cover basic benefits. The government would set four levels of coverage: The least generous would pay an estimated 60 percent of health care costs per year; the most generous would cover an estimated 90 percent.
INSURANCE INDUSTRY RESTRICTIONS: Starting in 2014: no denial of coverage based on pre-existing conditions. No higher premiums allowed for pre-existing conditions or gender. Limits on higher premiums based on age and family size. Starting upon enactment of legislation: children up to age 26 can stay on parents insurance; no lifetime limits on coverage.
GOVERNMENT-RUN PLAN: A new federal insurance plan would be offered to compete against private carriers. The government would negotiate -- not dictate -- payment rates for medical providers. Unlike the House bill, states could opt out of the plan. It's not clear the proposal commands enough votes to survive, and it could be replaced by a standby system pushed by moderates that would not go into effect until it was clear individual states were experiencing a lack of competition among private companies.
HOW YOU CHOOSE YOUR HEALTH INSURANCE: Self-employed people, uninsured individuals and small businesses could pick a plan offered through new state-based purchasing pools. Employees would be generally encouraged to keep their work-provided coverage.
DRUGS: Grants 12 years of market protection to high-tech drugs used to combat cancer, Parkinson's and other deadly diseases. Drug companies contribute $80 billion over 10 years with the majority of the money used to limit the prescription coverage gap in Medicare.
CHANGES TO MEDICAID: Income eligibility levels likely to be standardized to 133 percent of poverty, which is $29,327 a year for a family of four, for all parents, children and pregnant women. Federal government would pick up the full cost of the expansion during the first three years. States could negotiate with insurers to arrange coverage for people with incomes slightly higher than the cutoff for Medicaid.
LONG-TERM CARE: New voluntary long-term care insurance program would provide a basic benefit designed to help seniors and disabled people avoid going into nursing homes.
ANTITRUST: Amendment expected to be offered on the Senate floor to strip the health insurance industry of its antitrust exemption.
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The House bill (Affordable Health Care for America Act):
WHO'S COVERED: About 96 percent of legal residents under age 65 -- compared with 83 percent now. Government subsidies to help buy coverage start in 2013. About one-third of the remaining 18 million people under age 65 left uninsured would be illegal immigrants.
COST: The Congressional Budget Office says the bill's cost of expanding insurance coverage over 10 years is $1.055 trillion. The net cost is $894 billion, factoring in penalties on individuals and employers who don't comply with new requirements. That's under President Barack Obama's $900 billion goal. However, those figures leave out a variety of new costs in the bill, including increased prescription drug coverage for seniors under Medicare, so the measure may be around $1.2 trillion.
HOW IT'S PAID FOR: $460 billion over the next decade from new income taxes on single people making more than $500,000 a year and couples making more than $1 million. The original House bill taxed individuals making $280,000 a year and couples making more than $350,000, but the threshold was increased in response to lawmakers' concerns that the taxes would hit too many people and small businesses.
There are also more than $400 billion in cuts to Medicare and Medicaid; a new $20 billion fee on medical device makers; $13 billion from limiting contributions to flexible spending accounts; sizable penalties paid by individuals and employers who don't obtain coverage; and a mix of other corporate taxes and fees.
REQUIREMENTS FOR INDIVIDUALS: Individuals must have insurance, enforced through a tax penalty of 2.5 percent of income. People can apply for hardship waivers if coverage is unaffordable.
REQUIREMENTS FOR EMPLOYERS: Employers must provide insurance to their employees or pay a penalty of 8 percent of payroll. Companies with payrolls under $500,000 annually are exempt -- a change from the original $250,000 level to accommodate concerns of moderate Democrats -- and the penalty is phased in for companies with
payrolls between $500,000 and $750,000.
Small businesses -- those with 10 or fewer workers -- get tax credits to help them provide coverage.
SUBSIDIES: Individuals and families with annual income up to 400 percent of poverty level, or $88,000 for a family of four, would get sliding-scale subsidies to help them buy coverage. The subsidies would begin in 2013.
HOW YOU CHOOSE YOUR HEALTH INSURANCE: Beginning in 2013 through a new Health Insurance Exchange open to individuals and, initially, small employers. It could be expanded to large employers over time. States could opt to operate their own exchanges in place of the national exchange if they follow federal rules.
BENEFITS PACKAGE: A committee would recommend a so-called essential benefits package including preventive services. Out-of pocket costs would be capped. The new benefit package would be the basic benefit package offered in the exchange.
INSURANCE INDUSTRY RESTRICTIONS: Starting in 2013, no denial of coverage based on pre-existing conditions. No higher premiums allowed for pre-existing conditions or gender. Limits on higher premiums based on age.
GOVERNMENT-RUN PLAN: A new public plan available through the insurance exchanges would be set up and run by the secretary of Health and Human Services. Democrats originally designed the plan to pay Medicare rates plus 5 percent to doctors. But the final version -- preferred by moderate lawmakers -- would let the HHS secretary negotiate rates with providers.
CHANGES TO MEDICAID: The federal-state insurance program for the poor would be expanded to cover all individuals under age 65 with incomes up to 150 percent of the federal poverty level, which is $33,075 per year for a family of four. The federal government would pick up the full cost of the expansion in 2013 and 2014; thereafter the federal government would pay 91 percent and states would pay 9 percent.
DRUGS: Grants 12 years of market protection to high-tech drugs used to combat cancer, Parkinson's and other deadly diseases. Phases out the gap in Medicare prescription drug coverage by 2019. Requires the HHS secretary to negotiate drug prices on behalf of Medicare beneficiaries.
LONG-TERM CARE: New voluntary long-term care insurance program would provide a basic benefit designed to help seniors and disabled people avoid going into nursing homes.
ANTITRUST: Would strip the health insurance industry of a long-standing exemption from antitrust laws covering market allocation, price-fixing and bid rigging. The bill also would give the Federal Trade Commission authority to look into the health insurance industry at its own initiative.
Thursday, November 19, 2009
Wednesday, November 18, 2009
WI Firms Pay 22% More for Health Insurance- with Soultions Offered by Insuring Resources
Insuring Resources Commentary:
Wisconsin business is at a huge disadvantage in the national marketplace because we pay so much more for health insurance, according to new research by Mercer. Part of the reason, I believe, is because Wisconsin health care providers get paid less on average for treating people on Medicare so the costs are shifted on to the private sector side.
Now if health care reform includes a public plan option that covers small businesses and uses Medicare reimbursement rates the situation will get much worse for Wisconsin businesses.
Solution:
Health care reform must
1. level the Medicare reimbursement to bring Wisconsin up where it should be. Wisconsin providers are paid much less by Medicare than the national average.
2.if we have a public plan option that includes coverage for small businesses it must not use Medicare reimbursement rates UNLESS, Medicare can finally start to negotiate rates with providers. Right now, Medicare reimbursement rates are set by the feds, NOT negotiated in the marketplace. With the purchasing power of the federal government insuring tens of millions of people on Medicare this should be a no-brainer.
3. In addition, as I've said all along, providers need reimbursement incentives to make their care more efficient and reduce the waste. The Senate bill includes pilots for this but that doesn't go far enough, we need these efficiency incentives to be standard across the entire system.
4. And finally, Wisconsin cannot be penalized for having a higher rate of insured persons. There are incentives in the House bill that gives grant money to states with higher uninsured pct.s to help them along. This actually hurts states like Wisconsin that have been proactive. For instance- Wisconsin covers childless adults through BadgerCare up to 200% of FPL. Louisiana covers them up to 26% of FPL!!! If the House reform language passes Lousiana gets extra money to bring their insured numbers up to 150% while Wisconsin already surpasses that. By the way-- thanks to Wisconsin DHS Secretary Karen Timberlake for providing the Louisiana stat at a health care forum I attended in Madison yesterday.
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State firms pay 22% more for health insurance than U.S., survey shows By Rick Romell of the Journal Sentinel
Posted: Nov. 18, 2009 10:14 a.m.
Wisconsinites continue to pay more for health insurance than Americans generally, and the costs here have increased more rapidly, a new survey by benefits consulting firm Mercer shows.
Wisconsin companies and their employees paid an average of $10,888 per worker for health insurance in 2009 - nearly 22% above the national average of $8,945, Mercer found.
And the cost gap between Wisconsin and the rest of the country widened. Nationally, the cost of health benefits for active employees rose 5.5% for the year, the smallest annual increase in a decade. In Wisconsin, costs increased by 6.8%.
Mercer's findings are based on a late-summer survey of more than 2,900 employers with at least 10 employees each. Eighty-eight Wisconsin employers were surveyed.
Wisconsin business is at a huge disadvantage in the national marketplace because we pay so much more for health insurance, according to new research by Mercer. Part of the reason, I believe, is because Wisconsin health care providers get paid less on average for treating people on Medicare so the costs are shifted on to the private sector side.
Now if health care reform includes a public plan option that covers small businesses and uses Medicare reimbursement rates the situation will get much worse for Wisconsin businesses.
Solution:
Health care reform must
1. level the Medicare reimbursement to bring Wisconsin up where it should be. Wisconsin providers are paid much less by Medicare than the national average.
2.if we have a public plan option that includes coverage for small businesses it must not use Medicare reimbursement rates UNLESS, Medicare can finally start to negotiate rates with providers. Right now, Medicare reimbursement rates are set by the feds, NOT negotiated in the marketplace. With the purchasing power of the federal government insuring tens of millions of people on Medicare this should be a no-brainer.
3. In addition, as I've said all along, providers need reimbursement incentives to make their care more efficient and reduce the waste. The Senate bill includes pilots for this but that doesn't go far enough, we need these efficiency incentives to be standard across the entire system.
4. And finally, Wisconsin cannot be penalized for having a higher rate of insured persons. There are incentives in the House bill that gives grant money to states with higher uninsured pct.s to help them along. This actually hurts states like Wisconsin that have been proactive. For instance- Wisconsin covers childless adults through BadgerCare up to 200% of FPL. Louisiana covers them up to 26% of FPL!!! If the House reform language passes Lousiana gets extra money to bring their insured numbers up to 150% while Wisconsin already surpasses that. By the way-- thanks to Wisconsin DHS Secretary Karen Timberlake for providing the Louisiana stat at a health care forum I attended in Madison yesterday.
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State firms pay 22% more for health insurance than U.S., survey shows By Rick Romell of the Journal Sentinel
Posted: Nov. 18, 2009 10:14 a.m.
Wisconsinites continue to pay more for health insurance than Americans generally, and the costs here have increased more rapidly, a new survey by benefits consulting firm Mercer shows.
Wisconsin companies and their employees paid an average of $10,888 per worker for health insurance in 2009 - nearly 22% above the national average of $8,945, Mercer found.
And the cost gap between Wisconsin and the rest of the country widened. Nationally, the cost of health benefits for active employees rose 5.5% for the year, the smallest annual increase in a decade. In Wisconsin, costs increased by 6.8%.
Mercer's findings are based on a late-summer survey of more than 2,900 employers with at least 10 employees each. Eighty-eight Wisconsin employers were surveyed.
Monday, November 16, 2009
Wisconsin Group Leads The Way on Efficiency Data
Insuring Resources Commentary:
This is how Wisconsin can lead the way to show how efficient health care can be delivered. Health care reform must include incentives to providers to share their costs and quality outcomes to drive competition to more cost effective and quality care.
The WHIO Health Analytics Exchange announced today the launch of a database to assess health care quality, costs.
For more information visit WHIP at http://www.wisconsinhealthinfo.org/
___________________ _________________________
from the Milwaukee Journal Sentinel
Nov. 16, 2009 3:10 p.m. |
A 4-year-old collaborative effort to collect data from Wisconsin's insurers, hospitals, major employers and others has launched a database that can be used to analyze health systems' performance.
The WHIO Health Analytics Exchange contains information from millions of insurance claims and is being used by large medical groups, state government, business groups and other members of the Wisconsin Health Information Organization, said Julie Bartels, the organization's executive director.
The database shows, for example, that treatment for congestive heart failure in the Fox Valley and Madison costs significantly less than the statewide average, meaning those areas are much more efficient at caring for that disease, Bartels said.
Treatment for congestive heart failure costs slightly more in the Milwaukee area than the statewide average, the data show.
"The breadth of information in our repository is astounding," said Bartels, who will discuss Wisconsin's experience building the database Tuesday at an American Health Insurance Plans conference in Chicago.
"To us, the real opportunity is to look across all the claims aggregated here and get a picture of where we have cost-effective health care being delivered in Wisconsin, and where we have an opportunity to improve the cost-effectiveness of health care," said Karen Timberlake, secretary of the state Department of Health Services and a WHIO board member.
It's difficult to see trends when comparing a few heart attack treatments. But when you can look at thousands of procedures around the state, "it's really powerful," Timberlake said. "You start to see there are real differences in the way medicine is practiced."
That kind of information will help medical providers improve their care, said John Toussaint, president and chief executive of the ThedaCare Center for Healthcare Value in Appleton. If a provider discovers it is expensive or less efficient in a certain area, it "can either say, 'I'm going to put resources into this, or maybe not do it anymore,' " Toussaint said.
Ten founding members contributed $3 million to WHIO to develop the database, and six more fee-paying members have joined. The state contributed $1.55 million.
WHIO has given a three-year, $4.5 million contract to Ingenix, a health care information and research company, to manage the data warehouse and analyze the information. Ingenix is part of UnitedHealth Group Inc.
"We all know there is waste going on in health care, and it contributes to higher health care premiums," Timberlake said. "This is one way we in Wisconsin can work to hold down the cost."
This is how Wisconsin can lead the way to show how efficient health care can be delivered. Health care reform must include incentives to providers to share their costs and quality outcomes to drive competition to more cost effective and quality care.
The WHIO Health Analytics Exchange announced today the launch of a database to assess health care quality, costs.
For more information visit WHIP at http://www.wisconsinhealthinfo.org/
___________________ _________________________
from the Milwaukee Journal Sentinel
Nov. 16, 2009 3:10 p.m. |
A 4-year-old collaborative effort to collect data from Wisconsin's insurers, hospitals, major employers and others has launched a database that can be used to analyze health systems' performance.
The WHIO Health Analytics Exchange contains information from millions of insurance claims and is being used by large medical groups, state government, business groups and other members of the Wisconsin Health Information Organization, said Julie Bartels, the organization's executive director.
The database shows, for example, that treatment for congestive heart failure in the Fox Valley and Madison costs significantly less than the statewide average, meaning those areas are much more efficient at caring for that disease, Bartels said.
Treatment for congestive heart failure costs slightly more in the Milwaukee area than the statewide average, the data show.
"The breadth of information in our repository is astounding," said Bartels, who will discuss Wisconsin's experience building the database Tuesday at an American Health Insurance Plans conference in Chicago.
"To us, the real opportunity is to look across all the claims aggregated here and get a picture of where we have cost-effective health care being delivered in Wisconsin, and where we have an opportunity to improve the cost-effectiveness of health care," said Karen Timberlake, secretary of the state Department of Health Services and a WHIO board member.
It's difficult to see trends when comparing a few heart attack treatments. But when you can look at thousands of procedures around the state, "it's really powerful," Timberlake said. "You start to see there are real differences in the way medicine is practiced."
That kind of information will help medical providers improve their care, said John Toussaint, president and chief executive of the ThedaCare Center for Healthcare Value in Appleton. If a provider discovers it is expensive or less efficient in a certain area, it "can either say, 'I'm going to put resources into this, or maybe not do it anymore,' " Toussaint said.
Ten founding members contributed $3 million to WHIO to develop the database, and six more fee-paying members have joined. The state contributed $1.55 million.
WHIO has given a three-year, $4.5 million contract to Ingenix, a health care information and research company, to manage the data warehouse and analyze the information. Ingenix is part of UnitedHealth Group Inc.
"We all know there is waste going on in health care, and it contributes to higher health care premiums," Timberlake said. "This is one way we in Wisconsin can work to hold down the cost."
Saturday, November 14, 2009
Republican says House Dems Rejected Common Sense Reforms
Insuring Resources Commentary:
GOP Congressman Mark Kirk says House Democrats rejected several common sense Republican proposals in the debate on the House's Health Care reform bill.
He said some proposals sought to allow greater flexibility for state innovation. In not knowing the specifics I'd say state innovation should have been encouraged but the details are missing so on its face it seems like a missed opportunity to allow for some bi-partisanship.
On another issue Kirk says Dems rejected "allowing consumers to buy coverage from across state lines."
Let's analyze that one. Wisconsin insurance regulations are some of the strongest in the nation which also does add a bit of cost to our health insurance premiums. Health mandates requiring greater coverage do often add costs to health insurance premiums. BUT, we get better and more comprehensive coverage because of it. The old adage, "You get what you pay for" definitely applies here.
The wonderful state of Alabama however does not have a stellar reputation for its insurance regulations. Health insurance is cheaper there because insurers face less restrictions and mandates.
When faced with high health care premiums many businesses would seek cheaper coverage in Alabama wouldn't they, and they'd get what they paid for, wouldn't they?
What if your employer chose to purchase coverage from an Alabama-based insurer?
______________ ______________
Republican lawmaker says House Democrats rejected GOP proposals to improve health care bill
From JS Online 11/14/09
GOP Congressman Bashes Dems Health Care Proposals
In this week's Republican address Congressman Mark Kirk says he wants to see tort reform in health care improvements.
In this week's Republican address Congressman Mark Kirk criticizes the health care proposals pushed by Speaker of the House Nancy Pelosi.
In this week's Republican address, Congressman Mark Kirk says the Democrats' health care ideas are just too expensive.
In this week's Republican address Congressman Mark Kirk says the current health care proposals cost too much and take away too much.
WASHINGTON (AP) -- House Democrats missed opportunities to improve the House-passed health care bill when they rejected Republican ideas to limit lawsuits and give states more flexibility to enact innovative changes, a GOP lawmaker said Saturday.
Delivering the Republicans' weekly radio and Internet address, Rep. Mark Kirk of Illinois said health care costs could be lowered by "reining in lawsuits" and allowing consumers to buy coverage from across state lines. Kirk promoted several provisions in the House GOP health care bill, which was rejected a week ago when the House passed the Democratic plan.
"Unfortunately, all of these commonsense Republican reforms were rejected by Speaker (Nancy) Pelosi," Kirk said in the address. "The Pelosi health care bill has no significant lawsuit reforms and does not guarantee your medical rights from government waiting lines or restrictions."
Kirk, who is in his fifth House term representing the suburbs north of Chicago, is a candidate for the Republican nomination to run for the Senate seat that was held by President Barack Obama. He called the House Democrats' health plan "a new massive spending program, supported by heavy taxes and cuts to senior health care."
"In sum, the bill opens a new trillion-dollar entitlement just as our national debt tops $12 trillion," Kirk said.
GOP Congressman Mark Kirk says House Democrats rejected several common sense Republican proposals in the debate on the House's Health Care reform bill.
He said some proposals sought to allow greater flexibility for state innovation. In not knowing the specifics I'd say state innovation should have been encouraged but the details are missing so on its face it seems like a missed opportunity to allow for some bi-partisanship.
On another issue Kirk says Dems rejected "allowing consumers to buy coverage from across state lines."
Let's analyze that one. Wisconsin insurance regulations are some of the strongest in the nation which also does add a bit of cost to our health insurance premiums. Health mandates requiring greater coverage do often add costs to health insurance premiums. BUT, we get better and more comprehensive coverage because of it. The old adage, "You get what you pay for" definitely applies here.
The wonderful state of Alabama however does not have a stellar reputation for its insurance regulations. Health insurance is cheaper there because insurers face less restrictions and mandates.
When faced with high health care premiums many businesses would seek cheaper coverage in Alabama wouldn't they, and they'd get what they paid for, wouldn't they?
What if your employer chose to purchase coverage from an Alabama-based insurer?
______________ ______________
Republican lawmaker says House Democrats rejected GOP proposals to improve health care bill
From JS Online 11/14/09
GOP Congressman Bashes Dems Health Care Proposals
In this week's Republican address Congressman Mark Kirk says he wants to see tort reform in health care improvements.
In this week's Republican address Congressman Mark Kirk criticizes the health care proposals pushed by Speaker of the House Nancy Pelosi.
In this week's Republican address, Congressman Mark Kirk says the Democrats' health care ideas are just too expensive.
In this week's Republican address Congressman Mark Kirk says the current health care proposals cost too much and take away too much.
WASHINGTON (AP) -- House Democrats missed opportunities to improve the House-passed health care bill when they rejected Republican ideas to limit lawsuits and give states more flexibility to enact innovative changes, a GOP lawmaker said Saturday.
Delivering the Republicans' weekly radio and Internet address, Rep. Mark Kirk of Illinois said health care costs could be lowered by "reining in lawsuits" and allowing consumers to buy coverage from across state lines. Kirk promoted several provisions in the House GOP health care bill, which was rejected a week ago when the House passed the Democratic plan.
"Unfortunately, all of these commonsense Republican reforms were rejected by Speaker (Nancy) Pelosi," Kirk said in the address. "The Pelosi health care bill has no significant lawsuit reforms and does not guarantee your medical rights from government waiting lines or restrictions."
Kirk, who is in his fifth House term representing the suburbs north of Chicago, is a candidate for the Republican nomination to run for the Senate seat that was held by President Barack Obama. He called the House Democrats' health plan "a new massive spending program, supported by heavy taxes and cuts to senior health care."
"In sum, the bill opens a new trillion-dollar entitlement just as our national debt tops $12 trillion," Kirk said.
Friday, November 13, 2009
Business Roundtable Wants Increased Emphasis on Cost-Effectiveness
This is an important article from the business/ employer perspective
_________________ _____________
By Donna Smith (Reuters)
WASHINGTON (Reuters) - An influential business group said on Thursday that its continued support for President Obama's healthcare overhaul hinges on whether it slows the soaring growth rate of healthcare costs.
The Business Roundtable, which represents some of the largest employers in the United States, released a report saying that "effective" healthcare reforms could save employers as much as $3,000 per worker by 2019.
"The report also shows that reform done wrong ... could make a bad situation much worse, in which case Business Roundtable could not support the bill," Eastman Kodak (EK.N) Company Chairman and Chief Executive Antonio Perez said in a statement accompanying the release of the report.
Obama said it was further evidence that the U.S. healthcare system is broken.
"If we don't pass comprehensive reform, the report finds, health care costs that are already squeezing our businesses will continue to rise, and in 10 years, employment-based spending on health care for large employers will be fully 166 percent higher per employee than it is today," the president said in a statement.
"The yearly health insurance costs for the average employee will rise to a staggering $28,530," he added, citing a finding by the report.
Companies represented by the Business Roundtable, which includes such giants as Verizon Communications Inc. (VZ.N), The Boeing Company (BA.N) and Exxon Mobil Corp. (XOM.N), provide health insurance to more than 35 million workers and their families. The group has been a major force behind the healthcare overhaul push.
The business group opposes the bill approved last week by the U.S. House of Representatives. It says the measure fails to control costs and that some provisions, including one that would create a new government insurance plan, could undermine employer-sponsored health coverage.
The report, written by Hewitt Associates for the Business Roundtable, favors some of the cost-containment reforms included in legislation passed by the Senate Finance Committee.
These include changes in the government Medicare health insurance program for the elderly that would reward quality of care and not the quantity of services and treatments performed.
The report said a strong requirement that individuals be responsible for obtaining health insurance would help ensure that premiums do not jump with a proposal that would bar insurers from rejecting people with pre-existing conditions.
The Finance Committee weakened enforcement measures of the individual mandate provision, raising concerns that healthier people will delay seeking insurance, increasing the costs for those who buy insurance.
_________________ _____________
By Donna Smith (Reuters)
WASHINGTON (Reuters) - An influential business group said on Thursday that its continued support for President Obama's healthcare overhaul hinges on whether it slows the soaring growth rate of healthcare costs.
The Business Roundtable, which represents some of the largest employers in the United States, released a report saying that "effective" healthcare reforms could save employers as much as $3,000 per worker by 2019.
"The report also shows that reform done wrong ... could make a bad situation much worse, in which case Business Roundtable could not support the bill," Eastman Kodak (EK.N) Company Chairman and Chief Executive Antonio Perez said in a statement accompanying the release of the report.
Obama said it was further evidence that the U.S. healthcare system is broken.
"If we don't pass comprehensive reform, the report finds, health care costs that are already squeezing our businesses will continue to rise, and in 10 years, employment-based spending on health care for large employers will be fully 166 percent higher per employee than it is today," the president said in a statement.
"The yearly health insurance costs for the average employee will rise to a staggering $28,530," he added, citing a finding by the report.
Companies represented by the Business Roundtable, which includes such giants as Verizon Communications Inc. (VZ.N), The Boeing Company (BA.N) and Exxon Mobil Corp. (XOM.N), provide health insurance to more than 35 million workers and their families. The group has been a major force behind the healthcare overhaul push.
The business group opposes the bill approved last week by the U.S. House of Representatives. It says the measure fails to control costs and that some provisions, including one that would create a new government insurance plan, could undermine employer-sponsored health coverage.
The report, written by Hewitt Associates for the Business Roundtable, favors some of the cost-containment reforms included in legislation passed by the Senate Finance Committee.
These include changes in the government Medicare health insurance program for the elderly that would reward quality of care and not the quantity of services and treatments performed.
The report said a strong requirement that individuals be responsible for obtaining health insurance would help ensure that premiums do not jump with a proposal that would bar insurers from rejecting people with pre-existing conditions.
The Finance Committee weakened enforcement measures of the individual mandate provision, raising concerns that healthier people will delay seeking insurance, increasing the costs for those who buy insurance.
Tuesday, November 10, 2009
Cost Control Measures Gain Some Traction
Insuring Resources Commentary
Finally, we may be getting somewhere. I've highlighted the primary issues in bold within the NY Times article below. It looks like the cost hawks in Congress and experts like myself are finally getting some to listen to the message. The current bills do not go far enough in reducing health care costs. We may yet get there.
Even in this article there is too much emphasis on cost controls in Medicare like the draft language authored by Dr. Cortese of Mayo. That doesn't go far enough. We need them nationwide through every payor method-- public and private.
It's time to call your Senator and drive this point home.
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Democrats Raise Alarms Over Health Bill Costs
By SHERYL GAY STOLBERG-- New York Times
Published: November 9, 2009
WASHINGTON — As health care legislation moves toward a crucial airing in the Senate, the White House is facing a growing revolt from some Democrats and analysts who say the bills Congress is considering do not fulfill President Obama’s promise to slow the runaway rise in health care spending.
Mr. Obama has made cost containment a centerpiece of his health reform agenda, and in May he stood up at the White House with industry groups who pledged voluntary efforts to trim the growth of health care spending by 1.5 percent, or $2 trillion, over the next decade.
But health economists say it is impossible to know whether the bills, including one passed by the House on Saturday night, would meet that goal, and many are skeptical that they even come close.
Experts — including some who have consulted closely with the White House, like Dr. Denis A. Cortese, chief executive of the Mayo Clinic — say the measures take only baby steps toward revamping the current fee-for-service system, which drives up costs by paying health providers for each visit or procedure performed. Some senators are also dissatisfied.
“My assessment at this point,” said Senator Ron Wyden, Democrat of Oregon and a member of the Finance Committee, “is that the legislation is heavy on health and light on reform.”
There are a variety of ideas for attacking cost increases more aggressively, including setting Medicare reimbursement rates for doctors and hospitals more rigorously and discouraging workers and employers from buying expensive health insurance policies that mask the true costs of treatment.
Among other innovations being considered is a cost-cutting method known as bundling, in which health providers receive a lump sum to care for a patient with a particular medical condition, say, diabetes or heart disease. The House bill calls for the administration to develop a plan for bundling, while the Senate Finance Committee version of the bill gives it until 2013 to create a pilot program.
Some experts would like to see such changes adopted more quickly, and senators of both parties say they will press for more aggressive cost-cutting measures when the bill comes up for debate. But drastic changes in the health care reimbursement system could cost the White House the support of doctors and hospital groups, who have signed onto the legislation and are lobbying hard to keep the current fee-for-service system from being phased out too quickly.
The debate underscores a fundamental tension inside the White House between cost-containment idealists and pragmatists.
The first group includes officials like Peter R. Orszag, the budget director, and Dr. Ezekiel J. Emanuel, the medical ethicist whose brother Rahm is the chief of staff. The second includes Rahm Emanuel and Nancy-Ann DeParle, the director of the Office of Health Reform, who must contend with the realities of getting legislation passed.
“Let’s be honest,” Rahm Emanuel said in a recent interview. “The goal isn’t to see whether I can pass this through the executive board of the Brookings Institution. I’m passing it through the United States Congress with people who represent constituents.”
He went on: “I’m sure there are a lot of people sitting in the shade at the Aspen Institute — my brother being one of them — who will tell you what the ideal plan is. Great, fascinating. You have the art of the possible measured against the ideal.”
Mr. Orszag would not be interviewed. But in an e-mail message sent through a spokesman, he said the current legislation “lays the foundation” for cost-cutting over the long-term, adding: “Will more need to be done in the future? Absolutely.”
Senator Susan Collins, the Maine Republican whose vote the administration is courting, convened a news conference on Monday with Senator Lamar Alexander of Tennessee, a member of the Republican leadership, to spotlight her concerns over cost containment. Ms. Collins said she had been meeting with a group of moderate Democrats who shared her views.
“I don’t believe we need more pilot projects to show us that health care delivery reforms are necessary,” she said in an interview. She added, “I think people are much more upset over the cost of care than the administration is acknowledging.”
Both the House and the Senate are proposing cost-saving measures. The House bill projects $440 billion in Medicare savings over 10 years; the Senate Finance Committee bill projects about $420 billion. White House officials say there will be additional, substantial savings in the private sector, as well. But how much is not clear.
Still, it is one thing to wring savings out of a bloated system, quite another to change the way that system does business.
Experts agree that the Senate Finance bill does more to put systemic changes in place. That is because the bill includes two measures that health economists favor: a tax on high-value “Cadillac” health plans, and an independent commission that would make binding recommendations on how to cut Medicare costs.
House Democrats strongly oppose the Cadillac tax, which would hurt, among other people, union workers with generous benefit plans. But Ms. DeParle said in an interview that she sensed fresh interest in the House in adopting the Medicare commission idea. “There is a lot of support for cost containment,” she said.
Dr. Cortese, of the Mayo Clinic, said the bills could do more to reward quality care over quantity. He said he had met with Mr. Orszag and others at the White House and had proposed legislative language that would give Medicare three years to begin rewarding hospitals that are delivering better care at lower cost.
“Our position has been focusing on paying for value,” he said, adding, “My take is there are people in the White House who understand exactly what I’m saying.”
Yet a deal the White House made with the hospital industry could make it difficult to cut costs too deeply.
The White House and the Senate Finance Committee chairman, Max Baucus of Montana, agreed to limit hospitals’ payment reductions to $155 billion over 10 years. Those savings will come almost exclusively from “an agreement to squeeze the prices a little bit across the board, rather than reforming the way payments work,” said Mark McClellan, who ran Medicare under President George W. Bush.
Finally, we may be getting somewhere. I've highlighted the primary issues in bold within the NY Times article below. It looks like the cost hawks in Congress and experts like myself are finally getting some to listen to the message. The current bills do not go far enough in reducing health care costs. We may yet get there.
Even in this article there is too much emphasis on cost controls in Medicare like the draft language authored by Dr. Cortese of Mayo. That doesn't go far enough. We need them nationwide through every payor method-- public and private.
It's time to call your Senator and drive this point home.
----------------------- ----------------------
Democrats Raise Alarms Over Health Bill Costs
By SHERYL GAY STOLBERG-- New York Times
Published: November 9, 2009
WASHINGTON — As health care legislation moves toward a crucial airing in the Senate, the White House is facing a growing revolt from some Democrats and analysts who say the bills Congress is considering do not fulfill President Obama’s promise to slow the runaway rise in health care spending.
Mr. Obama has made cost containment a centerpiece of his health reform agenda, and in May he stood up at the White House with industry groups who pledged voluntary efforts to trim the growth of health care spending by 1.5 percent, or $2 trillion, over the next decade.
But health economists say it is impossible to know whether the bills, including one passed by the House on Saturday night, would meet that goal, and many are skeptical that they even come close.
Experts — including some who have consulted closely with the White House, like Dr. Denis A. Cortese, chief executive of the Mayo Clinic — say the measures take only baby steps toward revamping the current fee-for-service system, which drives up costs by paying health providers for each visit or procedure performed. Some senators are also dissatisfied.
“My assessment at this point,” said Senator Ron Wyden, Democrat of Oregon and a member of the Finance Committee, “is that the legislation is heavy on health and light on reform.”
There are a variety of ideas for attacking cost increases more aggressively, including setting Medicare reimbursement rates for doctors and hospitals more rigorously and discouraging workers and employers from buying expensive health insurance policies that mask the true costs of treatment.
Among other innovations being considered is a cost-cutting method known as bundling, in which health providers receive a lump sum to care for a patient with a particular medical condition, say, diabetes or heart disease. The House bill calls for the administration to develop a plan for bundling, while the Senate Finance Committee version of the bill gives it until 2013 to create a pilot program.
Some experts would like to see such changes adopted more quickly, and senators of both parties say they will press for more aggressive cost-cutting measures when the bill comes up for debate. But drastic changes in the health care reimbursement system could cost the White House the support of doctors and hospital groups, who have signed onto the legislation and are lobbying hard to keep the current fee-for-service system from being phased out too quickly.
The debate underscores a fundamental tension inside the White House between cost-containment idealists and pragmatists.
The first group includes officials like Peter R. Orszag, the budget director, and Dr. Ezekiel J. Emanuel, the medical ethicist whose brother Rahm is the chief of staff. The second includes Rahm Emanuel and Nancy-Ann DeParle, the director of the Office of Health Reform, who must contend with the realities of getting legislation passed.
“Let’s be honest,” Rahm Emanuel said in a recent interview. “The goal isn’t to see whether I can pass this through the executive board of the Brookings Institution. I’m passing it through the United States Congress with people who represent constituents.”
He went on: “I’m sure there are a lot of people sitting in the shade at the Aspen Institute — my brother being one of them — who will tell you what the ideal plan is. Great, fascinating. You have the art of the possible measured against the ideal.”
Mr. Orszag would not be interviewed. But in an e-mail message sent through a spokesman, he said the current legislation “lays the foundation” for cost-cutting over the long-term, adding: “Will more need to be done in the future? Absolutely.”
Senator Susan Collins, the Maine Republican whose vote the administration is courting, convened a news conference on Monday with Senator Lamar Alexander of Tennessee, a member of the Republican leadership, to spotlight her concerns over cost containment. Ms. Collins said she had been meeting with a group of moderate Democrats who shared her views.
“I don’t believe we need more pilot projects to show us that health care delivery reforms are necessary,” she said in an interview. She added, “I think people are much more upset over the cost of care than the administration is acknowledging.”
Both the House and the Senate are proposing cost-saving measures. The House bill projects $440 billion in Medicare savings over 10 years; the Senate Finance Committee bill projects about $420 billion. White House officials say there will be additional, substantial savings in the private sector, as well. But how much is not clear.
Still, it is one thing to wring savings out of a bloated system, quite another to change the way that system does business.
Experts agree that the Senate Finance bill does more to put systemic changes in place. That is because the bill includes two measures that health economists favor: a tax on high-value “Cadillac” health plans, and an independent commission that would make binding recommendations on how to cut Medicare costs.
House Democrats strongly oppose the Cadillac tax, which would hurt, among other people, union workers with generous benefit plans. But Ms. DeParle said in an interview that she sensed fresh interest in the House in adopting the Medicare commission idea. “There is a lot of support for cost containment,” she said.
Dr. Cortese, of the Mayo Clinic, said the bills could do more to reward quality care over quantity. He said he had met with Mr. Orszag and others at the White House and had proposed legislative language that would give Medicare three years to begin rewarding hospitals that are delivering better care at lower cost.
“Our position has been focusing on paying for value,” he said, adding, “My take is there are people in the White House who understand exactly what I’m saying.”
Yet a deal the White House made with the hospital industry could make it difficult to cut costs too deeply.
The White House and the Senate Finance Committee chairman, Max Baucus of Montana, agreed to limit hospitals’ payment reductions to $155 billion over 10 years. Those savings will come almost exclusively from “an agreement to squeeze the prices a little bit across the board, rather than reforming the way payments work,” said Mark McClellan, who ran Medicare under President George W. Bush.
Thursday, November 5, 2009
They call this "Reform"
Insuring Resources Commentary
Details on the Republican's "Health care reform" bill. I put that in quotes because calling this reform is a slam on the english language.
The assessment from the Cngressional Budget Office conculdes that the proposal would barely dent the ranks of the uninsured.
The measure would cover 3 million additional people at a cost of $60billion through 2019, according to an analysis by the nonpartisan Congressional Budget Office. The Democrats' bill, by comparison, would cover far more -- 36million additional Americans -- at a much higher cost -- $1.055 trillion through 2019, the CBO has said, while adding nothing to the deficit.
The bill leaves out a number of the key features of the Democrats' 1,990-page legislation, such as new requirements for employers to insure their employees and for nearly all Americans to purchase insurance. It also doesn't block insurers from denying coverage to people with pre-existing health conditions, as Democrats would do.
Instead, Cong. Boehner, the bills author, said the Republicans would encourage creation of insurance pools for high-risk individuals and take other steps to ease their access to coverage. By the way, on average those pools charge premiums equal to 130% in the individual market. Gee thanks, Cong. Boehner that'll help!
Many of the most respected health care voices in the GOP have historically treated the idea of eliminating pre-existing condition exclusions as an obvious plank in any reform effort. Apparently there's a little dissension on this issue. Here aere three examples:
Rep. Paul Ryan (R-Wisc.), who is widely regarded as one of the sharpest health care policy wonks in Republican circles, told MSNBC back in May that consumers needed to have "access to affordable coverage, regardless of [their] pre-existing condition." Representative Dave Camp (R-Mich), meanwhile, has insisted that Republicans "must address" the issue of pre-existing conditions. Rep. Joe Barton (R-Tex.) has called for the creation of a "straightforward national plan that covers pre-existing conditions."
Instead, the Republican plan increases incentives for people to use health savings accounts, caps non-economic jury awards in medical malpractice cases at $250,000, provides various incentives to states with the aim of driving down premium costs and allows health insurance to be sold across state lines.
By enhancing HSAs the GOP is putting more health care costs on the backs of its citizens. Since the bill is still in hiding and not viewable by the public its hard to assess the details.
**** This material was compiled from several sources including CNN, the AP, the Huffington Post and others.****
Details on the Republican's "Health care reform" bill. I put that in quotes because calling this reform is a slam on the english language.
The assessment from the Cngressional Budget Office conculdes that the proposal would barely dent the ranks of the uninsured.
The measure would cover 3 million additional people at a cost of $60billion through 2019, according to an analysis by the nonpartisan Congressional Budget Office. The Democrats' bill, by comparison, would cover far more -- 36million additional Americans -- at a much higher cost -- $1.055 trillion through 2019, the CBO has said, while adding nothing to the deficit.
The bill leaves out a number of the key features of the Democrats' 1,990-page legislation, such as new requirements for employers to insure their employees and for nearly all Americans to purchase insurance. It also doesn't block insurers from denying coverage to people with pre-existing health conditions, as Democrats would do.
Instead, Cong. Boehner, the bills author, said the Republicans would encourage creation of insurance pools for high-risk individuals and take other steps to ease their access to coverage. By the way, on average those pools charge premiums equal to 130% in the individual market. Gee thanks, Cong. Boehner that'll help!
Many of the most respected health care voices in the GOP have historically treated the idea of eliminating pre-existing condition exclusions as an obvious plank in any reform effort. Apparently there's a little dissension on this issue. Here aere three examples:
Rep. Paul Ryan (R-Wisc.), who is widely regarded as one of the sharpest health care policy wonks in Republican circles, told MSNBC back in May that consumers needed to have "access to affordable coverage, regardless of [their] pre-existing condition." Representative Dave Camp (R-Mich), meanwhile, has insisted that Republicans "must address" the issue of pre-existing conditions. Rep. Joe Barton (R-Tex.) has called for the creation of a "straightforward national plan that covers pre-existing conditions."
Instead, the Republican plan increases incentives for people to use health savings accounts, caps non-economic jury awards in medical malpractice cases at $250,000, provides various incentives to states with the aim of driving down premium costs and allows health insurance to be sold across state lines.
By enhancing HSAs the GOP is putting more health care costs on the backs of its citizens. Since the bill is still in hiding and not viewable by the public its hard to assess the details.
**** This material was compiled from several sources including CNN, the AP, the Huffington Post and others.****
Wednesday, November 4, 2009
Health Bills too Timid on Cutting Costs, Experts say
Insuring Resources Commentary
More evidence from the experts that we are potentially headed for disaster. We must address health care costs aggressively while expanding coverage of the uninsured or we risk exploding the system.
I'm not talking about price controls or rationing. We need to eliminate waste and reimburse services based on episodes of care and quality outcomes. Our current system does neither.
Yesterday I had my third conversation with staff from Sen. Feingold's office and have yet to make any sort of headway. I won't give up, but I need your help. Its time to call your senator or representative.
--------------------- ----------------------------
Proposals make only trims where broader changes are needed, critics argue
By Ceci Connolly
Washington Post Staff Writer
Wednesday, November 4, 2009
Democrats in Congress are embracing the spirit of President Obama's call to slow the runaway rise of health-care costs but are shying away from some of the most aggressive techniques for achieving that.
"The bills are directionally correct, but they're not going far enough," said George Halvorson, chairman and chief executive of Kaiser Permanente and the author of "Health Care Will Not Reform Itself."
In years past, policymakers tried taming health-care growth with price controls -- in government reimbursements and through managed care. The Obama administration has advocated a third way: moving away from fee-for-service payments, which reward providers for doing more procedures, to a coordinated system that pays doctors and hospitals for doing better.
Under that vision, providers would be given a few years to move to performance-based medicine, in which fees and results are published, money is directed to evidence-based therapies, and harmful errors such as preventable infections are reduced. In short, the goal is to save money by modernizing and improving.
Now, as the debate reaches a critical juncture, many are worried that the president's ambitious hopes to constrain costs could result in tepid half-measures on Capitol Hill. Among the concerns:
-- A Senate plan to tax high-priced insurance policies saves far less money -- and is less likely to change medical consumption -- than eliminating the tax exemption for employer-sponsored coverage.
-- Proposals on comparative-effectiveness research and a new Medicare cost-cutting commission have been watered down.
-- An array of Medicare pilot projects aimed at paying doctors and hospitals for quality rather than quantity would take years to be implemented nationally -- if they ever were.
-- None of the bills addresses medical liability, even though the Congressional Budget Office has concluded that tort reform could save $54 billion over the next decade.
'Tried and true'
Overall, Democratic lawmakers have turned to "tried and true" strategies for reducing spending that merely ratchet down payments rather than fundamentally changing how the health-care system operates, said Drew Altman, head of the nonpartisan Kaiser Family Foundation.
More than $110 billion worth of Medicare "savings," for example, simply comes from a cut in reimbursements to insurers that run the private Medicare Advantage program, and much of the $80 billion extracted from drug companies is in the form of higher Medicaid rebates to the government. Both proposals would reduce costs but have little to do with fundamentally refashioning health care.
Unlike past reform efforts that barely gave a nod to tackling double-digit medical inflation, the bills this year "have some of the right rhetoric," but they fall short of real-world applicability, said Jack Lewin, chief executive of the American College of Cardiology. Without significant financial incentives and strict deadlines, he predicted, few doctors would rush to move toward the coordinated-care models reformers say are needed to save money and maintain high quality.
Ralph Neas, head of the nonpartisan National Coalition on Health Care, noted that "these bills do very little in terms of reining in long-term cost growth," adding: "There is not enough in the public sector and virtually none in the private sector."
Neas called on Congress to adopt up to $2 trillion worth of potential savings trumpeted by Obama and industry leaders at a White House event in May. Only a few of the specific ideas, such as streamlining insurance claims forms, have been included in the legislation.
"Voluntary efforts are never enough," Neas said. "There has to be some way to make it enforceable."
Richard Foster, the chief actuary of the federal Centers for Medicare and Medicaid Services, said lawmakers could achieve far greater savings in the health system if they aggressively pursued research that identifies the best, most cost-effective treatments.
"If you did comparative effectiveness in a way that looked at whether to approve a new therapy because it is cost effective and is an improvement, then you'd have a fighting chance of slowing down the rate of growth," he said in an interview. "Nobody's proposing that."
Taxing benefits
White House budget chief Peter Orszag said in an interview that changing the tax treatment of employer-sponsored health benefits "is among the most important single things that could be done to constrain costs and improve quality."
Employees currently do not pay taxes on insurance purchased through the workplace. Lifting the exemption would be likely to make workers more price sensitive and prompt insurance companies to market more affordable policies, according to most economists.
Eliminating the exemption could raise $250 billion a year and more than pay for the enormous expansion of coverage envisioned by Obama and Democrats. But the Senate compromised, with a proposal to tax only high-priced "Cadillac" plans. That approach is estimated to save $200 billion over a decade, and House Democrats have opposed the idea, raising concerns that it may be dropped.
Orszag also bragged that a set of Medicare pilot projects could dramatically reshape how medicine is practiced in this country. The proposals include reducing reimbursements to hospitals that have unnecessarily high readmission rates, "bundling" payments to medical teams that coordinate patient care and providing bonuses to doctors who meet quality standards.
"We're creating incentives for a more efficient system," he said. Because lawmakers are still negotiating and the proposals could change, Orszag said, it is impossible to quantify the eventual savings.
While Orszag says a go-slow approach will help determine the best course, others say the ideas are promising enough to pursue aggressively now.
"I wish they had the courage of their convictions," said Douglas Holtz-Eakin, a former Congressional Budget Office director and adviser to Sen. John McCain (R-Ariz.). "Just do it."
Mark McClellan, a physician who ran two health agencies in the Bush administration, endorsed the ideas in the legislation but warned that pilot projects take too long to adopt broadly and that not enough emphasis is being placed on financial rewards and penalties based on health outcomes.
Orszag has high hopes for a proposed Medicare cost commission as well, suggesting that the panel of independent experts would guide the government program to deliver more efficient care. But the hospital industry has already struck a deal exempting it from any suggested cuts for 10 years, and Congress is likely to limit the panel's power to recommendations that do not touch eligibility or benefits.
Many remain skeptical that Congress will let stand spending reductions included in this year's comprehensive reform initiative, particularly $400 billion in Medicare trims. They point to 1997's Balanced Budget Act, in which Congress set a Medicare fee schedule that would squeeze physician payments if costs rose too steeply. But nearly every year, at the behest of the American Medical Association, lawmakers override the scheduled reductions.
That history "teaches us that single provisions that can be easily lobbied against tend not to survive the political process," said Helen Darling, president of the National Business Group on Health.
But for Orszag, the cost-control efforts on Capitol Hill represent significant progress.
"There's always the potential to do more," he said. "When you look at the details in the legislation, it is a substantial step, especially within the realm of the politically viable and realistic, as opposed to a think tank or academic ideal."
More evidence from the experts that we are potentially headed for disaster. We must address health care costs aggressively while expanding coverage of the uninsured or we risk exploding the system.
I'm not talking about price controls or rationing. We need to eliminate waste and reimburse services based on episodes of care and quality outcomes. Our current system does neither.
Yesterday I had my third conversation with staff from Sen. Feingold's office and have yet to make any sort of headway. I won't give up, but I need your help. Its time to call your senator or representative.
--------------------- ----------------------------
Proposals make only trims where broader changes are needed, critics argue
By Ceci Connolly
Washington Post Staff Writer
Wednesday, November 4, 2009
Democrats in Congress are embracing the spirit of President Obama's call to slow the runaway rise of health-care costs but are shying away from some of the most aggressive techniques for achieving that.
"The bills are directionally correct, but they're not going far enough," said George Halvorson, chairman and chief executive of Kaiser Permanente and the author of "Health Care Will Not Reform Itself."
In years past, policymakers tried taming health-care growth with price controls -- in government reimbursements and through managed care. The Obama administration has advocated a third way: moving away from fee-for-service payments, which reward providers for doing more procedures, to a coordinated system that pays doctors and hospitals for doing better.
Under that vision, providers would be given a few years to move to performance-based medicine, in which fees and results are published, money is directed to evidence-based therapies, and harmful errors such as preventable infections are reduced. In short, the goal is to save money by modernizing and improving.
Now, as the debate reaches a critical juncture, many are worried that the president's ambitious hopes to constrain costs could result in tepid half-measures on Capitol Hill. Among the concerns:
-- A Senate plan to tax high-priced insurance policies saves far less money -- and is less likely to change medical consumption -- than eliminating the tax exemption for employer-sponsored coverage.
-- Proposals on comparative-effectiveness research and a new Medicare cost-cutting commission have been watered down.
-- An array of Medicare pilot projects aimed at paying doctors and hospitals for quality rather than quantity would take years to be implemented nationally -- if they ever were.
-- None of the bills addresses medical liability, even though the Congressional Budget Office has concluded that tort reform could save $54 billion over the next decade.
'Tried and true'
Overall, Democratic lawmakers have turned to "tried and true" strategies for reducing spending that merely ratchet down payments rather than fundamentally changing how the health-care system operates, said Drew Altman, head of the nonpartisan Kaiser Family Foundation.
More than $110 billion worth of Medicare "savings," for example, simply comes from a cut in reimbursements to insurers that run the private Medicare Advantage program, and much of the $80 billion extracted from drug companies is in the form of higher Medicaid rebates to the government. Both proposals would reduce costs but have little to do with fundamentally refashioning health care.
Unlike past reform efforts that barely gave a nod to tackling double-digit medical inflation, the bills this year "have some of the right rhetoric," but they fall short of real-world applicability, said Jack Lewin, chief executive of the American College of Cardiology. Without significant financial incentives and strict deadlines, he predicted, few doctors would rush to move toward the coordinated-care models reformers say are needed to save money and maintain high quality.
Ralph Neas, head of the nonpartisan National Coalition on Health Care, noted that "these bills do very little in terms of reining in long-term cost growth," adding: "There is not enough in the public sector and virtually none in the private sector."
Neas called on Congress to adopt up to $2 trillion worth of potential savings trumpeted by Obama and industry leaders at a White House event in May. Only a few of the specific ideas, such as streamlining insurance claims forms, have been included in the legislation.
"Voluntary efforts are never enough," Neas said. "There has to be some way to make it enforceable."
Richard Foster, the chief actuary of the federal Centers for Medicare and Medicaid Services, said lawmakers could achieve far greater savings in the health system if they aggressively pursued research that identifies the best, most cost-effective treatments.
"If you did comparative effectiveness in a way that looked at whether to approve a new therapy because it is cost effective and is an improvement, then you'd have a fighting chance of slowing down the rate of growth," he said in an interview. "Nobody's proposing that."
Taxing benefits
White House budget chief Peter Orszag said in an interview that changing the tax treatment of employer-sponsored health benefits "is among the most important single things that could be done to constrain costs and improve quality."
Employees currently do not pay taxes on insurance purchased through the workplace. Lifting the exemption would be likely to make workers more price sensitive and prompt insurance companies to market more affordable policies, according to most economists.
Eliminating the exemption could raise $250 billion a year and more than pay for the enormous expansion of coverage envisioned by Obama and Democrats. But the Senate compromised, with a proposal to tax only high-priced "Cadillac" plans. That approach is estimated to save $200 billion over a decade, and House Democrats have opposed the idea, raising concerns that it may be dropped.
Orszag also bragged that a set of Medicare pilot projects could dramatically reshape how medicine is practiced in this country. The proposals include reducing reimbursements to hospitals that have unnecessarily high readmission rates, "bundling" payments to medical teams that coordinate patient care and providing bonuses to doctors who meet quality standards.
"We're creating incentives for a more efficient system," he said. Because lawmakers are still negotiating and the proposals could change, Orszag said, it is impossible to quantify the eventual savings.
While Orszag says a go-slow approach will help determine the best course, others say the ideas are promising enough to pursue aggressively now.
"I wish they had the courage of their convictions," said Douglas Holtz-Eakin, a former Congressional Budget Office director and adviser to Sen. John McCain (R-Ariz.). "Just do it."
Mark McClellan, a physician who ran two health agencies in the Bush administration, endorsed the ideas in the legislation but warned that pilot projects take too long to adopt broadly and that not enough emphasis is being placed on financial rewards and penalties based on health outcomes.
Orszag has high hopes for a proposed Medicare cost commission as well, suggesting that the panel of independent experts would guide the government program to deliver more efficient care. But the hospital industry has already struck a deal exempting it from any suggested cuts for 10 years, and Congress is likely to limit the panel's power to recommendations that do not touch eligibility or benefits.
Many remain skeptical that Congress will let stand spending reductions included in this year's comprehensive reform initiative, particularly $400 billion in Medicare trims. They point to 1997's Balanced Budget Act, in which Congress set a Medicare fee schedule that would squeeze physician payments if costs rose too steeply. But nearly every year, at the behest of the American Medical Association, lawmakers override the scheduled reductions.
That history "teaches us that single provisions that can be easily lobbied against tend not to survive the political process," said Helen Darling, president of the National Business Group on Health.
But for Orszag, the cost-control efforts on Capitol Hill represent significant progress.
"There's always the potential to do more," he said. "When you look at the details in the legislation, it is a substantial step, especially within the realm of the politically viable and realistic, as opposed to a think tank or academic ideal."
Monday, November 2, 2009
Charlie Wilson's War and Health Care Reform- can we ever get it completely right?
Insuring Resources Commentary
I finally just watched the movie, Charlie Wilson's War, the story of a renegade Congressman, a rich socialite and a rogue CIA agent who began the end of the Soviet Empire with the help of well-armed Afghan freedom fighters through a covert war.
The analogy to the battle for health care reform is apt as we inch closer and closer this fall to a reform package that could forever change the landscape of the American healthcare system. Or, like Charlie Wilson's War in Afghanistan it could come close and ultimately fail.
"These things happened. They were glorious and they changed the world... and then we screwed up the endgame"- U.S. Cong. Charlie Wilson.
Through the covert war in Afghanistan Congress spent over $1 Billion to oust the Soviets but failed to establish a sustainable infrastructure to support a democracy. As Charlie Wilson tried and failed to get just $1 million in funding to build Afghani schools and sustain the momentum from the war viewers are suddenly jolted into the present in our own minds with visions of Al Queda, the Taliban and our own futile overt war.
Full Circle
So what's all this mean for health care reform? Like rebuilding Afghani schools we need to ensure that health care reform brings us a sustainable health care future with incentives for quality care, reduction of waste through lean processes, and payment reform that incents quality and not quantity.
Let's get this right, THIS TIME, let's not do it halfway and leave the outcome unsustainable.
I finally just watched the movie, Charlie Wilson's War, the story of a renegade Congressman, a rich socialite and a rogue CIA agent who began the end of the Soviet Empire with the help of well-armed Afghan freedom fighters through a covert war.
The analogy to the battle for health care reform is apt as we inch closer and closer this fall to a reform package that could forever change the landscape of the American healthcare system. Or, like Charlie Wilson's War in Afghanistan it could come close and ultimately fail.
"These things happened. They were glorious and they changed the world... and then we screwed up the endgame"- U.S. Cong. Charlie Wilson.
Through the covert war in Afghanistan Congress spent over $1 Billion to oust the Soviets but failed to establish a sustainable infrastructure to support a democracy. As Charlie Wilson tried and failed to get just $1 million in funding to build Afghani schools and sustain the momentum from the war viewers are suddenly jolted into the present in our own minds with visions of Al Queda, the Taliban and our own futile overt war.
Full Circle
So what's all this mean for health care reform? Like rebuilding Afghani schools we need to ensure that health care reform brings us a sustainable health care future with incentives for quality care, reduction of waste through lean processes, and payment reform that incents quality and not quantity.
Let's get this right, THIS TIME, let's not do it halfway and leave the outcome unsustainable.
So this is a Gov't Takeover- 2% of the Market
Insuring Resources Commentary:
So after all the debate about the public plan option and all the skewed debate the actual numbers are in. The public plan will likely cover about TWO PERCENT.
Don't get me wrong the public plan will do wonders for those relegated to discriminatory coverage in the independent market and those abandoned and uninsured in our 35th best health care system.
Drew Altman from the Kaiser Family Foundation has it mostly correct. See below in italics. He says we need more discussion on "affordable coverage" , but even that doesn't get at the biggest issue of reducing HEALTH CARE costs.
While nearly the entire debate (as I've said all along) has focused attention on the public plan issue, we've all missed the boat. What about cost, waste elimination and PAYMENT REFORM?????
Debate on the public plan option has been the focus of 90% of the national discussion, yet in the end it will cover 2% of the population? Health Care reform should be about re-prioritizing our health care system.... shouldn't it?
Shouldn't we be focusing on the real issues, health CARE reform... not insurance reform? Maybe now we can set aside the issue of the 2% public plan and focus on cost and quality- i.e. the real issues that affect the vast majority of Americans. But I'm too cynical to believe that we'll actually start having a real discussion, afterall the GOP finally gave us their proposal. Tune in tomorrow for a gallow's analaysis of what that would do to our health care system. At this very late hour, we must refocus on eliminating waste, and emhasizing quality--- the most important issues we face. The public plan will help, but there are other important issues that will play a much bigger role in reforming the system that are being completely ignored.
--------------------------- From the Associated Press
After all the fuss, public health plan covers few
By RICARDO ALONSO-ZALDIVAR
The Associated Press
Sunday, November 1, 2009 7:35 AM
WASHINGTON -- What's all the fuss about? After all the noise over Democrats' push for a government insurance plan to compete with private carriers, coverage numbers are finally in: Two percent.
That's the estimated share of Americans younger than 65 who'd sign up for the public option plan under the health care bill that Speaker Nancy Pelosi, D-Calif., is steering toward House approval.
The underwhelming statistic is raising questions about whether the government plan will be the iron-fisted competitor that private insurers warn will shut them down or a niche operator that becomes a haven for patients with health insurance horror stories.
Some experts are wondering if lawmakers have wasted too much time arguing about the public plan, giving short shrift to basics such as ensuring that new coverage will be affordable.
"The public option is a significant issue, but its place in the debate is completely out of proportion to its actual importance to consumers," said Drew Altman, president of the nonpartisan Kaiser Family Foundation. "It has sucked all the oxygen out of the room and diverted attention from bread-and-butter consumer issues, such as affordable coverage and comprehensive benefits."
The Democratic health care bills would extend coverage to the uninsured by providing government help with premiums and prohibiting insurers from excluding people in poor health or charging them more. But to keep from piling more on the federal deficit, most of the uninsured will have to wait until 2013 for help. Even then, many will have to pay a significant share of their own health care costs.
The latest look at the public option comes from the Congressional Budget Office, the nonpartisan economic analysts for lawmakers.
It found that the scaled back government plan in the House bill wouldn't overtake private health insurance. To the contrary, it might help the insurers a little.
The budget office estimated that about 6 million people would sign up for the public option in 2019, when the House bill is fully phased in. That represents about 2 percent of a total of 282 million Americans under age 65. (Older people are covered through Medicare.)
The overwhelming majority of the population would remain in private health insurance plans sponsored by employers. Others, mainly low-income people, would be covered through an expanded Medicaid program.
To be fair, most people would not have access to the new public plan. Under the House bill, it would be offered through new insurance exchanges open only to those who buy coverage on their own or work for small companies. Yet even within that pool of 30 million people, only 1-in-5 would take the public option.
Who's likely to sign up?
The budget office said "a less healthy pool of enrollees" would probably be attracted to the public option, drawn by the prospect of looser rules on access to specialists and medical services.
As a result, premiums in the public plan would be higher than the average for private plans. That could nudge healthy middle-class workers and their families to sign up for private plans.
"The concern was that the public option would destabilize the bulk of private insurance, but in fact what Congress has fashioned is very targeted," said economist Karen Davis, president of the Commonwealth Fund. "It's not going to be taking away the insurance industry's core business."
It's unclear whether there are enough votes in the Senate for a public plan. The version that Majority Leader Harry Reid, D-Nev., has offered would let states opt out, probably leaving a smaller plan that the House would want.
Insurers aren't buying the budget office analysis. Asked if it might soften that opposition, industry spokesman Robert Zirkelbach of America's Health Insurance Plans responded with a curt "No."
While a government plan might start out modestly, insurers fear that Congress could change the rules later, opening it up to all people and setting take-it-or-leave payments for hospitals and medical providers, instead of negotiating, as the House bill calls for.
For the same reason, employer groups also remain wary. Big companies don't want to lose control of their health care budgets and instead have the government send them a tax bill.
"That cost is going to come back to you one way or another ... and it's coming back in the way of taxes and liabilities," said Eastman Kodak's chief executive, Antonio M. Perez, speaking for the Business Roundtable. "We just don't believe that there are miracles out there."
If Congress passes a public plan that's not much of a sensation, Democrats might have reason to regret all the time and energy they invested in it.
So after all the debate about the public plan option and all the skewed debate the actual numbers are in. The public plan will likely cover about TWO PERCENT.
Don't get me wrong the public plan will do wonders for those relegated to discriminatory coverage in the independent market and those abandoned and uninsured in our 35th best health care system.
Drew Altman from the Kaiser Family Foundation has it mostly correct. See below in italics. He says we need more discussion on "affordable coverage" , but even that doesn't get at the biggest issue of reducing HEALTH CARE costs.
While nearly the entire debate (as I've said all along) has focused attention on the public plan issue, we've all missed the boat. What about cost, waste elimination and PAYMENT REFORM?????
Debate on the public plan option has been the focus of 90% of the national discussion, yet in the end it will cover 2% of the population? Health Care reform should be about re-prioritizing our health care system.... shouldn't it?
Shouldn't we be focusing on the real issues, health CARE reform... not insurance reform? Maybe now we can set aside the issue of the 2% public plan and focus on cost and quality- i.e. the real issues that affect the vast majority of Americans. But I'm too cynical to believe that we'll actually start having a real discussion, afterall the GOP finally gave us their proposal. Tune in tomorrow for a gallow's analaysis of what that would do to our health care system. At this very late hour, we must refocus on eliminating waste, and emhasizing quality--- the most important issues we face. The public plan will help, but there are other important issues that will play a much bigger role in reforming the system that are being completely ignored.
--------------------------- From the Associated Press
After all the fuss, public health plan covers few
By RICARDO ALONSO-ZALDIVAR
The Associated Press
Sunday, November 1, 2009 7:35 AM
WASHINGTON -- What's all the fuss about? After all the noise over Democrats' push for a government insurance plan to compete with private carriers, coverage numbers are finally in: Two percent.
That's the estimated share of Americans younger than 65 who'd sign up for the public option plan under the health care bill that Speaker Nancy Pelosi, D-Calif., is steering toward House approval.
The underwhelming statistic is raising questions about whether the government plan will be the iron-fisted competitor that private insurers warn will shut them down or a niche operator that becomes a haven for patients with health insurance horror stories.
Some experts are wondering if lawmakers have wasted too much time arguing about the public plan, giving short shrift to basics such as ensuring that new coverage will be affordable.
"The public option is a significant issue, but its place in the debate is completely out of proportion to its actual importance to consumers," said Drew Altman, president of the nonpartisan Kaiser Family Foundation. "It has sucked all the oxygen out of the room and diverted attention from bread-and-butter consumer issues, such as affordable coverage and comprehensive benefits."
The Democratic health care bills would extend coverage to the uninsured by providing government help with premiums and prohibiting insurers from excluding people in poor health or charging them more. But to keep from piling more on the federal deficit, most of the uninsured will have to wait until 2013 for help. Even then, many will have to pay a significant share of their own health care costs.
The latest look at the public option comes from the Congressional Budget Office, the nonpartisan economic analysts for lawmakers.
It found that the scaled back government plan in the House bill wouldn't overtake private health insurance. To the contrary, it might help the insurers a little.
The budget office estimated that about 6 million people would sign up for the public option in 2019, when the House bill is fully phased in. That represents about 2 percent of a total of 282 million Americans under age 65. (Older people are covered through Medicare.)
The overwhelming majority of the population would remain in private health insurance plans sponsored by employers. Others, mainly low-income people, would be covered through an expanded Medicaid program.
To be fair, most people would not have access to the new public plan. Under the House bill, it would be offered through new insurance exchanges open only to those who buy coverage on their own or work for small companies. Yet even within that pool of 30 million people, only 1-in-5 would take the public option.
Who's likely to sign up?
The budget office said "a less healthy pool of enrollees" would probably be attracted to the public option, drawn by the prospect of looser rules on access to specialists and medical services.
As a result, premiums in the public plan would be higher than the average for private plans. That could nudge healthy middle-class workers and their families to sign up for private plans.
"The concern was that the public option would destabilize the bulk of private insurance, but in fact what Congress has fashioned is very targeted," said economist Karen Davis, president of the Commonwealth Fund. "It's not going to be taking away the insurance industry's core business."
It's unclear whether there are enough votes in the Senate for a public plan. The version that Majority Leader Harry Reid, D-Nev., has offered would let states opt out, probably leaving a smaller plan that the House would want.
Insurers aren't buying the budget office analysis. Asked if it might soften that opposition, industry spokesman Robert Zirkelbach of America's Health Insurance Plans responded with a curt "No."
While a government plan might start out modestly, insurers fear that Congress could change the rules later, opening it up to all people and setting take-it-or-leave payments for hospitals and medical providers, instead of negotiating, as the House bill calls for.
For the same reason, employer groups also remain wary. Big companies don't want to lose control of their health care budgets and instead have the government send them a tax bill.
"That cost is going to come back to you one way or another ... and it's coming back in the way of taxes and liabilities," said Eastman Kodak's chief executive, Antonio M. Perez, speaking for the Business Roundtable. "We just don't believe that there are miracles out there."
If Congress passes a public plan that's not much of a sensation, Democrats might have reason to regret all the time and energy they invested in it.
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