The government should initiate "small scale reforms" to its healthcare insurance system to overcome potentially devastating obstacles in serving an aging and chronically ill baby-boomer population, says one of the leaders in the healthcare consumerism movement.
"We're going to have just a huge problem," says John C. Goodman, president and CEO of the National Center for Policy Analysis, referring to 78 million baby boomers retiring early or losing jobs and potentially facing burdensome health issues. Goodman, an economist specializing in healthcare issues, writes what he terms the only "right-of-center" health policy blog.
As Goodman sees it, revamped policies would include "portable insurance"—in which providers would allow customers to move from job to job and maintain health insurance—and special needs insurance "instead of requiring insurers to be all things to all people, they should allow plans to specialize in treating one or more of the chronic conditions." Goodman has been an opponent of existing healthcare reform proposals as falling short of meeting the nation's healthcare needs. The legislative proposals are currently stalled in Senate and House conference discussions.
The emerging baby boomer population represents a special need, he says, adding that more than 80% of them will retire before they become eligible for Medicare. "Employers should be encouraged to negotiate to cover retirees," Goodman says, adding "two of three don't have the promise of post-retirement care."
"Most proposals for dealing with the problems of pre-existing conditions would completely divorce health insurance premiums from expected healthcare costs," Goodman wrote Jan. 27 in "Ten Small-Scale Reforms for Pre-Existing (Chronic) Conditions" for Health Affairs.
"Yet a policy of trying to force health plans to take enrollees they do not want risks jeopardizing the quality of care they receive. Instead of suppressing the price system, I propose 10 ways of dealing with this problem that make greater use of it."
The 10 Goodman recommendations include:
Encourage portable insurance. Goodman contends the problem of pre-existing conditions occur because health insurance isn't portable, and employers aren't allowed to buy insurance they can own and take with them from job to job, or out of a job. Goodman says, "The NFL and mineworkers have such policies, where they can take it from job to job."
Allow special needs health savings accounts for the chronically ill. These plans would include "cash and counseling programs" in which homebound and disabled patients potentially take care of their own private plans. Pilot programs exist for such programs in which there has been nearly a unanimous satisfaction rate among participants. The programs could be models for future plans for chronically ill people, Goodman says.
Allow special needs health insurance. Insurers should be allowed to specialize in chronic conditions, instead of being "all things to all people," Goodman writes. Insurers should be allowed to charge market prices, while quality competition should be encouraged, he says.
Allow health status insurance. There should be two separate kind of insurance, with separate premiums, Goodman says. Standard insurance would cover the health needs of people during the insurance period, while status insurance would pay future premium increases people face if they have a change in health status and then try to switch to another health plan, Goodman adds.
Allow self-insurance for changes in health status. The tax law allows employers to pay for current-period medical expenses with untaxed dollars. But there lacks an opportunity for employers or employees to save for future changes in a health status, and people need to engage in contingency savings for future payments—such as a health savings account (HSA).
Give people on their own the same tax break employers get. Goodman says all insurance should get the same tax relief regardless of where it is obtained or how.
Allow providers to repackage and re-price their services under Medicare and Medicaid. Goodman calls for "innovative solutions" that would allow providers to offer different bundles of services in the care of diabetes, asthma, cancer, and other diseases to reduce government cost and improve care.
Allow access to mandate-free insurance. Costly mandated benefits have priced out health people, raises premiums for the chronically ill, and diverts money from their care, Goodman says. A diabetic, for example, shouldn't have to pay for other types of care simply to get his own needed care, according to Goodman.
Create a national market for health insurance. Competition among special needs insurers would benefit the chronically ill as well as having the ability to buy insurance across state lines, Goodman says.
Encourage post-retirement health insurance. Goodman says post-retirement insurance should be allowed because more than 80% of baby boomers will retire before they are eligible for Medicare, yet face the greatest obstacle for denial of health insurance because of pre-existing conditions.
Rep. Gene Green, a Democrat of Texas, said he didn't have much choice but to vote for the House's health reform bill, which is now hanging perilously in a stalled House and Senate conference.
It's in the numbers, he says. Some 43% of Green's constituency in the Houston area don't have health insurance, the highest of any congressional district in the nation. Green's 29th district is nestled in a state which has the highest uninsured rate in the country.
"It would be irresponsible of me not to vote for passage of a bill that will allow 230,000 of my constituents more affordable quality healthcare," Green says.
All nine Democrats whose districts represent areas in the 10 highest uninsured rates also voted for the measure. One Republican in the top 10 uninsured districts voted against the healthcare reform plan.
The districts were identified in an Urban Institute review of U.S. Census data last year.
Besides Green's district, the other top districts, the members of congress, and the percentage of uninsured, were:
On their Web sites, some Democratic lawmakers, who voted for the bill, specifically noted the high uninsured rates or "challenges" related to uninsured issues in their districts, such as Becerra, Gene Green, Al Green, Cuellar, and Roybal-Allard. Hinojosa and Meek referred to statewide problems, but did not specifically mention uninsured rates in their districts. Jackson Lee and Bernice Johnson mentioned overall problems, but not their districts.
Sessions, the lone Republican in the top 10 of uninsured districts, did not mention his own district, and voted against the measure, according to his press statements about healthcare reform.
Sessions said he spoke out against the bill because "the American people have spoken: they do not want a government takeover of their healthcare." Sessions' office did not return phone calls seeking comment this week.
The 10 congressional districts with relatively high uninsured rates include areas with Hispanic majorities that surveys have shown had higher than normal uninsured populations, according to the Gallup-Healthways Well-Being Index Data, released in 2009. The districts also include large numbers of uninsured illegal immigrants as well as varying Medicaid restrictions.
"The 28th District of Texas faces unique healthcare challenges," said Cuellar. "The district has a large number of residents who live in medically underserved minority and rural communities. Our communities also have a large number of children who are uninsured or underinsured."
In California, Roybal-Allard praised the healthcare reform effort, noting that in her Los Angeles area district, the "average annual household income is less than $36,000 and where 40% of my candidate constituents are currently uninsured. This bill will provide access to healthcare for more than 240,000 more people." (Roybal-Allard's office listed the rate at 40% uninsured; Census figures pegged the figure at 38%.)
Jackson Lee said she regarded "healthcare as one of the most pressing issues facing this country and the world." She did not mention her Houston area district's uninsured rate—at 36%—in her statement. There was no comment from her office.
As far as Green is concerned, something needs to be done in Washington to help districts like his.
"I have a blue-collar district," Green says. "It has never been a wealthy area." The problems associated with his district is an example as to why health reform is needed, he adds.
A new study says doctors work less when their risk of malpractice litigation is higher.
On average, doctors end up working 1.7 hours less per week when their expected medical liability risk increases by just 10%, according to a new study published in the latest issue of the Journal of Law and Economics.
"The effect of malpractice risk on hours worked might seem like a small item compared to physicians moving across state borders or avoiding high-risk specialties like obstetrics," said economist Mark Showalter of Brigham Young University, one of the researchers. "However, when you aggregate that across all physicians the total effect is quite large."
Physicians wrestling with malpractice issues have been a longstanding concern. This month, surgeon and writer Autul Gawande wrote in a blog "the fear of massive settlement fees has forced doctors to take a number of generally excessive precautions." Other studies in recent years also have pinpointed physician concerns about malpractice lawsuits and their reactions to them.
In 2002, a report in the Harris Interactive called "Fear of Litigation: The Impact on Medicine " noted, "concerns about liability are influencing medical-decision-making on many levels."
In the Journal of Law and Economics study, researchers Eric Helland of Claremont McKenna College and Showalter found fear of malpractice suits has an impact on physicians' work schedules.
When something changed the risk of medical liability—such as an adjustment in the maximum amount a jury could award in malpractice cases —doctors adjusted their workload, according to the study. When liability risk increased, physicians saw fewer patients each week to minimize their chance of a lawsuit. When liability risk went down, doctors saw more patients each week.
The economists calculated that physicians working 1.7 hours less per week is the equivalent to "one in 35 physicians leaving a workforce entirely, or about 21,000 physicians."
The study also said that doctor's aged 55 and older and those with their own practices are more influenced by liability risk.
The economists examined data gathered from insurers about medical liability risks in each state, broken out by medical specialty, as well as survey data from doctors about their workload and income.
Existing malpractice caps are also an issue of concern, the study states. Some states are considering legal challenges to existing malpractice caps.
A survey of insurers projects the cost of employer-provided health plans will increase at a "double-digit" rate in 2010.
In its 21st National Health Care Trend survey, Buck Consultants found that costs for the most popular medical plans are projected to increase by more than 10% and are in line with previous trends.
In the survey, Buck Consultants measured the projected average annual increase in employer-provided healthcare benefits by analyzing responses from more than 100 health insurers. Insurers providing medical trends for the survey cover about 78 million people.
"Health insurers are concerned about higher costs due to federal mental health parity, as well as an increase in COBRA enrollment," said Harvey Sobel, a Buck principal and consulting actuary who directed the survey. "There is uncertainty due to health care reform and its impact on all sectors of the healthcare industry."
According to the survey, the projected health plan cost increases include:
Preferred Provider Organization (PPO) – 11.1%
Point-of-service (POS) – 10.9%
Health Maintenance Organization (HMO) – 10.3%
High Deductible Consumer Driven – 10.3%.
According to the survey, for plans that supplement Medicare, health insurers reported a projected increase of 5.8% excluding prescription drug coverage—down from 7.4% from the prior survey. The lower trend reflects the impact of federal controls on Medicare fees and the lower increases expected in Medicare deductibles and copays, according to Buck Consultants.
Mary Jo Hudson, Ohio's director of insurance, was not surprised by the survey findings. "Medical costs are up 13 to 15%; the expenses of healthcare are the largest driver of the cost of premiums going up," she says.
A Massachusetts attorney general's investigation into contracting between healthcare insurers and providers reveals "serious system-wide failings" that "threatens access to affordable, quality healthcare," according to a preliminary state report released today.
"Our review shows that the current system of healthcare payment is not always value-based and health care providers throughout the state are compensated at widely different rates for providing similar quality and complexity of services," said Attorney General Martha Coakley, who last week lost a widely followed U.S. Senate race to Republican Scott Brown in Massachusetts.
The report showed that insurance companies pay some doctors and hospitals twice as much as others for similar care.
The report "raises concerns that existing systemic disparities in reimbursement may, over time, create a provider marketplace dominated by very expensive 'haves' as the lower and more moderately priced 'have nots' are forced to close or consolidate with higher paid systems," Coakley said following the yearlong investigation.
Coakley said the report outlines six key findings that have "powerful implications for the healthcare marketplace in Massachusetts":
Prices paid by health insurance companies to hospitals and physician groups vary significantly within the same geographic area and among providers offering similar levels of service.
Price variations for hospitals and physicians offering services are not explained by quality of care, sickness or complexity of the population being served; proportion of patients on Medicare or Medicaid; or whether the hospital is a teaching or research facility.
Price variations are correlated to market leverage as measured by the relative market position of the hospital or provider group compared with other hospitals or provider groups within a geographic region or within a group of academic medical centers.
Variations in providers' per month expenses are not correlated to the methodology used to pay for healthcare, with expenses sometimes higher for globally paid providers paid on a fee-for-service basis.
Price increases, not increases in utilization, caused most of the healthcare cost increases during the past few years in Massachusetts.
The commercial healthcare marketplace has been distorted by contracting practices that reinforce and perpetuate disparities in pricing.
"The findings have powerful implications for ongoing policy discussions about ways to contain healthcare costs, reform payment methodologies, and control health insurance premiums while maintaining or improving quality and access," Coakley said.
Coakley made five recommendations to promote value-based purchasing:
Discourage or prohibit insurer/provider contract provisions that perpetuate market disparities.
Increase transparency and standardization in healthcare payment
Improve market function by adopting payment reform measures that do not worsen existing market dynamics
Develop regulations or legislation to mitigate health market dysfunction
Engage all participants in development of value-based healthcare market by promoting creation of products and tools that allow and encourage employers and consumers to make prudent healthcare decisions.
To combat healthcare fraud, Obama Administration officials met Thursday with law enforcement, government regulators, and insurance industry representatives to take steps to improve coordination and data sharing.
Noting the "staggering" loss of an estimated $60 billion in public and private healthcare funds lost each year, Attorney General Eric Holder told a National Summit on Health Care Fraud that combating fraud is one of the most urgent destructive national challenges that the administration faces.
Human and Human Services Secretary Kathleen Sebulius said the proposed 2011 budget Obama will unveil next week will "include historic support for anti-fraud efforts that will save billions of dollars over 10 years."
The plan calls for increased investment in programs that "have a proven record of preventing fraud, reducing payment errors, and returning funds to Trust Funds," Sebulius said. "The Obama Administration has zero tolerance for healthcare fraud and abuse." No detailed monetary amounts were announced.
The daylong session in Bethesda, MD, aimed to bring together pubic and private partners to establish a cooperative, national response to fraud, which officials said needs improvement.
Sandy Praeger, commissioner of the Kansas Insurance Department, said there needs to be better cooperation among the entities in health insurance.
James Roosevelt Jr., president and CEO of Tufts Health Plan in Boston, emphasized the importance of the private sector in joining the work of fighting healthcare fraud.
"Anti-fraud efforts face enormous challenges, but we know firsthand by working together with public agencies, we can increase antifraud performance." Such a partnership has "cost and quality benefits," he said. Roosevelt suggested federal officials include the private sector more and undertake "increased sharing" of public information.
After officials had a series of closed-door meetings at the conference, they discussed issues they want to investigate regarding healthcare fraud. Among them:
A "pre-payment" intervention system instead of the "pay and chase system" in Medicaid investigations. Officials say they want to explore giving the government time to delay Medicaid providers when waste, fraud or abuse is suspected. Currently, federal law requires that Medicaid send payments within a short time regardless of whether fraud is suspected.
Improved coordination of state enforcement efforts in preventing healthcare fraud.
Engaging families to identify fraud and abuse.
Changing identification numbers so healthcare doesn't rely on Social Security numbers.
Fraud team expansion
The Obama Administration intends to expand a law enforcement initiative known as Health Care Fraud Prevention and Enforcement Action (HEAT), which was initiated last May. Authorities also are expected to expand Medicare Strike Forces.
"HEAT has proven that better collaboration is the key to combating these crimes, recovering stolen resources and protecting essential Medicare and Medicaid dollars," Holder said.
Last year, the Justice Department charged 800 defendants with healthcare fraud, an all-time high, with Holter saying the "scope of the problem is simply shocking." Prosecutors obtained more than 580 criminal convictions. In civil enforcement actions, the department recovered $2.2 billion.
"One estimate suggests that more than $60 billion in public and private health funds are lost each year on healthcare fraud," Holter said. "That is a staggering amount of money."
The high-tech frenzy over Apple's new tablet computer, the iPad, includes the specter of improved healthcare efficiency, with the prospect of doctors dashing off memos with their fingertips, while saying goodbye to patient charts filled with illegible handwriting.
"Anything that could take doctor's time away from administrative duties, I imagine there would be a benefit," says Matt Fenwick, spokesman for the American Hospital Association, when asked about Apple's new tablet that was announced Wednesday. "I would imagine that would be significant improvements."
Steve Jobs, CEO of Apple, launched the iPad amid much fanfare. The iPad is thinner and lighter than any laptop or notebook, and works by multi-touch like an iPhone, but has a much larger screen and is capable of handling thousands of applications. It weighs about 1.5 pounds, and has a 9.7-inch display with a battery life of 10 hours.
Although Apple has pegged e-book applications and games at the top of likely users, the blog world has forecast the iPad for the healthcare industry.
Before the product launch, Jason Wilk, who runs the tinyComb site specializing in technical news, reported that Apple is targeting the potential of the heathcare industry and offers a cheaper alternative than an existing communication devices used in healthcare settings. For instance, the Apple tablet would cost about $1,000 compared to the $2,199 retail price for the Motion Computing C5 Mobile Clinical Assistant platform i9s, which has been designed for the healthcare industry, he wrote.
"iPhone has already served as a great platform for medical applications. The problem with the iPhone is that it is too small to handle all of this data, not from a processor standpoint, but just overall screen size," Wilk wrote. "The tablet can pave a whole new way for medical applications and the way we interact with our doctors."
"You can certainly bet the iPhone will interact very well with the tablet, so syncing information back and forth with your doctor via both devices should be a breeze," Wilk added.
Other experts say the new technology could bring about change in healthcare. But Fenwick hesitated to discuss possible medical impact of the new iPad, One of the concerns in using an iPad or any other computer system in hospitals involves "electronic health records and very sensitive information," Fenwick says. "Security is a high priority."
Other healthcare groups also aren't sure.
"It seems too soon for groups to know if/how this may help in [the medical] group setting," says Kris Deutschman, spokeswoman for the California Association of Physician Groups, referring to the iPad. "There are many groups investing [in technology] to better manage patient care but this hasn't hit their radar yet."
A significant majority of employers believe that the current healthcare reform proposals in Congress would lead to higher costs for both employer-sponsored benefit programs and healthcare services overall, according to the survey conducted by Towers Watson and the National Business Group. The survey focused on 507 employers nationwide that employ a total of 11.5 million workers.
A separate survey of 1,000 employees at midsize and large U.S. companies found that a majority of workers also believe health reform leads to higher costs and would decrease the quality of care and benefits available to them, according to Towers Watson, a global professional services company.
"These survey data confirm quantitatively what many people—employers, employees and policy pundits—have been talking about for the past four months," said Helen Darling, president of the National Business Group. "That is, whatever else a healthcare reform plan might do, it is unlikely to control health care cost, which has everyone worried."
The health reform itself effort appears to be on a political backburner, reflected in President Obama’s State of the Union speech, in which he devoted only a small portion of his speech on the issue. The reform bill is still in conference negotiations with Senate and House members.
Highlights from the employer survey included:
71% say health reform will increase the overall cost of healthcare services and increase access to health benefit coverage
69% say it will increase the cost of their benefit programs
46% say it will decrease employer-sponsored retiree medical benefits
35% say it will lead to fewer employers offering subsidized benefits
34% say it will increase transparency of providers, and 30% say it will increase the transparency of provider quality
27% say it will lower healthcare quality
Highlights from the employee survey included:
67% say health reform would result in higher costs
54% say it would reduce their available benefits
53% say it would lower the quality of healthcare
"Although the status of legislative healthcare reform is currently in limbo, it’s clear that employers and employees alike are concerned over the potential impact reform could have on health costs and their benefit programs," said Ron Fontanetta, an intellectual capital development leader at Towers Watson Health and Group Benefits.
"While health reform could ultimately provide greater access to healthcare to more Americans, there is a fair amount of skepticism over whether health reform will be able to curb rising health costs," he said.
In 90 some odd days (who's counting?), my son Ben is graduating from college. He's a jazz major—and he's jazzed up to say the least, about getting away from classrooms for a while, and simply sliding his fingers across his bass, playing music, and writing compositions.
Once the cap and gown are off, there's the question of where to live and what to do next. And, oh yeah, there's the question of insurance. It's when dreams dive a bit into blues progression. The cacophony in life.
Like many college-age children, Ben has been on our family health insurance policy. When he walks out the door at Temple University in Philadelphia, the ghosts of the Founding Fathers really have nothing to offer in ways of insurance practicality for a young person living for the future, without a job. He's thinking of graduate school, but not yet. He's 21 and single.
As a family, we haven't come to terms with Ben's insurance, never mind the full-time space requirements of him back at home after four years living away.
Nationwide, about two-thirds of college students are covered under their parents' health insurance plan.
The latest data from the U.S. Census Data showed that 13.2 million Americans between the ages of 19 and 29 are already uninsured, making that group the nation's largest uninsured demographic. And what makes matters worse is when the students graduate or leave college and have trouble finding a job.
According to AfterCollege, a company that specializes in employment for college-age youth, 78% of 2009 graduates had a difficult time obtaining full-time employment, leaving employer-sponsored group health insurance on hold.
Once Ben graduates, he may be on his own, insurance wise—or not.
Under the House and Senate bills, high school and college graduates may be able to remain under their family coverage until age 27. Conferees are debating the college age provision as well as other aspects of the reform package. If the Congress approves the measure and it is signed by President Obama, that provision would immediately go into effect.
As Sen. Dick Durbin, D-IL, said in the Capitol, "For families with young children who are off to college … you reach the point where you finally say: 'Wait a minute. My daughter is graduating from college. I wonder if she will still [be)] under my family health insurance plan.'"
On the surface, the fact that the provision is on the table is a relief to many parents of college-age children.
"Most students fall off their [parents'] health plan when they graduate or had a school-sponsored plan. Young adults are the biggest demographics for the uninsured," says Bill Suneson, co-founder of Boston-based Next Generation Insurance Group, which specializes in the "young" market.
With the possible congressional decision to allow young people to stay on their parents' insurance policies until age 27, the ability of his company to offer insurance policies to new college graduates probably will be negatively affected, he says. "It doesn't help" that aspect of the college insurance business, he predicts.
Indeed, from the perspective of insurance businesses that specialize in "America's uninsured population—young adults"—the age "27 provision" may not be the best fit, but there are a lot of issues affecting the college student market—and that makes for more insurance business options, according to Suneson.
For instance, while there are an estimated 67% of college graduates who may be tied into their families' plan, there are another 33% who may not have a plan, and may be searching for some kind of insurance on their own.
Despite some of the healthcare reforms being bandied about regarding coverage of post-graduate students, Next Generation Insurance Group officials sees a real potential for growth in the college market, with youths needing all sorts of insurance options, including health, short-term, major medical, and other needs. The company last year launched GradGuard.com, described as a complete portfolio of specifically designed insurance products for college students and new graduates.
Regardless of healthcare reform legislation in Congress, "There are definitely shortcomings in the current system when it comes to health coverage of students in college," says James A. Boyle, president of College Parents of America.
"One of the problems involves currently enrolled students who are within their parents' coverage who need quick medical attention at their campus—which refuses to take their parents' coverage. Eventually, the student can apply for a reimbursement, but what student does that? It's a widespread inconvenience."
"Whatever happens on the Hill, there are weaknesses in the students' plans," Boyle says. "Insurance companies are going to be a part of the future of health—and the uninsured 18- to 24-year-olds make up a significant percentage."
The other day Boyle flew to see representatives of Next Generation Insurance Group to discuss plans for a potential venture involving additional coverage policies for college age children.
As for my son Ben, he's thinking about what gigs he may play after graduation. Insurance isn't on his mind—for now. But insurers are keeping watch on college students—and see lots of business potential ahead even before graduation day.
Existing medical cost management systems in health plans are fragmented, and should be transformed into an integrated healthcare management system to deliver "consistent, sustainable" improvement in healthcare, a new report recommends.
The Computer Sciences Corp. (CSC) report, "Integrated Health Management for Health Plans," said an integrated healthcare management system, which involves myriad level of services in least restrictive settings, addresses the needs of patients and is cost-effective.
An integrated health plan addresses the costs of lifestyle factors, including chronic disease and high-cost interventions, the report said. It was noted, however, that implementing such an integrated system could be "difficult and expensive."
The report contends that reliance on administrative cost reductions is important but not sufficient. Instead, medical cost management—typically in the form of restrictions on provider payments and use—should be transformed to integrated care management.
"Health plans must transform their approach to medical cost management in order to make it effective, and deliver sustained high-quality care at an acceptable cost," according to the report.
The report outlines key steps for health plans to achieve integrated health management:
Deploy a "health intelligence" approach to optimize current care management process
Employ traditional medical management techniques that include wellness and lifestyle interventions, disease management, case management, and end-of-life programs
Coordinate wellness activities of home, workplace, and care settings once an integrated health management program is in place
Use integrated intervention results to inform other health plan stakeholders
The authors, Scott McConkey, a senior partner and managing director of the CSC healthcare group, and Jordan Battani, a researcher in CSC's emerging practices group, contend that changing traditional approaches in health plans is necessary, especially with rising healthcare costs.
"Health plans get slammed for contributing to those costs, but in practical terms, they have little control over the factors that cause the underlying costs," Battani says. "They don't deliver care and they don't get involved in all the decisions made in the hospital settings."
The report noted, "Health care cost inflation rates have proven to be remarkably resistant to change, consistently outpacing general inflation for at least a decade."
"Traditional approaches to health care cost management in the form of restrictions on provider payments and utilization, have sometimes been effective in the short run, but that success has generally been followed by periods of backlash after which health care costs begin to rise again," according to the report.
The report stated that implementing a robust integrated health management network "is a large-scale, long-term set of activities, and like other business intelligence implementation efforts, it can be difficult and expensive."
"Successful health plans will be the ones that master the underlying cause of cost inflation," the authors concluded. "Transforming existing medical and care management practices into an integrated health management program is a good place to start."