What Would A Public Insurance Option Look Like?

KFF Health News, October 26, 2016

California's insurance commissioner endorses the idea. But the Director of the UCLA Center for Health Policy Research has at least one concern.

This article first appeared October 26, 2016 on Kaiser Health News.

By Pauline Bartolone

SACRAMENTO, Calif.— The "public option," which stoked fierce debate in the run-up to the Affordable Care Act, is making a comeback — at least among Democratic politicians.

The proposal to create a government-funded health plan, one that might look like Medicare or Medicaid but would be open to everyone, is being advocated by some federal officials, and gaining traction here in California too.

Amid news that two major insurers were pulling out of Affordable Care Act exchanges, 33 senators recently renewed the call for a public option. The idea was first floated, then rejected, during the drafting of the federal health law, which took effect in 2010.

Democratic presidential candidate Hillary Clinton includes a public option in her campaign platform, and President Barack Obama urged Congress to revisit the idea in a JAMA article published in August.

Dave Jones, the elected regulator of California's private insurance industry, endorsed the idea of a state-specific public option in an interview last month with California Healthline, though he did not specify how it might work.

A public option "would look just like an insurance plan," except that the state or federal government would pay for medical care, potentially set up the network of doctors and hospitals, and make rules about paying providers, according to Gerald Kominski, Director of the UCLA Center for Health Policy Research. Private industry could be involved in these or other aspects of running the health plan, much as they do in Medicare Advantage and managed Medicaid plans.

California Healthline interviewed Kominski to better understand how a public option could work. The interview was edited for length and clarity.

Q: When we talk about a public option, do we mean a health plan for which the government takes the risk, sets the coverage rules and pays out the claims — and enrollees pay premiums just as they would to an insurance company?

That is what the public option would be. But that still leaves out the answer to a lot of questions about how actually that would occur. How would a government agency essentially become the insurer? So we have two examples. We have the Medicare program and we have the Medicaid program.

Medicare establishes the rules. It contracts with insurance companies to pay the bills. And that's the way that Medicare has operated for over 50 years.

Now we have Medicare Advantage plans, where the contracting is not to pay bills but is basically contracting with insurers to bundle the services. And rather than pay the doctors and hospitals, the government pays the insurer and puts the insurer at risk.

Q: Insurers have opposed this idea in the past, and they're opposing it again now that it's being raised by members of Congress.

Private insurers could participate as administrators or providers on behalf of the state. But here's one concern that I have with that model: California has four large insurance companies in the exchange that account for about 90 percent of the market.

Let's say the state of California wanted to create a public option and hire an insurance company to administer that product for it. What would be the reason or the incentive for any of those companies to agree to be the plan administrator for the public option when the public option would be competing with the product that they're already offering? They would be competing with themselves.

Q: Some provider groups may be opposed to a public option because they say that government programs like Medi-Cal pay very little and they believe a public option plan would also pay little. Is this necessarily the case that a government program would pay low rates?

It's not necessarily the case, but it is in fact what we observe in the Medicare and the Medicaid/Medi-Cal programs.

Q: Do you think a public plan would help bring down costs in the health care system by negotiating for lower payments to hospitals and doctors?

I think that is possible in other areas of the country, where there are markets with one or two health insurance plans in the exchange. I think California has one of the most competitive ACA marketplaces. And so would the public option in California dramatically reduce premiums? I think the answer is no. It would have little or no effect.

For some people, the advantage is that we think that the public option's going to be around because the state's not going to back out of its commitment, whereas private insurers come and go in the marketplace.

Q: Is there something about California's health care system that uniquely primes the state for a public option?

I think so. One of the things that's unique about California is the high percentage of managed care enrollment. The public option in California would probably include or be based on a managed care model and Californians are pretty receptive to that model.

Q: So if the public option could include private insurance, why are the insurers so opposed?

Well, the simple answer is they don't want more competition. And again it goes back to, why was this battle so intense during the development and enactment of the ACA back in 2009 and 2010? The insurance industry said we cannot compete with a plan, a government plan, that pays doctors and hospitals using Medicare fees or fee schedules.

You remember the fundamental rule of business is you don't want more competition. You want the market to yourself.

Q: Do you think it would be more effective or easier to implement a public option at a state or national level?

Well that's where you can't ignore the political environment. And so the short answer is in the current political environment, doing something at the national level is extremely difficult. Even though there might be arguments to develop a public option at the national level, it's very challenging in the current political environment to get the agreement.

Q: Is there something that's more efficient about a national public option?

Potentially. It's economies of scale. You know, the larger your potential market nationally, the lower the potential costs per person. You just get administrative savings and efficiency. But it's not easy to create a national program. One issue that's challenging is how to put together a national network of doctors and hospitals that would participate. That's a lot of work.

Q: Do you think the idea of a public option is more viable now than it was when it was debated before and ultimately stripped from the Affordable Care Act?

A: Well, I think that what makes it more attractive right now is the fact that we've got two large insurance companies that are pulling out of the exchange marketplaces. And because of that … the idea of a public option to provide stability and protection for people in the exchanges has resurfaced. And I think with good reason.

Feds Find Doctor Listings Often Wrong In Medicare Advantage Directories

KFF Health News, October 25, 2016

Provider directories for private Medicare Advantage plans are riddled with errors, according to the government's first in-depth review.

This article first appeared October 24, 2016 on Kaiser Health News.

By Phil Galewitz

Provider directories for private Medicare Advantage plans are riddled with errors, according to the government's first in-depth review.

The results made public Monday, arriving amid the annual enrollment period through Dec. 7, validate gripes long made by seniors and consumer advocates. The level of errors still surprised regulators, said officials from the Centers for Medicare & Medicaid Services who disclosed their findings at an industry conference in Washington.

Incorrect information was found for almost half of the 5,832 doctors listed in directories for 54 Medicare Advantage plans checked last fall, they said. Only online directories were examined.

The government hopes that a new rule this year will help raise that bar because it requires Medicare Advantage plans to contact doctors and other providers every three months and update their online directories in "real time."

CMS did not identify the names of insurers that were surveyed.

CMS' survey found the most error-prone listings involved doctors with multiple offices that did not serve health plan members at each location, said Christine Reinhard, a health insurance specialist in the CMS Division of Surveillance, Compliance and Marketing.

Explanations could be that the doctor was retired, worked at a different location or never worked at the address. Or maybe the doctor never had a contract with the Medicare health plan — a less likely possibility, according to officials.

The review also uncovered:

  • Wrong phone numbers for 521 doctors' offices.
  • Wrong addresses for 633 doctors' offices.
  • Error rates that exceeded 60 percent of the doctors surveyed for five Medicare Advantage plans.

CMS has not issued any fines but that could still occur, said Jeremy Willard, also a health insurance specialist in the CMS surveillance division. Inaccuracies found in the Medicare Advantage directories could lead to penalties up to $25,000 a day per beneficiary or bans on new enrollment and marketing.

Senior citizens rely on provider directories when choosing a health plan to identify in-network doctors. They also use them when seeking referrals to specialists.

"Errors jeopardize the beneficiary's ability to be connected with a needed provider," Willard said.

CMS carried out the survey by randomly calling 108 doctors representing primary care, cardiology, ophthalmology and oncology for the Medicare Advantage companies. The highest error rates involved primary care physicians and cardiologists.

America's Health Insurance Plans, the industry trade group, said its companies work hard to make provider directories accurate and keep them up-to-date.

"That's what consumers need — and that's what we're committed to improving," said spokesman David Merritt, acknowledging that plans needed to do better.

More than 17 million Americans, or nearly a third of Medicare beneficiaries, get coverage through Medicare Advantage plans.

Medicare Advantage plans and most exchange plans restrict coverage to a network of doctors, hospitals and other health care providers that can change during the year.

CMS is also surveying Medicare Advantage companies this fall, and officials hope to survey every company by 2018 when the three-year review will be completed.

California's RN Wages Now Highest In The Nation, Federal Data Show

California's RN Wages Now Highest In The Nation

KFF Health News, October 24, 2016

Registered nurses in the Golden State earn $100,000 a year on average, more than their counterparts anywhere else in the country, according to recently released data from the Bureau of Labor Statistics. The average hourly wage for registered nurses in California is $48.68 an hour, the 2015 data shows.

This article first appeared October 24, 2016 on Kaiser Health News.

By Ana B. Ibarra

Deborah Burger, co-president of the California Nurses Association, says that when she started her career as an intensive care unit nurse in the 1970s, a grocery clerk made more money than she did.

Things have changed quite a bit since then, especially in California.

Registered nurses in the Golden State earn $100,000 a year on average, more than their counterparts anywhere else in the country, according to recently-released data from the Bureau of Labor Statistics. The average hourly wage for registered nurses in California is $48.68 an hour, the 2015 data shows.

California also employs the most registered nurses — 255,010 last year. The Los Angeles-Long Beach-Glendale metropolitan area alone employs 70,810 nurses. The only other region employing more than that is New York-Jersey City.

Burger, who practices in Sonoma County, said appreciation for the value of nurses has grown over time. Their wages started rising in the early 2000s, and the female-dominated field began to see some parity with other occupations, such as law enforcement. A 1999 California law mandating specific nurse-to-patient ratios also played a role in boosting registered nurse wages.

"I think nurses themselves really started to understand that hospitals don't function without them and they are indispensable for patient safety," Burger said.

Nurses in Hawaii and Massachusetts earn nearly as much as those in California, with average annual salaries of $90,000 and $88,000, respectively. The national average salary for a registered nurse is $71,000.

This makes sense, experts say, considering that living expenses in those three states are high. In addition, the nurse's union has a strong presence in California.

Dr. Joanne Spetz, a professor at the University of California, San Francisco School of Nursing, said that despite the high statewide average, it is important to consider regional wage differences. "California is a big state and there is lots of variation," she said.

A nurse working in Bakersfield probably isn't making the same salary as one in San Francisco, Spetz said. Incomes of nurses on the pricey Westside of Los Angeles, and in the Bay Area, most likely drive the averages up, Spetz said.

The ten locations in the U.S. that pay the highest salaries to registered nurses are all located in California. At top are nurses in San Francisco, who earn $133,000 per year, on average. The city is also known for having the highest rents in the nation.

Other high-paying regions for California registered nurses include Santa Cruz-Watsonville, Sacramento and Modesto.

Spetz said another reason behind the higher salaries for RNs is that California's licensed vocational nurses — who receive less training than registered nurses — are not allowed to do as much as their counterparts in other states. For example, LVNs in California cannot administer medication through an intravenous line. This results in a higher demand for registered nurses, who are paid accordingly, Spetz said.

In 1999, California passed a law that established minimum nurse-to-patient ratios in hospitals, driving up demand for registered nurses in particular. In a 2009 study, Spetz and colleagues found that from 2000 to 2006, registered nurses in California's urban centers saw their wages rise by as much as 12 percent more than RNs in other states.

After the implementation of the nurse-to-staff ratios, "wage growth for RNs far outstripped wage growth in other states without such legislation," the study says.

High demand, the high cost of living and union power underlie the higher salaries of California's registered nurses.

Burger said the nurse's union has also played a role in assuring that nurses have access to pension plans and that they retire with health benefits. And that's something that some non-unionized nurses still don't receive, she said.

There's also been a culture shift. A registered nurse's job is no longer to simply carry out a doctor's orders; there are more functions and responsibilities, Burger said. "We're also now writing orders that doctors sign off on," she said. "It's a little bit of everything."

Emergency Room Use Stayed High In Oregon Medicaid Study

Emergency Room Use Stayed High In Oregon Medicaid Study

KFF Health News, October 20, 2016

Will Medicaid expansion save the country money as people stop using expensive emergency rooms for primary care? Not in the first years, says a study published in the New England Journal of Medicine.

This article first appeared October 19, 2016 on Kaiser Health News.

By Kristian Foden-Vencil, Oregon Public Broadcasting

The study found ER use among Medicaid patients in Oregon stayed high even two years after people gained coverage, and even as more patients visited doctors' offices, too.

All eyes have been on Oregon to answer this question because eight years ago, Oregon tried an experiment. It wanted to expand Medicaid, but it didn't have the money to cover every eligible resident.

So it held a lottery to give coverage to as many people as possible, in the fairest way possible. The result was something of a gift to researchers like Bill Wright, director of the Providence Center for Outcomes Research and Education in Portland. "You couldn't do this as a researcher," Wright said. "You couldn't design a study that randomly gave some people insurance and some people[none], because as a researcher, you don't want to put someone in that position, just to study it."

It wouldn't be ethical to leave some people without coverage just to be a "control group." But, since the state was doing it, it offered an invaluable chance to study the differences between people who have Medicaid and people who don't.

It was the first randomized study on the impacts of health insurance, and it's one of the largest, surveying 25,000 people.

The first findings reported earlier were that Medicaid was beneficial in many ways: it improved people's financial security; they went to the doctor when they were sick and it reduced rates of depression.

"These are all things that are really important benefits of Medicaid expansion," said Wright.

But another earlier study found Medicaid enrollees increased their Emergency Department visits by 40 percent over the first 15 months.

"That was a surprise to a lot of folks," said Wright.

It was widely believed that having insurance would encourage people to get primary care in doctors' offices or clinics, instead of waiting until they're really sick and heading to the ER, where care is most expensive.

After that study, experts scrambled to explain what was happening. Some thought it was pent-up demand from a group that hadn't seen a doctor in years because they didn't have insurance.

Others thought people just hadn't had time to establish a relationship with a primary care doctor. And that when they did, emergency department use would drop.

But now, after looking at two years of data, that's not what this latest study found, said Wright, who is one of the researchers.

"There was no sign that this ED use went down. So this idea of pent-up demand sort of fading away, at least in the first couple of years, it didn't happen."

Quite the opposite.

"If your hope is that in the short term, the first couple of years, you're going to see savings that come out of reduced ED use from Medicaid expansion alone. I don't think I'd be super optimistic about that. I think that it is going to cost money in the short term," he said.

Wright said there maybe savings in other areas, like an increased use of preventive services that could stave off problems that would become more expensive later.

And, Leslie Clement, with the Oregon Health Authority, said during the past two years, Oregon has seen avoidable emergency room use drop by 4 percent.

She said, that's because the state is coordinating care better, by doing things like helping people get to their doctors' appointments and take their medication.

"It is not just a 'open up coverage and let people used health care services as they have done historically,' " she said. "But it's reforming that system."

The Oregon study can't tease out much more information because the experiment had to stop when the state expanded Medicaid fully under the Affordable Care Act.

An Idea Borrowed From South Africa: Ordinary Citizens Fill Gaps In Health Care

KFF Health News, October 20, 2016

City Health Works contracts directly with primary care providers, like Mount Sinai Health System, to better manage its most difficult patients. Nearly all of City Health Works' clients are poor, juggling seven or more prescriptions and facing chronic illnesses that frequently spiral out of control.

This article first appeared October 20, 2016 on Kaiser Health News.

By Sarah Varney

NEW YORK— Destini Belton isn't a doctor or a nurse. She's a trained health coach, and as a trusted neighbor in Harlem, she goes where clinics and hospitals can't — into patients' homes to understand the mundane but vital details of their lives.

She visits people like Jessica Gonzalez who went blind at the age of 22 because of uncontrolled Type 1 diabetes. Now 33, Gonzalez has high blood pressure, high cholesterol and renal disease. Belton worries that Gonzalez isn't taking the right medication at the right time because she can't see the bottles.

Belton's work follows an example from half a world away. A nonprofit called Mamelani Projects brings health care into neighborhoods in Cape Town, South Africa by employing trusted community leaders. There are surprising similarities between South Africa, and the U.S.: a shortage of doctors in poor neighborhoods; widespread distrust of once segregated hospitals; concentrated and crippling poverty and a growing recognition that models of care that go beyond brick-and-mortar clinics are needed.

Belton is one of a small team of community health workers trained by Manmeet Kaur to help patients in New York City. Kaur trained with the Mamelani Projects in the townships of Cape Town. The organization she founded, City Health Works, contracts directly with primary care providers, like Mount Sinai Health System, to better manage their most difficult patients.

When chronically ill patients like Gonzalez do visit the doctor, researchers have found that half of them leave confused. Health coaches can help patients make sense of a doctor's directions and see up close the stresses of poverty they may be too embarrassed to share.

Gonzalez, for instance, is reluctant to admit her struggles to her doctor, but she trusts Belton to understand.

"With your doctor you don't really want to say what you eat," said Gonzalez, who is obese. "So I'm able to tell her like really, if I'm not going well, or if I sneaked and cheated I tell her the right things, and she helps me."

At weekly meetings, they discuss how patients, many disabled and with dementia, can stabilize their health and avoid costly visits to the emergency room and lengthy hospital stays. Nearly all of City Health Works' clients are poor, juggling seven or more prescriptions and facing chronic illnesses that frequently spiral out of control.

Kaur first witnessed the use of community health workers in sub-Saharan Africa, where doctors are in short supply and difficult to reach and later had an internship with Mamelani.

Long lines besiege clinics and hospitals in South Africa which are overwhelmed by endless needs. Apartheid-era laws created widespread poverty and desperate health conditions, especially in townships surrounding city centers like Cape Town.

But for conditions like HIV, hypertension and diabetes, life-saving drugs are useless — and even harmful — without proper nutrition. Too often in townships, daily diets are filled with junk food, fish and chips, meat and very few vegetables. So Mamelani Projects decided to teach local women about health and nutrition. They conduct classes in garages and visit people in their homes.

In the U.S., the need for health coaches is spurred in part by the Affordable Care Act and major changes in how hospitals are paid. Private and public insurers are testing out so-called bundled payments and other strategies that reward value instead of volume, and there are strong financial incentives to steady the lives of people like Jeanette Rodriguez, even when those needs seem to have nothing to do with health care.

A diabetic who suffers from back pain, Rodriguez was nearly done in by the stress of caring for her father. City Health Works' Belton intervened, helping her find a nursing home for him and guiding her appeal for disability benefits.

But she's also a liaison for Rodriguez's own medical needs, helping her keep track of appointments and drafting a list of ailments and questions for her doctor.

That's a big part of a health coach's job — teaching patients to be better advocates for themselves.

During an appointment at a nearby Mount Sinai clinic, that preparation has paid off. Dr. Joseph Truglio tells Rodriguez she likely had a mild stroke.

Rodriguez had dismissed the tingling on her right side as arthritis, but Belton's insistence — and long history working with her — ensured Truglio would take notice. And that is City Health Works' goal: identify patients careening toward catastrophe and intervene before it happens.

"Here we have a patient that had not been to the ER, but was slowly getting worse," said Truglio. "So that's the real success story, as opposed to sort of finding patients who are already in the hospital for something that we should have been dealing with for years before that."

Coaches use electronic health records to inform doctors about developments in the field, like whether patients are taking their medications or experiencing changes in their mental health.

Kaur wants to make coaches an indispensable part of the health care system by professionalizing their role and proving their financial value.

"Six years ago, the word 'community health worker' was foreign to most people we spoke to," she said. "Now it is written into almost every single grant or funding opportunity from [Medicare and Medicaid]."

But Kaur goes home each night to one of her biggest skeptics. Her husband, Dr. Prabhjot Singh, heads the department of health system design at Mount Sinai. He's weighing whether there's enough evidence that her program works and should be integrated into Mount Sinai's core business.

"Every time somebody sees one of these beautiful, well-designed, kind of custom engagement tools, I think the thought that comes up a lot with my colleagues, and frankly my own, is: How do you do this for 40,000 people? 50,000 people at the scale of the Mount Sinai Health System?" said Singh.

He added, "We actually have to know whether or not the relationship between Destini and her client is effective. It may feel really good, but from a health system perspective, we have to really understand, 'Is she getting healthier? And are we doing it in a cost effective way?'"

There are early signs the program is working: Patients with health coaches cost $600 a month less in medical care than a control group, a strong indication that coaches prevented expensive medical emergencies. For half the patients, coaches alerted doctors about patients' urgent needs.

City Health Works remains a small venture, supported largely by foundations interested in testing the model. But Kaur's ultimate aim is to have thousands of coaches like Destini Belton in neighborhoods around the country that can match the successes seen elsewhere in the world.

Big Raises For Many Home Care Workers Won't Necessarily Help Seniors

KFF Health News, October 19, 2016

Without improving conditions and raising pay, which hovers at $10 an hour, it may be impossible to meet skyrocketing demand for skilled and devoted workers.

This article first appeared October 19, 2016 on Kaiser Health News.

By Jane Gottlieb

In recent months, health aides who care for elderly Americans at home appeared at scores of rallies calling for better pay and workplace conditions. President Barack Obama and some of the presidential candidates have pledged to improve the lives of these workers, who often struggle on the poverty-level wages they are paid.

Now, thanks to the "Fight for $15" movement hundreds of thousands of home care workers in at least five states will gradually receive significant hourly raises. And as result of a large organizing campaign, tens of thousands who have joined unions can negotiate for paid sick time, health and retirement benefits.

"The Fight for $15 and the simultaneous benefits is an amazing, unprecedented thing that I don't think anyone five years ago would have expected, given our hyper-polarized political environment," said Laura Dresser, a labor economist at the University of Wisconsin-Madison who studies the impact of low wages. "This is a workforce that's coming out of the shadows."

People with a deep understanding of eldercare policy say that without improving conditions and raising pay, which hovers at $10 an hour, it will be impossible to meet skyrocketing demand for skilled and devoted workers.

But they also argue that bigger paychecks and benefits will not have a significant impact on senior citizens unless their aides and assistants are also better screened, trained and organized.

"I think it's going to take time and a different mindset to professionalize this job and improve outcomes," said Carol Rodat, New York policy director for the Paraprofessional Healthcare Institute (PHI), which researches ways to transform eldercare. "Achieving better wages is a first step, but there are others that have to follow or you don't get to the end point — improved outcomes for the clients."

As it stands, the soaring number of Americans who choose home care over nursing homes have no organized national system to count on that guides the hiring, education or oversight of their caregivers. There is little or no data that tracks how well the home care is delivered. And yet, these workers, like those in a hospital, provide a lifeline, not only dressing, feeding, bathing and shopping for clients, but working with their health care providers and noticing when their illnesses progress or relapse.

"It's been a growth industry people can get into with little to no experience and few barriers," said Rodat, whose organization wants better state and federal oversight. "We have to totally re-engineer home care. It will take a massive change."

In the past 20 years, the Service Employees International Union, which organized nurses, has focused on home care workers, a largely non-white, female workforce that earns as little as $8 an hour and is often unable to piece together a full day's work. And earlier this year, these workers landed in the national spotlight when they joined the "Fight for $15" minimum wage campaign.

As a result, 500,000 home caregivers in 12 states have joined SEIU and can bargain for paid sick time and retirement benefits. And Massachusetts, California, New York, Washington and Oregon, and cities such as San Francisco, Seattle, Los Angeles, New York and Washington D.C., passed laws phasing in a $15 minimum wage or an equivalent indexed to inflation. An estimated 640,000 of the more than 2 million aides hired through agencies or hired privately will see raises.

Also, starting this year the federal Fair Labor Standards Act guarantees them minimum wage and overtime.

The raises and union protections are concentrated in Northeastern and Western states. And they do not even cover the largest share of workers, the unpaid family members who care for a loved one. Nonetheless, many people who have worked closely on these issues see the changes as an important step in stabilizing what has been a marginal workforce.

With an annual turnover of around 50 percent,home care workers now have among the lowest retention of any industry. Labor organizers say even those who wish to stay often leave for better pay and hours. Advocates note that a trusted caregiver can be pivotal to a person's health and well-being.

"When you keep the same worker that individual is going to see changes in the client's quality of life. They are more likely to say 'Mrs. Smith usually doesn't confuse her children,'" said Caitlin Connolly, the Home Care Fair Pay campaign coordinator with the National Employment Law Project.

But many people who work in eldercare or study it also say that paying workers more and keeping them on the job will not assure senior citizens a standard of care because of the large gaps in regulation. Currently, not all home care agencies even check applicants' criminal histories, something not every state requires.

In a widely-cited study, researchers at Northwestern University's medical school found that just 55 percent of the 180 agencies conducted a national background check. Only a third tested applicants for drug use, even though the job can mean frequent contact with medications.

The study, led by geriatrician Lee Lindquist, showed that many agencies hire unskilled workers off Craigslist and place them in homes of elderly people with physical and cognitive impairments.

Lindquist found aides, some of them illiterate, who mixed up medications or neglected to feed or move clients. Supervisors rarely checked in. And training was lax.

Federal law requires home health aides, who perform skilled nursing functions such as wound care, to have 75 hours of training. There is no mandated training for the largest, fastest-growing segment, the personal aides who assist with housekeeping and grooming. No continuing education is required.

"We see a huge prevalence of Alzheimer's and dementia and depression and pulmonary disease and cardiac disease," noted Rodat of PHI. "You'd think we'd want to give people extra training since they are on the front line."

The increased training she and others are calling for costs more than many agencies and states say they can afford.

Still, some home care agencies say they provide training well beyond minimum standards to meet their customers needs.

Home Care Associates, in Philadelphia provides up to 150 hours of training, along with continuing education and coaching from experienced supervisors.

"A lot of people who do this work have a real passion for it," said Karen Kulp, president and CEO of the company. "But even if they get $15 an hour it's not going to be any different without training, support and supervision. You're not going to improve the quality of the work."

Critics complain that the Affordable Care Act's risk-adjustment program unfairly rewards health plans — including Blue Shield of California — that have excess administrative costs and higher premiums.

Are Blues' Plans Benefitting Unfairly From Program To Offset Cost Of Sicker Patients?

KFF Health News, October 18, 2016

Critics complain that the Affordable Care Act's risk-adjustment program unfairly rewards health plans — including Blue Shield of California — that have excess administrative costs and higher premiums. The Blue Cross Blue Shield Association, which represents 36 plans across the country, has warned Washington against rewriting the rules.

This article first appeared October 18, 2016 on Kaiser Health News.

By Chad Terhune

Some health insurers say they're paying too much to rival Blue Cross Blue Shield plans under a key pillar of the federal health law designed to compensate insurers that take on sicker and more expensive patients.

The critics' chief complaint is that the Affordable Care Act's risk-adjustment program unfairly rewards health plans — including Blue Shield of California — that have excess administrative costs and higher premiums. That comes at the expense of more efficient, lower-priced plans in the individual market, they say.

The Obama administration is considering changes to how these dollars are allocated in the state and federal exchanges, but critics say the proposed modifications don't go far enough.

Molina Healthcare, a Long Beach-based insurer, covers about 600,000 people through exchanges in California, Florida and seven other states. The company's chief executive, Dr. J. Mario Molina, said the flawed risk-adjustment program is hurting consumers by stifling competition and keeping rates artificially high.

Among insurers, "the rich get richer and the poor get poorer," Molina said in an interview with California Healthline. "Across the board, the people benefiting from this are the Blues, so they are putting a lot of pressure on to keep the status quo. I think [the Obama administration] understands the issue, but they may lack the political will to change it."

The Blue Cross Blue Shield Association, which represents 36 plans across the country, has warned Washington against rewriting the rules. Federal officials "should not heed the calls to make radical changes to the risk-adjustment model from a small, but vocal, minority of health plans that did poorly," the industry association wrote to the Obama administration in a letter released in July.

The risk-adjustment program doesn't rely on government funds. Rather, insurers compensate each other for taking on sicker patients under a complex government formula.

It relies on risk scores assigned to enrollees based on their age, gender and diagnosed medical conditions. The calculation also uses the average statewide premium, which reflects plans' administrative costs.

Health insurers big and small have said that methodology can hurt lower-priced plans and inflate what they owe.

Some of the new insurance co-ops created under the health law have sued the Obama administration, claiming that the program put them at a competitive disadvantage. The nation's third-largest health insurer, Aetna Inc., also said "the current model rewards inefficient and expensive plans." It isn't involved in the pending litigation.

For the first two years of exchange enrollment, Florida Blue received the most from risk adjustment — $705 million — based on a state-by-state review nationwide. Blue Shield of California was second with $317 million, and a unit of UnitedHealthcare in New York was next at $127 million.

Overall, seven of the top 10 recipients for risk-adjustment dollars were Blues' plans for 2014 and 2015, federal data show. Blue Cross Blue Shield plans are major players in most state insurance markets, so their strong performance on risk adjustment could be expected. However, a separate analysis by the Fitch Ratings agency found that some of these top recipients also have higher-than-average administrative expenses companywide.

Blue Shield of California called these complaints about risk adjustment "inaccurate." It said the government formula is "completely independent" of a plan's administrative costs and does not reward higher premiums.

In a statement, Florida Blue said its reimbursements were "based on the size of the state's market, our market share and the risk profile of the people we attracted."

Federal health officials have also defended their program, saying it's working as intended to compensate insurers that enrolled sicker patients. They have proposed some changes, such as adding prescription drug data to the calculations for 2018.

"These changes will support issuers in serving the highest-cost enrollees while also seeking to make risk adjustment more predictable and more effective at spreading risk for all issuers," Kevin Counihan, chief executive of the federal marketplace, wrote in an August blog post.

In addition to risk adjustment, there are two other mechanisms in the exchanges to cushion insurers from the cost of sicker enrollees. Reinsurance and a risk-corridor system offer further protection against high-cost claims or large financial losses. But those two programs were always meant to be temporary, and they expire at the end of this year. The risk-adjustment program is permanent, making it a bigger priority for policymakers and industry leaders.

"The heat on these risk-adjustment issues will really ramp up, and there's a lot of pressure on the administration to make sure this is right," said Sean Creighton, a senior vice president of risk adjustment at Verscend, a health care analytics company, and a former official at the Centers for Medicare & Medicaid Services. "These are large sums of money to be sloshing around."

Creighton said the industry complaints warrant a closer look. He said it might make sense to drop the average statewide premium from the formula and focus more directly on a health plan's medical claims. Some experts have suggested that the government could cap risk-adjustment payouts to a certain percentage of premiums to limit the financial strain on smaller plans.

Under the health law, insurers must spend at least 80 percent of customers' premiums on medical care for individual policies. This rule helps limit what insurers can spend on administrative expenses and retain as profit.

Timothy Jost, a law professor at Washington and Lee University in Virginia and an expert on the Affordable Care Act, said some administrative expenses are worth counting in the risk-adjustment program because they're tied to managing patients with diabetes and other chronic conditions.

"Administrative expenses do get factored in and some insurers think that rewards inefficient insurers," Jost said. "But [U.S.] Health and Human Services has been skeptical of this argument."

Steve Shivinsky, a spokesman for Blue Shield of California, said "risk adjustment recognizes that Blue Shield attracted sicker members than the market average. That is the primary driver behind the reimbursement."

But the San Francisco-based insurer also has been open about its struggle with excess overhead. In a recent memo to employees, it conceded that, "we spend more on administrative costs than other comparable health plans."

Blue Shield of California had the second highest expense ratio among Blues plans for the first nine months of 2015, according to Fitch Ratings. The California insurer spent 15.8 percent of its revenue on administrative expenses. The average for Blues plans nationwide was 10.6 percent. Florida Blue had an above-average expense ratio of 11.6 percent.

Molina said it paid $254 million into the government's risk-adjustment pool, to be distributed to other insurers. The company said that amount could have been reduced by $44 million, or 17 percent, if it solely reflected medical costs.

"In every single market that we are in, a Blues plan is the No. 1 recipient," Molina said. "That CEO [in Florida] should be sending me fruit baskets."

Government Begins Test Of Comparison Tool For Health Plan Networks

KFF Health News, October 14, 2016

The new tool will designate marketplace health plan networks as "basic," "standard" or "broad" based on how they compare with other health plan networks in a county. The label will reflect the availability of three types of providers: primary care, pediatricians and hospitals.

This article first appeared October 14, 2016 on Kaiser Health News.

By Michelle Andrews

The incredible shrinking provider network is nothing new in marketplace plans. One way insurers have kept premiums in check on the individual market is by reducing the number of providers available in a plan's network. Earlier this year, the federal government said that it would introduce a tool this fall to help consumers who are shopping on HealthCare.gov gauge how narrow a plan's provider network is compared with others in the area.

But most consumers who want that information will have to wait at least another year. The Department of Health and Human Services recently announced that the pilot project to test the network breadth tool just got a little, well, narrower.

Consumers can already check whether specific doctors or hospitals are included in a marketplace plan's provider network on HealthCare.gov. But there's currently no way to easily measure the breadth of a plan's provider network. This can be an important factor for some consumers, especially given the growing number of plans with no out-of-network benefits.

The new tool will designate marketplace health plan networks as "basic," "standard" or "broad" based on how they compare with other health plan networks in a county. The label will reflect the availability of three types of providers: primary care, pediatricians and hospitals.

Originally, network-breadth information was going to be available for the 35 states on HealthCare.gov, the federally facilitated marketplace. But in August HHS announced it would make the tool available in just six unnamed states.

In September, HHS said it would shrink the pilot still further, to four states — Maine, Ohio, Tennessee and Texas.

The information will be available sometime during the open-enrollment period for 2017 coverage that runs from Nov. 1 until Jan. 31, 2017.

The government will consider expanding the pilot to additional states and types of providers in future years, the notice said.

In 2015, an analysis by the management consultant firm McKinsey & Company found that 55 percent of hospital networks for marketplace plans were broad, meaning more than 70 percent of hospitals in a specified area participated.

Twenty-two percent of networks were classified as narrow, defined as those in which 31 to 70 percent of hospitals participated, and 17 percent were labeled ultra-narrow, meaning 30 percent or less participated.

Labels like "health maintenance organization" and "preferred-provider organization" aren't necessarily meaningful in communicating whether a network is broad or narrow anymore, said Sabrina Corlette, research professor at Georgetown University's Center on Health Insurance Reforms who has ;written about the network breadth pilot project.

Although the tool will let people compare networks in their area, still, "it's all relative," Corlette said. "If you've got a market where every single network is narrow, this network breadth rating is less useful."

"Drugs that were around for decades—almost a century, sometimes—caught us off guard," said Scott Knoer, chief pharmacy officer of the Cleveland Clinic, referring to price hikes for drugs such as nitroprusside.

Hospitals Say They're Being Slammed By Drug Price Hikes

KFF Health News, October 12, 2016

"Drugs that were around for decades—almost a century, sometimes—caught us off guard," said Scott Knoer, chief pharmacy officer of the Cleveland Clinic, referring to price hikes for drugs such as nitroprusside, which increased 672 percent per unit from 2013 to 2015, according to a new report.

This article first appeared October 11, 2016 on Kaiser Health News.

By Sydney Lupkin

Hospitals are getting slammed by drug price hikes that often have nothing to do with improving patient health, a new report has found.

Inpatient drug spending increased by 23.4 percent annually from 2013 to 2015, compared with 9.9 percent annual increases on retail drug spending during the same period, according to a new report by National Opinion Research Center (NORC) at the University of Chicago, which was commissioned by the American Hospital Association and the Federation of American Hospitals. Spending was driven by increases in drug unit prices rather than an increase in the volume of drugs used, they found.

"It would be one thing if price increases were associated with clear and important clinical improvements, but they're not," Chip Kahn, CEO of the federation, said Tuesday in a press briefing.

The price hikes driving the spending increases "appear to be random and inconsistent from one year to the next," the researchers wrote. About half of the drug price hikes in the report occurred in drugs with no generic competitors.

"Drugs that were around for decades — almost a century, sometimes — caught us off guard," said Scott Knoer, chief pharmacy officer of the Cleveland Clinic, referring to price hikes for drugs such as nitroprusside, which increased 672 percent per unit from 2013 to 2015, according to the report. "For a long time, old generic drug prices were so stable we didn't even think about that," said Knoer, who participated in the press briefing.

The brand name version of nitroprusside, Nitropress, was originally approved in 1981 to treat cardiovascular patients. Today, it's made by just one company, Valeant Pharmaceuticals, which bought it in early 2015, and pushed the price to $790.46 per unit from $150 per unit, according to the report. The price hike has been the subject of Congressional attention.

Nitroprusside cost hospitals almost $95 million in 2015 up from $48.3 million the year before, according to the report.

"We understand the value of innovation," said Rick Pollack, the American Hospital Association's president and CEO. "However an unaffordable drug is not a lifesaving drug and a price increase resulting from market manipulation is simply wrong."

The Pharmaceutical Research and Manufacturers of America (PhRMA) said the report misses the big picture by honing in on the drugs in the report, and it leaves out the fact that hospitals mark up drug prices when they bill patients.

"Focusing on a set of unrepresentative, older and off-patent medicines at a time when new generic drug applications had a record backlog gives a distorted portrayal of medicine spending," said PhRMA spokesperson Holly Campbell.

The Generic Pharmaceutical Association was not available for comment.

The report included a national web-based survey with responses from 712 community hospitals from April through June of 2016. Researchers then weighted these responses to come up with estimates for 4,369 community hospitals in the United States. The analysis also included aggregate data for 28 drugs from two group-purchasing organizations, or GPOs, which buy drugs in bulk to negotiate better costs. The two GPOs represent 1,400 community hospitals.

More than 90 percent of survey respondents said drug price hikes had a "moderate or severe" impact on their budgets. What's more, Medicare reimbursements often don't reflect increased inpatient drug costs because the reimbursements are based on price indexes, and drug prices are rising too fast for the indexes to keep up.

"The bottom line is if you spend several million dollars more on drugs, it's just accounting. You're going to spend several million dollars less on other things," Knoer said, adding that although this is not a problem for Cleveland Clinic, some hospitals aren't able to hire has many nurses or can't invest in the latest screening technologies as a result of increased drug spending.

David Vandewater, president and CEO of Ardent Health, which includes 14 hospitals, pointed out that hospital closures seem to be more common than ever before. And although greedy drug companies aren't 100 percent at fault, they may share some of the blame for this trend, he said.

When companies hike drug prices, hospitals lose money on insured patients, but make money on uninsured or out-of-network patients because they can legally charge a markup for drugs, said Gerard Anderson, a health policy and management professor at Johns Hopkins Bloomberg School of Public Health. Drugs are regularly marked up at least 500 percent, so if the drug price is higher, so is the profit.

"It's not a total loss to them when prices go up because charged payers make up some of the difference," Anderson said. He was not involved in the report or on the press call.

Ultimately, even healthy individuals wind up paying the price for out-of-control drug costs, in the form of higher premiums and copays, increased deductibles and higher taxes, Knoer said on the press call.

"If these kinds of increases took place in the sale of gasoline in the U.S., you'd be paying $30 a gallon," Vandewater said. "And if that was the case, the federal government or somebody would decide enough is enough."

Trump's Debate Claim On Health Care Costs

Trump's Debate Claim On Health Care Costs: It Depends What You Mean By 'Cost'

KFF Health News, October 11, 2016

Health care finally came up as an issue in the second presidential debate in St. Louis Sunday night. But the discussion may have confused more than clarified the issue for many voters.

This article first appeared October 10, 2016 on Kaiser Health News.

By Julie Rovner

Health care finally came up as an issue in the second presidential debate in St. Louis Sunday night. But the discussion may have confused more than clarified the issue for many voters.

During the brief exchange about the potential fate of the Affordable Care Act, Republican Donald Trump said this: "Obamacare is a disaster. You know it. We all know it. It's going up at numbers that nobody's ever seen worldwide. Nobody's ever seen numbers like this for health care."

Let's parse that discussion of costs piece by piece. Because when it comes to health care, there are many different types of costs: those for governments, employers and individuals. And those costs don't always go up and down at the same time.

First, the federal government's spending on the Affordable Care Act's insurance is coming in under budget projections. According to the official scorekeeper, the Congressional Budget Office (CBO), in March, the net cost of the insurance coverage provisions of the law — including tax credits to subsidize some lower-income customers' premiums and costs for adding people to Medicaid — "is lower by $157 billion, or 25 percent" than the estimate when the law was enacted in 2010.

Much of that is because CBO originally estimated that large numbers of employers would stop providing insurance to workers and send them to the law's online marketplaces, where many of them would get federal subsidies. That didn't happen. Medicaid spending increased more than CBO projected, but that was more than offset by the lower spending on tax credits.

What Trump was almost certainly referring to when he talked about costs going up were reports of increases in premiums for the marketplace plans. Those are for people who don't have employer coverage and don't qualify for a public health plan, such as Medicare or Medicaid. About 18 million Americans use those marketplaces, or exchanges.

And on average, premium prices in states that have announced their rates are going up next year at much higher rates than for the previous two years, although the final tallies won't be known until all the rates are released later this month. Charles Gaba, who crunches numbers for his blog, ACASignups.net, estimates a national average premium increase of around 25 percent.

Earlier in the debate, Trump noted that under the law, "your health insurance and health care is going up by numbers that are astronomical, 68 percent, 59 percent, 71 percent." And there are reports of very large increases like those, including in Oklahoma, where premiums in the individual market could rise anywhere from 58 to 96 percent. Even in California, which has what is generally considered a successful marketplace, rates are going up an average of 13.2 percent for next year.

There are several reasons for the increases. One is that insurers charged premiums that were simply too low to begin with, and now they are catching up in order not to go broke. Another goes back to the CBO prediction above, about employers sending workers to the individual market to buy their own insurance. When that didn't happen, insurers didn't get the influx of generally healthier people to offset the costs of the sicker people who the law made eligible for coverage for the first time. A recent study from researchers at the Brookings Institution found that premiums in that market are actually lower than they would have been had the law not been passed.

But even with premiums rising in many (though certainly not all) areas of the country, about half the people who buy insurance on the individual market won't feel much of that increase. Tax credits will increase to cover most of the hikes for those who bought through the exchanges, and in many places consumers can save money by changing plans. Even with an estimated 25 percent premium increase, the federal government projects, 78 percent of marketplace consumers should be able to find a plan that costs $100 per month or less. Another estimated 2.5 million people are purchasing coverage on their own who could be getting tax credits.

Meanwhile, the majority of Americans get coverage through an employer, and that market is seeing historically low premium increases. A recent report from the Kaiser Family Foundation found family premiums for employer-coverage rose an average of 3 percent in 2016, continuing several years of much-lower-than-average hikes. (Kaiser Health News is an editorially independent project of the Kaiser Family Foundation.)

However, consumers at every level are feeling more financial pain when it comes to health care. While premiums for most people have increased slowly, workers and individual insurance purchasers are being asked to pay much larger deductibles before their health insurance kicks in. When insurance does pay, patients also are being asked to contribute more for their share of the services. And even the slow rate of premium increases is often more than the growth in workers' wages, so it eats more of their paychecks.

At the same time, however, health care spending overall (as measured by the federal government) continues at a historically slow rate. Spending in 2014 (the last full year analyzed) was up 5.3 percent. That was only slightly higher than the five previous years, which included the smallest increase (2.9 percent in 2013) recorded since government officials began keeping track more than a half century ago.

Nonetheless, health spending is going up faster than the economy as a whole, thus consuming more of the nation's resources. And Trump is correct about U.S. health spending not looking good next to the rest of the world. The U.S. spends one-third more per person on health care than the next highest-spending country (Switzerland), and more than twice the average for industrialized nations. Yet Americans are not healthier than most of our international counterparts.

Pages