The Continuing Saga of Long Term Care

My masters thesis was on solving how long-term care is financed in this country. All these years later the financing issue is still unresolved. One option, LTC insurance, is only held by 10% of seniors. Medicaid still funds the majority of LTC costs. This column from Kaiser Health News is a good summary of the issue:.

http://www.kaiserhealthnews.org/Columns/2010/December/122310pollack.aspx

Docs in MA Looking to Improve Patient Experience

In Massachusetts, where patient experience survey results are publicly reported, the majority of physician groups have undertaken initiatives to improve office visits for their patients, such as changing office workflow, training staff, and investing in electronic health records, according to a new Commonwealth Fund–supported study published online by the Journal of General Internal Medicine. There has been less focus, however, on efforts to enhance clinicians' interpersonal skills, which play a central role in patients' care experiences.

Isn't it amazing how things that are publicly reported actually are paid attention to by those who are effected by the results?

Why No Outrage Over Deaths Caused by Medical Errors?

Mistakes that occur in a hospital setting are the real death panels out there. Yet these unnecessary deaths garner little attention:

Just before Thanksgiving, the Times did place on the front page a New England Journal of Medicine study concluding that the death rate from medical injury had not declined since 1999. Worth noting was were the vague explanations by health care leaders as to why progress has been so slow. Additionally, the story did not even mention the HHS report, which was based on a seemingly better methodology and more recent data. Perhaps the medical editors don't read the business pages.

Completely ignored by all was a careful study released in August by the Society of Actuaries that used claims data from private insurers. Even in this younger and presumably healthier population, errors in 2008 caused more than 2,500 avoidable deaths -- not to mention more than "10 million lost days of work." (I presume this figure refers to the effect of injured workers, not dead ones.)

Looks Like 10% or More is the Definition of "Unreasonable"

From Kaiser Health News:

Health insurers seeking a rate increase of 10 percent or more in 2011 must publicly detail why the increase is needed, under proposed rules released by the Obama administration Tuesday.

In following years, the Department of Health and Human Services will adjust the specific percentage threshold for each individual state. Thresholds would vary partly because medical costs vary by state.

The proposed rules, which would affect insurance policies sold to individuals and small businesses but not large employers, result from the new health care law. Administration officials repeatedly criticized insurers for raising rates excessively during and after the long debate leading up to passage of the law in March.

http://www.kaiserhealthnews.org/Stories/2010/December/21/ratesdec21.aspx

McKinnsey Model Results on Impact of Individual Mandate

This is surprising:

McKinsey and Co., an international consulting company, estimates the number of people residually uninsured will be as high as 40 million in 2016. Dr. Robert Kocher, director of the firm's Center for U.S. Health System Reform and a former special assistant to President Barack Obama on health care, recently spoke with Kaiser Health News' Amita Parashar about the center's estimates and who might not get insured as the health law takes effect.

Massachusetts though also implemented a mandate and saw its uninsured rate drop to around 3 percent. What Lessons can be learned from the Bay State?

Massachusetts did a nice job on public education. By having the Boston Red Sox help publicize, by using a lot of different channels, they've reached much of the population that perhaps has less awareness about health care insurance and also did a great job of getting young people in. Overall they had a relatively better risk pool and better pricing than you get if they weren't as effective in that area. The plans on the exchange are also well-represented and easy to "shop" for – enrollment is quite fast and easy. I enrolled in a plan on the exchange as an experiment and was impressed at how easy and effective it was to make a choice. It narrowed the choices based on your ZIP code and various factors you put in, which made shopping simple.

Uninsured Number Almost 60 Million

According to the National Health Interview Survey as of March 2010 over 59M people did not have HI the previous 12 months. This works out to 19% of the population.

Regulators Aim to Make Comparing Policies Easier

I have personally seen how many people do not have a clue when it comes to understanding their health insurance benefits. So for regulators to develop a template that insurers will have to follow to make it easier to compare policies is a great idea:

http://www.kaiserhealthnews.org/Stories/2010/December/15/State-Insurance-Officials-Vote-Rules-Health-Policies.aspx

Low Penalties for the Individual Mandate

With all the "concern" about the individual mandate, one issue that has yet to be addressed is the low penalty for not purchasing coverage. The fines are nothing when compared to purchasing insurance through a state exchange. Here is an article that provides more detail:

http://www.kaiserhealthnews.org/Columns/2010/December/121410laszewski.aspx

So How Will HHS Define Unreasonable?

[A] mechanism in the new health care law [is] designed to give insurance companies pause before proposing such large increases. Under the law, Washington won't be able to block big increases, but it will work with states to conduct annual reviews of increases that are considered "unreasonable." And the federal government gets to define what's unreasonable. Any day now, Health and Human Services Secretary Kathleen Sebelius is expected to issue regulations spelling out how the department will define the standard and the process by which the HHS will work with states to review the increases.

This should be interesting.

State Power Over Health Care Reform

While the ACA is a piece of federal legislation whose implementation is being overseen by HHS, quite a bit of authority is up to the states:

The exchanges, which still have to be set up, are state based, as are Medicaid programs. State insurance commissioners will have a lot of power and control to set regulations on how the exchanges will work. That will make a big difference in how reform functions in the individual insurance market – where many of the uninsured are expected to get insurance.

While the overhaul sets national standards for minimum benefits that insurers must offer in the exchanges, states can augment them. States could demand that insurers meet certain criteria, such as benefits requirements, or decline to set any at all. Each state will also have to determine whether to administer the exchange itself, let a private entity do so, or decline entirely and submit to federal intervention. Additionally, the law provides states much leeway in determining what is an "unreasonable" premium increase. States could go as far as to refuse any increases without justification, or merely require justification only for severe increases, and then, perhaps, after the fact. The medical loss ratio can be changed on a state-by-state basis with approval from the Department of Health and Human Services.

MA Medical Society Expresses Concern About ACOs

As I have said before, Massachusetts is the bell weather for what the future of health care looks like under the ACA. To try to slow down medical cost increases in the state, global payments are being considered. However, the MMS has its concerns:

The society's greatest concern, according to Coombs, is the disparity among providers that would easily integrate into an ACO environment and others that lack the appropriate technology or funding to adopt the ACO framework, including a global payment system.

"We support the notion that an integrated healthcare delivery system is a good thing," she told HealthLeaders. "However, there are physicians within our membership that lack the infrastructure to be able to transition into an accountable care organization at this stage. We encourage a pluralistic compensation system to include fee-for-service, salary, and limited pilot studies that utilize global payment system."

MMS expressed additional concerns about the ACO model, saying in a statement that it remains an untested method of healthcare financing and can pose unintended consequences that can impair the physician-patient relationship.

Kaiser Study: State Capacity to Regulate HI Premiums Varies Widely

• Kaiser study: States’ abilities to regulate insurance premiums highly variable: A recent Kaiser Family Foundation study examined laws in all 50 states and interviewed state department of insurance leaders in ten to assess preparedness of states to implement health insurance premium oversight provisions of PPACA. The study conclusions were:
  • A state’s statutory authority often tells little about how rate review is actually conducted in the state… The rigor and thoroughness that states bring to rate review can vary widely, and some states had little express statutory authority to disapprove rates prior to their use.
  • In many cases, statutory authority to disapprove rates does not extend to all market participants. A number of states only require certain carriers to undergo rate review and exempt other commercial carriers.
  • Most states interviewed use a subjective standard to guide the review and approval of rates. Common standards are that rates cannot be “excessive, inadequate, or unfairly discriminatory,” or that “benefits are reasonable in relation to premiums charged.”
  • Most of the states interviewed have made little or no effort to make rate filings transparent. Generally, states require the public to physically visit the department of insurance to access the documents in a rate filing. And many states allow carriers to designate some portions of the rate filing to be “trade secret” and thus not available to the public.
  • Many states lack the capacity and resources to conduct an adequate review. Many states do not have a sufficient number of trained actuaries to review all filed rates. In addition, statutory clauses that deem a rate approved if it is not acted on within 30 or 60 days can limit a state’s ability to conduct a thorough review.

States have a long way to go on this front.

Health Promotion and Premium Costs

Here are some recent articles debating whether employee health promotion programs save money:

Private insurers may be better at controlling healthcare costs than Medicare, according to a Health Affairs study of two Texas cities. The study is a follow-up to a widely read 2009 New Yorker article by Atul Gawande that showed per-capita Medicare spending in McAllen, Texas, was 86% higher than in El Paso. Gawande used data from the Dartmouth Atlas of Health Care for the article. But that dramatic variation in spending between the two cities evaporated in the private insurance market. ... The authors suggest that private insurers have means to control costs that Medicare does not, including utilization review and disease-management programs" (Vesely, 12/7). Earlier, related KHN coverage: Texas Town - Famous For High Medicare Costs - Has Cheaper Side (Rau, 12/7).

The Los Angeles Times: Meanwhile, "[a]s health insurance costs rise, employers are scrambling to reduce premiums, especially now that they average $10,073 per employee, according to a survey by benefits-consulting firm Mercer. One plan of attack? Wellness programs, with companies offering employees incentives to participate. ... The idea sounds simple -- just make people healthier and insurance claims will go down. But that's more easily said than done. Human resources managers debate how much they can impose health-related requirements on employees amid concerns of privacy, overreaching and discrimination. Also, there is that pesky return-on-investment question: Does health improve quickly enough to justify the expense, especially if turnover is high?" (Von Bergen, 12/7

Aetna Continues Its Quest for Health Data Mastery

http://www.businessinsurance.com/apps/pbcs.dll/article?AID=/20101207/BENEFITS02/101209920/1245

Key paragraph:

Aetna is entering the “new frontier” of information technology to help doctors and clients control costs, Chief Financial Officer Joseph Zubretsky said on Nov. 11 at an investor conference. Tuesday’s deal follows similar moves by UnitedHealth Group Inc., the biggest insurer by sales, as insurance companies diversify to cope with the U.S. health care overhaul law passed in March, said Jason Gurda, a Leerink Swann & Co. analyst in New York.

“Aetna is looking to provide a broader product offering and be heavily involved in the nuts and bolts of building and modernizing the health care system,” Mr. Gurda said in a telephone interview.

Concerns Moounting About ACOs

CQ HealthBeat: "The medical device industry told the Centers for Medicare and Medicaid Services that it's concerned about whether accountable care organizations could give providers financial incentives to hold back on needed patient care, particularly on technology. Meanwhile, insurance plan executives warned CMS officials that the ACOs could give hospitals and doctors new bargaining leverage in negotiations with insurers. Both outlined their concerns in letters sent to CMS late Friday. ... CMS officials in charge of writing the rules for the new systems are asking groups to offer input into how they should be structured" (Adams, 12/6).

The Hill Healthwatch: "The Medicare payment advisory panel is warning that accountable care organizations (ACOs), boosted by the new healthcare reform law, might face public backlash similar to what managed care organizations experienced in the 1990s. The reform law provides incentives to ACOs -- groups of providers and hospitals that coordinate efficient and quality care to a certain set of Medicare patients. ... However, prior history shows that ... some doctors who opposed the organizations helped stoke patients' fears, the Medicare Payment Advisory Commission (MedPAC) wrote in a letter to the Medicare chief last week" (Millman, 12/6).

Becker's Hospital Review: "Congress may have to create incentives for joining ACOs, such as lower out-of-pocket costs or getting a part of the savings, MedPAC wrote. The panel also recommended allowing beneficiaries to switch from an assigned primary care provider to another provider who is not in an ACO" (Page, 12/6).

HI Premiums Increases Continue to Outpace Wage Increases

Premiums for employer-sponsored family health insurance increased an average of 41 percent across states from 2003 to 2009, more than three times faster than median incomes, and Maryland's rise was among the highest, at 50%, according to a report to be released Thursday by the Commonwealth Fund. The report presents a state-by-state analysis for six years of premiums paid by employers and employees. The report "also found that deductibles rose sharply in almost all states, increasing an average of 77 percent from 2003 to 2009 in large as well as small firms