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Bartering and exchanging...

Saturday, April 24, 2010
 
There's been a lot of attention to the comments of Sue Lowden, who is running as the Republican frontrunner for the U.S. Senate seat now held by Senate Majority Leader Harry Reid in Nevada. At a town hall meeting, when describing her alternative to the health reform bill that passed, Lowden talked about going back to the world where patients would "barter" with their doctor. In a follow up interview, she didn't back down from this quaint notion, and in fact talked about "taking a chicken to the doctor."

There have been Jay Leno jokes and other responses, including this video that sets her comments to music...



Beyond the silliness of bartering with a chicken to the doctor, there's also the issue of how many chickens it would take, especially for more advanced procedures. Some websites have been designed to make this point, including one that actually calculates the numbers of chickens various procedures, like a hip replacement, would cost.

But Lowden clearly meant what she said, and deserves the ridicule. But there's a serious debate here that should not be overlooked. One is that some folks really do want to just go back to the good old days, as if medicine hasn't advanced and gotten more complicated and expensive in the process. Harkening back to history isn't a good way to deal with our current and future challenges in health care.

Let's take away the (admittedly humorous) statements about "chickens" and even "bartering." It is equally ridiculous to suggest that individual consumers are in a position to bargain with their doctor. Yet it is an article of faith among some politicians that the real solution to increasing health care costs is to shift the costs onto individuals, have them pay cash, which would "empower" them to bargain for a good price.

For those who raise the fear that reform would make health care like a trip to the DMV, it's strange to argue that health care should really be more like a trip to a used car salesman. Not only would that be needlessly stressful to have to bargain (especially at a time when you were sick), but the individual has little market power. Those who have been the best at negotiating have been large purchasers, like big employers or CALPERS, that negotiate on behalf of hundreds of thousands of people, that have the staff wherewithal to examine the data, make comparisons, and challenge insurer statements.

This is a relevant debate right now. As part of implementating federal health reform, there are bills to set up a new health insurance exchange, AB1602(Perez) and SB900(Alquist/Steinberg), in the California legislature. It is critical that this new exchange use its bulk purchasing power as an "active purchaser," to bargain on behalf of the millions that will get coverage through the exchange, for the best price and value.

So there's two different visions. One is an exchange that negotiates for the best cost and quality. Another is to simply let any insurer sell anything, and let individual consumers fend for themselves, and get deal on their own, with chickens or whatever else--frankly, it's less of a free market than a flea market, letting the buyer beware.

In this continued health reform debate, in Nevada and here in California, we shouldn't be chicken in our efforts to defend consumers.

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posted by Anthony Wright | Permalink | 10:09 PM


 
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Anthem Blue Cross seizes the political moment

Friday, February 05, 2010
 
It's not like Captain Renault is going to burst into Anthem Blue Cross' boardroom and announce he's "shocked!...shocked!" to see more consumer-gouging taking place.

We doubt that anyone is surprised to see Anthem Blue Cross seizing the day and aggressively hiking fees in California -- again -- for individual policy holders.

Never mind that containing costs of health coverage has been a major part of the national conversation for a year now. What matters to Anthem's parent corporation, Wellpoint, located in Indiana, is that the conversation is now down to a hushed whisper, thanks to the Party of No in Washington D.C.

And when it comes to reading political tea leaves, "no" means "yes" to Anthem Blue Cross, which for the second year in a row is increasing premiums by 30 to 39 percent. For Century City podiatrist Mark Weiss, 63, that means his and his wife's annual health insurance bill rises from $20, 184 to $27,336. Wow.

Weiss, who has been a member of Blue Cross for 30 years now, thinks "it's just unconscionable." So do a whole lot of other people -- who need to continue speaking up about it.

Read all about it in an article by Duke Hefland in the Los Angeles Times. Also, go to sickofbluecross.com to register your opinions and tell your story about being price-gouged by Anthem Blue Cross.

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posted by Cynthia Craft | Permalink | 9:43 AM


 
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Debunking death panels...

Friday, August 21, 2009
 

Jon Stewart interviewed health reform opponent Betsy McCaughey yesterday.

He pulled lots of punches. He didn't bring up her sordid history attacking the Clinton health reform effort with outright lies. He didn't bring up that the American Medical Association supports H.R.3200. He didn't bring up the many, many experts that have discredited her.

But it still gratifying to see someone who is outright lying being called out on it. The second half was not shown on TV, but put on the web. It's the better half, and is worth your time:

The Daily Show With Jon Stewart

Mon - Thurs 11p / 10c
Exclusive - Betsy McCaughey Extended Interview Pt. 2
http://www.thedailyshow.com/
Daily Show
Full Episodes
Political HumorHealthcare Protests

It will be tough to go through three weeks without Jon Stewart and Stephen Colbert providing context and commentary...

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posted by Anthony Wright | Permalink | 1:47 PM


 
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Even Wall Street agrees...

Monday, July 13, 2009
 
Wall Street’s analysts met with health care policy wonks in Washington July 8 for a conference organized by the Center for Studying Health System Change, which was funded by the Robert Wood Johnson Foundation.

An industry newsletter called Healthcare BS reports that everyone agreed the flawed health care system is costing too much of our economic resources – estimated at 16.7 % of gross domestic product.

Here are some of the findings on dollars-and-cents issues:

  • “Cost trends have ticked up, and so pricing is up about 1% on average in the individual and small-group market in 2009. This means higher deductibles and out-of-pocket costs -- all of which are expected to filter into the large-group market this year as employers set their benefits for 2010.”

  • "Premium increases and benefit changes stem from two primary causes: medical spending inflation and cost shifting, panelists said. As hospitals’ payments from government insurance plans are cut, they pass along more costs to private insurance carriers, and in turn, employers are passing along their cost increases to their employees in higher premium contributions, copays and out-of-pocket maximums."

  • "The analysts noted that insurance brokers generally earn hefty commissions of between 20% and 25% of the premium in the first year and then half that amount in each renewal year, adding substantially to the cost of individual insurance. "

  • "At the end of the day, everyone expressed a sincere desire to see the creation of an integrated health care delivery system that provides better care to more people at lower costs."

And these were the money guys talking.

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posted by Cynthia Craft | Permalink | 1:59 PM


 
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Advocacy through amendments...

Tuesday, June 23, 2009
 
How can Californians engage in the health reform debate?

I often get the question: Do we support the House/Tri-Committee bill? The HELP/Kennedy bill? The Finance/Baucus bill? But these aren't the right question, or at least, not the most useful ones.

First of all, they are all in draft form, and undergoing changes in real-time. And they are going to change significantly in the weeks ahead. The House bill will go through three committees, and be subjected to various proposed amendments. Senate bills will be considered by two committees, and ultimately merged into one product before heading to the floor.

These are the vehicles for health reform, but they will change over the weeks, especially as they go through the committee process, and face amendments and negotiation. This would be true if we started with a single-payer system, or a Wyden-like individual market approach--no legislation is unchangeble. So our main action is not to "support H.R. X" or oppose "S. Y" or anything like that.

The advocacy needed is to support the concept and urgency of health reform, this year, and to support or oppose specific principles and provisions that are important for patient. Whether it is the public health insurance option, for having all employers contribute their fair share, or the need for subsidies up the income spectrum past 400% of the federal poverty level, those are the debates that will make the difference in what the House and the Senate pass, and become the fodder for a House-Senate compromise.

It's not that I don't have opinions on any of this. Of the actual bills proposed, I prefer the single-payer model as proposed by Rep. Conyers or Rep. McDermott, over the individual market approach as proposed by Sen. Wyden. Of the main committee vehicles, which all follow a similar framework to what President Obama campaigned on, I've been impressed by the House vision and version, and concerned abou the direction I am hearing from the Senate committees at the moment.

Congressional representatives need to hear support, for example, for the public health insurance option, which is a key provision, as well as a principle--that consumers should not be left all alone at the mercy of the individual insurance industry. There's no bill number, but it's at the center of the conversation as we speak.

There will be a moment to be ready, to respond to the predicted deluge of amendments. See you soon

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posted by Anthony Wright | Permalink | 12:41 AM


 
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Another procrastination tool...

Thursday, June 04, 2009
 
In addition to the Washington Post's new health reform page, and Ezra Klein's new virtual outpost at the paper, there's another reason to update your web browser bookmark lists.

Kaiser Health News is a new, nonprofit journalism site, providing new reporting that is offered on the web and to other media outlets. We've commented on the wrenching changes in the media, and this is an attempt to continue good journalism around health issues even as the industry is in turmoil.

It also includes good links and resources, including a blog and blog watch on health issues. They even had a quick update on state-based health blogs, citing our budget reporting.

The excellent journalists behind Kaiser Health News are very familiar to California readers. They include Julie Appleby, who reported in California before going on to a prominent national health beat at USA Today, and Jordan Rau, the infamous Los Angeles Times reporter who just moved from Sacramento.

Rau's article spotlighting a hospital in New Jersey as a case study in cost containment is getting a lot of attention, as a complementary feature to Atul Gawande's much-discussed, must-read New Yorker article on health care costs.

Happy reading.

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posted by Anthony Wright | Permalink | 10:37 PM


 
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Skeptical optimism?

Tuesday, May 12, 2009
 
Victoria Colliver at the San Francisco Chronicle collects some of the responses to yesterday's announcement about the health industry's commitments, and I express my mix of skepticism on the policy and optimism on the politics.

Some have characterized this as a "voluntary" commitment by the industry--and that is something to be wary about. Health Access California has been correctly skeptical of past industry attempts here in our state of avoiding reform with "voluntary guidelines," like on the issue of hospitals overcharging the uninsured, or "voluntary discounts" by prescription drug companies. In the latter case, we fought an initiative battle, that the pharmaceutical companies spent $80 million on, on the very issue of a "voluntary" drug discount program, versus one where the discounts were negotiated. In both cases, the industries were trying to stop--or at least delay--legislation.

As Jonathan Cohn suggests:
This time, the industry groups aren't promising to control costs as an alternative to reform. They're promising to control costs as part of reform. In fact, some of the efficiency steps they are proposing wouldn't even be possible without the sorts of changes now under discussion in Washington, because they require changes in legislation.

If the "voluntary commitment" was explicitly posed as an alternative to health reform, or even of key reform elements--like the public health insurance plan, or bulk purchasing of prescription drugs and medical devices--then it would be a concern. But these efforts should not be--and don't have to be--mutually exclusive. And we should all be very clear about that in the weeks ahead...

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posted by Anthony Wright | Permalink | 12:50 AM


 
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Big day...

Monday, May 11, 2009
 
A lot of news on the federal health reform front today. The biggest is the announcement, in the form of a meeting with President Obama and letter from key health industry leaders, including organizations representing insurers, drug companies, hospital, device manufacturers, doctors, and health workers, to commit to $2 trillion in health care savings over the next 10 years.

The New York Times and Los Angeles Times have their write-ups. The range of opinion of the blogs ranges widely, from Time's Karen Tumulty to Joe Paduda of Managed Care Matters to Ezra Klein at The American Prospect to New York Times' Paul Krugman to The Treatment's Jonathan Cohn to Marc Ambinder at The Atlantic and Change.org's Tim Foley.

I'll add my two cents later. The details are not fully fleshed out, but the importance of the announcement today is more political than policy: that the federal health reform discussion is now more serious than it was before.

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posted by Anthony Wright | Permalink | 6:28 PM


 
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Comparative goals..

Thursday, February 12, 2009
 
The economic recovery package includes $1.1 billion for "comparative effectiveness" research, a comparatively small amount of money in a very big bill, but it's getting a lot of scrutiny and attention, as Victoria Colliver in the San Francisco Chronicle reports.

The attack against comparative effectiveness ranges from anti-health reform hack Elizabeth McCaughey to drug and device manufacturers. The unfair attack is that such research is "rationing." Since when is getting better information on cost and quality a bad thing?

As the links above indicate, a lot has been written on this subject already, but I think as consumer advocates we have a particular focus on this issue.

As consumer advocates, we have a long and proud history of working to make sure that patients get the care they need. For example, we sponsored the HMO Patients' Bill of Rights, which provides for independent medical review of insurers' decisions to deny such care.

At the same time, we are not for allowing drug and device manufacturers to sell anything they want at any price. There is a role for steering patients to the most appropriate, most effective medications and treatments, based on the most relevant research.

Drug and device companies may attempt to use the language of consumer advocates, but their interest is profoundly anti-consumer. We need more transparency and information, not just about the cost and quality of their products, but about their tactics in the coming health reform debate.

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posted by Anthony Wright | Permalink | 10:56 PM


 
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The Promised Land if you're Chronically Ill

Tuesday, November 18, 2008
 
The Netherlands!

According to the latest Health Affairs web issue, a Commonwealth Fund study of seven industrialized nations reveals -- once again -- that the US is dead last when it comes to quality and cost, particularly as it relates to caring for people with chronic conditions: diabetes, heart disease, arthritis, depression, etc.

The US spends the most ($7k per capita versus about $3k), and in spite of that more than half (54%) of patients end up skipping drugs, doctors visits, etc. because it's too darned expensive. Patients in the US are least likely to have a regular doctor, among the least able to see a doctor the same day when sick, and more likely to report that recommended treatments were unhelpful or that medical care was poorly organized.

Meanwhile, other countries, like the Netherlands, Canada, the UK or France, place strong emphasis on medical homes and chronic disease maintenance and don't require any co-pays, co-insurance for the maintenance of these conditions. In Germany, coinsurance is limited to 1% to 2% of income.

While there's quicker access to specialists in the US, the same can be said of the Netherlands, where requests to see a specialist are usually met in fewer than four weeks.

Here's a NY Times editorial on it.

In the meantime, diabetes cost the US $217.5 billion in 2007, according to the National Diabetes Economic Barometer study, by the Lewin Group. Perhaps other models worth a view.

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posted by Hanh Kim Quach | Permalink | 1:34 PM


 
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Dr. Colbert, DFA, with the diagnosis...

Saturday, November 15, 2008
 
The recent Jupiter clincial trial revealing that statins like Crestor may help prevent heart attacks, even for folks who would not ordinarily be prescribed the cholesterol-lowering drug, got front-page news.

While this could be an important breakthrough in science, medicine, and health, there are some concerns, encouraged by the . Leave it to Comedy Central's The Colbert Report to provide a counterpoint:




Colbert brings up some of the legitimate critique of PhRMA: that their research is focused more on finding a steady income stream from existing drugs than on new discoveries. “This is a great breakthrough in the battle to find things to prescribe to people who don’t need them...True, the drug costs $100 a month... But that is a small price to pay to not have the heart attack that there’s no way of knowing that you would have had.”

After a clip of Stanford cardiologist Mark Hlatky urging caution, Colbert quipped, “sounds like someone hasn’t gotten enough free Crestor pens.” Health Access California, CALPIRG, California Labor Federation and other senior and consumer groups supported a bill earlier this year to place limits on the drug company giveaways to medical providers, but the active opposition of PhRMA blocked it. Maybe now that the issue has gotten the famous "Colbert bump" (along with the city of Sacramento), we can be more successful in the future.

The Colbert piece led Scientific American and the Wall Street Journal Health Blog to (in jest?) encourage Colbert’s name be added to the list of candidates for FDA Commissioner as President Obama selects a new administration.

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posted by Anthony Wright | Permalink | 11:22 AM


 
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A Ray of hope on health care...

Friday, October 24, 2008
 
As a Yankees fan from the Bronx, it's weird to see the Tampa Bay Rays in the World Series, with the second-lowest payroll in baseball, especially given the enormous mismatch between the money the teams spend.

In health care, there's also a mismatch between how much we spend, and the results.
Californian Billy Beane, the general manager of the Oakland As, co-authored an op-ed today in the New York Times on this subject, with the improbable duo of Newt Gingrich and John Kerry. Beane invokes the excellent book MoneyBall, which shows the power of statistics to make tough decisions, when they write:

Remarkably, a doctor today can get more data on the starting third baseman
on his fantasy baseball team than on the effectiveness of life-and-death medical
procedures. Studies have shown that most health care is not based on clinical
studies of what works best and what does not — be it a test, treatment, drug or
technology.
This is why we have fought so hard for better transparency, like in last session's AB2967(Lieber), so we have better data on the cost and quality of the care provided by California doctors and hospitals.

Let's be clear: some insurers inappropriately use "evidence-based" arguments to deny needed care and treatments (some treatments haven't had full study, but still work); some policymakers use the lack of correlation between costs and outcomes as an excuse to cut, not recognizing the significant consequences (after all, the As or Rays in the Series is the exception, not the rule.)

But there should be no debate that we need much better information about the care we receive, and that we pay for. We'll be back on this issue next season.

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posted by Anthony Wright | Permalink | 8:35 AM


 
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The triple-whammy to workers...

Monday, October 20, 2008
 
Last week, Health Access was pleased to co-release a Families USA report, "Premiums Vs. Paychecks: A Growing Burden for California's Workers." It was covered in the Sacramento Bee, Contra Costa Times, and the Stockton Record. The basic findings:

* For family health coverage provided through the workplace in California, annual health insurance premiums in the 2000-2007 period rose from $6,227 to $12,194—an increase of $5,967, or 95.8 percent.
* Between 2000 and 2007, the median earnings of California’s workers increased from $25,740 to $30,702—an increase of $4,962, or 19.3 percent.

As if you didn't know from your personal experience, rising insurance costs are vastly outpacing the take-home pay of workers. And what's worse, workers are paying more, and getting less. These premiums are not just costing more, but they are buying less, in terms of benefits. Workers are being asked to pay more, both in terms of share-of-premium, and in terms of out-of-pocket costs, such as co-payments and deductibles. As much as employers are feeling this increase, they are even passing a bigger percentage of the costs along to the worker.

One of the reporters asked if there was advice, but the big solutions to rising health care costs are not individual actions, but collective policy reforms. And that's the challenge for the next few years, at both the state and federal level.

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posted by Anthony Wright | Permalink | 10:40 PM


 
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The new 401(k)s

Friday, August 15, 2008
 
I was pleasantly surprised, this week, by my periodic email from HSA Weekly. Usually, the publishers of this news compendium of Health Savings Account news send out articles intended to promote Health Savings Accounts and their crummy high-deductible health plans.

But this week, I got an article about how HSAs aren't doing all that well because consumers have been rightly wary of them.

The article sums it up well, but essentially, health care is a very complex system to navigate. The idea that "consumer choice'' and "cost-conscious'' behavior is going to drive down costs is ludicrous when you consider that:

a) the most expensive care (ie. emergency care) is not voluntary, nor do you have time to make "cost conscious'' decisions about which hospital you should go to when you're having a heart attack.
b) it's impossible to find price stickers on the care that we need
c) consumers aren't medical experts and don't know what care is most effective and less effective
d) "choice," as proponents of high-deductible plans like to promote, is not neccesarily a good thing. Think of how overwhelming it is to choose a flavor at Baskin Robbins.

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posted by Hanh Kim Quach | Permalink | 2:36 PM


 
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Controlling costs, not curbing care...

Thursday, July 10, 2008
 
Our friends at CALPIRG recently released a new study on cost containment in health care.

It's described in opinion piece by CALPIRG's Michael Russo in the California Progress Report, and in an article by Keith Darce of the San Diego Union Tribune.

It's a useful compilation of the research out there on cost containment, brought together in a readable package. The core message is that there are significant ways to cuts costs beyond the typical attempts to cut costs by cutting care.

While there is no one silver bullet to bring down health prices, there are several strategies that, together, can have a big impact. Health Access has a one-page fact sheet on controlling costs with a similar message, but the CALPIRG report gives good policy detail, especially in areas about reducing regional disparities in health spending, in administrative duplication, and in prescription drug purchasing. It's worth a read.

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posted by Anthony Wright | Permalink | 6:12 PM


 
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Cost containment bullets...

Tuesday, February 26, 2008
 
In the holy grail of cost containment, I've always thought that there isn't one "silver bullet," but there is a list of policy reforms (here's the Health Access one-pager) that can each bring down health costs somewhat, but that taken together, the savings over the long term could be significant.

Some of these reforms are ingrained in comprehensive health reforms: the negotiating power of large purchasing pools, the global budgeting of a single-payer system, or just the preventative aspect of getting everybody insured, and the reduction of the "hidden tax" of having the uninsured. Other elements, such as rate regulation, information technology, transparency of cost and quality, or encouragement of "best practices", are proposals that can be stand-alone, or part of broader reforms.

Joe Paduda at Managed Care Matters seems to have a similar philosophy on cost containment, and a similar list. In his post, he also goes through each idea, how Obama and Clinton fare in their proposals, how effective he thinks each strategy would be.

It's a pretty good and fair assessment, even if I might quibble on details. There are real cost containment elements in the Obama and Clinton plans: none are silver bullets, but together they can make a real difference.

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posted by Anthony Wright | Permalink | 12:57 AM


 
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Costing it out...

Wednesday, November 28, 2007
 
The new Health Wonk Review is up at Health Care Renewal, where our SCHIP post is spotlighted, along with several other posts from around the blogosphere.

An example is Maggie Mahar's HealthBeat critique of the New York Times' full-page editorial on rising health care costs.

I think the NY Times is right that there's no one silver bullet, but there's a legitimate set of proposals that each makes a difference, and together, can make a big difference. Health Access has a fact sheet describing an overlapping set of solutions to rising health care costs--which also dismisses ones that are phony answers as well.

I also agree with Mahar's critique of the NY Times on the details: Prescription drug prices are a bigger deal than you think; that the "skin in the game" idea is vastly overblown; etc. The overall point of nyceve's blistering attack on DailyKos is on point as well, that the insurers and their administrative costs and profits shouldn't be left off the hook.

So there's a lot of work to do. We may not be able to do all of it in one swoop, but let's get started!

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posted by Anthony Wright | Permalink | 12:01 PM


 
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Fact Check on AB8

Monday, September 10, 2007
 
The state Senate just concluded debate on AB8, which passed 22-17.

(Aside: All Republicans and Sens. Lou Correa, D-Anaheim, and Sheila
Kuehl
, D-Santa Monica voted against the bill. Correa is the only Democratic
lawmaker to oppose any health reform measures this year.)


The bill now heads to the Assembly, where I'm sure all 80 lawmakers will want to get up and speak. Lest they planned to crib from Senators, I wanted to set the record straight on some of the erroneous statements made by their colleagues in the red-wing of the Capitol.

Myth: "I cannot remember a bill -- either minor or major -- that comes before the Legislature without any organization in complete support,'' (Sen. Sam Aanestad, R-Grass Valley)

Fact: Last week, AB8 underwent substantial amendments that dealt with controlling the rapidly increasing health care costs, and affordability of health coverage for consumers. After amendments on both those issues surfaced, a number of strong consumer voices -- such as Consumers' Union, Health Access, CalPIRG, AARP, Congress of California Seniors, Service Employees International Union, California Labor Federation, AAFSME and ACORN and other groups moved to support the bill.

Myth: "This plan does nothing to contain costs.'' (Aanestad). Sen. Dave Cox, R-Fair Oaks, also alluded to this.

Fact: Amendments added to the bill last Wednesday directly address the issue of cost containment -- something that the It's OUR Healthcare coalition has been asking for all year. We recognize that without without controlling costs, any health reform efforts would collapse under the weight of increasing health care expenses.
Cost containment provisions include:
  • Preventing Californians from getting sicker by helping patients to affordably control chronic diseases. Asthma, diabetes and heart disease are among the biggest cost drivers in health care. Preventing and maintaining these diseases keep patients from getting sicker, and costing more money to treat. This means reducing co-pays and cost-sharing for doctor’s visits, lab tests and medications. High cost-sharing deters patients from seeking the necessary treatment and care for their diseases, causing their conditions to worsen.
  • Requiring public reporting on health care costs, and the quality of services. By publicly reporting how well – or poorly – doctors, hospitals and other providers perform health care procedures, providers would be driven to improve quality, thereby saving lives and saving health system dollars. Better information on quality and cost can allow purchasers and consumers effectively purchase care that gives them value for each dollar they spend.
  • Requiring the adoption of health information technology. Electronic records could help reduce costly errors due to poor handwriting, unclear instructions and other human errors. Technology could also help cut down on administrative costs.
  • Reining in prescription drug costs. Prescription drug costs climbed an average three times higher than the rate of inflation from 1994 to 2006. AB8 allows the state to combine with other public entities and trust funds to create a purchasing program for prescription drugs, using the power of a larger group to help leverage lower prices for prescription drugs.
  • Creating a public insurer that would compete for business with private insurers to help drive down costs. The public insurer, built on the foundations of California’s existing local initiatives, county-organized health systems, public hospitals and community clinics, would give Californians the option to obtain coverage from a publicly owned entity, such as a municipal utility.

Myth: Sen. Aanestad, in his speech on the Senate floor opposing AB8, also said the bill was "modeled on the Massachusetts plan.''

Fact: While AB8 certainly share certain features with the Massachusetts plan, one missing provision is glaringly obvious: the absence of an individual mandate. AB8 does not require anyone to have coverage if they can't afford it.
Here's how it would work: workers would be required to take up health coverage IF their employer pays for it and IF -- BIG IF, HERE -- the cost of health care (that includes premiums and out-of-pockets costs) does NOT exceed five percent of a worker's wages. That means a worker earning $41,000 a year would not have to pay more than $2,050 in premiums, co-pays, co-insurance and deductibles.

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posted by Hanh Kim Quach | Permalink | 3:19 PM


 
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Over There

Monday, July 16, 2007
 
I had the opportunity to attend a swanky event hosted by the California HealthCare Foundation with the German Minister of Health, Ulla Schmidt. Through a UN-like interpreter service, Ms. Schmidt described recent reforms that the country has taken to try and control skyrocketing costs.

Unlike some of their European counterparts that have universal healthcare system controlled by a central government entity, Germany’s system is based on coverage through private non-profits that arose out of sickness funds created in the late 1800s, that compensated workers in certain professions (who were required to pay into the system) from losing income when they got sick. Still, with this decentralized (and privatized) healthcare system, the country manages to cover 90 percent of its citizens.

As a result, Germany is struggling with many of the same issues of a private health care system that we are here – including the balance between regulation and encouraging free-market competition.

Perhaps we can borrow from lessons Ms. Schmidt has learned:
“Whoever calls for more competition in health services will usually not want that principle applied to themselves.’’

The system is now a patchwork of 292 sickness funds (down from 1,200 a decade ago) and workers can choose to move between the funds. The funds are required to contract with any applicant (guaranteed issue!). The result has been that younger, healthier and wealthier have fled to “sickness funds’’ that are cheaper (sound familiar?).

The way they’ve chosen to deal with this, Schmidt said, is that just this year, the federal government is starting to pool together all the contributions and distributing to the sickness funds based on the make-up of each funds subscriber base. So if one sickness fund has sicker people, then they’ll get enough money to assure that those people get proper preventive and maintenance care. This, Schmidt hoped, would take away the incentive for sickeness funds to design plans that attracted healthier people – AND reward efficient funds.

Funds that could take care of their members well – keep them healthy with existing dollars – would be rewarded. If they really used their money wisely, then they’d be able to refund subscribers

On the other side, inefficient funds that ran out of money would have to ask their subscribers for additional money. Those subscribers would then become disgruntled and be free to move to another plan.

Additionally laws in Germany require coverage and contribution based on income, mandate a very high level of benefits, and protect consumers from having to pay too much out of pocket already. We don’t have that here. But Schmidt said that’s the role that government plays – to assure those rules are followed.

In a sense, that’s what we’re trying to do this year: create more rules.

It was encouraging to hear from Schmidt, who presented ideas we might be able to borrow from.

Germany, however, has a very strong sense of solidarity among its citizens, that I’m not sure exists in all parts here, that could be more of a barrier for us. “Everybody has to contribute from their income to the health care system. That’s the principle. The healthy pay for the sick. The young pay for the old. The people with no kids pay for people with kids. That is the system.”

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posted by Hanh Kim Quach | Permalink | 2:43 PM


 
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The "hidden" reasons for reform...

Tuesday, May 29, 2007
 
You don't have to be a fan of the New America Foundation to take sides with it over the unabashedly conservative Hoover Institution.

Dan Walters has a questionable column in today's Sacramento Bee that gives way too much credence to a Hoover study trying to downplay the notion of a "hidden tax" in health care.

The "hidden tax" is a phrase Governor uses a lot, to talk about the amount that health premiums are higher because of the uninsured population. The New America Foundation released a study last year often cited by Schwarzenegger. Families USA had a similar conclusion in 2005 with its study documenting "the increased cost of care."

As I have previously said, I don't like the the Governor's rhetoric around a "hidden tax," he tends to blame the victim: the uninsured person who typically is not offered coverage on the job, is not eligible for public programs, and who finds that buying coverage as an individual is either unaffordable or even unavailable, because of "pre-existing conditions." This rhetoric has consequences: if the problem is that people are uninsured, rather than the barriers that lead them to be uninsured, it's no wonder that Schwarzenegger and New America Foundation both see the "individual mandate" as a solution--something we disagree with.

But it is important to acknowledge that our current fragmented health system comes with a cost, to all of us. One of the problems is the lack of fair and equitable financing, with most employers providing coverage to all their workers, but many that don't.

We all pay more when Wal-Mart and McDonald's pay less. It's the same health care system, of doctors and hospitals, and if some manage to not pay their fair share into the system, we all pick up the burden. (Let's remember, the uninsured get it worst, getting charged more than others and facing collections and bankruptcy. But there are costs that are borne in the overall system.)

In some states, they actually have an explicit fee on insurance to help fund the safety-net hospitals and providers that care for the uninsured. So employers and purchasers are able to directly see, on their bill, how much they are paying for a broken health system that leaves people uninsured.

The New America Foundation, in its analysis defending its work, actually pointed out Hoover didn't question the notion of a "hidden tax," just its size. And the New America Foundation makes a credible case that it is bigger than what Hoover estimates.

The thing that rankled me most about the Walters column was the notion that reducing the "hidden tax" was "the most appealing premise" of health care reform. Let's put aside the millions of uninsured who would get coverage, and no longer live sicker, die younger, and be one emergency away from financial ruin. Let's put aside the community, economic, and public health benefits.

It seems to me that there are other reasons why an *insured* person would want a change in our health system:

* SECURITY: Even insured people recognize that they are one job change, one divorce, or other life event, from being uninsured. Reforms could provide more security that they keep the coverage they have now (through an employer or a universal system), are more likely to have coverage at their next job, are more likely to have a safety net if they fall upon hard time, and are more likely to have coverage even if they get sick.

* AFFORDABILITY: Aside from efforts to simply shift the burden of costs onto consumers, most of the ideas to contain costs in the health care system work better when more people are in the system. Whether its information technology, or prevention, or bulk purchasing, or better planning (not to mention fair financing), the cost savings work best in a universal system, rather than our current a fragmented system where it is hard to implement these efforts. For those who are insured, we can best slow the growth in health care costs better if we deal with the uninsured issue as well.

There's no disagreement that there's a cost to the status quo. But let's recognize the other benefits of reform as well.

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posted by Anthony Wright | Permalink | 3:56 PM


 
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$950 million is real money...

Monday, May 28, 2007
 
No sooner do we try to tease out the profit motives of BlueCross in opposing new rules and oversight, than we find that the stakes are even higher than we think.

Lisa Girion at the LA Times has the scoop:


State regulators are investigating whether a $950-million dividend Blue Cross of California sent to its Indianapolis-based parent violates an agreement the companies made to limit such payments to keep premiums down and maintain the quality of healthcare benefits, officials said Friday.

Officials said the parent, healthcare giant WellPoint Inc., should have taken no more than $141 million out of California. They called the higher amount excessive, particularly as Blue Cross, which serves more than 7 million state residents, has continued to raise premiums. The state Department of Managed Health Care also is considering expanding its probe to determine whether there are any other potential violations of the three-year agreement, part of a deal to win the agency's approval for a corporate marriage that created the nation's largest health benefits provider.

Cindy Ehnes, director of the Department of Managed Health Care, said she was shocked to learn of the $950-million payday for WellPoint, whose total profit last year was $3.1 billion on $57 billion in revenue.


The merger of Wellpoint and Anthem in 2004, creating the nation's largest health insurer, was controversial, for everything from massive executive payouts, to the question of whether it would truly help patients, not just profits. Then-Insurance Commissioner Garamendi extracted a series of "undertakings," or conditions that the new insurer would have to agree to, in order for the merger to be deemed in the public interest and approved.

The question is whether California BlueCross ratepayers are paying inflated premiums to finance the business expenses and profits of the parent company, Wellpoint.

Normally, the state doesn't look at such information. But the Department of Insurance (and the Department of Managed Health Care) used the merger as a leverage point to place some oversight over BlueCross' behavior. But that authority to keep BlueCross in check has a three-year expiration date.

Let's see how the regulator use this authority. Let's make sure that health reform includes additional oversight over insurers that won't expire.

The undertakings are here. Here's Blue Cross' 2005 report on its compliance with the undertakings.

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posted by Anthony Wright | Permalink | 2:12 PM


 
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Not suprised....

Wednesday, May 16, 2007
 
We already knew that the U.S. ranks 21st in life expectancy and 23rd in infant mortality, in spite of spending more than any other industrialized nation on health care, according to OECD stats.

The Commonwealth Fund yesterday just released a report reaffirming that notion.

It's not a surprising revelation for those of us working in health care, but hopefully, it will provide a jolt to those who insist that America has the best health care in the world.

That's not to say the other systems (in Australia, Canada, Germany, NZ and the UK) are perfect -- but they spend about half as much money -- per person -- being imperfect than we do.

Key findings of the report are that the U.S.:
  • Is the most inefficient -- costing the most while providing the least.
  • Is the most inequitable, leaving low- and middle-income citizens with no health coverage.
  • Does poorly on chronic disease management.
  • Is behind in adopting information technology to help manage chronic illnesses and see exactly what other treatments any given patient is on before prescribing care.
  • Has horrible access because it lacks universal healht coverage.

The only measure that the U.S. does well on is preventive care. But, really, what good is preventive care (discovering you have diabetes) when you can't get your chronic disease managed?

Hopefully, such a report will help convince proud Americans who are convinced that we have the best health care in the world, that while America is great on many things -- it's not really on health care.

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posted by Hanh Kim Quach | Permalink | 2:28 PM


 
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We hate to gloat, but...

Wednesday, May 09, 2007
 
Health Access' Legislative Advocate, Beth Capell, is beaming.

She's right -- again -- and she's got a Wall Street Journal article, (subscription required) quoting big businesses and insurers such as Marriott International and Aetna, to prove it.

Her unlikely new allies are singing the praises of LOWERING co-pays to cut costs, rather than INCREASING them, as the trend has been the past decade.

"Behind the about-face (on co-pays) is mounting evidence that higher
copayments may not make long-term economic sense. While hey've curbed drug
spending in the short run, studies show they've also discouraged people from
taking essential medicines."

As a result, some employers -- such as Marriott and Proctor & Gamble -- and health plans, mainly Aetna, are reducing or eliminating co-pays for patients with chronic diseases -- such as diabetes, and heart disease.

Since eliminating co-pays on asthma drugs, Pitney Bowes, the giant mail managing company, reports spending 19% less ANNUALLY for EACH asthma patient compared with six years ago.

Mariott reports that the expense of waiving and halving copays is more than paid for by their newfound savings.

"Over the next several years, we think we'll see even better results,'' said
JIll Berger, Marriott's vice president of health and welfare.

Now, Marriott's going *nuts* -- waiving copays all over the place -- on childhood immunizations, mammograms and colonoscopies, the Journal reports.

I'm glad these businesses are "discovering'' the wisdom of this tactic, and frankly, am a little miffed about why others aren't following. It's kind of like getting the oil changed in your car, you do a little regular and preventive maintenance on the front end to avoid something really bad, expensive and hard to explain on the back end.

Hopefully, these new allies can help prosletize on this front, since many of their colleagues have declined to hear it from the experts.

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posted by Hanh Kim Quach | Permalink | 10:49 AM


 
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A senior moment...

Friday, May 04, 2007
 
I've been on the road speaking a lot. Yesterday, I presented on the health reform debate to a conference on Healthy Aging.

My message to them, not shockingly: seniors need to be engaged in this health reform and coverage expansion discussion. In part, I wanted to blow up the myth that seniors and their concerns aren't relevant because they largely have coverage through Medicare and Medi-Cal.

1) In fact, it is because they do have such coverage that they need to pay attention. Every time there is a recession or a deficit, we face calls to cut these programs. As health and consumer advocates, we argue that the increases in these programs are actually less than the overall private market, which leads us to conclude: We don't have a Medicare problem, We don't have a Medicaid problem, we have a health care problem.

And unless we fix the overall health care system problems, cutting Medicare or Medi-Cal isn't going to help. At the same time, Medicare and Medi-Cal will also be targeted for cuts until we get a handle on the overall system.

2) Medicare is a model, for those of us who support a universal, single-payer plan (like SB840), and related plans. Senator Kennedy and Representative Dingell just introduced a "Medicare for All" bill last week, allowing people to buy-in to Medicare. Professor Jacob Hacker calls his proposal "Medicare for Many." Introducing younger, healthier populations into Medicare, which right now is by definition older and sicker, could actually help the long-term financial picture for the program.

3) Many seniors rely on Medi-Cal, which could in store for major improvements. On the table are major Medi-Cal rate increases, which could increase access to care for many seniors, children, and people with disabilities. This also includes Medi-Cal expansions, not just for children but for low-income parents and adults without children at home: that's a big hole in our current system now, one that a lot who are in the 50-65 year old range fall through.

4) Speaking of the 50-65 year olds, they have perhaps the most to gain from comprehensive health reforms. Many are in the types of jobs that don't provide health coverage, and would benefit from an expansion of employer-based health coverage. Early retirees and others often find it impossible to buy coverage as an individual, either because it is unaffordable or unavailable, because of "pre-existing conditions" that virtually anybody who has lived sevreal decade has. Reforms on the table include prohibitions for insurers to deny or discriminate against consumers because of their health status.

5) Seniors are the biggest users of health care. Any effort to change or improve health care will naturally have a disproportionate impact on those who interact with the system the most.

6) Everybody has an intergenerational stake. Seniors also care about their own care, but that of their children and grandchildren. They want their family to have the social compact they had, where if they worked and paid taxes, they would have the security of health coverage. But they recognize that wihout action, that compact is unravelling.

Seniors can be an important voting block and political constituency, and so the success of reform, both in terms of if something gets passed and what gets passed, could hinge on the senior community.

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posted by Anthony Wright | Permalink | 7:14 AM


 
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How to control costs, and more...

Thursday, April 26, 2007
 
Some laughter at an unexpected part of the conversation at the hearing yesterday... Senator Perata was detailing the various measures in his bill intended to control costs. For example, he stated that "we are in the freaking stone age in terms of medical records," and said that we "are killing people" by not using modern electronic technology to deal with medical records.

Beyond his own bill, he went on a short rant about prescription drug advertising, and the large amount of money spent on the television commercials for "the little blue pill," and the impact it has on health costs in general. He was very skeptical that as a patient he should be asking his doctor about any medication beyond aspirin. "What the heck do I know?" he inquired, wondering why he should be pestering his doctor about drugs, rather than the other way around.

He said if one looks at the sports show, all the advertisements are for "beer, cars, and pills--and not in that order." With a bemused smile, we commented on all TV commercials "and all those smiling men."

Not finished, he even interjected "you don't see the women smiling, only the men."

And then the conversation went back to health reform.

On a more serious note, one way to deal with the issue of prescription drug advertising is at the federal level, in a bill by California Congressman Henry Waxman, as described in this blog post by Steve Blackledge of CALPIRG. Not so seriously, he managed to invoke a comparison to Steve Martin in The Jerk.

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posted by Anthony Wright | Permalink | 1:20 AM


 
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Anthony Wright is the executive director,
with a background as a consumer advocate and community organizer on many issues, including health issues for the last ten years in California and New Jersey.