Posts Tagged ‘Medicare’

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Will the ACA Survive the Supreme Court, 2012 Election?

Wednesday, February 1st, 2012

The 26 states that have challenged President Barack Obamas healthcare law face several dilemmas as they try to convince the Supreme Court to declare the law’s Medicaid expansion unconstitutional   The two lower courts that heard the Medicaid challenge ruled in favor of the Obama administration, even as those judges struck down the healthcare law’s individual mandate. Legal experts on both sides of the mandate debate were surprised that the Supreme Court agreed to also hear the Medicaid piece of the state’  lawsuit.  The healthcare law’s supporters claim that the states erred in their initial brief on the Medicaid expansion, which was filed with the Supreme Court.

According to the states involved in the lawsuit. the ACA’s Medicaid expansion is “coercive.” Although state participation in the program is strictly voluntarily, the brief argues, the healthcare law makes it impossible for states to opt out of Medicaid.  The brief tries hard to link the Medicaid expansion to the individual mandate, arguing that states won’t be able to exercise their legal right to leave Medicaid because it’s the only way for Medicaid-eligible residents to fulfill the mandate.

“While the (Affordable Care Act) purports to leave states’ participation in Medicaid nominally voluntary, multiple aspects of the Act evince Congress’ keen awareness that, in fact, no state will be able to reject its new terms and withdraw from the program,” the brief says. “Most obviously, the ACA’s individual mandate requires Medicaid-eligible individuals to obtain and maintain insurance.”  But most Medicaid-eligible people would be exempt from the mandate, said Timothy Jost, a law professor at Washington and Lee University and a supporter of the health law.

Then there’s the Supreme Court case, which will be heard in the spring and a verdict announced prior to the November presidential election. According to Kurt Mainwaring, a ksl.com contributor, “Far-reaching consequences of the court’s ruling will likely impact both the cost of healthcare and the outcome of the 2012 elections.  If the Supreme Court rules that ACA is constitutional, healthcare costs will likely continue to rise — although at a slower rate than if the law were determined to be unconstitutional.  At present, healthcare costs make up approximately 18 percent of GDP. If expenditures continue on their current trajectory, “the share of GDP devoted to healthcare in the United States is projected to reach 34 percent by 2040.”  Translated to real numbers, the Department of Health and Human Services (HHS) notes that Americans paid approximately $1,000 annually in healthcare costs in 1960; more than $7,000 per year in 2007; and are projected to pay more than $13,000 per year by 2018.  This kind of increase in healthcare costs is not sustainable — and these kinds of projections are part of the reason ACA was enacted in the first place.

Beach Conger, a Vermont internist writing in the Burlington Free Press believes that “Medicare for All” — a possibility that was raised during the lengthy debate over the ACA — should be reconsidered.  According to Conger, “Medicare and I were born in the same year. Professionally speaking, that is. We were raised together, and we have been married to each other for what seems an eternity. As with any long-term relationship, we have had our ups and downs, but we have both matured over the years, and I believe we are both the better for it. Without being too vain, I have to say I have done a better job at providing health care, and I have to admit that Medicare has helped me do it.  At first, it just made sure that those retired people who wished to pay me the fees to which those in my line of work have become so accustomed, could actually do so. But eventually it realized that there was more to the business than just money, and it began to keep an eye over my shoulder, making sure I was not leaving undone those things which ought to be done and not doing those things which I ought not.  So I can’t help but think, why not Medicare for everyone? It would be so simple. And that’s when I realized.  It was too simple.”

Dr. Conge, it should be pointed out, lives in Vermont, to date the only of 50 states to enact a single-payer public option — Green Mountain Care.

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MLK & Healthcare Reform

Monday, January 30th, 2012

A recent byline article in Forbes magazine by Carolyn McClanahan, M.D., CFP, raises many issues about healthcare in the year 2012.  According to McClanahan “The New England Journal of Medicine’s (NEJM) article on the fate of healthcare reform in 2012 greatly saddens the optimist in me. It discusses four important events, and I’ll share my “simplistic view” of these events:

“State legislatures getting in gear to fill their role assigned by the ACA.  As I’ve discussed previously, we have a complicated healthcare system which is expensive and inefficient.  Instead of simplifying, each state will implement or delay implementing the law based solely on their political interest.  This is not productive.”

“The second event is the Supreme Court’s ruling on the legality of the ACA in May. It is possible that the entire law could be struck down, (albeit unlikely).  If this scenario plays out, we will have wasted billions implementing parts of the law to date.  Another more likely scenario is the law will be upheld but the mandate that everyone purchase health insurance be thrown out.  This would severely weaken the law because people will only buy insurance when they are sick.  There will still be a requirement that insurance companies have to sell insurance to everyone regardless of health status.  This is not financially feasible.  Most likely, the law will stand, but who really knows?”

“The third key event is the deadline for states to apply for federal grants to operate their health insurance exchange.  State who don’t apply will either have to cede control of the exchanges to the federal government or pay for the cost of implementation themselves.  State governors and legislatures against the ACA, like my home state of Florida, risk turning away resources and having more of the federal government running the show.  Talk about the law of unintended consequences.”

“The fourth key date is the election in November.  If President Obama wins re-election, implementation will continue.  If he loses, the winner will have a difficult time repealing the law unless the Republicans can win 60 seats in the Senate.  So what is their plan?  Have everyone drag their feet on implementation or do a half-baked job.  Wouldn’t it be nice if instead they came up with a good plan to fix the parts that are not working?  Simplify and clean up the mess of the insurance part of the law and implement with speed and clarity the good parts like preventive care initiatives, rebuilding our primary care workforce, and improving our ability to handle large disasters.”

A similar viewpoint was expressed by Department of Health and Human Services (HHS) Secretary Kathleen Sebelius, who said that access to healthcare is the next civil rights frontier.  According to Sebelius, “On Martin Luther King Day, it is easy to congratulate ourselves on our progress in moving beyond segregated schools, lunch counters and drinking fountains. The hard question is this: what injustices do we still accept that should, in fact, be intolerable?  Surely Dr. King would find the next civil rights frontier in healthcare, with nearly 50 million uninsured, almost 45,000 deaths annually due to lack of insurance, and more than half of all personal bankruptcies linked to illness and medical bills.”

“While the Affordable Care Act will bring improvements, such as decreasing the ranks of the uninsured, supporting community health centers, and investing in prevention, it leaves many gaps. At least 23 million people will still be uninsured in 2019. Tens of millions will be underinsured, one serious illness away from financial ruin. Most people who suffer medical bankruptcy had private insurance before getting sick. And medical bankruptcy is a cruel double whammy. Already beset with pain, anxiety and fear – due to serious illness – families find themselves financially devastated.  This doesn’t happen in other industrialized countries, which have high-quality health systems that cover everyone.”

As a department, we are committed to ensuring that all Americans achieve health equity by eliminating disparities and doing what we can to improve the health of all groups, including the poor and underserved,” Sebelius said. “One of the most important ways we are doing this is through our new health care law, the Affordable Care Act.”

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As States Create Health Insurance Exchanges, Insurers Are Benefiting from the ACA

Wednesday, January 25th, 2012

The same insurance companies that spent millions of dollars working to defeat the Patient Protection and Affordable Care Act (ACA) claiming it would raise costs and disrupt coverage, are seeing their profit margins soar to levels not seen since before the recession and are benefiting financially from the law, a Bloomberg Government study shows.

Insurers recorded their highest combined quarterly net income of the past 10 years after the law was signed in 2010, said Peter Gosselin, the study author and senior healthcare analyst for Bloomberg Government. The Standard & Poor’s 500 Managed Health-Care Index rose 36 percent in the period, four times higher than the S&P 500.  “The industry that was the loudest, most persistent critic of this law, the industry whose analysts and executives predicted it would suffer immensely because of the law, has thrived,” Gosselin said. “There is a shift to government work under way that is going to represent a fundamental change in their business model.”

Health insurers gave $86.2 million to the U.S. Chamber of Commerce to oppose the law after Obama administration officials disparaged their desire to chase profits by raising customer premiums.  America’s Health Insurance Plans (AHIP), still claims the law will increase costs and cause consumers to lose coverage.  Even so, the insurers saw their average operating profit margins expand to 8.24 percent in the six quarters since the ACA became law, compared with 6.88 percent during the previous 18 months.

One significant finding of an annual California Employer Health Benefits Survey released by the California HealthCare Foundation, a research and grant-making non-profit organization, is that in California fewer companies provided healthcare coverage for their employees last year; those that did raised premiums for coverage. According to the survey, premiums have risen 153 percent since 2002, a rate more than five times the increase in California’s inflation rate.  During the last two years alone, the proportion of state employers offering coverage to workers fell to 63 percent from 73 percent, according to the survey.

“This is a departure from previous years and could be an early sign of future changes,” the foundation report noted in commenting on data collected between July and October 2011 in interviews with 770 private firm benefit managers.

Increasing costs and shrinking coverage are speeding up, said Anthony Wright, executive director of Health Access California, a group that advocates for expanded health insurance coverage.  “They are frankly multi-decade trends,” he said. “What is notable is that this is more significant than usual.”  What’s been a “gradual erosion of employer-based coverage in good years” has evolved into “a steep one in bad years,” Wright said. “To be down to 63 percent (of California companies offering coverage) is huge.  It used to be up over 80 percent.”

There is good news, however, in the fact that 13 states have functioning health insurance exchanges, two have pending legislation to establish them, while another five are planning their exchanges. Health insurance exchanges are state-regulated standardized healthcare plans where individuals can purchase health insurance and be eligible for federal subsidies.  The remaining 30 states are moving more slowly.  For example, Pennsylvania is gradually moving toward a health insurance exchange.  “Pennsylvania has taken steps towards the establishment of an exchange, which I think is positive — there are other states that have moved more aggressively, including states whose governors are part of the lawsuit,” said Sharon Ward, director of the Pennsylvania Budget and Policy Center, a non-government organization that supports the federal health care law.  Two states — Louisiana and Arkansas — have opted out of the insurance exchange program.

Insurers are of two minds regarding the issue of insurance exchanges. Some favor the programs because they would help them to reach more consumers.  Consumer advocacy groups and insurance analysts claim that exchanges would increase competition to the industry, with the ultimate result of cutting prices nationwide.

Writing in the Green Bay Press Gazette, Jeff Mason, CEO of the BayCare Clinic, believes that, generally speaking, healthcare payments need fixing. According to Mason, “Healthcare finance is complicated even in the best of times.  Unfortunately, it isn’t the best of times.  We’re in a climactic period in healthcare when the finance mechanisms don’t work anymore.  Employers can’t continue to pay the spiraling healthcare costs.  Providers can’t continue to shift their low-reimbursement government work to employers. The government can’t expect any more free care out of providers.  Right now, our clinic collects less than half of what we charge to all of our customers in aggregate.  We collect 11 cents of every dollar we charge to Medicaid, and 13 cents of every dollar we charge to Medicare.  This is considered our “low-pay” business, and is extremely difficult to manage financially.

“This physician/hospital payment problem is a government experiment that started in the 1980s and has gone terribly wrong.  It followed the concept that a large purchaser of a service should get a better price and began discounting government payments to providers.  Medicare started by shaving a few percent, but then it got larger and larger.  All along, health care providers were shifting the shortfalls to the private employers.  At the same time, health care expense continued to grow as we obtained more expensive new medications and new technologies to improve patient treatments.”

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Some of America’s Doctors Are Going Broke

Wednesday, January 18th, 2012

Many of America’s physicians have an embarrassing secret — they are going broke. This quandary is claiming a wide range of casualties, including family physicians, cardiologists and oncologists.

Industry insiders are concerned about the trend.  Approximately 50 percent of all doctors operate a private practice. If a cash crunch forces the closure of an independent practice, it robs a community of a vital healthcare resource.  “A lot of independent practices are starting to see serious financial issues,” said Marc Lion, CEO of Lion & Company CPAs, LLC, which advises independent physician practices about their finances.  Doctors say that smaller insurance reimbursements, changing regulations, soaring business and drug costs take away from their practices’ profitability. Some experts counter that doctors’ lack of business sense shares the blame.

Recent steep 35 percent to 40 percent cuts in Medicare reimbursements for key cardiovascular services, such as stress tests and echocardiograms, have taken a substantial toll on revenue for cardiologists, as an example.  Federal law requires that Medicare reimbursement rates be adjusted every year based on a formula tied to the economy’s health. That law says rates need to be cut every year to keep Medicare financially sound.

Although Congress has blocked those cuts 13 times over the 10 years, most recently on December with a two-month temporary “patch,” this dilemma haunts doctors every year.

Beau Donegan, senior executive with a hospital cancer center in Newport Beach, CA, is well aware of physicians’ financial woes.  “Many are too proud to admit that they are on the verge of bankruptcy,” she said. “These physicians see no way out of the downward spiral of reimbursement, escalating costs of treating patients and insurance companies deciding when and how much they will pay them.

“This is a very timely and truthful story for doctors and hospitals in America. This is also a 911 call for U.S. healthcare security.  More importantly, when a doctor is ‘$3.2 million in debt’ or has to force 6,000 cancer patients to look for a new doctor”, as reported by CNN Money, “our healthcare system infrastructure earthquake is coming,” says Dr. Jin Zhou, president of ERISAclaim.com, a national expert on PPACA and ERISA appeals and compliance.  This 2012 CNN Money report is consistent with an AMA report on March 4, 2011 that 51 percent of doctors in Texas are going broke: “51 percent of Texas doctors dug into personal funds to keep practices afloat in 2010,” Dr. Zhou said.

Writing in Forbes, Rick Ungar counters that “While there is considerable truth to be found in the CNN Money piece, a deeper analysis is in order given the knee-jerk reaction by the many who are too quick to place the problem and the blame at the feet of the federal government.  First off, it is important to recognize that not all physicians in the healthcare system are facing financial crisis. About 50 percent of the nation’s doctors are employed, typically by hospitals, and receive a salary in exchange for their service. So far, these practitioners do not appear to be in any significant financial danger.”

The financial problems are typically experienced by a portion of the remaining 50 percent who wish to operate their own private practices and, as a result, find themselves suffering from the financial stresses faced by so many small businesses in these difficult times.  Yet, even among this 50 percent, not all private practices areas are in trouble. For example, surgeons and dermatologists seem to be doing just fine while cardiologists and oncologists, whose business models necessarily make them more susceptible to trouble, are feeling the pain.

Why oncology and cardiology?

Part of the blame does rest with changes in Medicare and Medicaid payment policies. Certainly, cardiologists and oncologists, whose practices naturally bring them into contact with more senior citizens, are the most likely to feel the pain when it comes to reduced government payments. Last year, the Centers for Medicare & Medicaid Services (CMS) took a hatchet to what is paid to cardiologists for performing important tests such as echocardiograms, stress tests and other “machine” based testing. But what you may not know is that these reductions were based on a survey conducted by the American Medical Association, at the request of the CMS, that seemed to go out of its way to omit cardiologists in private practice from the survey participants. Why? Because private practice cardiologists have, by and large, dropped out of the AMA and the AMA’s interest was in getting more money set aside for those medical practitioners in other areas of medicine who remain members.

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Medicare Times Are a Changing

Monday, January 16th, 2012

Baby boomers may not like it — and whoever wins the White House this year — but the Medicare that our parents knew and love is destined to change. And it’ll be like it or lump it.

With more than 1.5 million baby boomers enrolling in Medicare every year, the program’s future is one of the most crucial economic issues for anyone who currently is 50 or older. Healthcare costs are the most erratic part of retirement expenses, and Medicare remains a great deal for retirees, who often get benefits worth significantly more than the payroll taxes they paid while working.  “People would like to have what they used to have.  What they don’t seem to understand is that it’s already changed,” said Gail Wilensky, a former Medicare administrator. “Medicare as we have known it is not part of our future.”

Consider these numbers.  Medicare’s giant trust fund for inpatient care is expected to run out of money in 2024.  When that happens, the program will collect only enough payroll taxes to pay 90 percent of benefits.  Additionally, researchers estimate that as much as one-fifth and even two-thirds of the more than $500 billion that Medicare now spends every year is spent on treatments and procedures of little or no benefit to patients.

Representative Paul Ryan (R-WI), chairman of the House Finance Committee, is leading the charge on changing Medicare.  Ryan’s current proposals will not impact people now 55 or older would not have to make any changes.  But how would it work?  Would it save taxpayers’ dollars?  Would it shift costs to retirees, who are least able to afford it?   Will Congress ultimately end traditional Medicare?  These questions are still waiting for answers.  “I’m not sure anybody has come up with a formula on this that makes people comfortable,” said health economist Marilyn Moon, who formerly served as a trustee overseeing Medicare finances.

The White House’s preference is to keep the existing structure of Medicare while “twisting the dials” to control spending, said Medicare trustee, economist Robert Reischauer of the Urban Institute think tank.

Ryan’s original approach would have put 100 percent of future retirees into private insurance.  His most recent plan, written with Senator Ron Wyden (D-OR), would keep traditional Medicare as an option, competing with private plans.

Writing for AARP, Ricardo Alonzo Zaldiver says that, “This could mean more Medicare recipients joining private insurance plans (currently, only about 25 percent of Medicare recipients are in private ‘Medicare Advantage” plans, while the other three-quarters participate in the traditional, government-run Medicare program).  A new voucher-for-private-Medicare plan would be available to anyone currently under 55.

“It could also mean keeping the existing Medicare structure but making certain tweaks to control spending.  Under President Obama’s healthcare overhaul, the Independent Payment Advisory Board could force Medicare cuts to service providers if costs rise above certain levels and Congress fails to act.  Obama has said he’ll veto any plan to cut Medicare benefits without raising taxes on the wealthy.  During failed budget negotiations last summer, he indicated a willingness to gradually raise the Medicare eligibility age to 67, revamp co-payments and deductibles in ways that would raise costs for retirees, and cut payments to drug makers.  ‘For the 76 million baby boomers signing up over the next couple of decades, it will pay to be watching.’”  President Obama has promised that he will veto any plan to cut Medicare benefits without raising taxes on the wealthy.

The Chicago Sun-Times offers this sage advice: “Fix Medicare, ignore scare talk.”  According to writer Steve Huntley, “I’ve contributed to Medicare every year of its existence. Yet, it’s a myth that seniors have paid the costs of their Medicare services, as demonstrated by the research of economists Eugene Steuerle and Stephanie Rennane of the Urban Institute think tank.  Their study showed that a two-income couple earning $89,000 a year would pay $114,000 in Medicare taxes during their careers but could expect to receive $355,000 in medical care in retirement. They could get prescriptions, doctor visits and hospital services valued at three times their contribution to Medicare.

“Medicare combined with Medicaid and Social Security add up to an entitlement time bomb –  they’ll consume all tax revenues by 2052, according to a Heritage Foundation analysis –  for the people who’ll be stuck with the bill: working Americans.  In 1950, there were 16 taxpaying workers for each retiree; by the time the baby boomers all retire, there will be two workers for each retiree. Entitlement reform has to happen.”

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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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Time to Resolve the “Doc Fix”

Wednesday, December 21st, 2011

Congress’ end of year to-do list inevitably includes the “doc fix” – billions of dollars to avoid deep rate cuts for physicians who treat Medicare’s 48 million patients.  Congressmen and Senators always defer the cuts demanded by a 1997 reimbursement formula — known as the sustainable growth rate (SGR) – and which most believe needs to be entirely rewritten.  The deferrals are temporary, and the doc fix has become increasingly difficult to pass through a divided and deficit-wary Congress.  In 2010, Congress put off scheduled cuts five times, with the longest delay lasting one year.

The story is the same heading into 2012.  If lawmakers are unable to agree before returning home for the holidays, 500,000 physicians will face a stiff 27 percent cut beginning January 1.  Although Congressional leaders have vowed to prevent that, they disagree over how to pay for the fix.  There is little doubt some agreement will be reached, but that deal could be delayed until early next year.

The cost of congressional intervention, not surprisingly, has grown: Delaying the cuts — the solution Congress has chosen since 2003 — will cost $21 billion for a one-year delay and $38.6 billion for two years.  Repealing the formula would add approximately $300 billion to the deficit, according to the Congressional Budget Office.

No one imagined that the SGR would cause so much trouble when it was passed as a minor element of the Balanced Budget Act of 1997.  Nearly 15 years ago, Medicare physician spending, which accounts for a small share of the program’s overall outlay, was growing slowly.  The law included other restraints that have since been repealed.  Analysts predicted that, at most, the SGR formula would curb physician payments minimally.  “It wasn’t viewed as a big deal at the time,” said Paul Van de Water, an economist specializing in Medicare with the research group Center on Budget and Policy Priorities.  “They needed a few more billion dollars in savings (for the Balanced Budget Act), so they just tacked on the SGR arrangement.”

Kaiser Health News wonders why Congress doesn’t just scrap the SGR formula.  “Money is the biggest problem.  It would cost about $300 billion to stop the doc fix cuts over the next decade and Congress can’t agree on where to find that kind of cash.  Some lawmakers, including Senator Jon Kyl (R-AZ), have proposed using money saved from winding down the wars in Iraq and Afghanistan to finance a permanent fix.  While the idea has found favor among some Democrats, other Republicans oppose it.  For physicians, the prospect of facing big payment cuts is a source of mounting frustration.  Some say the uncertainty led them to quit the program, while others are threatening to do so.  Still, defections have not been significant to date, according to MedPAC.  Physician groups continue to lobby Congress to enact a permanent payment fix.”

Dr. Florence C. Barnett recently decided to quit seeing Medicare patients.  She said the plan covered approximately 33 percent of what it cost her to see patients — and found herself facing a growing Medicare patient population after other local neurosurgeons left the program in 2010.  “This is the way the government will ration healthcare,” Barnett said.  “The people who can afford it will have healthcare, and the people who are only on government support — they will not be able to find a doctor or they will have a very long wait.  It’s happening now.”

A survey conducted by the Medicare Payment Advisory Commission found that among patients looking for a new primary-care physician in 2010, 79 percent experienced no problems finding one.  According to the American Medical Association (AMA), which generally resists limits in reimbursements, nearly 33 percent of primary-care physicians already restrict how many Medicare patients they accept in their practices.

Physicians are once again relying on Congress to put off the impending cut.  It’s a scenario that Glen Stream, M.D. and president of the American Academy of Family Physicians, calls a “Lucy and Charlie Brown and the football thing.”  In other words, physicians have become numb to the whole situation.  This year, that numbness could be risky.  “Doctors are sort of numb from this,” Stream said.  “It’s concerning because I think there’s a very serious chance that this cut could go into place and yet many practicing physicians have heard this years and years in a row and it always seems to get averted at the last minute.  I think that they may not understand the gravity of the situation this time.”

Writing on the MDNews.com website, Maggie Behringer says that “Last year the battle to fund the Medicare deficit — $19 billion for the fiscal year — ended in a one-year measure.  The summer saw a hands-off stance from the Center for Medicare and Medicaid Services when the administration instructed providers to temporarily cease filing claims until Congress resolved a standstill over stimulus spending and unemployment benefits.  The cut projected for January, 2012, should Congress fail to enact the customary doc-fix, totals to 27.4 percent.  The core conflict for legislators — 19 of whom are physicians, themselves — emerges in the inability of the SGR to adapt in today’s economic environment.  The formula was originally developed to bind spending to the economy’s growth.  Despite initial success, the exponential climb in healthcare costs quickly surpassed the overall market.  The subsequent deficits to fund Medicare were further compounded by the recent depression and ongoing recession.  Even if Congress is able to act in time with a temporary doc-fix over the holidays, the fundamental dilemma will remain a question of funding just as the patient population eligible for Medicare benefits enters a major boom.”

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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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Study Tracks Development of ACOs

Wednesday, December 14th, 2011

Accountable care organizations (ACOs) are the biggest thing in healthcare today, and a new study by Leavitt Partners quantifies exactly how hot they are.  ACOs, as defined in the Patient Protection and Affordable Care Act (ACA), are a delivery model that offers doctors and hospitals financial incentives to provide quality care to Medicare patients and keep costs affordable.

Even though ACOs are not yet operating, there are already 164 “ACO entities” in the country, according to a report by Leavitt Partners, a consulting firm led by Mike Leavitt, a former governor of Utah and Secretary of Health and Human Services during President George W. Bush’s administration.  In his survey of ACOs, Leavitt examined news releases, media reports, trade groups and conducted interviews and concluded that a health system is an ACO if it either self-identified as one or was “adopting the tenets of accountable care.”  The study included systems that work with private payers rather than Medicare.

Of the 164 “ACO entities” identified, 99 are sponsored by hospital systems, 38 by physician groups and 27 by insurers.  They are in 41 states, although there were vast regional discrepancies.  Poor, rural regions reported minimal ACO growth.

“A quiet scramble is clearly underway,” Andrew Croshaw, managing director at Leavitt Partners and director of the Leavitt Partners Center for ACO Intelligence, said.  “In certain markets, competition to establish leadership is already emerging.”

Due to the rush to complete the study, ACOs may be prolific in certain areas while sparse in some regions of the country.  Even though ACOs are still a new concept, certain states are already home to significant accountable care activity, primarily in Texas, California, and Michigan.  In general, states with larger populations have more ACOs.  “Adoption of this model will vary greatly due to both regional differences as well as variations among the sponsoring entities,” the report states.

Of the 164 ACOs that researchers examined, nearly 60 percent were established by hospitals or health systems, indicating a trend toward hospital systems leading the development of ACOs.  Leavitt Partners examined the trends of “ACO or ACO-like organizations,” meaning the report loosely defined an ACO as an entity that is “financially accountable for the healthcare needs of a population, manages the care of that population and bear that responsibility at an organizational level.”

The success of the various ACOs is still not known. According to the report, although there are different models of providing accountable care, the most successful approaches at achieving an ACO’s goals is still undecided.  “With neither a set definition, nor a national method for identifying ACOs, it is difficult to precisely identify and study such organizations,” according to the report.  “It is possible that some of the organizations, which should be considered ACOs, are missing from our study and some, such as organizations that self-identify as ACOs but will never ultimately adopt any type of care coordination or bear any risk for a population, may not belong.”

The final ACO rule provides more flexibility for eligible providers and increases the amount of possible bonuses.  The Centers for Medicare & Medicaid Services (CMS), which released the rule in October, also decreased the number of quality measures from 65 in five domains to 33 in four domains.  Although the full implications of the rule are not yet known, providers’ responses reflected their desire for long-term care to actively participate.  ”We certainly want to ensure skilled nursing and post-acute facilities are part of the cost-saving model,” according to the American Health Care Association President and CEO Mark Parkinson.

There are some who are not quite so bullish about ACOs. One is J. Thomas Rosch, commissioner of the Federal Trade Commission, who is deeply skeptical about ACOs.  According to Rosch, “even in the most optimistic scenario, the savings to Medicare from the ACO program are no more than a rounding error.”  He also believes that there is a possibility that providers may form ACOs not to collaborate or improve healthcare, but to gain market share.

“Against the very meager prospects for cost savings, there is a very real risk that some ACOs will be formed with an eye toward creating or exercising market power.  The net result of the Shared Savings Program may therefore be higher costs and lower quality healthcare — precisely the opposite of its goal,” Rosch said.

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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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