Monday, December 07, 2009

Blue Cross, Blue Patients

Another study predicts higher insurance prices

Another day, another study confirming that ObamaCare will increase the price of health insurance. The Blue Cross Blue Shield Association has found that premiums in the individual market will rise on average by 54% over the status quo, which translates into an extra $3,341 a year for families and $1,576 for singles. The White House denounced the report as a "sham" before it was even released, which shows how seriously it takes such concerns.

The Congressional Budget Office also found this week that ObamaCare will boost premiums in the individual market by as much as 13%. But the White House called that a triumph because the higher costs will be offset by taxpayer subsidies that will be transferred to the federal balance sheet.

The Blue Cross study is in fact more precise than CBO's because it is based on real market data, rather than modeling assumptions. The association mined the actuarial data from its six million individual or small-business policies, nearly one-eighth of those sold in the U.S.

Lo and behold, Blue Cross found costs will rise if Democrats force insurers to cover anyone who applies and then limit how much insurers are allowed to charge based on age or health condition. Economists call this adverse selection; people will wait until they're sick to buy coverage, and the Democratic rules make it perfectly rational for them to do so.

"And you can bet as we continue to make progress," communications director Dan Pfeiffer wrote on the White House blog, "the insurance industry will continue to try and distract and misinform because they know their very profitable status quo is in grave danger." He must be referring to the industry's overall profit margin of 2.2% in 2008.

The reality is that all health-care costs are ultimately borne by consumers, whether through more expensive premiums, lower wages or higher taxes. The regulatory schemes favored by Democrats can't change that law of economics but they will ensure that insurance is even more costly than it is today.

When that day comes, the political class will of course blame the insurance companies, and all of the current White House denials will fall down the memory hole.


GOP forces Donks to admit that they are reducing spending on the elderly

Senate Republicans forced Democrats to vote in favor of cutting billions from providers of home care for older people as partisan debate flared Saturday during a rare weekend session on President Barack Obama's health care overhaul.

Obama planned to travel to Capitol Hill on Sunday to help Democrats resolve internal disputes that stand in the way of Majority Leader Harry Reid bringing the 10-year, nearly $1 trillion legislation to a vote.

Ahead of his visit, Republicans, bent on making Democrats cast politically risky votes, offered their third amendment in the debate so far showcasing more than $400 billion in cuts to projected Medicare spending that would pay for the bill, mostly for subsidies to help extend coverage to millions of uninsured. Like the other two, this one went down to defeat, on a vote of 53 to 41. The measure by Sen. Mike Johanns, R-Neb., would have eliminated $42 billion in cuts over 10 years to agencies that provide home health care to seniors under Medicare. Four moderate Democrats joined all Republicans present in voting for the amendment: Sens. Jim Webb of Virginia, Evan Bayh of Indiana, Blanche Lincoln of Arkansas and Ben Nelson of Nebraska.

Underscoring the pressures on the moderates, Lincoln, who faces a difficult re-election next year, initially cast a "no" vote with the Democratic majority but switched to "yes" in the course of the 15-minute vote. Republicans accused her of flip-flopping, but Lincoln said later that she changed her vote after considering how important home health care is to Arkansas. "That's why they give us 15 minutes," said Lincoln.

The more consequential action was taking place behind closed doors Saturday as Democrats struggled to find a compromise on a proposed government insurance plan that would compete with private insurers. Lincoln and several other moderate Democrats are opposed to the government insurance plan in the bill, and Reid, D-Nev., doesn't have a vote to spare in his 60-member caucus.

Health and Human Services Secretary Kathleen Sebelius joined in some discussions and several senators cited progress on the issue. There was discussion of various options, including nonprofit insurance plans administered by the Office of Personnel Management, which runs the Federal Employees Health Benefits Program. "I'm optimistic that something, I'm not sure what, but something can be arrived at," said Sen. Mary Landrieu, D-La. "It's definitely going to be something that's of a nonprofit nature."

Reid called the unusual sessions as he races to finish the bill by Christmas. The weekend work also allowed him and other Democrats to highlight their commitment to Obama's signature issue, arguing that Americans can't take weekends off from worrying about health care, so the Senate shouldn't, either.

Republicans, determined to stall if they can't kill the bill, weren't impressed. "I think the majority leader believes that somehow if we stay in on weekends the Republicans are going to blink. I assure him we're not going to blink," said Senate Minority Leader Mitch McConnell, R-Ky.

Lawmakers went at each other over who really wanted to protect older people. Johanns said home health care agencies were being unfairly targeted in the legislation, noting that they account for 3.7 percent of the Medicare budget but would absorb 9.4 percent of the cuts to Medicare in the Senate bill. The percentage is even higher in the House version of the legislation, which passed last month. "These are truly some of the most vulnerable Americans that receive these services and the cuts are placed directly on their backs," Johanns said.

Democrats said those cuts, and others to Medicare private insurance plans and providers, would reduce overpayments, inefficiency and waste in the popular program, thereby strengthening it. They noted repeatedly that AARP supports the overall cuts, and also produced a letter from the National Association for Home Care and Hospice in support.

The Dec. 4 letter said the group has "agreed to do its part by reducing costs and payments in a manner that makes the Medicare home care program more efficient and less susceptible to abuse."

But Democrats didn't want to let the Republican amendment go unanswered, so Sen. John Kerry, D-Mass., offered an amendment stating that the bill would not reduce guaranteed home health benefits. It passed 96-0. "They're busy talking about the cuts when this actually improves what Medicare beneficiaries are going to get," said Kerry, referring to new preventive services and other items in the bill.

MEDPAC, an organization established by Congress to advise lawmakers on Medicare, has projected that home health care agencies would be overpaid by Medicare in 2009 by margins of 12.2 percent overall. There are some 9,700 companies providing home health care under Medicare.

The overhaul legislation would provide coverage to more than 30 million more people over the next decade with a new requirement for nearly everyone to purchase insurance. There would be new marketplaces, lower-income people would get subsidies, the federal-state Medicaid program for the poor would grow, and there would be a ban on unpopular insurance company practices such as pulling coverage when someone gets sick.


Medicine isn’t perfect, Obamacare is even less perfect

Pay for the blue pill that works, not the red one that doesn't. That's the president's simple prescription for improving American health care, one that relies on government panels and committees to set guidelines for doctors and patients alike. At least, that's the theory.

The theory met messy reality last week when the U.S. Preventive Services Task Force recommended that women in their 40s shouldn't get mammograms. But the secretary of health and human services -- who, incidentally, oversees this panel -- thinks women probably should. And the American Cancer Society believes that they definitely should; major private insurance companies, for the record, will continue to fund the tests. Confused yet?

Recommendation from a largely unknown government panel hardly seems like typical material for national headlines. But when it involves breast cancer and the announcement is made in the heat of debate over health reform, people are -- understandably -- concerned.

The U.S. Preventive Services Task Force, as it turns out, is not part of a larger Obama White House rationing conspiracy, as some would have it. Task force members were appointed by President Bush, and they voted on this recommendation before Obama's inauguration. As for cost considerations, the task force had none: Members are mandated not to weigh dollars and cents when considering the risk and benefits of recommendations. That's not to suggest that their conclusion isn't highly controversial. For starters, it seems counterintuitive: Early screening for cancer makes sense.

No wonder, then, that a full 87 percent of Americans believed that routine scanning was "almost always a good idea" in a 2004 poll published in the Journal of the American Medical Association.

Today, American panels and doctors groups are moving away from the "scan first, ask questions later" philosophy. We aren't the only ones having second thoughts. In Japan, all newborns were screened for neuroblastoma starting in 1984, but the program was scrapped a few years ago when more babies died from unnecessary surgeries than the obscure cancer.

For many, such reversals are deeply unsettling, a reminder that medicine is far from an exact science. "The history of medicine is a record not only of brilliant success and stunning progress," Theodore Dalrymple, a British physician, wrote in 2002. "It is also a litany of mistaken ideas and discarded treatments, some of which came to appear absurd or downright dangerous after having once been hailed as unprecedented advances."

As a physician myself, I know a thing or two about going by the book and getting it wrong. When I was in residency, the standard treatment for bipolar patients suffering depression was Prozac or its sister drugs. It turned out that Prozac intervention was not only highly problematic, but also bested by placebo.

For those on the left, the answer to the chaos of medicine is to establish government panels. With Obamacare, for instance, White House officials propose a commission to cut hundreds of billions from Medicare by improving the quality of care. How? By setting up an Independent Medicare Advisory Commission that would guide clinical decisions for doctors and patients alike.

The controversy over breast cancer screening, however, shows the political and practical limitations of this one-size-fits-all approach: Medical organizations have difficulty in setting and agreeing upon clinical guidelines, and patients are apt to resent mandates from bureaucrats.

Leaving health verdicts in the hands of centralized authorities is a sure way to keep making mistakes in a field where re-examination and reversal are an unavoidable reality.


The New Squeeze on Private Pregnancy Care

With very peccable timing, a handful of local officials are launching legislative assaults on popular pregnancy care centers even as Congress debates health care reforms it claims will promote more choice and competition. The assaults began in Baltimore where the City Council passed a law last week imposing regulations and penalties on the overwhelmingly privately funded centers that provide pregnancy-related services to some of the city’s neediest women.

The Council’s ostensible concern was that the centers misrepresent their services by failing to inform new clients what they don’t offer – abortion and contraceptives. What the centers do offer is not in dispute and is widely valued by their clients – confirmation of pregnancy; sexually transmitted infection/disease counseling; relationship counseling; food, clothing and prenatal vitamins; and referral to an array of community resources for family and medical support – all services provided at little or no cost to the clients or to taxpayers.

Baltimore officials rejected suggestions from some council members that it regulate Planned Parenthood of Maryland and other agencies that offer abortion and contraception, but do not provide material assistance to mothers. Meanwhile, officials in Montgomery County, Maryland are taking up the issue as well.

Ironically, these challenges follow on the heels of newly published information about the quality and depth of the services pregnancy resource centers provide in the United States. The information was quantified for the first time in a collaborative report released by the Family Research Council in September. The report demonstrates the medical accuracy standards the centers follow and the international scope of their networks. Among other findings, the centers:

* Assist an average of 5,500 Americans daily with sexuality-and pregnancy-related concerns;

* Offer parenting classes to new mothers through nearly 70 percent of centers nationwide;

* Provide medically referenced literature, reviewed by national-level experts, on prenatal/fetal development, risk avoidance/primary prevention of sexually transmitted infection and disease, and the physical and psychological risks of abortion;

* Provide live, 24-hour-a-day, seven-days-per-week accessibility to centers via Option Line, a national telephone hotline and web site that averages 20,000 contacts per month;

* Includes an international network of more than 60 centers in Canada, and another 40-plus countries worldwide from Romania, to Vietnam, to Zambia, and beyond;

* Rely on the engagement of more than 40,000 trained volunteers, including professional counselors and medical personnel, many of whom were honored last year at the White House.

With a national debate underway over cost containment and patient choice in health care, attacks on the privately supported and publicly popular centers are incomprehensible.


MA: Six hospitals to sue state over payment shortfalls

We might note that the Bay State plan is one of the models for ObamaCare (the other is of course Medicare itself). Any questions?

Six community hospitals, squeezed by the economic downturn and the Massachusetts budget crunch, are set to file a lawsuit in Suffolk Superior Court this morning seeking millions of dollars from the state for unpaid health care services.

The suit charges that Massachusetts violated a law requiring adequate reimbursement to hospitals for patients insured by the government. The hospitals contend the state set repayment rates so low they do not cover the cost of such medical care.

The plaintiffs are part of a group of health care providers known as “disproportionate share hospitals,’’ institutions at which at least 63 percent of patients, mostly low-income or elderly, are covered by public insurance plans such as Medicaid or Medicare. Many of the hospitals are losing money, or barely breaking even, after taking on thousands of patients newly insured by public plans under the state’s 2006 health care overhaul.

The lawsuit, which names the state secretary of health and human services as a defendant, focuses on reimbursements from Medicaid, the state-administered program for patients who can’t afford medical care.

State officials yesterday said they have not seen the complaint and do not comment on litigation. But they expressed confidence that their reimbursement policies would be upheld.

The hospitals, serving regions stretching from the Merrimack Valley to Cape Cod to the Berkshires, maintain they have absorbed a combined shortfall of more than $100 million in the past three years, the difference between the cost of care provided to Medicaid patients and the amount the hospitals were reimbursed. That has resulted in hundreds of layoffs and millions of dollars in cost cuts, they say. “By ignoring its statutory, contractual, and other obligations to the plaintiff hospitals, [the state] has undermined and directly threatened their ability to provide care to the vulnerable and under-served safety net population they are mandated to serve,’’ the lawsuit says.

The hospitals in the lawsuit are Berkshire Medical Center in Pittsfield, Signature Healthcare Brockton Hospital, Cape Cod Hospital in Hyannis, Holyoke Medical Center, Merrimack Valley Hospital in Haverhill, and Quincy Medical Center. They are all midsized hospitals whose executives argue state government shows preferential treatment to Boston Medical Center and Cambridge Health Alliance, two providers that treat a similar patient population, but receive more money proportionately.

Officials in the office of state Health and Human Services Secretary JudyAnn Bigby yesterday said that starting Nov. 1, the state boosted payments to all disproportionate share hospitals by 10 percent for the coming year, an increase of $18 million above the $700 million paid to those hospitals in the past year. The increase - by MassHealth, the state program that administers Medicaid - was based on higher in-patient care at the hospitals, they said.

“We recognize the important role that these hospitals play in our health care system and continue to work with them,’’ said Juan Martinez, spokesman for the Office of Health and Human Services. “While we cannot comment on the lawsuit itself, we are confident that the state’s actions comply with all applicable law and will be upheld.’’

In a reflection of how the state’s budget crisis has rippled through the health care sector, Boston Medical Center filed suit against Bigby’s office in July, accusing state officials of cutting payments for treatment of thousands of low-income patients. That complaint is pending in Suffolk Superior Court in Boston.

Michael F. Collins, chief executive of Merrimack Valley Hospital, a 110-bed hospital that has had to cut the equivalent of 30 full-time jobs in the past year, said the state’s financial woes have fallen largely on hospitals like his, in areas of high unemployment that lack the political clout Boston area hospitals carry on Beacon Hill.

The state has undercompensated Merrimack Hospital by $4.4 million for Medicaid patients over the past three years, he said. “There’s a huge gap between our cost of care and what we get from the state, and that gap has to close,’’ Collins said. “This is a tough time for the state,’’ he said. “For the six of us to say we want more money is not a message people want to hear right now. But it’s about fairness and equity. The state can’t give more money to Boston Medical Center and Cambridge Health Alliance all these years and ignore the rest of us.’’

At Holyoke Medical Center, the hospital’s endowment trust fund has tumbled to $3 million from $12 million a decade ago and it has become increasingly difficult to borrow money to replace old equipment, said chief executive Hank J. Porten. Porten said the 212-bed hospital, where 71 percent of patients are covered by Medicaid or other public insurance, has been forced to lay off 88 employees over the past year. Citing Holyoke’s high poverty rate, he said: “There’s not a lot of other places people here can go for care. Long term, we have to get a solution to our funding.’’


Boobs in Congress

One of the ostensible reasons for reforming our health insurance system is the need to halt the growth of spending on medical treatment. So it may be a surprise to learn that in its first major vote on the health care overhaul, the U.S. Senate took a clear and simple position: Cost is no object.

In November, the United States Preventive Services Task Force, a federally sponsored panel of medical experts, announced that it was recommending against routine mammography among women younger than 50. The proposal, coming amid the health care debate, was taken as a gruesome attempt to sacrifice lives to save pennies.

In fact, cash was not a consideration. The task force's rationale was that the benefits of routine breast cancer screening to women in that age group are insufficient to justify the harms it causes them. Yes, it can be expected to save one life for every 1,904 women aged 40 to 49 who get mammographies, but it also yields false positives, which require additional procedures.

Even when the positives are not false, they often lead to unnecessary treatment -- surgery, radiation and chemotherapy -- for tumors that pose little risk. The panel noted that mammograms often serve only to detect "a slower-growing cancer that would have eventually become clinically apparent but would never have caused death."

There are precedents for medical authorities to conclude that tests are not always worthwhile. Last year, the same agency declined to recommend screening for prostate cancer among men under 75 because "the benefits of screening for prostate cancer are uncertain and the balance of benefits and harms cannot be determined." Few protests were heard.

Nor is it usually considered utterly insane to take costs into account. We could save lives by testing everyone over 55 for diabetes, for example. At more than half a million dollars for every healthy year of life that would be saved, however, we have the good sense not to.

But the mammography recommendation goes against the central premise of both American medicine and the welfare state: more is always better. Many American women, who have been told for years that they need to get regular mammograms starting at 40, are not ready to break with that practice, and our political leaders wouldn't dare suggest they reconsider.

Quite the contrary. The Senate voted to force health insurance companies to offer free mammograms -- no deductibles, no co-payments. The lawmakers also ordered the federal government to completely disregard the task force proposal.

Republicans as well as Democrats ridiculed the notion that Americans should be denied any test they want at someone else's expense. Said Sen. John Barrasso, R-Wyo., "I don't want a government bureaucrat making a decision for the women of America, if they should be allowed to have screening mammograms."

Actually, no one has proposed making it a crime for people to undergo screening. Those patients who think a screening exam is essential, but whose policies don't cover it, may find facilities that offer it free. They would also have the option, however unfamiliar, of paying for it themselves, at an average cost (according to the American Cancer Society) of about $100.

The Senate measure is not about the right to obtain preventive care. It's about the right to make someone else pick up the tab. By demanding mammogram coverage in private and government plans, the amendment would raise the cost of health insurance for everyone. Which, as you may recall, is exactly the opposite of what "reform" was advertised to do.

Those who think we cannot afford unlimited budgets for health care may take heart from another Senate vote. It repulsed an effort by Sen. John McCain, R-Ariz., to delete more than $400 billion in promised Medicare savings in the coming decade.

Alas, the Senate, by a 100-0 vote, also promised that no Medicare benefit currently provided will ever be canceled. Even the alleged savings (from -- get this -- eliminating waste and inefficiency) are unlikely to be achieved. They are in the bill to create the impression that someone, someday, will be willing to control costs.

Fat chance. Many opponents of the administration's effort warn that it will lead to federally imposed rationing of medical care, cruelly denying Americans the treatments they need. The more plausible outcome is that the government will insist on providing anything and everything until the day we run out of money. Our leaders know they can't do this forever. So they'll settle for doing it as long as they can.


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