Consumer health cooperatives "are not yet ready for prime time" and "are certainly not a substitute for a public option" in health reform, Yale professor Jacob Hacker said yesterday.
"Are cooperatives going to be effective in taking on these gigantic insurance companies? From everything I know from people who represent them, the answer is a flat 'no.' "Cooperatives, even if they're established after a lengthy period of development, would be small and scattered and lack the means to restrain cost increases or implement delivery of payment reform on a broad scale," said Hacker, who is one of the leading proponents of the public insurance option.
And if the Senate Finance Committee endorses federally promoted health cooperatives, they should be understood for what they are: An effort to kill the public plan, and with it the prospects for a competitor to take on private insurance companies, he said.
Hacker joined U.S. Sen. Sherrod Brown (D-Ohio), a member of the Senate Committee on Health Education, Labor, and Pensions, who decried efforts by special interest groups to undermine a public plan and several key provisions in health reform legislation by spreading rumors that have no basis in fact. They made their remarks in a teleconference for reporters sponsored by in a conference organized by Campaign for America's Future a left-leaning Washington, D.C., political group advocating social reforms, including healthcare policy change, such as universal coverage.
He decried what he called a "misinformation campaign" being circulated at town halls and other forums that President Obama isn't a U.S. citizen, that health reform would constitute euthanasia of older, sicker Americans, and that the effort would amount to socialized medicine and a government takeover.
Without directly accusing special interest groups of spreading those rumors, Brown said in a response to a reporter's question acknowledged that Pharma, America's Health Insurance Plans, and the American Hospital Association are special interests that "are trying to shape this bill."
"I appreciate that they have come to the table. I also know what they're doing, what drug companies are doing on biologics, and what the health insurance industry is doing, trying to get a weak public option or no public option at all to basically decimate the public option," he said. "These interest groups are out there, as of course they would be, and they're spending–the statistics I've seen are $1.4 million a day, not just from drug or insurance companies, but they're the main part of that."
Brown added, "Don't think these interests groups aren't out there, fighting every day out there...to keep their share and enlarge their share of the public healthcare dollar in this country.
"And they're a big reason this is so difficult . . . because there's so much money at stake. The insurance companies and drug companies, if they always have their way with Republicans, I want to make sure that they're less likely to have their way with progressive democratic majority and the progressive Democratic president."
On the issue being floated by members of the Senate Finance Committee, that a health cooperative might be a suitable substitute for a public option, Hacker explained his strong opposition.
Cooperatives aren't a serious means of achieving three essential goals that public plan is far more likely to accomplish, he said. Those are to:
Provide a benchmark for cost and quality for private insurance.
Offer a backup that provides financial health security for those without workplace coverage and small employers without access to good group health options.
Create a backstop to bring down spending through innovations in payment and delivery of care.
"(Cooperatives) might be able to provide some backup in some parts of the nation," Hacker said, "but...they're not going to have the reach or authority to implement innovative delivery and payment reforms in increasingly consolidated insurance and provider markets."
The consumer activist group Public Citizen says it has 10 basic patient safety reforms that could save 85,000 lives and $35 billion annually.
The report "Back to Basics," analyzes the results of several studies of treatment protocols for chronically recurring, avoidable medical errors. Most of the reforms in Public Citizen's report involve fundamentals as simple as practitioners consistently washing their hands, sufficiently tending to patients to prevent bed sores, and following simple safety checklists to prevent infections and complications stemming from operations.
The financial toll of failing to follow accepted safety procedures is astounding, PC says. Severe pressure ulcers cost an average of $70,000 apiece to treat. A catheter infection costs $45,000. Collectively, avoidable surgical errors cost an estimated $20 billion a year, bed sores $11 billion, and preventable adverse drug reactions $3.5 billion.
"There are many incentives to order expensive tests and procedures and too few rewards for providing basic, sensible care," says David Arkush, director of Public Citizen's Congress Watch division. "As the largest investor in the nation's healthcare system, the federal government should ensure that fulfilling basic patient safety standards is a condition of receiving federal reimbursements."
Public Citizen proposes that healthcare providers:
1. Use a checklist to reduce avoidable deaths and injuries resulting from surgical procedures (this would save $20 billion a year)
2. Use best practices to prevent ventilator-associated pneumonia (this would save 32,000 lives and $900 million a year
3. Use best practices to prevent pressure ulcers (this would save 14,071 lives and $5.5 billion a year)
4. Implement safeguards and quality control measures to reduce medication errors (this would save 4,620 lives and $2.3 billion a year)
5. Use best practices to prevent patient falls (this would save $1.5 billion a year)
6. Use a checklist to prevent catheter infections (this would save 15,680 lives and $1.3 billion a year)
7. Modestly improve nurse staffing ratios (this would save 5,000 lives and $242 million a year)
8. Permit standing orders to increase flu and pneumococcal vaccinations in the elderly (this would save 9,250 lives and $545 million a year)
9. Use beta-blockers after heart attacks (this would save 3,600 lives and $900,000 a year)
10. Increase use of advanced care planning (this would save $3.2 billion a year)
Public Citizen also proposes five steps to ensure near-universal adoption of these reforms:
1. The federal government should leverage its $750 billion annual investment in healthcare to compel providers to use proven patient safety practices. HHS can enact many reforms through the regulatory process. Congress could ensure rapid adoption by including instructions to HHS in legislation.
2. Congress should require HHS to take responsibility for accrediting providers to receive Medicare reimbursements. At present, the federal government delegates most accrediting authority to the Joint Commission, which derives its income from the very hospitals it oversees and denies accreditation to less than 1% of these hospitals.
3. Congress should make significant financial investments to increase the country's supply of nurses and set federal minimums of acceptable nurse-to-patient ratios.
4. Congress should require mandatory reporting of adverse events, including requiring hospitals to institute strong internal reporting, and creating whistle-blower protections for healthcare workers. National reporting of the most serious medical errors is largely left to the Joint Commission. However, that organization estimates that it learns of only about one-tenth of 1% of serious medical errors despite its stated requirement that doctors disclose all errors to patients.
5. Congress should ensure that the requirements for hospitals to report doctor discipline and maintain viable peer review processes are followed. Hospitals have been required since 1990 to report to the federal government cases in which doctors are suspended for more than 30 days. But nearly 50% of hospitals have never reported a single disciplinary action.
In the past 10 years, a fair amount of headway has been made in refining error reporting systems, especially since the Institute of Medicine report "To Err Is Human". More recently, Patient Safety Organizations have taken shape and been introduced to the healthcare industry.
One point of view missing from all of these reporting systems, however, is that of the patient and his or her family. However, a new project funded by the Agency for Healthcare Research and Quality (AHRQ) aims to utilize the patient's perspective more when analyzing adverse events.
"AHRQ values the perspective that consumers have regarding the quality of their healthcare," says Linda Greenberg, PhD, senior advisor at the AHRQ's Center for Quality Improvement and Patient Safety. "This project is geared toward listening to the patient's voice–and learning from their experience–as a means to improve the quality of care."
In September 2008, the AHRQ awarded a two-year contract to RTI International, a research institute, and Consumers Advancing Patient Safety (CAPS), a nonprofit organization, to develop recommendations for designing a consumer reporting system, and how to make one a reality. Almost at its halfway point, the project has collected initial feedback from patients and experts involved.
The case for a consumer reporting system
Sue Sheridan, MBA, MIM, founder of CAPS and leader of the World Health Organization's Patients for Patient Safety initiative, would have liked a consumer reporting system available when her family was affected twice by medical errors.
"My husband died from a medical error and my little boy suffered brain damage from a medical error," says Sheridan. "So I saw healthcare from a really different perspective, I saw the dangerous gaps that exist in our healthcare system." Sheridan was invited by the AHRQ to testify at the first summit on medical errors and patient safety 10 years ago.
"Part of my testimony was 'why was there no system for me to report these errors?' says Sheridan. She felt that her experience could have helped the healthcare system as a whole learn from the errors.
In 2006, a Kaiser Family Foundation survey revealed that one in three people said they or a family member had experienced a medical error. A more recent study published in the Annals of Internal Medicine found that among 998 patients 23% reported having at least one adverse event occurring during their hospital stay. Only 11%, however, had an error recorded in their medical records. A consumer reporting system would work to remedy this disconnect and reduce the total number of medical errors by factoring in the patient's view.
"This underreporting of patient safety events limits the ability of healthcare providers to learn from past mistakes and be proactive in preventing bad outcomes in the future," says Greenberg. "Patients are in a unique position to experience the entire continuum of care from one care setting to another, where healthcare providers may not have the same opportunity to view the whole picture of the patient’s experience of care in the same way."
It is this experience that the contract, titled Designing Consumer Reporting Systems for Patient Safety Events, hopes to capture and use in a way that will improve patient safety.
Considerations for design
The goal of the contract is to recommend how a consumer reporting system should be designed, says Greenberg. To do so, the project has engaged different groups of people. First, a technical expert panel consisting of 18 national and international experts in patient safety has met during the past year to hash out key design elements through a consensus approach. The technical expert panel plans to meet three more times over the next year to flesh out the design of a consumer reporting system.
In addition to the technical expert panel, a big part of the project involves talking directly with patients and getting feedback from them about how to design a consumer reporting system. The project members have conducted two focus groups so far. Participants in these were either a patient or a family member who had experienced an adverse event (a near miss or actual event). Greenberg says the plan is to conduct eight more focus groups.
"We're learning a lot from the patient population," says Sheridan. "In the design of the ideal patient reporting system, AHRQ has requested that we go out to this patient population and learn directly from them, and it's so often that piece is missed. When it comes to patient safety they forget the patient and so we're going directly into the trenches to patients who have thought about reporting what has happened to their family and run into barriers."
A third group of people from whom feedback is being solicited is a group of key stakeholders. Project members are interviewing national experts who are knowledgeable about patient safety from a multitude of backgrounds—including clinicians, patient advocates, representatives from healthcare organizations, and experts in quality improvement and event reporting, says Greenberg.
Ultimately, the groups and individuals involved in this project hope the recommendations developed will allow the steps for creating a consumer reporting system to be taken.
"I think that a consumer reporting system will give us a much better idea of the incidence of medical errors," says Sheridan. "We know that the current reporting systems are tragically underutilized so I think that patients can, by reporting, accelerate change, drive change, and demand change."
For more about the AHRQ's contract to decide on design elements of a consumer reporting system, see the September issue of Briefings on Patient Safety.
The Senate Finance Committee proposal to impose an employer mandate to either provide health insurance to workers or subsidize their health costs has "deep flaws" that would make it too expensive to hire lower-wage earners, minorities, women, and disabled workers, according to a new analysis by the Center for Budget and Policy Priorities.
"The fact that low-income workers would cost an employer up to several thousand dollars more to perform the same job could not easily be overcome," according to the analysis.
The CBPP analysis, written by Judith Solomon and Robert Greenstein, maintains that the employer mandate is an essential component of healthcare reform. However, they say the proposal that Finance Committee negotiators is considering creates more problems than it solves.
Under the Senate Finance proposal, the CBPP says, employers with 50 or more employees who do not offer health coverage would have to pay the average subsidy cost per person for all employees who purchase coverage through a new health insurance exchange and qualify for a subsidy because their family income is below 300% percent of the poverty line.
However, employers wouldn't have to contribute to the health insurance costs of employees with higher family incomes. Thus, the proposal would make it considerably more expensive for employers who do not offer insurance to hire workers from lower-income families than workers from higher-income backgrounds to do the same job.
As a result, CBPP says, employers would have strong incentives to hire people who have a spouse with a good income or health coverage, teenagers whose parents make a decent living, and people without children, because the eligibility limit for the subsidies in the new health insurance exchanges will increase with family size. Low-income women with children in one-earner families would be particularly disadvantaged.
While language could be included to try to ban discriminatory effects, CBPP says it would be virtually impossible to enforce. For example, it would be difficult to prove in court that an employer has passed over one applicant and hired another to avoid the health surcharge. Moreover, most low-income job applicants who do not get hired could not afford to hire attorneys. Those workers who might sue could wait months and years for a settlement.
The study also found that the Senate Finance proposal would:
Create differential treatment of workers based on their family income and would likely influence decisions about which employees to let go when workforces are cut, such as during a recession.
Unintentionally discriminate in hiring and firing based on race because minorities are more likely to have lower family incomes than non-minorities.
Discourage the hiring of low-income people with disabilities who will need subsidies if they can't get coverage through their employer—and who will not have an option of forgoing coverage given their health conditions. It would not be possible to provide an exemption from this requirement for people with disabilities, because the health insurance exchanges will not be conducting disability determinations.
The CBPP falls in line with a July 15 Congressional Budget Office study, which suggests that proposals similar to what Senate Finance is considering would lead to greater job losses than a traditional "pay or play" requirement. Under a traditional "play-or-pay" mandate, employers who don't offer coverage pay a modest dollar amount per worker or a modest percentage of payroll and are able to cover those costs by paying lower wages than they otherwise would.
However, the CBO estimates that a proposal similar to what Senate Finance is considering would not allow employers to pass these much larger costs on to the affected workers because their pay is often at or near minimum wage.
As a result, CBO determined, such a proposal "could therefore have a much larger impact on employment than a substantially smaller pay-or-play fee affecting a broader base of workers. Moreover, the employment loss would be concentrated disproportionately among low-income workers whose employers expected would be more likely to obtain subsidies from the government (for example, unmarried individuals who do not receive family coverage through a spouse's job)."
Opposition to the Senate Finance proposal has made common allies–at least in the short-term–of the liberal CBPP and the conservative Heritage Foundation.
"Regardless of who is formally required to pay, the burden of these taxes and costs will ultimately fall primarily on employees through lower wages," Heritage analysts James Sherk and Robert A. Book wrote recently. "An employer mandate does not give workers without health insurance something for nothing but rather forces them to purchase it out of their wages whether they like it or not—and no matter how low those wages are. Congressional rhetoric to the contrary, much of the burden of paying for an employer mandate will fall on ordinary Americans, and lower-income workers will be hit the hardest."
Senators headed home for their August break amid an escalating partisan battle over healthcare reform, and a small band of lawmakers hope to keep their compromise alive until Congress reconvenes in September. But Senate Democratic leaders continue to stoke the controversy, accusing GOP leaders of an artificial grass-roots movement to undermine public confidence in reform efforts.
President Obama supports the creation of a public insurance plan that would compete with insurers on state or regional marketplaces in which the uninsured and small businesses could buy coverage with the help of income-based subsidies. Most Republicans in Congress are against a public option, saying it would drive insurers out of business. And some key centrist Democrats in Congress say Democrats must give up on it if they want to win a filibuster-proof 60 votes in the Senate.
Governors from both parties fear the implications of the healthcare overhaul now being devised, saying Congress will give the states expensive new Medicaid obligations without providing enough new money to pay for them. The states' fears were stoked further when House lawmakers drafting health legislation reached a cost compromise with conservative Blue Dog Democrats that would force states to take on a greater Medicaid spending burden than an earlier version of the bill.
The parent companies of Hartford Hospital and the Hospital of Central Connecticut announced plans to enter into a business affiliation they say will strengthen clinical programs and improve financial efficiency. Under the plan, which requires approval by state and federal regulators, the hospitals would maintain their own medical staffs, bylaws, rules, boards and licenses.
France claims it long ago achieved much of a healthcare system that covers everyone, and provides what supporters say is high-quality care. But soaring costs are pushing the system into crisis. As a result, while Congress fights over whether America should be more like France the French government is trying to borrow U.S. tactics. In recent months, France imposed co-pays on patients to try to hold down prescription-drug costs and forced state hospitals to crack down on expenses.
Senior members of the Senate Finance Committee, trying to put together a bipartisan bill to guarantee health insurance for all Americans, were told that their proposals might be unaffordable to states and to many low-income people. The emerging legislation would expand Medicaid to cover millions of additional people. It would also offer premium subsidies, in the form of tax credits, to people with incomes just above the Medicaid cutoff so they could buy private insurance.
