Posts Tagged ‘Obamacare’

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ObamaCare: Shambolic or Shining?

Thursday, May 2nd, 2013

The word of the week, courtesy of NY Times columnist, David Brooks, is "shambolic" which he uses to describe ObamaCare as it becomes implemented. As the overhaul of the US health system becomes a reality, the critics on both sides of the political aisle are joining Brooks to carp on what seems like a bureaucratic nightmare.

Even Max Baucaus, Democrat from Montana, has called the rollout of the healthcare exchanges a potential “train wreck” (the Obama team expects to spend $4 billion this year on setting up the 50 state-based exchanges and $1.5 billion next year running several of them).

Then there’s the application to apply for insurance from an exchange which started out as a 21 page booklet.  Following criticism, the Health and Human Services Department announced that they’ve cut the application from 21 pages down to three pages.

The issue seems to be that ObamaCare is creeping along without many of its details worked out or workable. While any sweeping institutional reform will have its shambolic elements, it’s useful to realize that Medicare did not arrive in 1965 as a fait accompli; It’s actually been a 48-year work in progress.  Today, beneficiaries get coverage through Original Medicare and the newer model, Medicare Advantage (also known as Parts A and B); then we had Disability and end-stage renal benefits in 1972; then the Medicare and Medicaid Program Protection Act of 1987 to fight all the fraud; then the prescription drug benefits for the Medicare population, which went into effect in 2006 (maybe the Bush Administration’s singular achievement if you listen to former administration official like Karen Hughes).

Lastly, people say that the administration is force feeding us a rewriting of healthcare law that the country doesn’t want. According to the Kaiser Health Tracking Poll for March 2013, only 37 percent of Americans like Obamacare. Looking at Medicare, we see the same parallels. In July of 1962 when President Kennedy first proposed it, a Gallup poll found 28% in favor, 24% viewing it unfavorably, and 33% with no opinion. A month later, 54% said it was a serious problem that “government medical insurance for the aged would be a big step toward socialized medicine.” After Lyndon Johnson was elected, a Harris poll found only a minority, 46%, supported a Federal plan to extend health care to the aged. Today, of course, Medicare is overwhelmingly popular.

Perhaps, the experience of Medicare counsels us to be aware that history has a way of confounding growing pains and poll numbers.

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What Would Repeal Look Like?

Wednesday, July 18th, 2012

The nonpartisan Congressional Budget Office (CBO) has issued a report that the House Republicans’ bill to repeal President Obama’s health care reform legislation would increase the deficit by roughly $230 billion through 2021.   According to the CBO statement, “The March health care legislation would have a net cost of about $780 billion over the 2012-2019 period. Repealing that legislation would eliminate such costs. But [the health care legislation] also included a number of provisions to reduce federal outlays (primarily for Medicare) and to increase federal revenues (mostly by increasing the Hospital Insurance payroll tax and imposing fees on certain manufacturers and insurers); in March, CBO and JCT estimated that those provisions unrelated to insurance coverage would, on balance, reduce direct spending by about $500 billion and increase revenues by about $410 billion over the 2012-2019 period. If that legislation was repealed, such reductions in spending and increases in revenues would not occur. Thus, H.R. 2 would, on net, increase federal deficits over that period.”

Undeterred, Sen. Orrin Hatch (R-Utah), ranking member on the Finance Committee, said if Republicans gain control of the chamber next year, their efforts to replace the healthcare overhaul will focus on cost control, instead of coverage expansions. Hatch was the author (along with Ted Kennedy) of SCHIP, the largest expansion of taxpayer-funded health insurance coverage for children in the U.S. since Medicaid began in the 1960s. Hatch is in position to lead the committee with primary jurisdiction over federal health policy if Republicans retake the Senate, which Republicans would do if they net only four Democratic-held seats.

As evidence of ObamaCare’s inability to reduce overall healthcare costs, Hatch cited the 9.5% increase in the cost of an average family health plan to $15,073 last year over its cost when the law was enacted.

The first cost-control efforts he would undertake would come in Medicare and Medicaid, he said. Those steps include increasing physician pay and removing “government-dictated prices” in Medicare that increases costs for the privately insured when providers pass along the cost of caring for Medicare and Medicaid patients.

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GOP Proposes Putting Seniors on Congressional Healthcare Plan

Tuesday, July 3rd, 2012

In a highly controversial move, Republicans critical of Medicare have proposed opening up the Federal Employee Health Benefits Plan (FEHBP) to Medicare patients.  “We are going to offer a plan that would give all senior citizens in the country the same congressional healthcare plan that we have,” said Senator Rand Paul (R-KY).  “We are not willing to wait until after the next election to fix the entitlements.”

The National Active and Retired Federal Employees Association (NARFE) warned that the plan could shake the federal program, while asking seniors to pay more for healthcare.  “This is a kill-two-birds-with-one-stone kind of proposal that would both bring down Medicare as we know it and threaten the stability of the FEHBP,” Joseph A. Beaudoin, NARFE president, said.  Beaudoin said seniors should examine the proposal closely, because it throws open the doors of a stable healthcare program to millions of seniors currently enrolled in Medicare.  “Given the current environment of budget attacks on federal employees, retirees and Medicare, the federal workforce and all Americans should be wary of plans like the one proposed today,” he said.

Called the Congressional Health Care for Seniors Act (CHCSA), the plan’s supporters claim that it would save taxpayers $1 trillion in the first 10 years as well as provide enhanced healthcare benefits, choice, quality and outcomes by moving seniors into the FEHBP.

How would it work?  Federal employees can now choose from approximately 250 plans participating in FEHBP, including 20 nationwide plans.  The large selection provides access to better doctors, better quality healthcare, and the ability to pick plans that best suit the person’s individual needs.  The rationale also is that because Congress uses the plan, it must be the best in the country.  Additionally, the legislation would set up a “high risk pool” for the costliest patients within the FEHBP.  The federal government will directly reimburse healthcare plans for enrolling the most expensive five percent of patients, which keeps premiums low while allowing high-risk patients to get the same quality healthcare as every other enrollee – federal employees and seniors alike.  If the legislation is passed, seniors could enroll in FEHBP starting in 2014.

There is some bipartisan support for this proposal.  In 2004, Senator John Kerry (D-MA) proposed allowing uninsured people, not seniors, to enroll in FEHBP.  “Entitlements are broken,” said Paul.  “It’s not Republicans’ fault; it’s not Democrats fault.  I tell people, ‘It’s your grandparents’ fault for having too many kids and then your fault for not having enough kids.’  It’s a demographic problem.”

Paul said the plan “means-tests the benefits and gradually allows the age of eligibility to go up.”  Currently, Medicare eligibility age is 65; Paul’s plan would gradually increase it to 70 by 2034.  “There is means-testing in this — and the reason you have to do that is: we’re spending more on Medicare than is coming in.”  According to Senator Lindsey Graham, (R-SC), “What I would tell the person near retirement is don’t fear change, embrace it, because you’ll have more doctors available to treat you and your family.  “Think about not just what happens to you…think about where we’ll be as a nation if something doesn’t change pretty quickly with these big programs.”

Virtually everyone in Washington agrees that the federal government must control its deficits and rising debt by finding a way to reduce entitlement spending.  President Bill Clinton’s former budget director, Leon Panetta, now defense secretary, who reproached the Senate Budget Committee: “You can’t meet the challenge that you’re facing in this country” by only cutting discretionary spending, which is less than a third of all spending.  “If you’re not dealing with the two-thirds that is entitlement spending, if you’re not dealing with revenues, and you keep going back to the same place, frankly you’re not going to make it, and you’re going to hurt this country’s security.”

Paul acknowledges that adding seniors to the federal program would drive costs up for its current 8.5 million enrollees by approximately 24 percent.  “Federal employees are the one group of people who may have a legitimate argument with the Congressional Health Care Plan for Seniors,” according to Paul’s synopsis.  “Asking them to share their healthcare with the elderly will cause their premiums to increase.”  Not surprisingly, as soon as the legislation was announced, the National Active and Retired Federal Employees Association expressed concerns that the bill would destabilize the federal workers’ program.

Beaudoin notes that “As for the senators’ notion that America’s seniors should be in the same healthcare system as America’s elected officials, they seem to have forgotten that starting in 2014, members of Congress will no longer be covered by the FEHBP but will be in state-based healthcare exchanges.”

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The Individual Mandate Passes: ObamaCare Survives Supreme Court

Monday, July 2nd, 2012

In one of the most significant rulings in recent memory (perhaps since the awarding of the Presidency to George W. Bush in 2000), the Supreme Court upheld President Obama‘s health care law  in a nuanced interpretation of Federal versus states’ rights. The historic 5-4 decision will affect the way 30 million uninsured Americans receive and pay for their personal medical care.   Chief Justice John Roberts cast the deciding vote (another surprise since most expected it to be Justice Kennedy if the law passed) and wrote the opinion. The key factor was classifying the penalty for not abiding by the individual mandate — the requirement that most Americans buy health insurance or pay a fine — as a tax and therefore constitutional. “Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness,” wrote Roberts. The court’s four liberal justices, Stephen Breyer, Ruth Bader Ginsburg, Elena Kagan and Sonia Sotomayor, joined Roberts in the outcome; Conservative Justices Samuel Alito, Anthony Kennedy, Antonin Scalia and Clarence Thomas dissented.

The Obama Administration had taken a different approach in its argument, saying that Congress had the authority to pass the individual mandate as part of its power to regulate interstate commerce; the court struck this down, but preserved the mandate as within Congress’ constitutional taxing powers. As Roberts put it, a person who does not wish to carry health insurance is left with a “lawful choice to do or not do a certain act, so long as he is willing to pay a tax levied on that choice.”

The Republican-controlled House will vote July 11 for a full repeal of the health care law. It is a symbolic move that stands little chance of passage in the Democratic controlled Senate. Republican presidential candidate Mitt Romney and GOP congressional leaders have pledged to repeal the law if they take control of Congress and the White House in November elections. The decision may silence critics who have claimed that the Roberts Court has been one of the more partisan in recent memory, particularly with its decision in the 2010 Citizens United case which took the cap off independent political expenditures by corporations and unions. The ACA drew the Supreme Court into the election-year crossfire over the role of government and the concerns about deficit spending,

The court did find one part of the law unconstitutional, saying its expansion of the federal-state Medicaid program threatened states’ existing funding. According to the Wall Street Journal, “the court ruled that the federal government can’t put sanctions on states’ existing Medicaid funding if the states decline to go along with the Medicaid expansion.”

Some reactions:

House Budget Chairman Paul Ryan, R-Wis.: “It’s up to the American people in the next election and their representatives to determine the fate of this law.”

House Speaker John Boehner, R-Ohio: “The president’s health care law is hurting our economy by driving up health costs and making it harder for small businesses to hire. Today’s ruling underscores the urgency of repealing this harmful law in its entirety.”

Senate Minority Leader Mitch McConnell, Republican of Kentucky: “Today’s decision makes one thing clear: Congress must act to repeal this misguided law.”

The full  impact of the ruling politically remains to be seen. The Wall Street Journal reflected the uncertainty: “The court’s decision, while a relief to Democrats, could further energize voters who dislike the law to back Republicans in November. And it forces the Obama administration to continue defending the unpopular insurance mandate, which the court has now made clear is legally equivalent to a tax on those who refuse to carry health insurance. On the other hand, the court’s blessing could itself shape public opinion of the law, particularly among independents and undecided voters who view the justices as relatively free of the partisan agendas of the government’s elected branches. Polls consistently show that the public places greater confidence in the Supreme Court than either Congress or the presidency, although the justices’ approval ratings have slipped somewhat over the past year.”

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Majority of Americans Want Healthcare Reform Thrown Out

Wednesday, June 20th, 2012

A newly released CBS News/New York Times poll concluded that nearly 70 percent of Americans want the Supreme Court to overturn either all of the Patient Protection and Affordable Care Act (ACA) or declare the individual mandate unconstitutional.  In the poll, 41 percent think that President Obama’s healthcare law should be overturned, with another 27 percent saying they want the court to keep the law but overturn the mandate.

Nearly 25 percent of respondents want the entire law upheld.  The margin of error was three percentage points.

The percentage that wants to see the entire law declared unconstitutional has risen since April when 37 percent said they wanted the court to overturn the full law; 29 percent said the mandate should be overturned; and 23 percent wanted the law upheld.  The new poll shows that Republicans are much more likely to want the entire law overturned than Democrats, with 67 percent wanting the law to be overturned compared to just 20 percent of Democrats.  While 42 percent of Democrats say they want the entire law to be upheld, 42 percent of Independent respondents want the Supreme Court to throw out the law entirely.  Tea Party members want to see the entire law overturned — 70 percent back that.

Writing in the Washington Post, Ezra Klein says that “Bottom line: If you’re Anthony Kennedy and John Roberts, and you want to rule against the individual mandate but you’re worried about a public backlash, this poll calms your fears.”

The most anticipated Supreme Court ruling in years, it has the potential to impact the presidential race between Obama and likely Republican nominee Mitt Romney.  If elected, Romney has promised to repeal “Obamacare.”  Obama says the law will provide insurance to nearly all Americans, and cut medical costs over the long term.

Of course, public opinion is not the only driver in the high court’s decisions.  But the justices certainly are aware of the fact that Americans keep expressing their dislike of the ACA.  The court will base its decision on the strength of legal arguments and the justices’ interpretation of the Constitution.  The justices wouldn’t allow themselves to be influenced by popular opinion, would they?  Dahlia Lithwick, who covers the court for Slate, isn’t so certain.  According to Lithwick, “If public opinion was strongly in favor of the Affordable Care Act, I don’t think this law would be in question right now.  But because public opinion has been so muddled – polls even this week suggest that some people like some parts of the law but most people don’t like all of it – I think it might even embolden the Court to take that step of striking it down.”

Merrill Goozner, writing for MedCity Times, takes a more optimistic view, believing that the ACA will survive even if the individual mandate is thrown out.  According to Goozner, “It was deemed necessary to make the private marketplace for individual and small group insurance policies more efficient and affordable.  It worked by expanding the pool of participants, which would lower insurance costs for everyone.  How does that work? If families that buy insurance have to pick up the tab for people without coverage when they fall ill, the cost of every policy goes up. Estimates for uncompensated care provided to the uninsured range as high as $116 billion a year–enough to cost the average family $1,000 a year in higher premiums, according to the brief to the court submitted by the Obama administration.

“Supporters of the Affordable Care Act have passionately endorsed the individual mandate, largely based on those economics.  Jonathan Gruber, the Massachusetts Institute of Technology economist who helped Romney design the state law that became the model for ‘Obamacare,’ claims the mandate makes all the other insurance reforms in the law possible.  In particular, it enables the requirement that insurance companies sell policies to everyone no matter what their health status – known as guaranteed issue – at rates that do not discriminate based on health status – dubbed community rating.  Without a mandate, young and healthy people, knowing they could sign up at any time, even if there was a late enrollment penalty, ‘would take their chances… rather than sign up for insurance that they don’t fully value,’ Gruber wrote recently in a brief for the Center for American Progress.  ‘As these young and healthy individuals leave the (state) exchanges (where policies will be sold), they will raise prices for those left behind, causing even further exit – and potentially unraveling the entire market.’”

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Health Insurer OKs Reform No Matter What the Supreme Court Does

Monday, June 18th, 2012

Even if the Supreme Court declares the Patient Protection and Affordable Care Act (ACA) unconstitutional, UnitedHealth, the nation’s largest health insurer will still cover certain types of preventive care. The extensions will apply primarily to its customers who have individual policies or small-group health insurance through their employer, a minority of its 35 million total members.  The ACA, whose goal is to provide coverage for millions of uninsured people, started unfolding in 2010 after health insurers fought to block its passage.  Challenges to the law from states and other groups opposed to it wound their way to the Supreme Court.  Bob Laszewski, a consultant and former insurance executive, UnitedHealth’s move a “very smart business decision.”  The provisions are relatively inexpensive and are already factored into the coverage price.  If insurers cut these benefits, customers probably will expect a corresponding premium drop, he noted.  “It would probably be more trouble to roll these things back than go ahead with them,” Laszewski said.  “It just makes common sense to leave these things in there and not take these benefits away since they’re already priced in.”  Laszewski expects other insurers and large employers to take a similar approach.

The provisions UnitedHealth will maintain include providing coverage for dependents up to age 26 under their parents’ plan.  The company will still offer certain preventive healthcare services without requiring a co-payment.  These include yearly check-ups, screening for high-blood pressure and diabetes, and immunizations.  Additionally, UnitedHealth will continue to forgo lifetime dollar coverage limits on policies.  “The protections we are voluntarily extending are good for people’s health, promote broader access to quality care and contribute to helping control rising healthcare costs,” UnitedHealth Chief Executive Officer Stephen Hemsley said.  “These provisions make sense for the people we serve and it is important to ensure they know these provisions will continue.”

The ACA is the largest overhaul of the $2.6 trillion American healthcare system in nearly a half century.  It is designed to ultimately expand coverage to more than 30 million uninsured Americans, by setting up insurance exchanges and opening Medicaid for low-income Americans.

According to estimates, the ACA let approximately 6.6 million young adults remain on their parents’ health insurance plans last year, according to a report from The Commonwealth Fund. If the law is declared unconstitutional, Republican lawmakers may reinstate the extension of young adults dependent coverage.  Other provisions that UnitedHealth plans to maintain include providing easily understandable ways for members to appeal coverage claim decisions; and eliminating rescissions, which are considered to be retroactive policy cancellations, except in the case of fraud.  DeAnn Friedholm, director for health reform at the Consumers Union, called UnitedHealth’s actions “a positive step” and said she hopes other companies follow suit should the law be struck down.

Ronald Pollack, executive director of the consumer advocacy group Families USA and a supporter of the law, applauded UnitedHealth’s move.  “It would make a huge difference for a great number of people who would otherwise be left out in the cold in terms of getting coverage,” he said. “And hopefully, given UnitedHealthcare’s market share, this would have tremendous influence on other companies.”  Even if other large insurers follow suit, Pollack said, it would hardly make up for the loss of other provisions in the law that are set to take effect in 2014 — including subsidies to help low-income Americans buy insurance and bans against discriminating against adults with preexisting conditions.

Writing for CBS News, Stephanie Condon says that UnitedHealth’s decision “Could also alter the political fallout from the high court’s decision.  Should the Supreme Court reject President Barack Obama’s law, he could point to UnitedHealthcare’s announcement to validate his policy agenda.”

The Associated Press’ Ricardo Alonso-Zaldivar points out that dismantling the ACA could be messy.  “It sounds like a silver lining.  Even if the Supreme Court overturns President Barack Obama’s healthcare law, employers can keep offering popular coverage for the young adult children of their workers.  But here’s the catch: The parents’ taxes would go up.  That’s only one of the messy potential ripple effects when the Supreme Court delivers its verdict on the Affordable Care Act this month.  The law affects most major components of the U.S. healthcare system in its effort to extend coverage to millions of uninsured people.  Because the legislation is so complicated, an orderly unwinding would prove difficult if it were overturned entirely or in part.  Better Medicare prescription benefits, currently saving hundreds of dollars for older people with high drug costs, would be suspended.  Partially overturning the law could leave hospitals, insurers and other service providers on the hook for tax increases and spending cuts without the law’s promise of paying more to offset losses.”

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Is Medicare in Peril if the Supreme Court Rules Against the ACA

Monday, April 30th, 2012

Could there be collateral damage if the Supreme Court rules to overturn the Patient Protection and Affordable Care Act (ACA)? Some healthcare experts are warning of potential collateral damage if the Supreme Court strikes down the entire ACA: potential chaos for Medicare.  “The Affordable Care Act has become part and parcel of the Medicare system, encouraging providers to deliver better, more integrated, better coordinated care, at lower cost,” said Judy Feder, a public policy professor at Georgetown University and former Clinton administration health official.  “To all of a sudden eliminate that would be highly disruptive.”

Sara Rosenbaum, a professor of health law and policy at George Washington University, is more blunt: “We could find ourselves at kind of a grand stopping point for the entire healthcare system.”  It’s not only Democrats warning of potential problems.  Gail Wilensky, who ran Medicare and Medicaid during President George H.W. Bush’s administration, doesn’t think it’s likely that the court will strike down the entire health law.  But if it does, she warns, “it seems like it takes everything with it, including those aspects that are only very peripherally related to the expansion of coverage.”

One reason that so many experts are concerned is that the ACA altered the payment rates for nearly every type of healthcare professional who treats Medicare patients.  Every time Medicare sets a payment rate, it must cite a legal authority.  Since 2010, according to Rosenbaum, that legal authority has been the ACA.  If the law is ruled unconstitutional, she said, every one of those changes “doesn’t exist anymore because the law doesn’t exist.”  The result?  “You have agencies sitting on two years of policies that are up in smoke,” she said.  “Hospitals might not get paid.  Nursing homes might not get paid.  Doctors might not get paid.  Changes in coverage that have begun to take effect for the elderly, closing the donut hole might not happen.  We don’t know.”

Writing for the Huffington Post, Ethan Rome, Executive Director, Health Care for America Now, says that “The Supreme Court will uphold the ACA not only because it’s constitutional, but because to do otherwise would impose a massive judicial intervention in one of the economy’s most complex sectors and derail a train with millions of individuals and businesses on board.  If the conservative justices disregard decades of legal precedents and strike all or part of Obamacare, they would not merely be tearing down the most sweeping piece of social legislation since Medicare and Medicaid, they would be taking away substantial consumer protections and benefits from millions of America’s seniors, families and small businesses.  The court would have to take responsibility for dismantling the law piece by piece, a task as difficult as it is unconscionable.  The law is two years old.  Implementation is moving forward, and hundreds of complicated provisions are in effect, helping millions of Americans.  States, businesses, doctors, hospitals and insurance companies have undertaken major, costly changes in anticipation of the improved insurance marketplace developing right now.  The fact is that serious wreckage would result from a bad decision.  Attempting to unscramble this omelet would be a national nightmare.”

Politico’s J. Lester Feder offers this perspective. “If America is hoping a Supreme Court ruling will end the legal uncertainty hanging over the healthcare system once and for all, there’s a chance it could be sorely disappointed.  Most legal experts are hoping the Supreme Court will give a clear thumbs up or down to the healthcare law.  But they’re worried about the possibility that, if the court strikes down just part of the health law, it could outsource the job of figuring out precisely which provisions of the gargantuan law stay or go.  That could mean at least another year of legal proceedings before the country — and the states that have to build the health exchanges — really know the rules its health system will operate under.  And that doesn’t even include the wild card of the election.  The parties challenging the law attempted to head off this scenario by specifically asking the court to consider whether the individual mandate could be severed from the rest of the law.  But if the Supreme Court decided it lacked the capacity — or the desire — to settle questions of how dependent the various parts of the law are on the individual mandate, it could remand the case to the lower courts to work through the details, legal experts say.  Another outside possibility is that the Supreme Court could appoint a ‘special master’ to sift through it under the high court’s supervision, though special masters usually oversee complex settlements or disputes among states, not dismantling politically charged legislation.”

If the unthinkable happens and the Supreme Court does strike down President Barack Obama’s signature piece of legislation, employers and insurance companies — not the government — will be the primary drivers of change over the next decade.  They’ll borrow some ideas from Obamacare, and push harder to slash costs.  Business can’t and won’t take care of America’s 50 million uninsured.  Workers will pay more of their own medical costs as job coverage changes to plans with higher deductibles.  Another part of the equation will be tax-free accounts for routine medical expenses, to which employers can contribute.  Employees and their families will be steered to hospitals and doctors that can prove to insurers and employers that they deliver quality care.  These networks of medical providers would earn part of their fees for keeping patients healthy, similar to the accountable care organizations in the ACA.

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$1,000 Toothbrushes and $140 Tylenols: And You’re Footing the Bill

Thursday, March 29th, 2012

As the debate about the future of Medicare heats up, the program’s chief actuary estimates that 15 percent to 30 percent of healthcare expenditures are wasteful. Cindy Holtzman, a consumer advocate with Medical Billing Advocates of America, cited several examples, such as a Florida patient who was charged $140 for a single Tylenol.  A patient in South Carolina paid $1,000 for a toothbrush.  A patient in Georgia who used one bag of IV saline solution was billed for 41 bags for a total of $4,000.  In the case of the Georgia patient, insurance paid the entire claim.  “Usually any kind of bill under $100,000, they (insurance companies) don’t look at the details.  And that’s where something like this can be paid in error,” Holtzman said.  After Holtzman investigated, the bill was fixed, and the insurance company was refunded its money.

Medicare spending exceeded $500 billion in 2010.  As much as $75 billion to $150 billion could be cut without reducing needed services.  A potential cause is that Medicare’s reimbursement procedures do not track the appropriateness of the care provided.  Medicare farms out its claims administration to private local contractors based on how quickly and cheaply they process claims.  These contractors are not given incentives to audit the taxpayer dollars they spend; even if they wanted to, they would need data that is typically not found on the claim form.

Healthcare spending is wasteful across the board, not just in Medicare.  Writing for Politico, Ralph G. Neas, CEO of the National Coalition on Health Care (NCHC), a non-profit, non-partisan organization working to improve America’s healthcare system, says that “Total expenditures on healthcare represented 17 percent of the gross national product in 2010 and are projected to reach 20 percent by the end of this decade.  The federal government already spends more for health care than for defense, Social Security or any other single spending category.  The nonpartisan Congressional Budget Office has emphatically identified rising health costs as the greatest threat to our fiscal future.  It doesn’t have to be this way.  Our current system is devastatingly inefficient.  The United States spends 141 percent more on healthcare than other economically advanced nations.  But our far higher bill is not buying us a healthier population.  Roughly 30 percent to 40 percent of medical and hospital costs can be attributed to waste and inefficiency.  That means, America is on a path to squander $10 trillion over the next decade. That hemorrhage would leave our economy — and our cities, states, small businesses and middle-class families — on life support.  Given our financial condition, preventing this kind of spending and the economic drag it represents should be the kind of urgent national problem that overrides ideological differences and encourages us to find common purpose.”

NEHI, an independent non-profit national network for health innovation, has recommended actions that would reduce wasteful healthcare spending by up to $84 billion. The plan was produced in collaboration with the National Priorities Partnership.  One major area for savings is eliminating emergency department overuse.  More than half of the 120 million annual ED visits can be avoided, representing a $38 billion opportunity for savings.  Medication errors add up to seven million inpatient admission and outpatient visits involving serious but avoidable medication errors, representing a $21 billion opportunity for savings.  Unnecessary hospital readmissions is another area where savings can be achieved.  Seven million people are readmitted to hospitals within 30 days of discharge annually but 836,000 of these cases could be avoided, representing a $25 billion opportunity.

Another study believes that healthcare spending waste is much more widespread.  As much as 50 cents of every dollar spent in healthcare is wasted, according to Pricewaterhouse Cooper’s Research Institute. The organization determined that unnecessary price gouging makes up $1.2 trillion of the $2.2 trillion spent on healthcare nationwide.  “Our best estimate is that for the country as a whole, probably half of what we’re spending on healthcare delivery today is technically waste from a patient’s perspective,” said Dr. Brent James, chief quality officer for Intermountain Healthcare in Salt Lake City.  “There are better ways of doing it.”

The Institute of Medicine (IOM), a division of the non-partisan National Academy of Sciences, reports that “excess costs” – which translates to waste — in the American healthcare system cost $810 billion every year. Their findings?  Overly-high insurance administrative costs absorbed by doctors and hospitals cost $190 billion.  Insurance company inefficiencies cost $20 billion.  Unnecessary services (brand name drugs instead of generics, repetitive tests and procedures, etc.) cost $210 billion.  Too-high prices for doctors and hospitals cost $85 billion.  High drug and device prices cost $20 billion.  Errors and avoidable complications cost $75 billion.  Inefficient delivery of services costs $ 80 billion.  Fraud costs $75 billion.  Missed disease-prevention opportunities cost $55 billion.

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The Supreme Court Takes on the ACA

Tuesday, March 27th, 2012

As the Supreme Court begins three days of hearing about the constitutionality of the Patient Protection and Affordable Care Act (ACA), Americans have mixed feelings about President Barack Obama’s signature healthcare overhaul.  The individual mandate is extremely unpopular, despite the fact that approximately 80 percent of Americans have healthcare coverage through workplace plans or government insurance such as Medicare and Medicaid.  When the insurance obligation kicks in, the majority of Americans won’t need to buy anything new.  The bottom line appears to be that Americans object to being told how to spend their money, even if it solves the dilemma of the nation’s more than 50 million uninsured.  One critic dismissed the individual mandate by saying “If things were that easy, I could mandate everybody to buy a house and that would solve the problem of homelessness.”

Listen to Republicans describe the law as an attack on personal freedom, and you’d be surprised to learn that the idea originated with them.  Its model is the Massachusetts law enacted in 2006 when Mitt Romney was the governor.  Former House Speaker Newt Gingrich supported an individual mandate as an alternative to President Bill Clinton’s healthcare proposal, which put the burden on employers.  All four GOP candidates have promised to repeal the Affordable Care Act, which they describe as “Obamacare.”  Former Senator Rick Santorum (R-PA) terms it “the death knell for freedom.”

President Obama and congressional Democrats passed the mandate in 2010, without Republican support, in an effort to create a fair system that assures that all Americans — whether rich or poor, young or old — get the healthcare they need.  One thing that proponents point out is that other economically advanced countries have succeeded at it.  Congress determined that when the uninsured visit a clinic or the emergency room, the care they can’t afford costs roughly $75 billion a year.  A large percentage of that cost ends up adding $1,000 a year to the average family’s insurance premium.

In legal briefs challenging the law, opponents contend that the “minimum coverage requirement” — known as the individual mandate — would set a precedent that could apply to literally anything.  If it’s legal for Americans to be told to buy health insurance, Congress could try to impose “a broccoli mandate, a car-purchase mandate, really any other mandate that you’d want,” said Ilya Somin, a law professor at George Mason University.  “There are lots of interest groups that would love to lobby Congress to require people to buy their products.”

The mandate is intended to ensure that new insurance market reforms in the law work as intended.  Unless younger, healthier people — who often don’t purchase insurance until they get sick — are covered, the costs of those changes would be exorbitant.  In response to opponents’ admonitions that a mandate to buy insurance could lead to other government-required purchases, the Obama administration argued that no such examples exist.  “Respondents acknowledge that states do have the power to enact purchase mandates, but they identify no example of any state ever having compelled its citizens to buy cars, agricultural products, gym memberships or any other consumer product,” according to the Obama administration.

Not surprisingly, 73 percent of Americans believe that the Supreme Court will be influenced by politics when it rules on the constitutionality of the ACA.  The attitude crosses party lines and is particularly popular with independent voters, of whom 80 percent believe that the court will not base its ruling strictly on its legal merits, according to a Bloomberg National Poll.  Seventy-four percent of Republicans and 67 percent of Democrats believe that politics will be a determining factor in the court’s healthcare decision.

“I always worry when the court steps into the political thicket,” said Barbara Perry, a Supreme Court scholar and professor at the University of Virginia in Charlottesville.  “It does so at its peril.”  The justices themselves say that politics doesn’t impact their decisions.  “It is a very serious threat to the independence and integrity of the courts to politicize them,” Chief Justice John Roberts said at his 2005 Senate confirmation hearing.  Justice Stephen Breyer told Bloomberg News that politics doesn’t influence the court, even in cases with electoral implications.  “It would be bad if it were there,” he said.  “And I don’t see it.”

In reviewing the ACA, the Supreme Court is entering territory that it hasn’t approached since the days of Franklin Delano Roosevelt: ruling on a president’s signature legislative victory in the midst of his re-election campaign.  Justices are taking more time to listen arguments — six hours over three days — than any other case in the last 44 years.   “This is a central challenge to the modern Constitution, which was fashioned during the New Deal and then elaborated further during the civil rights revolution,” said Bruce Ackerman, a professor at Yale Law School in New Haven, Connecticut and author of The Decline and Fall of the American Republic.  “This goes to the very foundations of modern American government.”

The closest comparable was 76 years ago, involving Roosevelt’s New Deal, a response to the Great Depression.  It wasn’t a single piece of legislation and included the creation of Social Security.  The court ruled against parts of the New Deal, while leaving others in place.  The principal decision came when the court struck down much of the National Industrial Recovery Act, which allowed industries to create trade associations that set quotas and fixed prices.

Those wishing to tune in and watch the excitement are destined to be disappointed. The Supreme Court will make available same-day audio of the oral arguments.  In its announcement, the court said it is making the audio available because of the “extraordinary public interest” in the case.

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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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