Assessing the Real Cost of Health Care in America
We can’t measure the real cost of any public program, unless we consider the economic factors, such as opportunity cost, which is the cost of spending excessive resources on health care that could otherwise go to something else. In order to do this, lets look at what other industrialized countries have in per capita income and what they are spending for health care. Based on 2006 income data the United States is no longer the wealthiest country per capita. Norway is the wealthiest country with $53,100 dollars of gross national income per person, compared to the USA’s $44,200 per person. Ireland is third with an income of $41,300 per person. What is interesting is both of these countries have national health care plans and higher taxes than in the United States. When you compare spending on health care, citing the Journal of Health Affairs article published in June of 2004, Norway spent $2,920 per person compared to the United States $4,487 per person, and Ireland spent $1,935. Even Switzerland, with its high cost of living and land locked economy, spent considerably less than the United States, at $3,322 per person in that year.
Cost of USA Healthcare Impedes Economic Growth
Health care costs are frequently measured against Gross Domestic Product, which is the sum of what we produce in the United States. As a former farmer’s daughter, I grew up owning the ethos that we are what we produce. Gross domestic product per person is also greater in Norway than in the U.S.A., with $102,400 per person versus $90,700. (Ireland’s GDP is not on the top 13 list, so I have not listed it.) Even when you look at GDP per hour worked, the United States is not in the top three. Here is that breakdown; Norway $72.70/person/hr., Belgium $56.10/person/hr., Netherlands $52.10/person/hr., France $51.30/person/hr. and then the United States with $50.60/person/hr. There are a variety of ways to measure the value of a gross domestic product, such as per person per hour worked or just per person, but either way, the United States is no longer preeminent in GDP. When you couple that with the loss of the dollar in value throughout the world, (the Euro is worth 50% more than the U.S. dollar now), the cost of America’s existing health care system must be examined as an impediment to real economic growth.
USA Spending on Health Care
The argument against a cohesive national health care plan is often based on the presumption that financing national health care would be excessive, but in fact, all of the countries that have national health care programs spend less than the United States. It is time we as a nation look at what we are getting for our health care investment. Lets review the current financing mechanisms for health care in this country, including; federal programs, employer sponsored health care plans, and individually funded health care. Citing the most recent Kaiser Foundation reports for health care spending here is the breakdown for the United States Health Care Budget excluding Medicare:
Medicaid- (05 data)- $4,202 per individual
SCHIP Medicaid (05 data)-$-1,509 per child
Employer Plans (06 survey)-$4,479 per individual
$12,206 per family
Individual Plans (04 data)-$3,331
Determine What We Are Getting
No matter how you look at health costs in the United States, we are spending much more than any other industrialized country. Using this comparison of current health care programs and their costs, the reader should conclude they have a minimum budget of $3,397 per person for health care. As a society we need to determine the best way to finance our health care, which is already paid for by the individual through taxes, direct contributions, and increased costs in goods and services to cover corporate benefit programs. The question on the lips of everyone then becomes "What am I getting, not just what is the cost of the program."
Assessing Hidden Costs
To reveal the true cost of any program you have to do a solid cost/benefit analysis, which takes into account hidden costs like pass-through expenses for inadequate reimbursements to clinicians. An example of a hidden cost is when Medicaid fails to adequately pay hospitals or physicians for services, thereby requiring those providers to recoup higher fees from other patients in order to stay solvent. Other hidden costs include re-insurance for catastrophic claims for private plans, which the government could subsidize through a stop-loss guarantee and save employers about 5% in administrative expenses. Other areas of expense include plan administration and claims payment, which could be streamlined by requiring regional health care organizations to offer uniform benefits, and standardized claims processing. This could generate another savings of 3% to 6%. This combination of changes then creates the budget for allocating health care benefits, such as covering everyone for primary care.
Budgeting National Health Care
I did a quick calculation on how our health care investment, which averages $3,758 per person (excluding Medicare), compares to the average USA wage, and it is 7.68% of the average wage. So, if employers were going to continue to contribute to the cost of national health care, their share would be about half of that, or close to 4% of wages. This could be paid by contributions to a mandated benefit plan or through a payroll tax increase, but I am betting employers would rather contribute to a health plan than pay more taxes. Individuals would pay half of that figure also. For people who are of low income, the federal government would subsidize their cost. In this way we would have the start of an equitable health care financing system, where the budget is transparent, and inclusive of everyone. So, the next time you hear someone talking about health care costs, make sure you consider the whole picture, not just the insurance premium and not just the tax contribution.
This article was written by Roberta Winter, MHA, MPA and may be reprinted with her permission.
Recap on Presidential Candidate Health Care Reform Platforms
Deciphering Health Care Reform Platforms
This is part four in a series on the health care reforms as stated by Clinton, McCain, and Obama. I review wage and tax, as well as Medicaid and private health plan cost data. Briefly here are the summaries of the candidate health care reforms:
Clinton
Would extend health coverage to all residents through a combination of Medicaid/SCHIP expansion, employer mandates, and federal subsidies. Clinton would allow U.S.A. residents to enroll in the Federal Employees Health Benefits Plan if they do not have employer-sponsored coverage.
Who Pays
Clinton would require large employers to offer health insurance to their employees. She would also require residents to have health insurance. Clinton would limit tax cuts for taxpayers with incomes over $250,000 per year and use the revenue generated to pay for the federal subsidies for health care, like Medicaid expansion. She also estimates a reduction in expenses for payments to hospitals for the uninsured, probably through reduction in disproportionate share reimbursements.
McCain
McCain would not extend health coverage to all residents, but he would expand Veterans Benefits.
Who Pays
McCain want to change clinician reimbursements through the creation of a single fee for coordinated patient care, as opposed to the current DRG reimbursement based on billing per item. This reimbursement might benefit primary care providers more and possibly specialists who work with chronic diseases, like diabetes. It may not be to the benefit of all physicians however as some current reimbursements would either be eliminated or reduced. He indicates he would reform the tax code, including the elimination of tax preferences for employer paid health benefits. He would also provide a tax credit for individuals to obtain health insurance. He advocates medical savings accounts and high limit catastrophic insurance coverage with multi-year contracts.
Obama
Obama would require all children to have health insurance or to be covered on the Supplemental Childrens Health Insurance Plan, SCHIP. He would also require employers to offer health insurance coverage or to contribute to the cost of the public health plan alternative. Obama does support mental health parity, which would be a big plus for hospitals, who are the refuge for the mentally ill who can’t obtain other treatment. Obama would offer to federal reinsurance to employers, to protect them from significant medical claims. This provision would be very attractive to employers who are currently struggling with an unstable re-insurance marketplace.
Who Pays
Employers would be required to pay for the cost of health insurance under the Obama plan. Obama would also discontinue tax cuts to those with incomes over $250,000/year. He has not specifically identified revenue recapture under projected savings for health care reforms, but he does talk about gains through efficiencies.
Monday, February 11, 2008
Tuesday, February 5, 2008
Crib Notes on Health Care Platforms for Clinton, Obama, and McCain
Leading Presidential Candidates-Clinton, McCain, Obama
Proposals for Health Care Reform
This week’s column analyzes the leading presidential candidates Senators Hillary Clinton, Barak Obama, and John McCain proposals on health care reforms and how their ideas would address these five questions:
1. Access to Care
2. Optimization of Government Purchasing for Medicare and other Programs
3. Reimbursement Alignment for Desired Clinical Outcomes
4. Streamlining the Health Care System Administratively
5. Financing Health Care for all
Access to Care
The three questions that must be addressed in order to answer the access question are:
Do the proposed changes provide health care coverage for all residents, or at least a close approximation of that?
Secondly, do their proposals address adequacy of reimbursements for health care clinicians and facilities?
Thirdly, are there enough clinicians to meet the increased demand for primary care and other services from changes in health care access and if not, what is being proposed by the candidate?
Mandate for Universal Health Coverage
Yes, for Clinton and to a lesser extent, Obama, and no for McCain in mandating health coverage. Clinton would require every resident to have health insurance coverage and require large employers to provide employee health care or contribute to the cost for it. Obama would require employers to offer meaningful coverage or contribute to the cost of the public health plan.
Expand SCHIP, Children’s Insurance under Medicaid
Yes for Clinton and Obama, no for McCain.
Create a National Public Health Plan
Obama would create a National Health Insurance Exchange for small businesses and individuals without access to other public programs, to offer health insurance through private plans or the new public plan. Clinton would offer a similar health choice menu for public or private plan enrollment. McCain would not do either.
Reimbursement Reforms impacting Access
McCain’s position to reimburse Medicare and presumably Medicaid on a single fee for coordinated care, could help increase access to more pediatricians and other primary care providers.
Nursing Pipeline to Assure Adequate Supply
Clinton and Obama propose an increase in federal funding for training more nurses. Obama also proposes improvements in reimbursements, training grants, and loans for health care professionals.
Optimization of Government Health Care Programs
McCain’s List for improving existing government programs
1. Adopt malpractice reforms
2. Strengthen health care anti-trust laws
3. Improve transparency in pharmacy pricing
4. Change health insurance marketing from state to national oversight
5. Support public health initiatives for chronic disease prevention, health education, and reductions in obesity, diabetes, and smoking.
Clinton’s list for improving existing government programs
1. Permit the federal government to negotiate RX prices for Medicare directly with drug manufacturers
2. Change patent laws to increase the availability of generic drugs
3. Limit pharmaceutical advertising to consumers
4. Encourage disclosure of medical errors with liability protection for physicians
5. Support more federal funding for reducing health disparities and developing quality measures
6. Strengthen consumer protections for long-term care
Obama’s list for improving existing government programs includes
1. Promotion of generic drug programs
2. Allowing importation of drugs from other countries
3. Direct negotiations with drug companies for the Medicare program
4. Reform malpractice
5. Strengthen anti-trust laws in health care
6. Creation of an independent institution for review of medical errors, to establish quality standards, and create measures.
Reimbursement; Paying for Desired Clinical Outcomes
McCain’s List
1. Change clinician reimbursements to a single coordinated payment for care, rather than fee for service
2. Bar payment for preventable medical errors or mismanagement by health care providers
3. Provide Medicare payments for patient care coordination and prevention
Clinton’s List
1. Provide federal recognition for physician driven certification for best practices and incentivize quality through an increase in federal reimbursements for Medicare
2. Would not pay for preventable infections and other medical errors
3. Reduce reimbursements on the Medicare Advantage Plan to the equivalent of Medicare, which is considered inadequate compensation by many physician groups
Obama’s List
1. Reduce Medicare Advantage Plan reimbursement to the same level as Medicare, which could impare access to primary care.
2. Creation of a new public health plan, similar to the federal employee’s health plan, which could be expensive.
3. Obama does not specify how he would reward clinicians for chronic disease management or other health care goals.
Streamlining Health Care Administratively
McCain’s List
1. Creation of a uniform electronic medical records standard
2. Advocates national standards for insurance regulation, not state
3. Encourage alternate forms of access and licensing for providers
4. Establish national standards for measuring health outcomes
Clinton’s List
1. Require all private insurance carriers to offer coverage on a guaranteed issue and renewable basis, creating one national standard
2. Move to establish community rates, rather than variations based on health and other factors
3. Require private insurers to meet minimum loss ratios, which means a high value of every dollar collected would have to go for consumer benefits
4. Require coverage for preventive care
5. Encourage regional purchasing cooperatives, where states can band together for optimal purchasing and stabilization of health care financing
6. Establish national standards for prevention of health disparities, technology for electronic medical records, chronic care management, best practices, and medical error disclosure
Obama’s List
1. Create a National Health Insurance Exchange for residents to obtain coverage through private or public health plans.
2. Require health insurance coverage to be guaranteed issue and that the plans meet standards for benefits and quality.
3. Maintain existing state health care reforms if they meet the minimum standards for the national health plan.
4. Creation of an independent quality institute for health care, to analyze data, and promote ways to minimize health chronic disease
5. Promote new models for addressing physician errors along with reforming malpractice laws
Financing New Health Care Ideas
One of the key components of any health care reform is the financing. Presently health care is provided through the FICA Medicare tax, which is matched by employee and employer, state taxes for Medicaid, general funds from the U.S. government, employer contributions, and individual contributions. In a later issue, I will review how all of these stack up, but for now, here is a summary of the top three candidate’s ideas for financing health care reforms.
Senator McCain
1. Finance health care expansions by reforming the tax code, including eliminating tax preferences for employer paid health benefits
2.Allowing individuals to purchase multi-year health care contracts through Health Services Accounts (medical savings accounts)
3. Advocates a tax credit for individuals and incentives to obtain insurance coverage
4. Contain costs through changes in provider reimbursements, tort reform, and quality improvements
5. Senator McCain did not have a budget posted for his reforms as of January.
Senator Clinton
1. Require individuals who earn more to pay more for a national health care program
2. Tax subsidy to help families obtain health insurance
3. Would not phase out employer provided health plans, but would require large employers to provide health care
4. Senator Clinton estimates her reform package would cost a 110 billion a year after it is fully implemented, but has identified 21 billion saved by the reduction of uninsured and existing Medicaid payments to hospitals. She has identified another 54 billion in revenue recapture by limiting the employer paid health insurance tax exclusion and limiting the tax cuts for individuals with incomes over 250,000.
Senator Obama
1. Expand federal programs and create the National Health Insurance Exchange
2. If employers do not offer health care to employers, they would be required to contribute to the cost of the federal option for their employees
3. Obama’s annual estimate for the cost of his health plan reforms is 65 billion, which is half of Clinton’s. This seems grossly unrealistic when you consider that just covering the 46 million people who are uninsured, at the cost of the average private employer plan of $4,479 per year would equal 206 billion.
In conclusion, of the three candidates, Hillary Clinton has been the most explicit and realistic in terms of what her health care proposal would cost, initially, and ultimately.
Since the financing of health care reforms is very complicated, the next posting at http://healthpolicymaven.blogspot.com will review various budgets for the proposals. All reference material for candidate positions was gleaned from the Kaiser Family Foundation web site at: http://www.health08.org/D-Side-By-Side_01_31_08.pdf
Proposals for Health Care Reform
This week’s column analyzes the leading presidential candidates Senators Hillary Clinton, Barak Obama, and John McCain proposals on health care reforms and how their ideas would address these five questions:
1. Access to Care
2. Optimization of Government Purchasing for Medicare and other Programs
3. Reimbursement Alignment for Desired Clinical Outcomes
4. Streamlining the Health Care System Administratively
5. Financing Health Care for all
Access to Care
The three questions that must be addressed in order to answer the access question are:
Do the proposed changes provide health care coverage for all residents, or at least a close approximation of that?
Secondly, do their proposals address adequacy of reimbursements for health care clinicians and facilities?
Thirdly, are there enough clinicians to meet the increased demand for primary care and other services from changes in health care access and if not, what is being proposed by the candidate?
Mandate for Universal Health Coverage
Yes, for Clinton and to a lesser extent, Obama, and no for McCain in mandating health coverage. Clinton would require every resident to have health insurance coverage and require large employers to provide employee health care or contribute to the cost for it. Obama would require employers to offer meaningful coverage or contribute to the cost of the public health plan.
Expand SCHIP, Children’s Insurance under Medicaid
Yes for Clinton and Obama, no for McCain.
Create a National Public Health Plan
Obama would create a National Health Insurance Exchange for small businesses and individuals without access to other public programs, to offer health insurance through private plans or the new public plan. Clinton would offer a similar health choice menu for public or private plan enrollment. McCain would not do either.
Reimbursement Reforms impacting Access
McCain’s position to reimburse Medicare and presumably Medicaid on a single fee for coordinated care, could help increase access to more pediatricians and other primary care providers.
Nursing Pipeline to Assure Adequate Supply
Clinton and Obama propose an increase in federal funding for training more nurses. Obama also proposes improvements in reimbursements, training grants, and loans for health care professionals.
Optimization of Government Health Care Programs
McCain’s List for improving existing government programs
1. Adopt malpractice reforms
2. Strengthen health care anti-trust laws
3. Improve transparency in pharmacy pricing
4. Change health insurance marketing from state to national oversight
5. Support public health initiatives for chronic disease prevention, health education, and reductions in obesity, diabetes, and smoking.
Clinton’s list for improving existing government programs
1. Permit the federal government to negotiate RX prices for Medicare directly with drug manufacturers
2. Change patent laws to increase the availability of generic drugs
3. Limit pharmaceutical advertising to consumers
4. Encourage disclosure of medical errors with liability protection for physicians
5. Support more federal funding for reducing health disparities and developing quality measures
6. Strengthen consumer protections for long-term care
Obama’s list for improving existing government programs includes
1. Promotion of generic drug programs
2. Allowing importation of drugs from other countries
3. Direct negotiations with drug companies for the Medicare program
4. Reform malpractice
5. Strengthen anti-trust laws in health care
6. Creation of an independent institution for review of medical errors, to establish quality standards, and create measures.
Reimbursement; Paying for Desired Clinical Outcomes
McCain’s List
1. Change clinician reimbursements to a single coordinated payment for care, rather than fee for service
2. Bar payment for preventable medical errors or mismanagement by health care providers
3. Provide Medicare payments for patient care coordination and prevention
Clinton’s List
1. Provide federal recognition for physician driven certification for best practices and incentivize quality through an increase in federal reimbursements for Medicare
2. Would not pay for preventable infections and other medical errors
3. Reduce reimbursements on the Medicare Advantage Plan to the equivalent of Medicare, which is considered inadequate compensation by many physician groups
Obama’s List
1. Reduce Medicare Advantage Plan reimbursement to the same level as Medicare, which could impare access to primary care.
2. Creation of a new public health plan, similar to the federal employee’s health plan, which could be expensive.
3. Obama does not specify how he would reward clinicians for chronic disease management or other health care goals.
Streamlining Health Care Administratively
McCain’s List
1. Creation of a uniform electronic medical records standard
2. Advocates national standards for insurance regulation, not state
3. Encourage alternate forms of access and licensing for providers
4. Establish national standards for measuring health outcomes
Clinton’s List
1. Require all private insurance carriers to offer coverage on a guaranteed issue and renewable basis, creating one national standard
2. Move to establish community rates, rather than variations based on health and other factors
3. Require private insurers to meet minimum loss ratios, which means a high value of every dollar collected would have to go for consumer benefits
4. Require coverage for preventive care
5. Encourage regional purchasing cooperatives, where states can band together for optimal purchasing and stabilization of health care financing
6. Establish national standards for prevention of health disparities, technology for electronic medical records, chronic care management, best practices, and medical error disclosure
Obama’s List
1. Create a National Health Insurance Exchange for residents to obtain coverage through private or public health plans.
2. Require health insurance coverage to be guaranteed issue and that the plans meet standards for benefits and quality.
3. Maintain existing state health care reforms if they meet the minimum standards for the national health plan.
4. Creation of an independent quality institute for health care, to analyze data, and promote ways to minimize health chronic disease
5. Promote new models for addressing physician errors along with reforming malpractice laws
Financing New Health Care Ideas
One of the key components of any health care reform is the financing. Presently health care is provided through the FICA Medicare tax, which is matched by employee and employer, state taxes for Medicaid, general funds from the U.S. government, employer contributions, and individual contributions. In a later issue, I will review how all of these stack up, but for now, here is a summary of the top three candidate’s ideas for financing health care reforms.
Senator McCain
1. Finance health care expansions by reforming the tax code, including eliminating tax preferences for employer paid health benefits
2.Allowing individuals to purchase multi-year health care contracts through Health Services Accounts (medical savings accounts)
3. Advocates a tax credit for individuals and incentives to obtain insurance coverage
4. Contain costs through changes in provider reimbursements, tort reform, and quality improvements
5. Senator McCain did not have a budget posted for his reforms as of January.
Senator Clinton
1. Require individuals who earn more to pay more for a national health care program
2. Tax subsidy to help families obtain health insurance
3. Would not phase out employer provided health plans, but would require large employers to provide health care
4. Senator Clinton estimates her reform package would cost a 110 billion a year after it is fully implemented, but has identified 21 billion saved by the reduction of uninsured and existing Medicaid payments to hospitals. She has identified another 54 billion in revenue recapture by limiting the employer paid health insurance tax exclusion and limiting the tax cuts for individuals with incomes over 250,000.
Senator Obama
1. Expand federal programs and create the National Health Insurance Exchange
2. If employers do not offer health care to employers, they would be required to contribute to the cost of the federal option for their employees
3. Obama’s annual estimate for the cost of his health plan reforms is 65 billion, which is half of Clinton’s. This seems grossly unrealistic when you consider that just covering the 46 million people who are uninsured, at the cost of the average private employer plan of $4,479 per year would equal 206 billion.
In conclusion, of the three candidates, Hillary Clinton has been the most explicit and realistic in terms of what her health care proposal would cost, initially, and ultimately.
Since the financing of health care reforms is very complicated, the next posting at http://healthpolicymaven.blogspot.com will review various budgets for the proposals. All reference material for candidate positions was gleaned from the Kaiser Family Foundation web site at: http://www.health08.org/D-Side-By-Side_01_31_08.pdf
Sunday, February 3, 2008
Top Three Presidential Candidates Health Care Reform Proposals
Leading Presidential Candidates-Clinton, McCain, Obama Proposals for Health Care Reform
Two weeks ago I wrote an article about the five fundamental questions that need to be asked in order to design optimum health care reforms in the United States. This week’s column analyzes the leading presidential candidates Senators Hillary Clinton, Barak Obama, and John McCain proposals on health care reforms and how their ideas would address these five concerns:
Access to Care
Optimization of Government Purchasing for Medicare and other Programs
Reimbursement Alignment for Desired Clinical Outcomes
Streamlining the Health Care System Administratively
Financing Health Care for all
Access to Care
The three questions that must be addressed in order to answer the access question are:
Do the proposed changes provide health care coverage for all residents, or at least a close approximation of that?
Secondly, do their proposals address adequacy of reimbursements for health care clinicians and facilities?
Thirdly, are there enough clinicians to meet the increased demand for primary care and other services from changes in health care access and if not, what is being proposed by the candidate?
Of the three presidential candidates, Clinton, Obama, and McCain, only one opposes a mandate for health coverage and that is Republican McCain. Of the two leading Democratic candidates, Clinton would require every resident to have health insurance coverage and require large employers to provide employee health care or contribute to the cost for it. Obama would require all children to have health insurance and require employers to offer "meaningful" coverage or contribute to the cost of a public health plan. There would be limited change in access to health care with McCain’s stance, while Obama and Clinton would increase the number of people who could afford to access health care via insurance due to mandates and subsidies. In terms of expanding existing public programs, Clinton and Obama would expand Medicaid and SCHIP, the supplemental children’s insurance program, whereas McCain would only expand Veteran’s benefits. Obama would create a National Health Insurance Exchange for small businesses and individuals without access to other public programs, to offer health insurance through private plans or the new public plan. Clinton would offer a similar health choice menu for public or private plan enrollment.
McCain’s position to reimburse Medicare and presumably Medicaid on a single fee for coordinated care, could help increase access to more pediatricians and other primary care providers. If private insurance would become more available to a portion of the uninsured, this would allow these individuals to obtain care more readily than through Medicaid.
In terms of investing in health care infrastructure to increase the supply of nursing and other health care professionals, McCain does not address this, but Clinton and Obama propose an increase in federal funding for training more nurses. Obama also proposes improvements in reimbursements, training grants, and loans for health care professionals.
Optimization of Government Health Care Programs
To create more value from currently funded government programs, McCain would encourage risk-adjusted payments for Medicaid, coupled with private insurance. He also alludes to alternative forms of access and different licensing for providers. For cost containment he would adopt malpractice reforms, health care anti-trust laws, transparency in pharmacy pricing, and change regulation from state to national for health insurance marketing purposes. McCain would also support public health initiatives for chronic disease prevention, health education, and reductions in obesity, diabetes, and smoking.
Clinton’s platform permits the federal government to negotiate RX prices for Medicare directly with manufacturers, change patent laws to increase the availability of generic drugs, and limit pharmaceutical advertising to consumers. She would also encourage disclosure of medical errors with liability protection for physicians. Clinton would also support more federal funding for reducing health disparities, developing quality measures, and strengthening consumer protections for long-term care.
Obama’s ideas for optimizing government programs include promotion of generic drug programs, allowing importation of drugs from other countries, and direct negotiations with drug companies for the Medicare program. He would also reform malpractice and strengthen anti-trust laws in health care. Like Clinton, he supports the creation of an independent institution for review of medical errors, to establish quality standards, and create measures.
Reimbursement; Paying for Desired Clinical Outcomes
McCain would change clinician reimbursements to a single coordinated payment for care, rather than fee for service. He would also bar payment for preventable medical errors or mismanagement by health care providers. He would also provide Medicare payments for patient care coordination and prevention.
Clinton would provide federal recognition for physician driven certification for best practices and incentivize quality through an increase in federal reimbursements for Medicare. Like McCain, she would not pay for preventable infections and other medical errors. She also wants to reduce reimbursements on the Medicare Advantage Plan to the equivalent of Medicare, which is considered inadequate compensation by many physician groups.
Obama would reduce Medicare Advantage Plan reimbursement to the same level as Medicare, which could impare access to primary care. He also advocates creation of a new public health plan, similar to the federal employees health plan, which could be expensive. (Clinton talks about using the federal employees’ plan as a model too.) Obama does not specify how he would reward clinicians for chronic disease management or other health care goals. Obama has concentrated on the consumer and insurer aspects of health care, but does not seem to have spent much time reviewing clinician impacts.
Streamlining Health Care Administratively
All three candidates support deployment of a national medical records standard, but McCain does not specifically allocate federal funds in his platform. McCain advocates national standards for insurance regulation, not state, which would allow more competition from vendors. This would also allow national standards and certification for health insurance offerings. He would encourage alternate forms of access and licensing for providers and establish national standards for measuring health outcomes.
Clinton would require all private insurance carriers to offer coverage on a guaranteed issue and renewable basis, creating one national standard. She would also move to establish community rates, rather than variations based on health and other factors. Clinton would require private insurers to meet minimum loss ratios, which means a high value of every dollar collected would have to go for consumer benefits. She would also require coverage for preventive care. She would encourage regional purchasing cooperatives, where states can band together for optimal purchasing and stabilization of health care financing. Clinton would establish national standards for prevention of health disparities, technology for electronic medical records, chronic care management, best practices, and medical error disclosure.
Obama would create a National Health Insurance Exchange for residents to obtain coverage through private or public health plans. This is a first step in creating a national platform to educate consumers on health care options, setting one standard instead of fifty. Like Clinton, he would also require coverage to be guaranteed issue and that the plans meet standards for benefits and quality. The exchange would conduct the evaluations and communicate the values. He would maintain existing state health care reforms if they meet the minimum standards for the national health plan. He would support the creation of an independent quality institute for health care, to analyze data, and promote ways to minimize health chronic disease. Obama would also promote new models for addressing physician errors along with reforming malpractice laws.
Financing New Health Care Ideas
One of the key components of any health care reform is the financing. Presently health care is provided through the FICA Medicare tax, which is 1.651% of wages, matched by employee and employer, state taxes for Medicaid, general funds from the U.S. government, employer contributions which are heavily subsidized by tax deductions, and individual contributions. In a later issue, the healthpolicymaven will review how all of these stack up, but for now, here is a summary of the top three candidate’s ideas for financing health care reforms.
Senator McCain would finance health care expansions by reforming the tax code, including eliminating tax preferences for employer paid health benefits and allowing individuals to purchase multi-year health care contracts through Health Services Accounts (medical savings accounts). He also advocates a tax credit for individuals and incentives to obtain insurance coverage. He would contain costs through changes in provider reimbursements, tort reform, and quality improvements. Senator McCain did not have a budget posted for his reforms as of January.
Senator Clinton would require individuals who earn more to pay more for a national health care program. She would provide a tax subsidy to help families obtain health insurance. She would not phase out employer provided health plans, but would require large employers to provide health care. Senator Clinton estimates her reform package would cost a 110 billion a year after it is fully implemented, but has identified 21 billion saved by the reduction of uninsured and existing Medicaid payments to hospitals. She has identified another 54 billion in revenue recapture by limiting the employer paid health insurance tax exclusion and limiting the tax cuts for individuals with incomes over 250,000.
Senator Obama would expand federal programs and create the National Health Insurance Exchange. If employers do not offer health care to employers, they would be required to contribute to the cost of the federal option for their employees. Obama’s annual estimate for the cost of his health plan reforms is 65 billion, which is half of Clinton’s. This seems grossly unrealistic when you consider that just covering the 46 million people who are uninsured, at the cost of the average private employer plan of $4,479 per year would equal 206 billion. How is he going to cover the 46 to 50 million uninsured without a significant budget increase?
In conclusion, of the three candidates, Hillary Clinton has been the most explicit and realistic in terms of what her health care proposal would cost, initially, and ultimately.
Since the financing of health care reforms is very complicated, the next posting at http://healthpolicymaven.blogspot.com will review various budgets for the proposals. All reference material for candidate positions was gleaned from the Kaiser Family Foundation web site at: http://www.health08.org/D-Side-By-Side_01_31_08.pdf
This article was written by Roberta E. Winter, MHA, MPA and may be reprinted with her permission.
Two weeks ago I wrote an article about the five fundamental questions that need to be asked in order to design optimum health care reforms in the United States. This week’s column analyzes the leading presidential candidates Senators Hillary Clinton, Barak Obama, and John McCain proposals on health care reforms and how their ideas would address these five concerns:
Access to Care
Optimization of Government Purchasing for Medicare and other Programs
Reimbursement Alignment for Desired Clinical Outcomes
Streamlining the Health Care System Administratively
Financing Health Care for all
Access to Care
The three questions that must be addressed in order to answer the access question are:
Do the proposed changes provide health care coverage for all residents, or at least a close approximation of that?
Secondly, do their proposals address adequacy of reimbursements for health care clinicians and facilities?
Thirdly, are there enough clinicians to meet the increased demand for primary care and other services from changes in health care access and if not, what is being proposed by the candidate?
Of the three presidential candidates, Clinton, Obama, and McCain, only one opposes a mandate for health coverage and that is Republican McCain. Of the two leading Democratic candidates, Clinton would require every resident to have health insurance coverage and require large employers to provide employee health care or contribute to the cost for it. Obama would require all children to have health insurance and require employers to offer "meaningful" coverage or contribute to the cost of a public health plan. There would be limited change in access to health care with McCain’s stance, while Obama and Clinton would increase the number of people who could afford to access health care via insurance due to mandates and subsidies. In terms of expanding existing public programs, Clinton and Obama would expand Medicaid and SCHIP, the supplemental children’s insurance program, whereas McCain would only expand Veteran’s benefits. Obama would create a National Health Insurance Exchange for small businesses and individuals without access to other public programs, to offer health insurance through private plans or the new public plan. Clinton would offer a similar health choice menu for public or private plan enrollment.
McCain’s position to reimburse Medicare and presumably Medicaid on a single fee for coordinated care, could help increase access to more pediatricians and other primary care providers. If private insurance would become more available to a portion of the uninsured, this would allow these individuals to obtain care more readily than through Medicaid.
In terms of investing in health care infrastructure to increase the supply of nursing and other health care professionals, McCain does not address this, but Clinton and Obama propose an increase in federal funding for training more nurses. Obama also proposes improvements in reimbursements, training grants, and loans for health care professionals.
Optimization of Government Health Care Programs
To create more value from currently funded government programs, McCain would encourage risk-adjusted payments for Medicaid, coupled with private insurance. He also alludes to alternative forms of access and different licensing for providers. For cost containment he would adopt malpractice reforms, health care anti-trust laws, transparency in pharmacy pricing, and change regulation from state to national for health insurance marketing purposes. McCain would also support public health initiatives for chronic disease prevention, health education, and reductions in obesity, diabetes, and smoking.
Clinton’s platform permits the federal government to negotiate RX prices for Medicare directly with manufacturers, change patent laws to increase the availability of generic drugs, and limit pharmaceutical advertising to consumers. She would also encourage disclosure of medical errors with liability protection for physicians. Clinton would also support more federal funding for reducing health disparities, developing quality measures, and strengthening consumer protections for long-term care.
Obama’s ideas for optimizing government programs include promotion of generic drug programs, allowing importation of drugs from other countries, and direct negotiations with drug companies for the Medicare program. He would also reform malpractice and strengthen anti-trust laws in health care. Like Clinton, he supports the creation of an independent institution for review of medical errors, to establish quality standards, and create measures.
Reimbursement; Paying for Desired Clinical Outcomes
McCain would change clinician reimbursements to a single coordinated payment for care, rather than fee for service. He would also bar payment for preventable medical errors or mismanagement by health care providers. He would also provide Medicare payments for patient care coordination and prevention.
Clinton would provide federal recognition for physician driven certification for best practices and incentivize quality through an increase in federal reimbursements for Medicare. Like McCain, she would not pay for preventable infections and other medical errors. She also wants to reduce reimbursements on the Medicare Advantage Plan to the equivalent of Medicare, which is considered inadequate compensation by many physician groups.
Obama would reduce Medicare Advantage Plan reimbursement to the same level as Medicare, which could impare access to primary care. He also advocates creation of a new public health plan, similar to the federal employees health plan, which could be expensive. (Clinton talks about using the federal employees’ plan as a model too.) Obama does not specify how he would reward clinicians for chronic disease management or other health care goals. Obama has concentrated on the consumer and insurer aspects of health care, but does not seem to have spent much time reviewing clinician impacts.
Streamlining Health Care Administratively
All three candidates support deployment of a national medical records standard, but McCain does not specifically allocate federal funds in his platform. McCain advocates national standards for insurance regulation, not state, which would allow more competition from vendors. This would also allow national standards and certification for health insurance offerings. He would encourage alternate forms of access and licensing for providers and establish national standards for measuring health outcomes.
Clinton would require all private insurance carriers to offer coverage on a guaranteed issue and renewable basis, creating one national standard. She would also move to establish community rates, rather than variations based on health and other factors. Clinton would require private insurers to meet minimum loss ratios, which means a high value of every dollar collected would have to go for consumer benefits. She would also require coverage for preventive care. She would encourage regional purchasing cooperatives, where states can band together for optimal purchasing and stabilization of health care financing. Clinton would establish national standards for prevention of health disparities, technology for electronic medical records, chronic care management, best practices, and medical error disclosure.
Obama would create a National Health Insurance Exchange for residents to obtain coverage through private or public health plans. This is a first step in creating a national platform to educate consumers on health care options, setting one standard instead of fifty. Like Clinton, he would also require coverage to be guaranteed issue and that the plans meet standards for benefits and quality. The exchange would conduct the evaluations and communicate the values. He would maintain existing state health care reforms if they meet the minimum standards for the national health plan. He would support the creation of an independent quality institute for health care, to analyze data, and promote ways to minimize health chronic disease. Obama would also promote new models for addressing physician errors along with reforming malpractice laws.
Financing New Health Care Ideas
One of the key components of any health care reform is the financing. Presently health care is provided through the FICA Medicare tax, which is 1.651% of wages, matched by employee and employer, state taxes for Medicaid, general funds from the U.S. government, employer contributions which are heavily subsidized by tax deductions, and individual contributions. In a later issue, the healthpolicymaven will review how all of these stack up, but for now, here is a summary of the top three candidate’s ideas for financing health care reforms.
Senator McCain would finance health care expansions by reforming the tax code, including eliminating tax preferences for employer paid health benefits and allowing individuals to purchase multi-year health care contracts through Health Services Accounts (medical savings accounts). He also advocates a tax credit for individuals and incentives to obtain insurance coverage. He would contain costs through changes in provider reimbursements, tort reform, and quality improvements. Senator McCain did not have a budget posted for his reforms as of January.
Senator Clinton would require individuals who earn more to pay more for a national health care program. She would provide a tax subsidy to help families obtain health insurance. She would not phase out employer provided health plans, but would require large employers to provide health care. Senator Clinton estimates her reform package would cost a 110 billion a year after it is fully implemented, but has identified 21 billion saved by the reduction of uninsured and existing Medicaid payments to hospitals. She has identified another 54 billion in revenue recapture by limiting the employer paid health insurance tax exclusion and limiting the tax cuts for individuals with incomes over 250,000.
Senator Obama would expand federal programs and create the National Health Insurance Exchange. If employers do not offer health care to employers, they would be required to contribute to the cost of the federal option for their employees. Obama’s annual estimate for the cost of his health plan reforms is 65 billion, which is half of Clinton’s. This seems grossly unrealistic when you consider that just covering the 46 million people who are uninsured, at the cost of the average private employer plan of $4,479 per year would equal 206 billion. How is he going to cover the 46 to 50 million uninsured without a significant budget increase?
In conclusion, of the three candidates, Hillary Clinton has been the most explicit and realistic in terms of what her health care proposal would cost, initially, and ultimately.
Since the financing of health care reforms is very complicated, the next posting at http://healthpolicymaven.blogspot.com will review various budgets for the proposals. All reference material for candidate positions was gleaned from the Kaiser Family Foundation web site at: http://www.health08.org/D-Side-By-Side_01_31_08.pdf
This article was written by Roberta E. Winter, MHA, MPA and may be reprinted with her permission.
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