Posts Tagged ‘Medicaid’

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ACA Is Fixing U.S. Healthcare Delivery: Donald Berwick

Wednesday, January 4th, 2012

Dr. Donald Berwick, who oversaw Medicare and Medicaid until recently said the programs are trapped in a health system that promotes wasteful spending and inefficient care. “Healthcare is broken,” Berwick, who headed the Centers for Medicare and Medicaid Services (CMS), said.  “We have set up a delivery system that is fragmented, unsafe, not patient-centered, full of waste and unreliable.  Despite the best efforts of the workforce, we built it wrong. It isn’t built for modern times.”  Berwick said the Patient Protection and Affordable Care Act (ACA) is changing how physicians and hospitals are paid and deliver care through such innovative arrangements as accountable care organizations (ACOs), which improve coordination and lower costs.”

According to Berwick, it is not clear whether these efforts will produce results quickly enough to silence the critics who want to make more radical changes that would shift the majority of the burden onto beneficiaries.  “That is the central question, the nub…whether that will happen fast enough, I just don’t know.”

To read the full transcript of Berwick’s remarks, click this link:

Berwick defended his tenure as CMS administrator. Even though he failed to win Senate confirmation, that did not impact his ability to get things done, though he would have preferred a longer term.  “An agency of this size will do better with longer-term leadership commitment,” he said.  With the knowledge that his tenure was likely to be short, Berwick felt a greater sense of urgency to achieve things.  Berwick’s most challenging decisions involved state requests to cut Medicaid benefits and writing regulations to encourage doctors and hospitals to form ACOs, while not making the requirements overly burdensome.

Berwick took exception to state’s efforts to limit hospital coverage for Medicaid recipients, which is presently under review by federal regulators.  Hawaii has proposed a 10-day limit on some enrollees; Arizona has proposed a 25 day limit.  “It’s a nonsensical idea.  If a patient needs 20 days, the patient should get 20 days,” he said.

According to the Bangor Daily News, Berwick’s departure from CMS is “an unnecessary loss.” Berwick’s parting words should help Americans understand how their health system is in the process of being improved.  The article notes that “Waste is a broad term, including needless medical procedures, failure of adequate preventive measures, duplication and inefficiency, as well as outright fraud.  Hospital-acquired infections have caused the deaths of almost 100,000 Americans each year and the illness of millions more, according to the U.S. Centers for Disease Control and Prevention.  Dr. Berwick has reported that these complications have added as much as $45 billion a year to hospital costs borne by taxpayers, insurers and customers.  He said that some hospitals have virtually eliminated some infections that other hospitals still consider inevitable.  Under the Affordable Care Act, sometimes called Obamacare, financial incentives will go to hospitals that excel in fighting these infections starting in 2015.

Unnecessary hospital readmissions add another $12 billion a year, estimates the Medicare Payment Advisory Commission.  It says half or more of these readmissions could be prevented through better coordination and patient education, permitting them to recover at home rather than re-entering the hospital with complications.  ‘Integrated care’ will also reduce costs, said Dr. Berwick, by protecting patients from having to tell their stories over and over to different providers and letting a doctor know what medication they had already been given.  No figure is available for the savings from automated record keeping, but it is becoming substantial.  Preventive medicine is already reducing waste, for example by detecting diseases at early stages for prompt treatment.  The Affordable Care Act makes preventive benefits like cholesterol tests, mammograms and screening for colon and rectal cancer free for everyone with Medicare.”

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ACA Gives 2.5 Million Young Adults Healthcare Coverage

Tuesday, December 27th, 2011

The number of young adults who have no medical coverage has contracted by 2.5 million since the Patient Protection and Affordable Care Act (ACA) took effect, according to a new analysis by the Obama administration.  That decline is 2½ times larger than earlier government and private estimates, which showed about one million Americans ages 19 – 25 had acquired coverage.

Obama administration officials said they now have more comprehensive data and are slicing the numbers more precisely than the government typically does, in an attempt to identify the impact of a popular provision in the law.  Thanks to the ACA, young adults can remain on their parents’ health insurance plans until their 26th birthdays.  Families have flocked to sign up their offspring, making the transition to work in a challenging economic environment a bit easier.

“Thanks to the Affordable Care Act, 2.5 million more young adults don’t have to live with the fear and uncertainty of going without health insurance,” said HHS Secretary Kathleen Sebelius.  “Moms and dads around the country can breathe a little easier knowing their children are covered.”

“This comparison makes it clear that the increase in coverage among 19 to 25 year-olds can be directly attributed to the Affordable Care Act’s new dependent-coverage provision,” according to an Assistant Secretary for Planning and Evaluation (ASPE) brief.  “Furthermore, the coverage gain for young adults was entirely due to an increase in private coverage (from 49 percent to 58 percent), with no change in Medicaid coverage during this period.”

“The increase in coverage among 19- to 25-year-olds can be directly attributed to the Affordable Care Act’s new dependent coverage provision,” according to the Department of Health and Human Services (HHS).  “Initial gains from this policy have continued to grow as…students graduate from high school and college.”

That age group previously recorded the highest uninsured rate. Now, 26- to 35-year-olds have that dubious distinction by a narrow margin, according to the Centers for Disease Control and Prevention.

According to the HHS survey, nearly 36 percent of Americans ages 19 – 25 — more than 10.5 million people — were uninsured in the third quarter of 2010, before the law’s provision took effect.  The majority of employer-based health plans began carrying the provision January 1, 2011.  By the 2nd quarter of 2011, the proportion of uninsured young adults had fallen to slightly more than 27 percent, or about eight million people.

And just who are these young adults?  Some are transitioning from school to work. Others are trying to start their careers by working at low-wage jobs that don’t usually come with healthcare coverage.  Some – known as the “invincibles” – pass up job-based health insurance because they don’t think they’ll need it and prefer some extra money in their paychecks.

Similarly, the National Center for Health Statistics has documented a broadly similar trend, only not nearly as spectacular.  According to administration officials, those statistics do not focus on the change from calendar quarter to calendar quarter, as the new HHS report does.  Instead, they pool data over longer time periods; that tends to dilute the law’s perceived impact.

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Berwick Laments Washington, D.C., Cynicism About ACA

Tuesday, December 20th, 2011

Dr. Donald Berwick, who recently left his job as administrator of the Centers for Medicare and Medicaid Services (CMS) because the Senate refused to confirm his nomination, struck back at his critics who had accused the pediatrician of advocating healthcare rationing.

“The true rationers are those who impede improvement, who stand in the way of change, and who thereby force choices that we can avoid through better care,” Berwick said.  “It boggles my mind that the same people who cry ‘foul’ about rationing an instant later argue to reduce healthcare benefits for the needy, to defund crucial programs of care and prevention, and to shift thousands of dollars of annual costs to people — elders, the poor, the disabled – who are least able to bear them.”

Although Berwick didn’t specifically accuse Senate Republicans, it was clear that he was referring to proposals to drastically slash the nation’s budget deficit by capping federal funding to states for Medicaid.  That proposal could cut billions of dollars that critics have said would lead to cuts in benefits.

During his 16-month tenure at CMS, Berwick studiously avoided using the term “rationing”.  Now, the gloves have come off.  “When the 17 million American children who live in poverty cannot get the immunizations and blood tests they need, that is rationing.  When disabled Americans lack the help to keep them out of institutions and in their homes and living independently, that is rationing.  When tens of thousands of Medicaid beneficiaries are thrown out of coverage, and when millions of seniors are threatened with the withdrawal of preventive care or cannot afford their medications, and when every single one of us lives under the sword of Damocles that, if we get sick, we lose health insurance, that is rationing.”

Berwick also jabbed at those who inaccurately said the Patient Protection and Affordable Care Act (ACA) included so-called “death panels.”  According to Berwick, “If you really want to talk about ‘death panels,’ let’s think about what happens if we cut back programs of needed, life-saving care for Medicaid beneficiaries and other poor people in America.  Maybe a real death panel is a group of people who tell healthcare insurers that is it OK to take insurance away from people because they are sick or are at risk for becoming sick.”

Going even further, Berwick said that the ACA needs more advocates supporting the law. “The law is just a framework,” Berwick said.  “Healthcare in America can improve and it can become sustainable without a tremendous amount of community involvement.”  President Obama has an important role in this, as do healthcare consumers who must push healthcare leaders to rethink the way they work.  “Increasingly, though, that advocacy role is falling to physicians, nurses, and hospital executives.  We need their voices, because they know the system can’t go on the way it is,” he said.

“I think that a lot of the public concern about that law and a lot of the congressional criticism is ill-founded and based on myths,’’ Berwick said.  “I think any chance to air publicly, with conversation and even debate, matters of such concern is healthy.’’

While contemplating what to do next in his career, Berwick said “I’m excited by how much is in motion in healthcare right now.  It’s an incredibly interesting and promising time with many risks, and I want to stay thoroughly engaged in reshaping American healthcare into the high-performance, sustainable system I know it can be.”

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Super Committee’s Failure Raises Questions About Healthcare Funding

Wednesday, December 7th, 2011

Now that the Super Committee has failed to identify $1.2 trillion in cuts from the federal budget, automatic cuts totaling billions for everything from Medicare to biomedical research, start in 2013.  Some healthcare sectors will fare better than others.  The primary health entitlement programs, Medicare and Medicaid, are protected under the law that created the Super Committee.  Automatic cuts will not impact Medicaid, the joint federal-state health program for the poor.  Medicare would be cut by two percent – all from payments to hospitals and other providers.

The bad news is that unless Congress reworks the legislation mandating the automatic cuts, a series of across-the-board reductions will begin in 2013.  The House and Senate appropriations committees must decide how to spread the cuts among various programs.  And some of the larger, better-financed lobbies may be able to influence what is cut and what is kept.

Even though the Medicare cuts are limited to hospitals and other medical providers and would not exceed two percent, they argue that is too much and that they sacrificed plenty in the Patient Protection and Affordable Care Act (ACA).  Rich Umbdenstock, president and CEO of the American Hospital Association, said sweeping cuts would hurt Medicare beneficiaries and their families and “also have an impact on the ability of hospitals to provide essential public services to the communities they serve given the impact that Medicare has on the entire healthcare system.”

Officially known as the Joint Select Committee on Deficit Reduction, the Super Committee was unable to meet its deadline to come up with $1.2 trillion of deficit reduction required by the law that created it, much less the $4 trillion that deficit hawks said was necessary to stabilize the finances of the U.S. government, whose debt has topped $15 trillion.  The failure ensures that the fiscal debate between Democrats who want to protect social programs and increase revenue by raising taxes on the wealthy; and Republicans who want smaller government and have pledged to reject tax increases will be a fundamental choice confronting voters in 2012.

“After months of hard work and intense deliberations, we have come to the conclusion today that it will not be possible to make any bipartisan agreement available to the public before the committee’s deadline,” Representative Jeb Hensarling,(R-TX), and Senator Patty Murray, (D-WA) said.  The co-chairs thanked committee members, staffers and “the American people for sharing thoughts and ideas and for providing support and good will as we worked to accomplish this difficult task.”

Writing for Politico, David Nather speculates on whether the Super Committee’s failure has harmed efforts to reform Medicare and Medicaid.  It would be easy to conclude that the Super Committee’s failure means the big, expensive health care entitlement programs — Medicare and Medicaid — are untouchable.  It also would be wrong.  The timing was off, coming too close to a presidential election.  The co-chairs weren’t powerful enough.  The work came too soon after a summer debt deal that Democrats hated.  Republicans couldn’t give the kind of concessions on taxes that Democrats needed.  And the alternative to a Super Committee deal on healthcare entitlements — the two percent automatic cuts in healthcare payments and defense funding that will now take place in 2013 — wasn’t harsh enough to force a deal on Medicare and Medicaid. In fact, it might even have been the easier way out.  All of which means Medicare and Medicaid are not off the table forever.”

The Hill’s Sam Baker offers a different perspective. “The Super Committee’s demise is a mixed bag for the American Medical Association and other groups that wanted the 12-member panel to tackle Medicare’s payment formula, known as the sustainable growth rate (SGR).  The AMA — with bipartisan support in Congress — pushed hard for the supercommittee to include in its deficit-cutting package a long-term fix to the SGR.  The formula calls for automatic annual cuts in doctors’ payments, which add up as Congress consistently delays each cut from taking effect.  Aspirations of a long-term SGR patch should be put to rest, healthcare lobbyists said. But they questioned whether the supercommittee push was ever realistic, because an SGR fix would add to the deficit.”

“I never once believed that the Joint Select Committee would be the one to do that,” said Julius Hobson, a senior adviser at the Washington, D.C.-based law firm Polsinelli Shughart and a former AMA official.

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Can Marilyn Tavenner Save Medicare?

Monday, December 5th, 2011

President Barack Obama’s choice of Marilyn Tavenner as administrator of the Centers for Medicare and Medicaid Services – to replace Dr. Donald Berwick, whose recess appointment was set to expire at the end of the year – is more likely to survive the Senate confirmation process relatively unscathed.

A Harvard-educated pediatrician, Berwick won praise and the backing of major healthcare groups for his academic work, which focused on cutting the cost of care while improving quality and patient experience.  Republicans took exception to his praise of Britain’s National Health Service as an “example” for the United States to emulate.  Others accused him of supporting “rationing” healthcare services, a claim Berwick rejects.  “Every bone in my body, as a physician, even as a person, is to get everything (patients) want and need and to help them at every step,” he said.  “I have gone to the mat to get a last-ditch bone marrow transplant for a child with leukemia…and they are telling me I’m rationing?  They haven’t met me.”

White House officials said, “Before entering government services, Tavenner spent nearly 35 years working with health care providers in significantly increasing levels of responsibility, including almost 20 years in nursing, three years as a hospital CEO, and 10 years in various senior executive-level positions for Hospital Corporation of America.”

According to Ezra Klein, “Tavenner’s healthcare experience lies much more in management than policy.  Former colleagues describe her as a patient-centered manager, a hands-on medical professional equally comfortable in the board room and the emergency room.  And in contrast to Berwick, Tavenner isn’t associated with a grand vision for health reform, or a particular policy agenda for Medicare and Medicaid.  ‘With Marilyn, you present the information, then she makes a decision, and you move on,’ said Patrick Finnerty, who served as Virginia’s Medicaid director under Tavenner.  ‘She doesn’t make promises she can’t keep.  There are differences of opinions, and she would try to work through those.  She’s straight with folks but always respectful.’”

Tavenner started her career as a nurse at Virginia hospitals owned by the Hospital Corporation of America (HCA).  Tavenner met with success, rising from chief nursing officer to CEO.  In 2004, she was again promoted to HCA’s president of outpatient services, her first national position with the firm.  She resigned two years later, when then-Virginia Governor Tim Kaine tapped her to head the state’s Health and Human Resources department.

Tavenner has already won the American Medical Association’s (AMA) backing. “We have worked extensively with her in her role as deputy administrator, and she has been fair, knowledgeable and open to dialogue,” AMA President Peter Carmel said.  “With all the changes and challenges facing the Medicare and Medicaid programs, CMS needs stable leadership, and Marilyn Tavenner has the skills and experience to provide it.”

Senator Orrin Hatch (R-UT), the ranking Republican on the Senate Finance Committee, said that the panel would thoroughly scrutinize Tavenner, but did not say he opposes her nomination.  Despite Hatch’s mild comment, Tavenner is expected to face some difficult questioning because Senate Republicans have not overtly endorsed her.  According to a Republican healthcare lobbyist, “I can’t imagine a lot of support for her,” noting that the high-profile CMS role “always gets sucked into the controversy of the day.”  Ultimately, Tavenner is likely to be confirmed for the CMS post.

Tavenner is widely seen as a pragmatic administrator who will not rock the CMS boat. “The only way to stabilize costs without cutting benefits or provider fees is to improve care to those with the highest health care costs,” she said.  Tavenner also said she opposed Republican efforts to turn Medicaid into a block grant that would limit the amount of federal funding states can receive for the program.  “That approach would simply dump the problem on states and force them to dump patients, benefits or make provider cuts or all the above,” she said.  Tavenner “brings continuity in terms of implementing the mission,” said Len Nichols, director of George Mason University’s Center for Health Policy Research and Ethics.

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Showdown As Opposing Medicare Ads Debut

Wednesday, November 30th, 2011

A coalition of advocacy groups such as the Americans United for Change, Service Employees International Union, American Federation of State, County, the Municipal Employees and Service Employees International Union and Moveon.org recently started running a series of ads telling lawmakers not to cut Medicare benefits.  In particular, the ads target Representative Denny Rehberg (R-MT), Senator Dean Heller (R-NV) and Senator Scott Brown (R-MA).

“If you vote to cut Medicare, Representative Rehberg, I will remember it every time I visit my doctor.  I’ll remember you cut Medicare and Medicaid every time I fill my prescription,” says an elderly woman narrator in one of the ads.  “I’ll remember you cut Medicare every time I fall or get hurt. I’ll remember you protected millionaires over protecting my health. My friends will remember it, too — all of them.  Call Senator Heller.  Tell him to protect Medicare and Medicaid.”

Brian Walsh, the National Republican Senatorial Committee communications director, made light of the Democratic message, arguing that the half-trillion dollars they shifted out of Medicare to pay for healthcare reform makes their argument hollow.  “The irony of this pathetic attack ad is that in each of these three races, it’s actually the Democrat candidates who are all firmly on record supporting the $500 billion in Medicare cuts that were included in their massive healthcare overhaul,” said Walsh.  “The big labor unions funding this ad know that, but yet they are doing everything they can to mislead voters in Montana, Nevada and Massachusetts.”

In the meantime, the United States Chamber of Commerce is running commercials attacking Senators Sherrod Brown (D-OH) and Jon Tester (D-MT).  Friends of the U.S. Chamber criticize Tester for supporting “government-run healthcare” and challenges Brown on energy taxes.  The business community has been under unprecedented threat,” Rob Engstrom, part of a two-man team running the chamber’s political operation, said.  The trade group plans to break its previous political spending record — $50 million — to try to elect a more business-friendly Congress.  The Montana ad reminds viewers about Tester’s votes for “government-run healthcare” then urges voters to “call Senator Tester and tell him to stop supporting big government and start fighting for Montana’s families.”

Americans United for Change explains why it is running ads about protecting Medicare and Medicaid.  “For decades, seniors have relied on Medicare being a guaranteed benefit and those less fortunate have depended on Medicaid to provide long-term care and coverage for children.  These programs need to be strengthened to ensure they remain available for future generations, which means not gutting and decimating benefits, leaving low-income children, seniors, and people with disabilities out in the cold.  The key to making Medicare sustainable is reining in costs, not dumping more expenses onto seniors.  We are working to set the right priorities for an economically secure future while continuing to protect healthcare coverage for those who can least afford it.”

Writing for the Huffington Post, Sam Stein describes the Democratic ads as “Not exactly the most visually stimulating videos, the ads warn lawmakers that they will pay a political price for cutting Medicare or Medicaid.  That may prove to be popular politics — certainly, polls show that voters want the two healthcare programs protected — but the notion that cuts won’t ultimately be pursued is highly unlikely.  Aides on the Hill from both political parties have long agreed that there is room to trim down Medicare’s provider-side components.  Reforms to Medicaid, whether in the form of decreased help to the states or something more structural, have also been discussed.”

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Employer-Susidized Healthcare Insurance at a New Low

Wednesday, November 23rd, 2011

Fewer than half of  America employers - just 44.5 percent in the 3rd quarter, a decline of more than five percent in three years, — contribute to their employees’ healthcare coverage, according to a Gallup and Healthways Inc., poll.  The firms, which surveyed more than 90,000 adults, blamed the decline on high unemployment, under-employment and an increased number of employers who do not offer health insurance to their workers.

Employer-sponsored health insurance is one of the pillars of the $2.6 trillion U.S. healthcare industry.  Unfortunately, companies have scaled back benefits and raised employee charges to cope with fast-rising healthcare costs and anemic economic growth.  The latest figure was 5.3 percent below the 2008 high of 49.8 percent, when the companies began tracking trends in employer-sponsored health insurance.  “The health insurance system in the United States is experiencing numerous changes.  Governments and businesses have and will continue to cut back and/or reform their health coverage offerings,” according to the pollsters.

There was also an increase in the ranks of those covered by government plans from Medicaid, Medicare and military programs, which was up 2.2 percentage points since 2008 at 25.1 percent but off a 2010 high of 25.7 percent.

According to the Kaiser Family Foundation, there were 41 million uninsured American adults and 24 million adults under retirement age receiving the Medicaid program for low-income people and other public insurance plans last year.  Medicare covers an estimated 48 million beneficiaries.  The survey found higher levels of health insurance coverage among young people aged 18 to 26, which the pollsters attributed to a provision of the ACA that allows parents to cover grown children under their insurance plans.  Other portions of the law, including tax credits for small businesses, did not appear help those aged 25 to 64, whose uninsured ranks increased.

One large employer cutting back on healthcare coverage is Wal-Mart, the nation’s largest private employer.  Citing rising costs, the retailer told its employees that all future part-time employees who work less than 24 hours a week will no longer be eligible for any of the company’s health insurance plans.  Additionally, new employees who average 24 hours to 33 hours a week will no longer be able to include a husband or wife as part of their healthcare plan, although children can still be covered.  This is a massive shift from a few years ago when Wal-Mart expanded coverage after being criticized because so many of its 1.4 million workers could not afford or did not qualify for coverage — sending many of them to Medicaid.

“Over the last few years, we’ve all seen our healthcare rates increase and it’s probably not a surprise that this year will be no different,” said Greg Rossiter, a Wal-Mart spokesman.  “We made the difficult decision to raise rates that will affect our associates’ medical costs.  The decisions made were not easy, but they strike a balance between managing costs and providing quality care and coverage.”

There’s also some good news on the employer-subsidized healthcare front. Nearly 75 percent of medium-to-large employers plan will continue to offer their workers health insurance once the major provisions of the ACA take effect, according to a survey by consulting firm Towers Watson.  According to the survey of 368 mid-to- large-sized companies, 71 percent plan to continue to offer healthcare benefits to their employees through 2014, the year that everyone will be required to have health insurance and state-based health insurance exchanges will kick off.  Approximately one-third of the companies are not certain if they will continue offering insurance, or, if they stopped providing insurance, whether they would compensate employees by offering pay raises.

“With so much still unknown regarding both the short- and long-term impact of healthcare reform, most employers will not make wholesale changes to employer-sponsored health plans in 2012,” said Ron Fontanetta, senior healthcare consulting leader at Towers Watson.

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Obama to Sign Executive Order Releasing $1 Billion to Cut Medical Fraud

Wednesday, November 23rd, 2011

President Barack Obama will once again sidestep a fractious Congress and sign an executive order designed to cut fraud from Medicare and Medicaid.  The Department of Health and Human Services (HHS) will administer the changes, such as testing changes to obsolete hospital billing systems to prevent overbilling, administration officials said.

The billion-dollar initiative will reward the “most compelling new ideas” for cutting costs and improving care of Medicare and Medicaid patients with rewarding federal grants.  Called the Health Care Innovation Challenge, the initiative will provide between $1 million and $30 million over three years to individual organizations or coalitions that develop sustainable, new approaches to improving healthcare quality and efficiency.  “We’ve taken incredible steps to reduce healthcare costs and improve care, but we can’t wait to do more,” said HHS Secretary Kathleen Sebelius.  “Both public and private community organizations around the country are finding innovative solutions to improve our healthcare system, and the Health Care Innovation Challenge will help jump-start these efforts.”

Centers for Medicare and Medicaid Services (CMS) administrator Dr. Donald M. Berwick, M.D. said, “When I visit communities across the country, I continually see innovative solutions at the very ground.  By putting more programs like this in place and more ‘boots on the ground,’ these types of programs can truly transform our healthcare system.”

This program is part of the Obama Administration’s “We Can’t Wait” initiative, which is a series of legal Executive Branch steps designed to move America forward while Congressional Republicans block critical and necessary legislation.

To demonstrate that its campaign to cut government waste is working, the White House said the administration cut improper payments by nearly $18 billion in 2011, largely in such programs as Medicare, Medicaid, Pell Grants and food stamps.  Budget chief Jack Lew ordered federal agencies to tighten their oversight of contractors and grant recipients to reduce the potential for taxpayer waste.

Not surprisingly, there was some immediate opposition to the initiative, with Republican critics calling it a “$1 billion experiment.”  “On the day the Supreme Court decided to review the constitutionality of ‘Obamacare,’ the president is asking for another $1 billion in taxpayer dollars to pay for another healthcare experiment that will continue taking us in the wrong direction,” said RNC spokeswoman Kirsten Kukowski.  “We already spent $2.6 trillion on his job-killing health care bill.  Another $1 billion Executive Order is just more words for a president more interested in campaign talking points than creating jobs.”

With the Supreme Court preparing to hear arguments for and against the Patient Protection and Affordable Care Act (ACA) next March, it is important to note that even the 26 states suing to have the law overturned are hedging their bets.  Only four states have refused all federal money to plan for the changes that are scheduled to take place.

Several healthcare industry leaders expressed their support for the ACA. “The system is transforming itself,” said Charles N. Kahn III, president of the Federation of American Hospitals.  “But the success of these changes depends a lot on whether there is sufficient funding.”  Nationally, hospital systems are anticipating an influx of federal funds and patients as the law goes into full effect.  “If the law is struck down, healthcare reform will have to continue one way or another,” said Patricia Brown, president of Johns Hopkins HealthCare.

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America’s Healthcare System Needs Improvement: Study

Wednesday, November 2nd, 2011

The American healthcare system is not very healthy, according to a wide-ranging new assessment of the system that covers 42 measures of healthcare delivery, the United States scored just 64 out of 100.  “Costs are up sharply, access to care deteriorated, health system efficiency remains low, disparities persisted, and health outcomes fail to keep pace with benchmarks,” concluded the 2011 National Scorecard on U.S. Health System Performance. The report was issued by the Commonwealth Fund, a nonprofit healthcare policy foundation.

There are some bright spots on the report.  For one, the number of Americans who are controlling their high blood pressure rose from 31 percent in 2008 to 50 percent in 2009.  Additionally hospitals have improved their ability to care for patients with heart attacks, pneumonia, and other common conditions.

The Commonwealth Fund report also determined that the typical U.S. infant mortality rate is 35 percent higher than the top-performing states.  Other wealthy countries still have infant mortality rates that are significantly lower than the best-performing states in the United States.  If the U.S. did as well as the top-performing country in that category — France — 91,000 fewer babies would die prematurely each year, Cathy Schoen, senior vice president at Commonwealth Fund said.  “These statistics are real,” she said.  “They are real human lives.”  Other “areas of concern” include childhood obesity, preventive care and infant mortality.

Another issue is cost, an oft-cited statistic that the U.S. spends more per person on healthcare than any other country.  According to the Commonwealth Fund report, the nation in general spends twice as much as comparable countries, but doesn’t have better care to show for it.  “We are headed toward spending $1 of every $5 of national income on healthcare,” the report’s authors said.  “We should expect a better return on this investment.”  The high cost of healthcare takes a toll on personal finances, the report said.  By 2010, 40 percent of working-age adults had medical debt or difficulties paying medical bills, an increase of 34 percent when compared with 2005.

It is important to note that the majority of the report’s data is from 2007 – 2009, prior to the passage of the Patient Protection and Affordable Care Act (ACA).  The healthcare reform law is likely to lead to improved scores on some of the categories, particularly access and affordability.  For example, 25 percent of residents in 15 states lacked health insurance.  The ACA will require that all Americans have health insurance in 2014.  It also will reduce eligibility requirements for Medicaid so more low-income people will be eligible, and provide government subsidies to others who can’t buy insurance on their own.

The report’s authors remain optimistic that the health reform law will address many of the problems highlighted in the report.  “This scorecard illustrates that focused efforts to change the healthcare system for the better are working and are worth the investment,” said Maureen Bisognano, president and CEO of the Boston-based Institute for Healthcare Improvement.  “If we target areas where we fall short and learn from high-performing innovators with the United States, we should see significant progress in the future,” said Dr. David Blumenthal, commission chair and professor of medicine and healthcare policy at Massachusetts General Hospital and Harvard Medical School.

Writing in the Huffington Post, a Social Epidemiologist at Columbia University, thinks that the price Americans pay for their healthcare is too high.  “It’s well known that Americans pay more for less when it comes to healthcare than just about any other country in the world.  In 2009, we spent nearly $8,000 per person to provide medical care to just over 80 percent of our population — that compares, for example, to just under $3,500 spent per person in the U.K. to provide care for the entire population.  To add injury to insult: our counterparts across the pond get an extra year of life for their $3,500 than we do for our $8,000.

“Why do we pay more for less when it comes to our health?  Every policy wonk has his theory.  Common ones include the high cost of American medical education (which is too expensive), or that permissive tort laws in the U.S. enable lawyers to profit from the health system (which is true).  But while each of these theories, and others, explain small quirks in our health system that certainly contribute to it’s gargantuan price tag, they don’t address the fundamental issue with our health system.  And that’s that our market-driven system introduces perverse financial incentives for medical providers that don’t align with the health or wellbeing of Americans.  This leads to wasted money and lost lives.

“In our healthcare system, the fundamental billing unit is the “procedure” — doctors charge per action, diagnostic or curative, taken on the part of a patient.  While, on the surface, rewarding doctors for each step they take to make a patient better may seem fair, it has disastrous consequences for the structure of our health system.  Chief among them is our top-heavy specialty physician structure,” El-Sayed concluded.

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ACO Rules Revised to Attract Providers

Thursday, October 27th, 2011

The Obama administration has issued revised regulations to encourage doctors, clinics and hospitals to take greater responsibility for improving patients’ care.  The rules will reward healthcare providers who enter into partnerships to cut the cost of caring for Americans while also boosting quality — two goals of the Patient Protection and Affordable Care Act (ACA).  Known as Accountable Care Organizations, or ACOs, these partnerships have been promoted by many experts as the most promising remedy for the high costs that typify the American healthcare system.

Supporters believe that ACOs could save taxpayers billions of dollars by better coordinating patient care and replacing the current fragmented system in which patients bounce between doctors and hospitals with minimal communication between providers.  “ACOs can represent a very big step forward in helping to transform Medicare, Medicaid and the Children’s Health Insurance Programs so they can help assure high quality, seamless and less costly healthcare,” said Dr. Donald Berwick, who runs the Medicare and Medicaid programs and helped to write the new rules.

“We have made changes in response to what we heard,” Berwick said. “I think they make the program more attractive.”  During the early days, between 50 and 270 ACOs may enroll in the program and save the Medicare program as much as $950 million over four years, according to independent estimates.

Among the changes are increased flexibility in eligibility to participate in the Shared Savings Program; a choice of start dates in 2012; a longer agreement period for those starting in 2012; more flexibility in the governance and legal structure; more streamlined quality performance standards; changes to the financial model to enhance financial incentives to participate; increased sharing caps; no downside risk and first-dollar sharing in Track 1; removal of the 25 percent withholding of shared savings; increased flexibility in timing for the evaluation of sharing savings (claims run-out reduced to three months); more flexibility in antitrust review; enhanced flexibility in timing for repayment of losses; and more options for participation of Federally Qualified Health Centers and Rural Health Clinics.

ACOs are a key provision in the ACA to decelerate rising health costs while delivering high-quality care to Medicare patients.  They are designed to change the incentives that influence how doctors and hospitals operate.  Today, most hospitals and doctors get paid more by delivering more, not necessarily better, care.  ACOs will reward healthcare providers for keeping costs down and meeting certain quality measures, including cutting hospital readmissions or emergency room visits.  ACO’s goal is to replicate the highly respected models of care at the Mayo Clinic in Rochester, MN, and the Geisinger Health System in Pennsylvania where hospitals and doctors coordinate their efforts within the same organization.

George Roman, senior director of health policy at the American Medical Group Association, which represents approximately 400 large provider organizations, described the changes as “music to my ears.  We asked for almost all of these things.”

“We are very pleased at the number of significant changes in rules.  They have made the program look more attractive,” said Linda Fishman, senior vice president of the American Hospital Association.  “But it remains to be seen how many hospitals will find these changes to be motivation enough to enter the program.”

The 696-page document includes more generous shared savings incentives, leaves out 32 of the 65 original quality measures, and gives potential ACO participants extra time to formulate their plans.  One vital change is that the rule no longer mandates that 50 percent of participating physicians be approved under meaningful use requirements for electronic health record use. The revisions provide more opportunities for new ACOs to participate without absorbing risk in the earlier years, as well as major changes in at least 10 other critical areas.  Thanks to the revisions, many in the healthcare industry think more providers will be encouraged to sign up.

Writing in the Washington Post, Sarah Kliff notes that “It’s a big moment in health policy wonk land right now: the Obama administration has just published the final Accountable Care Organization rule.  Sound dull?  Let’s rephrase: The Obama administration has just released a regulation that could decide whether the American healthcare system moves past the broken, expensive fee-for-service model.  The idea is to encourage groups of providers to band together into ‘accountable care organizations’ and accept a flat fee for all care related to a particular patient or condition.  If they could deliver high-quality care in a cost-effective way, they could keep the money they saved.  The hope is to do nothing less than change the basic business model of American medicine from making money by getting patients to spend more money to making money by saving patients money.  There.  That’s better.  This is not the administration’s first crack at encouraging ACOs.  A proposed rule in April, which detailed the requirements to become an ACO, was greeted with howls of protest by the provider community.  In hundreds of comment letters, hospital and doctor groups blasted the program as unattractive, with too much risk and not enough reward.  The American Medical Group Association warned CMS that virtually none of its members would participate.  The group called the rule ‘overly prescriptive, operationally burdensome, and the incentives are too difficult to achieve to make this voluntary program attractive.’

“There are two things that really irked healthcare systems here. First, if an ACO ended up spending more money than the target set by Center for Medicare and Medicaid Services (CMS), it would have to pay back some funds. Second, any ACO would have to show savings above two percent before they could reap any of the financial rewards.  The rule eliminates both of those barriers to entry.  It creates an ACO track with no ‘downside risk.’  The two percent gap gets cut, too: under the final rule, ACOs share in any savings from the very first penny.  CMS made a lot of other adjustments too that make the program easier to participate in, like lowering the quality reporting requirements and eliminating requirements that ACOs show significant use of electronic medical records.  As one CMS official put it this morning, the agency wanted to ‘smooth the on-ramp’ into the program.”

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