Conservative economists writing in today’s Wall Street Journal dismiss the notion that the cost of providing medical care for the uninsured is eventually shifted onto those already insured. Citing an Urban Institute study that appeared in 2008 in Health Affairs, they claim the total cost shift is 1.7 percent at most, or $80 a year for the average plan. They also dismiss as flawed a Families USA study that found there was a significant rise in private insurance premiums to cover the cost of the uninsured.
How did the Democratic-controlled Congress that passed health care reform go wrong by accepting this premise?
Congress ignored the $40 billion to $50 billion that is spent annually by charitable organizations and federal, state and local governments to reimburse doctors and hospitals for the cost of caring for the uninsured. These payments, which amount to approximately three-fourths of the cost of such care, mitigate the extent of cost shifting and reduce the magnitude of the hidden tax on private insurance.
A few paragraphs later, they attack the health care reform law for relying on Medicaid to cover about half the uninsured who will receive coverage under the act:
Medicaid payments to doctors and hospitals are so low that the program creates a cost shift of its own. In fact, a long line of academic research shows that low rates of Medicaid reimbursement translate into higher prices for the privately insured.
So patients who pay nothing or almost nothing do not shift costs because the providers — doctors and hospitals, primarily — get mostly reimbursed for that care by charities and the government. Yet discounted payments through Medicaid are made whole by cost shifting to private plans.Continue reading…
In defending his controversial proposal to turn Medicare into premium support for buying private insurance, Rep. Paul Ryan, R-Wis., on Meet the Press last Sunday took a potshot at the Independent Payment Advisory Board, which is the key cost control component of President Obama’s health care reform law.
Premium support would give seniors the power to choose the level of care in their plans, Ryan asserted. “The alternative to that is a rationing scheme with 15 bureaucrats the president is going to appoint next year on his panel to ration Medicare spending. We don’t think we should give the government the power to ration care to seniors.”
The House Budget Committee chairman didn’t explain why faceless bureaucrats working for insurance companies would be any different or better than their counterparts in government in choosing what should or should not be covered. But a group of more than 100 academic and think tank health care experts has rallied to the defense of the board, which won’t swing into action until 2015.
Their ranks include liberal economists like Brookings scholar Henry Aaron and Harvard’s David Cutler, who was one of the architect’s of the health care reform law. But they also include former Congressional Budget Office chief Alice Rivlin, who has her own version of a premium support plan, and Harvard’s Joseph Newhouse, who has been a big booster of private insurance plans over the years.Continue reading…
The Government Accountability Office has weighed in on the failure of the Food and Drug Administration to properly monitor medical device recalls. Its review of the 3,510 recalls between 2005 and 2009 — 40 percent of which were cardiovascular radiological or orthopedic devices — found:
Several gaps in the medical device recall process limited firms’ and FDA’s abilities to ensure that the highest-risk recalls were implemented in an effective and timely manner. For many high-risk recalls, firms faced challenges, such as locating specific devices or device users, and thus could not correct or remove all devices.
“The gist of this report is that the FDA can’t tell if recalls of high-risk devices were carried out successfully because it lacks criteria for assessing device recalls and doesn’t routinely review recall data,” said Sen. Charles Grassley, R-Ia., who along with Sen. Herb Kohl, D-Wis., called for the report. “Recalls are typically voluntary, and patients would be better served if the FDA took a thorough approach to post-market surveillance of medical devices.”
The question arises in the wake of yesterday’s news that the government and GlaxoSmithKline settled a string of lawsuits charging the company with illegal promotion of prescription drugs for unapproved uses. The $3 billion settlement represented just a small fraction of the sales to patients for whom the off-label prescriptions either caused harm or did little or no good.
Glaxo’s chief executive Andrew Witty, in a prepared statement, assured the public that his company has “fundamentally changed our procedures for compliance, marketing and selling in the U.S. to ensure that we operate with high standards of integrity.”
Judging by the number of seminars and conferences over the past few years designed to help companies meet the legal requirements for promoting drugs, there would certainly appear to be a lot more attention being paid these days to staying within the law. There have been 165 settlements between the government and drug companies over the last two decades, and the more recent settlements — $2.3 billion from Pfizer and $1.4 billion from Eli Lilly — have achieved blockbuster status (a word usually reserved for drug sales above $1 billion). While that is affordable for the highly profitable industry, settlements of that size do tend to capture the attention of top company officials and begin to tip the risk-reward ratio for illegal activity toward better compliance with the letter of the law.
Call it the Scott Walkering of America.
Even though tax revenues are finally rising faster than expenses, governors across the nation are recommending more austerity in the budgets they’re presenting to state legislatures this year, the latest survey from the National Governors Association shows.
For the fiscal year beginning July 1, governors are recommending a 2.2 percent increase to $683 billion in general revenue fund spending. That’s down from the 3.3 percent increase in state spending in 2012. Revenue, meanwhile, is projected to rise four percent during the coming fiscal year.
“The public sector has even more uncertainty at this time than the private sector,” said Dan Crippen, executive director of the NGA and former head of the Congressional Budget Office. Citing the looming Supreme Court decision on health care reform, the uncertain levels of federal aid from the “fiscal cliff” negotiations, and talk of tax reform that could cut tax expenditures that benefit state and local governments, “it’s pretty hard for states to plan,” he said.
Despite recent court settlements that recouped more than a quarter billion dollars from lab-test companies for allegedly overbilling California’s Medicaid program, the federal government seems to be ignoring similar schemes that drain Medicare coffers.
The cases involve the nation’s two largest medical laboratory-testing companies – Laboratory Corporation of America and Quest Diagnostics – that together control about half the annual $25 billion lab test market. The Medicare suits, filed in federal court in Manhattan by a former industry executive, claim the testing companies charged insurers like UnitedHealthcare unprofitably low rates while squeezing Medicare and Medicaid.
The whistleblower suits allege the schemes relied on sweetheart deals in which managed-care companies required in-network physicians to send their patients’ lab tests to a single testing company. As part of the deal for below-cost prices, the insurance companies allegedly promised to encourage physicians in their networks also to send Medicare and Medicaid patients to the same testing company, which then billed the Centers for Medicare and Medicaid Services (the federal agency that oversees both programs) or state Medicaid agencies at significantly higher rates.
With over a dozen conservative states leaning against expanding Medicaid to cover poor workers without health insurance, perhaps it is time to resuscitate an idea embraced by President Ronald Reagan. Let the federal government take over Medicaid lock, stock and barrel.
In 1982 the president who ushered in the modern conservative era offered to assume federal responsibility for the program that now consumes over 22 percent of state government budgets in exchange for states taking over welfare. His offer built on a series of recommendations going back to 1969 by the U.S. Advisory Commission on Intergovernmental Relations, which called for a federal takeover of all public assistance programs.
President Obama’s health care reform law, if it survives the final hurdle of next November’s election, could give that idea new life. Under the Affordable Care Act, states are responsible for creating insurance exchanges where individuals and businesses can buy individual or group health plans.
The U.S. Preventive Services Task Force is at it again. This time, the government-appointed panel is on fat patrol. Its review of the medical literature found that diet and exercise combined with group counseling beat popping a pill when it comes to controlling weight.
For those with short memories, USPSTF is the government panel that in the midst of the health care reform debate had the temerity to suggest the evidence was iffy on the wisdom of mammography for women under 50. Check with your doctor before deciding if an early start to routine breast cancer screening was right for you, they said.
Conservatives had a field day. “We don’t know how far government will go in this bureaucracy,” cried Rep. Michele Bachmann, R-Minn., who a few months later launched her presidential campaign. “This is how rationing begins,” intoned Rep. Marsha Blackburn, R-Tenn.
When it comes to obesity, though, a little food rationing is just what the doctor ordered, according to the latest from the USPSTF. How one rations matters, however.
“With drugs, when people stop, they gain the weight back,” said David Grossman, a senior investigator at Group Health Research Institute in Seattle and chairman of the 16-member panel that issued the updated guidelines on obesity prevention on Tuesday. “This is a lifestyle problem. If you don’t change your lifestyle, drugs are not likely to provide a long-term solution.”
Michelle Obama wasn’t taking the easy path when she chose the obesity epidemic and childhood obesity in particular as her main cause. Since the late 1970s, the number of people considered obese grew by half and now totals 32 percent of men and 36 percent of women. One in 20 Americans are now considered morbidly obese. By 2030, if nothing is done, those numbers are expected to grow to over 40 percent obese with over 10 percent morbidly so.
The Supreme Court’s imminent decision on the Affordable Care Act will trigger a political firestorm whether they accept the legislation in its entirety, throw out every page of the 906-page bill or do something in between, which is the most likely outcome.
If the high court follows the polls, it probably will rule the requirement that individuals purchase insurance – the mandate – is unconstitutional but leave the rest of “Obamacare” intact. A CBS/New York Times poll released earlier this month showed that 41 percent wanted the entire law overturned, 24 percent supported it fully and 27 percent supported it but wanted the mandate eliminated.
Pooling the latter two groups suggests there is majority support for the coverage expansion, insurance protections and delivery system reforms contained in the bill – as long as there is no mandate. It was only the Obama administration’s decision to include the requirement that individuals purchase health coverage – something done to win insurance industry backing for the law – that gave opponents the cudgel they needed to stoke widespread opposition to reform.
The insurance industry, recognizing many of the reforms are popular, is already preparing for a thumbs-down ruling on the mandate. Three major carriers, UnitedHealth, Aetna and Cigna, said last week they would continue to allow young adults to stay on their parents’ plans until age 26, pay for 100 percent of preventive services and eliminate lifetime caps on coverage, reforms from the ACA that are already in place.
The numbers are stark. According to the United States Preventive Services Task Force, for every man whose death from prostate cancer is prevented through PSA screening, 40 become impotent or suffer incontinence problems, two have heart attacks and one a blood clot. Then there’s the psychological harm of a “false positive” test result, which is 80 percent of all “positive” tests. They lead to unnecessary worry, follow-up biopsies, physical discomfort and even harm. Final grade: D.
Three men close to me have been diagnosed with prostate cancer late in life. Each was around 70. My dad, already in throes of advancing Alzheimer’s disease, did what the doctor ordered (actually, I suspect my mom told my dad to do what the doctor ordered). He had surgery. And for the last six years of his life, which until his final three months was at home, she cleaned up after him because of his incontinence. My neighbor made the same choice. He quietly admitted to me one day that he suffers from similar symptoms, but he is grateful because he believes his life was saved by the operation. And my friend Arnie? I’ve written about him in this space before. He was diagnosed at 70, and being a psychiatrist with a strong sense of his own sexual being, understood the potential tradeoffs. He decided to forgo treatment. He died a few years ago at 90. I never learned the cause.
So what does it mean that PSA testing gets a D rating?