The New Yorker wrote, "'If you're starting from scratch,' he [Obama] says, 'then a single-payer system'-a government-managed system like Canada's, which disconnects health insurance from employment-'would probably make sense. But we've got all these legacy systems in place, and managing the transition, as well as adjusting the culture to a different system, would be difficult to pull off. So we may need a system that's not so disruptive that people feel like suddenly what they've known for most of their lives is thrown by the wayside.'" [New Yorker, 5/7/07]
I read this stuff so you don’t have to, for which I will expect massive offerings of spinach pies and stuffed grape leaves at some point in the future. Anyway, since none of the progressive or liberal health policy wonks seem so inclined, I’ve now waded through the entire Baucus white paper and most of the Senate Finance Committee hearings on this health care kerfuffle.
I’m planning to inflict on y’all, in the near future, my acerbic [or otherwise] comments on the whole thing, though I’ll try to keep it cut up into manageable chunks. I was going to go through the points in the Call To Action in order, from front back, but because I wasted spent yesterday evening hunting down JindalCare instead, for now I’m just going to skip to page 76 and say a few things about Medicare Advantage.
Medicare beneficiaries can obtain benefits through the traditional fee-for-service program or by enrolling in private insurance plans that are approved to offer Medicare benefits. Private insurance plans are paid a monthly amount by the government for each beneficiary whom they enroll. In return, insurers agree to provide coverage for the range of Medicare benefits that their enrollees need. The program allowing private insurers to serve Medicare beneficiaries is called Medicare Advantage (MA).
The Medicare Payment Advisory Commission (MedPAC) estimates that Medicare Advantage (MA) insurers are currently paid 13 percent more than the amount Medicare would pay if the same beneficiaries remained in the traditional fee-for-service program. Current estimates indicate that these excess payments will total $62 billion over the next five years, and $169 billion over the next ten years.
MedPAC has called for Medicare Advantage payments to be set equal to traditional Medicare. The health insurance industry defends these payments by pointing to extra benefits that low-income MA enrollees receive relative to traditional Medicare, like eyeglasses, dental coverage, and lower copayments. But delivering these extra benefits through Medicare Advantage is not as efficient as delivering them directly through traditional Medicare. Moreover, MedPAC reports that MA plans are less efficient at delivering Medicare Part A and B benefits than the traditional fee-for-service program. Private insurers’ higher overhead and added administrative costs — including profits — mean that fewer benefits are passed along to beneficiaries. CBO and the U.S. Comptroller General estimate the administrative costs of private plans serving Medicare beneficiaries are in the range of 11 to 13 percent, compared to estimates of 2 to 5 percent for the traditional Medicare program.
The majority of Medicare beneficiaries have multiple chronic conditions that could be treated more effectively through interdisciplinary care teams, and the insurance industry contends that private plans better coordinate care and improve quality oversight in the Medicare program. There is no solid evidence that supports this assertion. Not all Medicare Advantage plans are designed to integrate or coordinate care across the spectrum of providers, and not all use electronic medical records to better manage care. Even so, all Medicare Advantage payments are based on the same rates — whether or not the plan uses advanced methods of coordinating and delivering care.
The paper then goes on for several more paragraphs detailing the various tweaks we could try so as to maybe level the Medicare playing field so that the private MA insurers can compete. WTF?
We’ve now got years of Medicare Advantage data showing that the public, taxpayer-funded program works more cheaply and more efficiently than the private insurers can do this for. And we’re also starting to pile up data from various states’ [not just Florida’s] Medicaid programs, where experimentation with letting the private insurers in just makes things more expensive and less efficient.
So, my question here to Senator Baucus — and to Tom Daschle, John Dingell, Ted Kennedy, and anybody else who may be working on Obama’s plan — How many more of us have to be your guinea pigs before you realize that we can’t afford the insurance industry?
Medicaid program on skids, Jindal says
But wrangling persists as remedies planned
Saturday, November 15, 2008
By Jan MollerBATON ROUGE — Arguing that “doing nothing is not an option,” Gov. Bobby Jindal on Friday proposed restructuring Louisiana’s health-care program for the poor into a private insurance model that relies on managed-care principles to control costs and improve health outcomes.
[…]
Jindal’s plan calls for pilot programs in four regions — New Orleans, Baton Rouge, Shreveport and Lake Charles — where most Medicaid recipients would be required to choose between competing managed-care networks. The state would provide “choice counselors” to help people pick between the plans, and people who don’t choose would be automatically enrolled in a plan.
Pilot regions, Medicaid recipients have to choose between competing managed-care networks, choice counselors, and automatic enrollment if you don’t/can’t decide among the competing plans — all are straight out of the Florida “Medicaid Reform” playbook.
That couldn’t possibly have anything to do with the fact that Alan Levine, formerly the director of Florida’s Agency for Health Care Administration [which oversees Medicaid in FL] and implementer of a “medicaid reform” pilot project here [back when JEB!, brother of Dubya, was governor] is now head of Louisiana’s DHH [which oversees Medicaid in LA], could it? Ha!
So, just how is that Florida Medicaid Reform pilot project working out anyway?
You can read the final report for year 2 if you like [big PDF], but the question I most want answered is — according to the report, 287,015 people enrolled in the program, but 111,603 disenrolled — why?
Anyways, on first reading [and second, and third, if you want to know] I didn’t find much in that report that report that could be termed actual data, though there are lots of numbers and tables scattered throughout, and none of those numbers and tables addresses actual health outcomes. It’s all stuff about utilization of call centers, and grievances, and coupons for baby diapers and children’s Tylenol given out as rewards for “making healthy lifestyle choices.”
The Baton Rouge [LA] Business Report has the best wrap-up I’ve found so far. Some excerpts from an article, Market Forces —
Gov. Bobby Jindal’s administration wants to move fast to secure a federal waiver to implement Medicaid reform in Louisiana, the idea being to improve the delivery of health services to low-income families and the disabled, resulting in a healthier population, more accountability and significant savings.
Guiding the effort is Alan Levine, Jindal’s secretary of Health and Hospitals, who oversaw a similar experiment in Florida as Medicaid adviser to former Gov. Jeb Bush. Levine says the Florida pilot projects have been mostly successful. Several critics have come to the opposite conclusion, although Levine says such criticisms have not been based on reliable data.
And though the details aren’t even close to being worked out, Levine is convinced Louisiana’s reform effort will succeed in part because of how it will differ from Florida’s.
[…]
Florida Medicaid reform is performing admirably or not, depending on whose study you believe. A July report from the Community Health Action Information Network, a patient advocacy group, says the Florida Agency for Health Care Administration vastly inflated the savings created by reform. A survey of doctors by the Health Policy Institute at Georgetown University seems to point to a decline in physician participation since reform.
[…]
Florida’s Medicaid reform pilots started in 2006 in Broward and Duval counties, and in 2007 was expanded to three more counties. A report by former AHCA Inspector General Linda Keen found problems with the pilots, however, and Medicaid reform was not expanded to other counties. Keen has since stepped down, and AHCA has a new secretary, Holly Benson, who is expected to push ahead with expanding reform.
In response to criticism, Levine cites a report by the James Madison Institute, a free-market think tank, that argues previous studies on reform are flawed and that competition in the pilot counties has been spurred and significant cost savings realized.
[…]
Levine says Louisiana’s transformation of Medicaid will look like Florida in the general sense of bringing the marketplace to bear in solving problems. In the pilot programs, residents eligible for Medicaid could choose among HMOs or other health networks called Provider Service Networks.
[…]
In Florida, the PSNs and HMOs compete against each other, with the marketing advantage going perhaps to the HMOs, which have been ensconced in the Florida Medicaid market for years. In Louisiana, individual PSNs will be managed by HMOs and compete against other PSN/HMO teams.
[…]
Levine’s agency will require HMOs to partner with a provider, which he says creates a “natural, market-based filter.” DHH will do an actuarial analysis to decide how many HMO/PSNs a given market requires. DHH will decide which HMOs get in based on metrics such as history of patient satisfaction, promptness of payment, etc. The HMOs that make the cut will compete against each other in that market. That way, the state is out of the business of setting Medicaid rates. The HMOs do it instead—which is probably not going to be music to most doctors’ ears.
[…]
If reform through managed care is not more economical than old fashioned fee-for-service, it’ll be a hard sell taking the concept statewide. Studies are under way that everyone hopes will answer that question. Doctors in the pilot counties, meanwhile, are divided on reform depending on how much bargaining power they have with HMOs or PSNs to get higher rates of reimbursement from Medicaid. Scarce specialists are likely to have more bargaining power. Primary care doctors, who aren’t as scarce, are likely to have less.
[…]
Dr. Steven Spedale is a Baton Rouge pediatrician and member of Levine’s advisory committee, representing the Louisiana chapter of the American Academy of Pediatrics. Spedale says it’s too early to know how well Florida’s Medicaid reform will work, since only three years have passed in what was designed as a five-year demonstration project.
“It’s hard to hold it out as the model to use because no one has the final numbers,” he says.
So, in Florida, a patient advocacy group says the reported savings were inflated, the Inspector General found problems with the program, but a free-market think tank says that: previous studies on reform are flawed and that competition in the pilot counties has been spurred and significant cost savings realized. Who ya gonna believe?
Oops, almost forgot this —
So it is fair to conclude that the state (again with a federal funding match available) has cut its commitment to insuring children from poor families to about two-thirds of what it was a few years ago. The problem is made worse by the unwillingness of private health insurance to cover children. Florida is tied for second-worst in the country in the percentage of uninsured children aged 0-18.
One of the arguments heard here in the US from incrementalists in the health care reform debate is that we don’t have to go with single-payer — lots of other countries have multiple, private insurance companies [see item 3 below]. We could just tweak our private insurers to be just as affordable and reliable as theirs!
Not so fast, subsidy-breath. The following is basically a c&p from an article I found at the PNHP site, but I’ve done a little editing and emphasizing of my own.
International Health Systems for Single Payer Advocates
By Dr. Ida Hellander
PNHP Executive DirectorHealth care systems in the Organization for Economic Cooperation and Development (OECD) countries primarily reflect three types of programs:
1. In a single-payer national health insurance system, as demonstrated by Canada, Denmark, Norway, Australia, Taiwan and Sweden, health insurance is publicly administered and most physicians are in private practice. U.S. Medicare would be a single payer insurance system if it applied to everyone in the U.S.
2. Great Britain and Spain are among the OECD countries with national health services, in which salaried physicians predominate and hospitals are publicly owned and operated. The Department of Veteran’s Affairs would be a U.S. single payer national health service system if it applied to everyone in the U.S.
3. Highly regulated, universal, multi-payer health insurance systems are illustrated by countries like Germany and France, which have universal health insurance via non-profit “sickness funds” or “social insurance funds”. They also have a market for supplementary private insurance, or “gap” coverage, but this accounts for less than 5 percent of health expenditures in most nations.
Sickness or social insurance funds do not operate like insurance companies in the U.S.;
- they don’t market,
- they don’t cherry pick,
- they don’t set premiums,
- they don’t set rates paid to providers,
- they don’t determine benefits,
- they don’t earn profits or have investors,
etc. In most countries, sickness funds pay physicians and hospitals uniform rates that are negotiated annually (also known as an “all-payer” system). Princeton economist Uwe Reinhardt calls Switzerland’s “sickness funds” quasi-governmental agencies**
There is no model similar to sickness funds *** operating in the U.S., although they are often confused with the Federal Employee Health Benefit Program (FEHBP), which is simply a group of for-profit private insurance plans with varying benefits, rules, regulations, providers, etc. The 1993 Clinton health plan was an attempt to regulate private insurance companies in the U.S. to behave more like sickness funds, but the insurance industry defeated it.
Bottom line: The most important point for single payer advocates is that every country with universal coverage has a non-profit insurance system. No country uses for-profit, investor-owned insurance companies such as we have in the U.S. (although they do have a small role in selling “gap” coverage).
Notes:
* The three basic models are general outlines, and there are many examples of “mixed models” (e.g. although Sweden has national health insurance, the hospitals are owned by county government, a feature more common to countries with a national health service).
** Many countries are tinkering with how sickness funds operate (e.g. Germany). The most extreme change is in the Netherlands, which since 2006 has allowed the non-profit regional sickness funds to become for-profit insurance companies, and new insurance companies to form, in the hope that “competition” would control costs. After just one year of experience, the country has experienced —
- a wave of anti-competitive mergers of the insurers
- emergence of health plans that “cherry pick” the young and healthy
- loss of universal coverage
- the emergence of 250,000 residents who are uninsured
- another 250,000 residents who are behind on their insurance payments.
All of the positive data from the Netherlands (on costs, infant mortality, quality, etc) is based on the system pre-2006 (personal communication, Hans Maarse).
*** In the film “Sick around the World” five nation’s health systems are shown. The U.K. is an example of a single payer national health service. Taiwan is an example of a single payer national health insurance. Germany, Japan, and Switzerland use multiple “sickness funds” that are non-profit and pay uniform rates to providers (“all-payer”)
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