Monday, June 30, 2014
Now that the furor over the scheduling fiasco at some of the Veterans Administration Health Centers has become tepid this article reviews problems in the V.A. which would not be ameliorated by the private sector, as suggested by some legislators.
Fact-There were inordinate delays in patient care at some Veteran’s Health Centers
Myth-Treating Veterans in the private sector would improve their care
The V.A. has an unusual patient mix, which includes severe combat injuries as well as an aging population of older veterans with chronic disease and often, low incomes. First of all, with the exception of major urban trauma centers, most U.S. hospitals are not ready to treat combat injuries, especially in the mental health and social support areas. Secondarily, the private sector health system in the United States is driven by finance and reimbursement decisions which do not target serving the chronically ill and low income patients. Though the nation now provides health insurance to most of its population, if you availed yourself of the tax-credit-insurance-exchange-option, this does not mean that the low income population who are covered solely on Medicare/Medicaid actually are able to obtain care management in any coordinated manor. The Veteran’s Administration does provide care management, both in terms of the nation’s first and well integrated electronic medical record program and because the V.A. is a single health system. The electronic medical record and patient management system of the V.A. is so good that other countries have adopted it, including Switzerland, and it was a free open source system until former President Bush allowed Cerner to put a black box around it. Fobbing the veterans off into the mélange of U.S. health systems would not create better record keeping or care coordination, except possibly under the best integrated health systems, such as the Mayo Clinic or Kaiser, which function as true group practices. Even if the best integrated health systems could contract to serve veterans, there would be capacity issues.
Fact-The incentive plan for Veteran’s Health Center managers was based on reducing patient wait times
Myth-Perverse incentives in the private sector do not cause delays and inappropriate treatment for patients
In reality, the private health sector in the United States is composed of many for-profit and non-profit health care organizations, and financial interests all too often cause adverse patient care and waste. Primary areas of waste in the private sector health system are; predominance of unnecessary procedures which do not necessarily improve patient outcomes and fraud. The Federal Bureau of Investigation estimates that Medicare fraud costs the government up to ten percent of all annual Medicare billings, which meant the fraud tally was 57 billion dollars in 2011. That works out to two hundred dollars for every man, woman, and child in the country.
Fraud is not a problem in the V.A., since there are no private sector incentives to overcharge or provide unnecessary services, as the entire system runs on a budget. One of the concerns in the private health care system now is the shortage of primary care clinicians, especially since we have added so many more patients to the lowest economic tier of medical care, via the Medicaid expansion. This program does not provide adequate reimbursement for health care providers. The current Medicaid program is probably the closest model the nation has to the V.A. patient management issues, because it has a low income patient population, who also have difficulty finding a doctor, which results in wait times and gaps in the care continuum. As T.R. Reid pointed out in The Healing of America, we have citizens going blind because they can’t afford their glaucoma medicine.
Fact-The Veteran’s Administration is the most cost effective health care system in the nation for the complex patients it serves
Myth-Private sector health systems could treat the veterans more efficaciously
Even if we just compared the Veterans Administration to Medicare, the V.A. is far less expensive than the per capita cost of Medicare. A recent study by the Health Economic Resource Center comparing prescription drug costs between Medicare and the Veterans Administration shows the V.A. costs 48.2% less for the same RX. This is because, unlike Medicare (no thanks to President Bush) the V.A. actually has group purchasing of prescription medications and a lower administrative cost for distribution. And this economic principle applies throughout its network.
Private health care systems must balance their budgets based on a complex system of financial reimbursements for services, because they are not government agencies. This means they can make organizational changes with greater ease, but they also assume the financial responsibility. Because of this reality, the private sector has an over-abundance of imaging, specialty surgical facilities and the like, as they are very lucrative. The U.S. health care model has a “build it and they shall come” approach, hence we are awash in ambulatory surgical centers for joint replacements. Let’s face it, doctors spend twelve years in medical training and have huge government funded loans and they need to make money. As individuals they are merely responding to the health system of incentives, which is driven largely by medical device companies and the pharmaceutical industry.
To improve care for our veterans, many whom have serious injuries from the Afghanistan and Iraq wars, we need to give the Veterans Administration enough money to hire enough clinicians. All of the political rhetoric and head rolling won’t change the patient wait times if there aren’t enough clinicians. I don’t want to hear about congressmen taking the agency to task, but rather, how much money has been allocated to help alleviate this problem. Don’t take a short cut with our service men and women. It isn’t always about making money, but about providing care.
This article was written by Roberta E. Winter, aka healthpolicymaven and author of Unraveling U.S. Health Care-A Personal Guide.
Monday, June 2, 2014
Small Business Insurance Exchange First Year Results-Where Does Your State Stand?
Now that first year data for enrollment in Small Business Insurance Exchanges is available, The Commonwealth Fund, a nonprofit health systems research group, sponsored a webinar for SHOP results. This article reviews nine states which chose to participate in the Small Business Insurance Exchange program, reveals information on enrollment and some surprising innovations for these quasi-governmental insurance marketplaces which was gleaned from that presentation as well as other sources including state legislative sites.
Several states created incentives or mandates for the local insurance industry to participate in the SHOP exchanges. The difference in approach between Maryland and Washington is stark, one set a clear standard and mandated participation, sort of “you will suffer together equitably approach” versus Washington’s “who wants to play approach. Colorado, New York, and Oregon decided to implement waiting periods for insurers who chose not to participate in the small business exchange program initially. This does not appear to be much of a disincentive, because the cost to establish the programs, would be borne by the insurers, and create a competing component for their existing insurance programs.Waiting to participate may be viewed as prudence, but with the risk for market share loss.
California’s Small Business Health Options program has been plagued by enrollment glitches, but it is expected to succeed over time. When I navigated to their site from the healthcare.gov site, it suggested that employers had to mail their completed application materials.
Colorado’s health insurance exchange web site, called Connect for Health Colorado clearly indicates the employer category, which the end user can follow to locate plan information and insurance broker or government assistance.
District of Columbia
The District of Columbia was able to get its Small Business Exchange open in a mere nine months and it includes; Aetna, Carefirst (a Blue Cross/Blue Shield plan), Kaiser, and United Health Care. According to the D.C. Health Exchange Director, only one group with fifty employees enrolled in their SHOP, but they found robust participation from the small businesses it was meant to serve. Of program enrollees 83% had fewer than five employees and 50% of those enrollees chose the platinum or most comprehensive health care plan, and 28% chose the gold plan. It appears that adequate health care coverage is of more concern to these business owners than the lowest price plan.
Florida has been successful with its Small Business Health Options Program and its web portal was clear and easy to follow.
Originally Maryland mandated that insurance companies with state revenues in excess of 20 million of insurance premiums participate in the small business exchange. Maryland further incentivized private insurance companies to participate in its SHOP CO-OP program by exempting them from paying premium tax on small business health insurance plans within the SHOP program. As of May 2014, Maryland has decided to abandon plans to run its own Small Business Exchange, because of the high cost, instead opting to rely on the insurance broker community to market it. This means that qualifying employers will still be able to obtain government tax credits for purchasing insurance, which have been available since 2010, but only through the federal exchange starting this year.
In New York State, most major insurance carriers were interested in participating in the small business exchange. But New York has a robust marketplace with many carriers and several of their Medicaid carriers were interested in entering the SHOP marketplace. This would seem to be a prudent move, allowing diversification of risk, a stabilizing factor for managing a population.
Oregon, which is now infamous for accepting over 130 million dollars in federal money to set up an exchange, including 48 million for “early innovation”, and ultimately was unable to enroll a single individual it it’s web portal. For more information on federal money given to states for the insurance exchanges go to Chapter 13, of Unraveling U.S. Healthcare-A Personal Guide, published in July 2013, by Rowman and Littlefield. Oregon found, like Washington, that only a single insurance company wanted to participate in the SHOP program. As of March 17, 2014, Oregon has been unable to enroll a single individual on its small business exchange program. To further entice small business to enroll in the small business exchange program Oregon has reduced premiums by 13.1%, which is a significant regression.
Rhode Island has successfully launched its Small Business Exchange program, with a greater percent of small business participation than any other state. Rhode Island’s web site for SHOP is integrated into the general health exchange web site which I was able to navigate through easily. Way to go Rhode Island!
Washington State chose not to participate in the small business exchange in the inaugural year, primarily because only one insurer indicated an interest in bothering with the exchange process.
Federal Marketplace Information
The Center for Medicare and Medicaid (CMS) has also stipulated that insurers with a 20% or greater share of the individual exchange market must offer the small business exchange as well. The deadline for small business exchanges has been moved to 2015. CMS has created a tool for employers to use to calculate full time employee equivalents, in order to determine eligibility for SHOP exchanges, in addition to the tax credit estimator. Follow the links to see for yourself.
Employers are slated to receive a bundled monthly billing even if employees have five different provider and plan choices, by 2015. The federal small business insurance market place will include an agent/broker portal, so businesses can designate a representative and that party will receive some stipend. In order for a small business to receive the federal tax credits for health insurance purchasing, the plan must be part of the Small Business Health Exchange Option, which mandates standards for coverage and plan administration protocols.
It is unclear how insurance agents will be paid for federal insurance exchange enrollments, but since CMS does pay Medicare enrolled agents to market Medicare products, and CMS is the governing agency for the program, this should be manageable. The big difference is Medicare plans have a single 3 month open enrollment window each year, whereas the SHOP plans have a rolling calendar of enrollments depending on the date of inception.
For more information on small business exchanges, an excellent nonpartisan summary is found at the National Center for State Legislation, which was one of my sources for Unraveling U.S. Healthcare-A Personal Guide’s chapter on the Patient Protection and Affordable Care Act.
And this is the healthpolicymaven signing off, encouraging you to explore your options for health care subsidies from your government. Your government is helping you to pay for your insurance, through direct insurance subsidies or indirectly through tax free benefits for individuals and tax deductible benefit plans for employers.