Overhauling Health Care Czarina Style
The United States is known for its wastefulness of consumer goods and energy resources but the excess in our health care system is beyond comparison by all global measures. It is incomprehensible that informed citizens would chose to squander our national resources given a reasonable choice. This dilemma was aptly cited as a national crisis in the National Academy of Sciences Report to President Bush. It is essential that the correct problems be addressed in order to solve resource allocation and equity of distribution in US health care. This analysis explores various perspectives and clarifies what elements have the greatest opportunity for sustained change in the US healthcare system.
Enhancing healthcare and delivering a more affordable product are not mutually exclusive. The polarization that occurs between the public and private healthcare camps only serves to undermine progress for better consumer outcomes. Sean Sullivan’s characterization of prescription drug coverage policies for Medicare patients was inaccurate and inflammatory. Several major insurers in Washington State offer Medicare supplement policies with open enrollment provisions, regardless of insurability annually. Coverage for prescriptions is offered under the contracts. University of Washington Professor Sullivan’s assertion that coverage was only offered by fly-by-night companies to insomniacs was incorrect. Additionally, his assessment that insurance companies put small pharmacists out of business was also inflamed by his personal ire. Insurance companies serve as third party administrators for their clients and they have a fiduciary obligation to provide the most attractive contracts for their clients. This means if they can negotiate an RX discount and offer lower drug prices from a Prescription drug wholesaler, they are going to strike a deal. It is not the responsibility of the insurance company (ies) to support drug stores, large or small. Business failure for any small business is common, because of reduced margins and flawed business plans, but other industries lack the convenience of uncontrollable health care costs for their business failure.
Public perception that everyone in health care is making a profit is grossly in error. Of the remaining insurance companies in the healthcare business, profits are uneven and inconsistent. Profits generated are from business linked to health care contracts, not from the administration of those contracts. Biotechnology companies are another industry in health care that is an extremely volatile sector. Many providers in health care operate on a not-for-profit basis, hospitals, clinics, and insurers. The only segments of health care that seem to be consistently profitable are the drug companies and medical supply companies. Politicians tend to attack industries for sound bites and voter approval rather than the more laborious work of regulatory reform. It is far easier to criticize the health care system and its components than it is to promulgate change.
Much debate ensues about the percentage of United States Health care that is publicly versus privately financed. This is a circular argument as in a democracy the public investment is paid for by private taxpayers. The focus should not be which sector is paying as much as how can we work together to do a better job of administering, selecting, and distributing health care in our country. In order to move forward on a system renovation we need to agree on what as a country, we do well in health care. Below is my list of excellence in health care within the USA:
Creating new technologies to treat specific diseases
Promoting popular healthful practices, like anti-smoking campaigns and dental hygiene
Innovation of health care administration over the world wide web
Minimal wait times for services
A wealth of resources spent on experimental procedures to prolong life
Fairness dictates agreement on what the United States does not do well and here is my selection for the dubious honor:
Cover all citizens
Provide affordable health care to all citizens, but especially in the private sector
Provide excellent pre-natal care regardless of economic circumstances
Judiciously spend money on treatment of viably challenged patients
Develop and distribute effective medical treatments to the population regardless of social demographics
Administer national health resources efficiently
Rather than arguing about whom pays for the present health care system, lets deescalate the situation by identifying what we as a nation agree on for good and poor outcomes and processes in the system. A nonpartisan group with broad representation from the healthcare industry, government, and academia need to work on creating a more efficient system. Polarizing the debate along political lines serves to delay any real reform. An atmosphere of respect would go a long way to gaining greater receptivity for trade offs in reform issues. Health care reform is by no means a win win situation for everybody. Instituting a national mandated health care program could produce the following winner and losers:
Winners
Uninsured
Employees of small employers
Not for Profit Hospitals/health care providers
Senior Citizens
Families
Losers
Small employers(depending on cost)
Unions (one less bargaining chip)
Drug companies
Single employees
This is by no means a complete list, but here is my rational for the categorizations.
Uninsured
First of all, the uninsured, estimated at forty two to forty eight million, would emerge as clear winners in a government mandated health care approach. The uninsured are made up of the unemployed and working citizens who do not have access to affordable healthcare but are not poor enough to be covered by Medicaid. It should also be noted that the nation would win in an indirect fashion by covering these members, as maintenance of health is less expensive to provide than emergency room care, often the only care mode available to this constituency. An additional tax or a reduction in tax spending in another area would be required to cover the uninsured, so to that extent the tax subsidizers would lose here. In my financial calculations of a single payer health system, I estimated it would cost twenty-eight dollars as of October 2002, per paycheck to cover the uninsured.
Employees working for Small Employers
Small employers are least able to pay for employee benefits and are less likely to subside family health care costs, so I believe employees of small employers would gain more from a nationally mandated proposal than their employers. Small businesses would fight this mandate tooth and nail with the prediction that millions of jobs would be lost due to the increased cost of the new tax. In truth, this would only adversely affect the employers who are not taking care of their employees. Other small employers may find the single payer plan to be less costly than current options and simpler administratively. For industries like farming, which employs a significant migrant worker population we would expect the price of food to increase in the USA or a reduction in local jobs in that industry.
Large Employers
I am defining large employers as those with 500 or more employees. It is my belief that these businesses would benefit from the simplicity of a single payer plan and the cost would not exceed what they are already paying. The existence of Leapfrogsuggests that large employers are very concerned about the present health care system of public private resources effectively managing health care. Large employers would also win because a mandated benefit would remove some of the power of unions to dictate benefits and costs to corporations. Conversely, I perceive the unions would lose because they would lose a bargaining chip. Labor unions are already suffering from lack of differentiation and loss in membership, so a national healthcare policy would only exacerbate the problem.
Hospitals
For purposes of analyzing the impact of a uniform adequately funded national healthcare program, I am only addressing hospital outcomes. Presently under the hodgepodge funding arrangement, hospitals are struggling to survive, especially in rural areas. With a guarantee of funding, assuming fair DRG schedules, stability would enhance this sector of the industry. It is possible for profit hospitals could lose some margin, but that would depend on how they marketed their services. A single payer system would not mandate that hospitals be not-for-profit. Ancillary services like cosmetic surgery could still be paid for on a private basis. Virginia Mason in Seattle Washington has an extensive cosmetic surgery business for example. Hospitals that have excellent outcomes could be selected as magnet facilities for certain procedures and may not have to spend as much money on promotion, so they could win as well. Hospitals with poor outcomes or redundant services would lose and potentially close in an economically efficient system. It would probably take years to achieve this result.
Senior Citizens and RX Use
Presently senior citizens spend about 25% of their income on prescription drug costs. There are several reasons for this hardship; drugs are a favored method of treatment in the USA, an aging population, and the high cost of prescriptions due to financing of research and corporate profits. If a single payer health care system were in place, the drug developers would not be able to charge whatever they want for medications. This would lower the cost to seniors and other RX users. Of course the well financing corporate darling drug companies, who have consistently produced profits of 20%, would lose in this proposal. Their argument would be we couldn’t finance research to save lives if we don’t have the ability to recoup our initial investment. Some would argue they would be forced to leave the USA to produce their products, so jobs would be lost. Still, because of the degree of education and expense in developing these biotech facilities, they are all near major academic medical centers, so it is doubtful all of the drug companies would leave. Finally, France is a major developer of new drug therapies, so invention is possible with a socialized heath care approach. Invention and public health are not mutually exclusive.
Families
One could argue that citizens with families would benefit more under a single payer government mandated health care approach than childless employees. Based on my calculations, the average increase in payroll tax would be seventy-two dollars per pay period, which is less than the cost of providing family health coverage in private employer plans. Most employees are paying several times that amount to cover their dependents for insurance. So, families would be clear winners. Childless citizens may argue they are not getting the requisite benefit, but the increase in payroll tax is no different than the subsidy of lower income retirees and widows with Social Security Benefits now. The SSI and Survivors benefits are disproportionately geared to provide a greater income replacement ratio to citizens earning less than the social security cap. In other words, a low-income worker will have a higher income replacement ratio than a higher earning worker.
Where do we go from here
The solution to get all of these disparate groups invested in the idea that a single payer reform is a viable idea is to be ready to bargain and offer some trade offs. My suggestion is don’t try to have the government take over everything, at least not initially. This would be politically explosive and untenable. I suggest that providers continue to operate in their current form, but the coalition of public and private interests decides on the mandated benefit levels and sets prices. So, the government lays the ground rules for what is acceptable. Doctors and hospitals can continue to operate in their current form, but without the billing hassles for reimbursement and greater economic security from tort reform and price regulations. I also suggest that all present forms of government provided healthcare stay the same, but with improved funding for the poor. However, the administration of all nongovernment health care plans would change in my proposal as health czar. I am advocating a government contract for private administration of a nationalized heath care program. This would appease the major insurance companies who have invested millions in infrastructure for claims payment systems and eliminate the weak organizations. It would allow private industry to raise capital for a paperless conversion for claims payment, with all citizens enjoying the benefit. I am envisioning regional health administrators, with perhaps seven regions in the United States. This would also give the citizens the security of knowing that everything wouldn’t change under a single payer proposal. By allowing all parties to be represented at the negotiating table we can invent a more efficient and equitable health care system in the USA. I believe we can achieve close to universal coverage and more affordable coverage for all with the integration of public and private resources.
This article was written by Roberta E. Winter, MHA, MPA in October 2007 and may be reprinted with her permission.
Tuesday, August 18, 2009
Wednesday, November 5, 2008
2008 Election Recap
Wow! Eighty percent of registered voters in Washington State showed up at the polls yesterday. The 2008 elections were a Republican’s nightmare, since high voter turn out typically means higher Democratic voters. America saw record numbers of voters across the country. Especially heart warming was the increase in new voter registration. As someone who has never missed a presidential election, I applaud this improvement in public participation in our democracy.
There were a number of issues that I blogged on in the past year, which were impacted by yesterday’s election(s). Here are the highlights:
Death with Dignity Approved
Former Governor Booth Gardner’s Death with Dignity Initiative in Washington State was approved with a 58% majority. This means that terminally ill patients, who obtain at least two medical opinions, can elect to end their suffering with the administration of lethal drugs.
McCain defeated
Senator McCain’s health care platform to eliminate the tax-free nature of employer provided health care through an individual health care credit program hit a sour note with the public. As I predicted in May, this health policy approach contributed to his defeat by freshman Senator Barak Obama.
Obama’s Health Care Platform
President elect Obama favors a "play or pay" approach for employers to provide health insurance coverage to all employees. Large employers would be required to offer health insurance to their workers or else they would be assessed a tax of 6% of payroll, which would go into a health care purchasing fund. Small employers would receive federal assistance to obtain health care for their workers, through regional purchasing cooperatives. Barak’s plan is to keep the public/private partnership we now have for health care, but to strengthen efficiencies and improve quality. He is an advocate of renegotiating Medicare prescription drugs under one federal contract, which would lower the cost of prescription medications for seniors. The pharmaceutical industry is most assuredly gearing up for heavy lobbying in Washington. Though President elect Obama does not favor mandating health insurance, his plan does include a series of provisions that would help millions more Americans have access to health care. This process will alleviate some of the pressure on hospitals, which have been burdened with the lion’s share of unfunded care.
Rossi Defeated
The impetus for my original blog was Washington State gubernatorial candidate, Dino Rossi’s lack of support for basic health care for poor children under the federal SCHIP expansion last year. Democratic Governor Christine Gregoire, a strong supporter of health care subsidies for the needy, defeated Mr. Rossi. Governor Gregoire expanded primary health care for poor children in Washington State under her first term and we can all breathe a sigh of relief this will not be undercut.
In conclusion, the public has spoken and it does see a role for government support and advocacy for its citizens, which is a reversal of the Bush Administration’s policies. Let us not forget to look at improving health care delivery efficiencies, not the least of which include the over use of technology and renegotiating Medicare drug coverage. At least with Mr.Obama we have someone who will listen to all parties before making decisions.
This article was written by Roberta E. Winter, MHA, MPA and may be reprinted with her permission.
There were a number of issues that I blogged on in the past year, which were impacted by yesterday’s election(s). Here are the highlights:
Death with Dignity Approved
Former Governor Booth Gardner’s Death with Dignity Initiative in Washington State was approved with a 58% majority. This means that terminally ill patients, who obtain at least two medical opinions, can elect to end their suffering with the administration of lethal drugs.
McCain defeated
Senator McCain’s health care platform to eliminate the tax-free nature of employer provided health care through an individual health care credit program hit a sour note with the public. As I predicted in May, this health policy approach contributed to his defeat by freshman Senator Barak Obama.
Obama’s Health Care Platform
President elect Obama favors a "play or pay" approach for employers to provide health insurance coverage to all employees. Large employers would be required to offer health insurance to their workers or else they would be assessed a tax of 6% of payroll, which would go into a health care purchasing fund. Small employers would receive federal assistance to obtain health care for their workers, through regional purchasing cooperatives. Barak’s plan is to keep the public/private partnership we now have for health care, but to strengthen efficiencies and improve quality. He is an advocate of renegotiating Medicare prescription drugs under one federal contract, which would lower the cost of prescription medications for seniors. The pharmaceutical industry is most assuredly gearing up for heavy lobbying in Washington. Though President elect Obama does not favor mandating health insurance, his plan does include a series of provisions that would help millions more Americans have access to health care. This process will alleviate some of the pressure on hospitals, which have been burdened with the lion’s share of unfunded care.
Rossi Defeated
The impetus for my original blog was Washington State gubernatorial candidate, Dino Rossi’s lack of support for basic health care for poor children under the federal SCHIP expansion last year. Democratic Governor Christine Gregoire, a strong supporter of health care subsidies for the needy, defeated Mr. Rossi. Governor Gregoire expanded primary health care for poor children in Washington State under her first term and we can all breathe a sigh of relief this will not be undercut.
In conclusion, the public has spoken and it does see a role for government support and advocacy for its citizens, which is a reversal of the Bush Administration’s policies. Let us not forget to look at improving health care delivery efficiencies, not the least of which include the over use of technology and renegotiating Medicare drug coverage. At least with Mr.Obama we have someone who will listen to all parties before making decisions.
This article was written by Roberta E. Winter, MHA, MPA and may be reprinted with her permission.
Sunday, May 4, 2008
McCain Seeks to Eliminate Employer Health Plans
Presidential Candidate John McCain presented his healthcare reform ideas on April 30th, to a Tampa, Florida audience. True to his style, Senator McCain has taken a polarizing approach to health care reforms, by seeking to eliminate private employers from the provision of health care in America.
Here are the highlights of his reform ideas:
1. McCain would eliminate the tax preference for employer provided health insurance. Instead of a tax deduction for private employers to provide health insurance, he would offer a tax credit to taxpayer households, $2,500 for individuals and $5,000 for a family.
2. Individuals would purchase health insurance plans on the open market(s).
3. A guaranteed access plan would be available to all, even the unhealthy, whom private insurers would seek to exclude from coverage.
4. He is not in favor of a national health care plan.
5. He would encourage support of health savings accounts.
6. McCain seeks to reform Medicare reimbursements by bundling payments to physicians by disease or diagnosis.
7. Like everyone else, he encourages the proliferation of electronic medical records.
Analysis
Though private employers provide less than half of all the health care for USA residents, a disproportionate share of funding for health care services comes from the private sector. This discrepancy is partially due to the significant uninsured population in the country, which accesses health care through hospitals, thus causing those providers to increase their charges for paying customers, to make up for unreimbursed care. Additionally, government programs like Medicaid and to a lesser extent, Medicare, do not fully reimburse health care providers for their costs, which increases the burden of healthcare financing to the private sector health care system. Senator McCain, by removing the economic incentive for employers to provide health care, will encourage employers to cease providing group medical insurance. The spread of risk over large employer and collectively bargained groups at least provides some stability to the private health care system, which would be jeopardized by his individual market based approach.
McCain has stated that insurers have been taking advantage of healthcare consumers and by creating an individual health care purchasing climate, citizens will be better off, through increased competition in the private insurance marketplace. Need I remind him of the Medicare HMO debacle when the government provided incentives to insurance companies to recruit Medicare applicants to their HMO plans? In this scenario, enterprising insurance companies thought they could profit by insuring Medicare customers on the government’s capitated reimbursement formula only to realize they couldn’t manage the risks. All but a handful of insurers subsequently dumped their customers back into the marketplace, forcing retirees with chronic conditions to change providers yet again. Consumers were not better off with the marketplace approach to care; they were disrupted, in some cases jeopardizing their health. The insurers found managing the population was more difficult than they had anticipated. Though McCain’s health care reforms do not address Medicare, one wonders how an individualized health insurance purchasing market would improve care and reduce cost for individuals and families. One of the basic tenants of risk management is adhering to the "law of large numbers", which means we are better off pooling our resources in fewer large groups than splintered smaller ones. McCain’s health care platform does not seem to support the spread of risk over large populations, but rather "cherry picking" by smaller entrepreneurial insurance companies.
In terms of optimizing government purchasing, his plan adds complexity to the current regulatory climate for health insurance, by creating more entry points for health care initiation. One of the problems with efficient health care delivery in the United States is the variance in administration by virtue of 50 different insurance commissioner’s and their policies on health care underwriting, financial reporting, and administrative oversight. This would seem to be exacerbated by increased variables in his healthcare reform proposal. An open market for individual health care purchasing would increase complexity over the current employer driven marketplace, in terms of communication to households as well. If we consider the different educational levels of individuals, not to mention language barriers, how would this be handled efficiently and efficaciously?
Senator McCain’s ideas to change the Medicare reimbursement process by bundling per case have merit, because managing a patient with chronic disease should be done on a macro basis, not per line item for each transaction. Of course, accommodating patient acuity and cost-of-living factors into reimbursements for disease management would be key to fairness. No mention is made of how Senator McCain would align reimbursement with desired outcomes.
Guaranteed Access to Health Insurance is already provided in some states, like Washington, where the risk pool for individuals who can’t get health insurance through individual markets is managed by the state. The problem with this approach is the cost of the health care is prohibitively expensive for many people, yet these individuals are not poor enough to qualify for the state’s Basic Health Plan or Medicaid programs. McCain provides no specifics on how the federal government would address these concerns, other than to say he would work with the individual states.
The healthpolicymaven believes Senator McCain will experience fierce opposition from union representatives, the insurance industry, and many large employers. Once an organized media campaign is financed by these stakeholders, his health plan and maybe his presidential aspirations will go the way of Clinton’s first term national health plan. I am also betting voters won’t want to lose their employer health plans without a much clearer idea of what they will be getting from Mr. McCain and his advisors, one of whom is Carly (the hammer) Fiorina.
Here are the highlights of his reform ideas:
1. McCain would eliminate the tax preference for employer provided health insurance. Instead of a tax deduction for private employers to provide health insurance, he would offer a tax credit to taxpayer households, $2,500 for individuals and $5,000 for a family.
2. Individuals would purchase health insurance plans on the open market(s).
3. A guaranteed access plan would be available to all, even the unhealthy, whom private insurers would seek to exclude from coverage.
4. He is not in favor of a national health care plan.
5. He would encourage support of health savings accounts.
6. McCain seeks to reform Medicare reimbursements by bundling payments to physicians by disease or diagnosis.
7. Like everyone else, he encourages the proliferation of electronic medical records.
Analysis
Though private employers provide less than half of all the health care for USA residents, a disproportionate share of funding for health care services comes from the private sector. This discrepancy is partially due to the significant uninsured population in the country, which accesses health care through hospitals, thus causing those providers to increase their charges for paying customers, to make up for unreimbursed care. Additionally, government programs like Medicaid and to a lesser extent, Medicare, do not fully reimburse health care providers for their costs, which increases the burden of healthcare financing to the private sector health care system. Senator McCain, by removing the economic incentive for employers to provide health care, will encourage employers to cease providing group medical insurance. The spread of risk over large employer and collectively bargained groups at least provides some stability to the private health care system, which would be jeopardized by his individual market based approach.
McCain has stated that insurers have been taking advantage of healthcare consumers and by creating an individual health care purchasing climate, citizens will be better off, through increased competition in the private insurance marketplace. Need I remind him of the Medicare HMO debacle when the government provided incentives to insurance companies to recruit Medicare applicants to their HMO plans? In this scenario, enterprising insurance companies thought they could profit by insuring Medicare customers on the government’s capitated reimbursement formula only to realize they couldn’t manage the risks. All but a handful of insurers subsequently dumped their customers back into the marketplace, forcing retirees with chronic conditions to change providers yet again. Consumers were not better off with the marketplace approach to care; they were disrupted, in some cases jeopardizing their health. The insurers found managing the population was more difficult than they had anticipated. Though McCain’s health care reforms do not address Medicare, one wonders how an individualized health insurance purchasing market would improve care and reduce cost for individuals and families. One of the basic tenants of risk management is adhering to the "law of large numbers", which means we are better off pooling our resources in fewer large groups than splintered smaller ones. McCain’s health care platform does not seem to support the spread of risk over large populations, but rather "cherry picking" by smaller entrepreneurial insurance companies.
In terms of optimizing government purchasing, his plan adds complexity to the current regulatory climate for health insurance, by creating more entry points for health care initiation. One of the problems with efficient health care delivery in the United States is the variance in administration by virtue of 50 different insurance commissioner’s and their policies on health care underwriting, financial reporting, and administrative oversight. This would seem to be exacerbated by increased variables in his healthcare reform proposal. An open market for individual health care purchasing would increase complexity over the current employer driven marketplace, in terms of communication to households as well. If we consider the different educational levels of individuals, not to mention language barriers, how would this be handled efficiently and efficaciously?
Senator McCain’s ideas to change the Medicare reimbursement process by bundling per case have merit, because managing a patient with chronic disease should be done on a macro basis, not per line item for each transaction. Of course, accommodating patient acuity and cost-of-living factors into reimbursements for disease management would be key to fairness. No mention is made of how Senator McCain would align reimbursement with desired outcomes.
Guaranteed Access to Health Insurance is already provided in some states, like Washington, where the risk pool for individuals who can’t get health insurance through individual markets is managed by the state. The problem with this approach is the cost of the health care is prohibitively expensive for many people, yet these individuals are not poor enough to qualify for the state’s Basic Health Plan or Medicaid programs. McCain provides no specifics on how the federal government would address these concerns, other than to say he would work with the individual states.
The healthpolicymaven believes Senator McCain will experience fierce opposition from union representatives, the insurance industry, and many large employers. Once an organized media campaign is financed by these stakeholders, his health plan and maybe his presidential aspirations will go the way of Clinton’s first term national health plan. I am also betting voters won’t want to lose their employer health plans without a much clearer idea of what they will be getting from Mr. McCain and his advisors, one of whom is Carly (the hammer) Fiorina.
Monday, February 11, 2008
Assessing the Real Cost of Health Care in America
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.
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.
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.
Tuesday, January 29, 2008
How to Obtain Health Care Without Insurance
For the 50 million people without insurance in the United States, this blog is for you. How do you obtain health care if you have no insurance? There are four basic methods for accessing care sans health insurance financing and they are; pay with cash or credit per clinical visit, frequent public health centers in urban areas, access community health centers in rural and metropolitan areas, and use the old standby, hospital emergency departments. The average person who is without insurance may feel there are no options other than paying out of pocket for treatment and worse yet, frequenting the emergency room for care. The lack of health insurance does limit the number of clinicians who will serve the patient, but there are two institutional remedies in America, the public health system and federally qualified health clinics. Both of these organizations are designed to provide primary health care on an as-needed basis for under-served populations, including the uninsured.
CHC-Community Health Center
Community Health Centers were authorized in 1975 to promote health care for medically under-served populations. There are 3,709 federally qualified health care centers in the United States and 89 are in Washington State. One of the most famous federally qualified health centers is the Pike Market Clinic. Other well-known FQHCs in the Puget Sound area are Puget Sound Neighborhood Health Centers and SeaMar Clinics. These clinics must periodically reapply for federal funding to support the health care they provide to rural and poor urban communities. The centers also have to conform to certain governance standards, including community representation on the board, and auditing for government grant compliance. Not all "community health centers" are federally qualified health centers. The federal agency Health Resources Services Administration (HRSA) rate community health centers number one for outcome driven results, which means good value for their patients. The Bush Administration has continued to support CHC’s and increased relative funding for them. Patients must have a primary care provider in a community health clinic in order to have continuity of care. Patients will be expected to contribute to the cost of their care based on their level of household income. Also, the community clinic typically has an on-site pharmacy, so the patient can get his or her prescription filled there as well. All Community Health Clinics with pharmacies offer discounted pharmaceutical pricing, because of a federal provision called 340B Drug Pricing.
PHD-Public Health Department
Public Health Departments are most robust in larger cities, like Seattle, WA or Portland, OR but smaller communities, like Bremerton, WA have public health programs as well. In smaller communities the health department may be more involved in disease surveillance and health inspection of public facilities. However, even in smaller cities the health department is involved in emergency planning, executing public health directives like childhood immunizations, and disease investigation( like E Coli). In urban areas residents can go to the public health clinic for primary care, just like they would go to their family doctor, but payment for services is based on a sliding fee scale according to the patient’s income. Lab work is often done on the premises to save money for the health department. Both community health clinics and health departments also accept insurance for reimbursement. You might wonder why someone would choose to go to a public health department if they have insurance and the answer is convenience and also continuity. For example, if a patient has immunization records at the health department, it may be easier to continue to maintain those in one location.
DSH-Disproportionate Share Hospital
The urban poor do frequent the emergency departments of urban hospitals in droves, which is costly for the community and the facility. Consequently the federal government created a program called disproportionate share funding for hospitals that are designated as serving this population. This is a federal subsidy for hospitals so they can continue to provide care for patients who can’t pay and have no where else to go. There are 1,291 disproportionate share hospitals in the United States and 12 of those are deemed critical access hospitals in Washington State, according to the Health and Human Services administrative agency HRSA. The DSH facility in Seattle is Harborview Medical Center.
340B-Discounted Prescription Drug Program
Qualifying health care facilities are eligible for 340B drug discounts based on the 1992 Veterans Health Care Act. So, you can go to a community health clinic or the public health department or in a true emergency situation, the DSH hospital, for treatment. To obtain discounted prescription drug costs go to a community health clinic with its own pharmacy or to a DSH hospital. You do not have to be admitted to the hospital to have your script filled in the hospital pharmacy. Your script should be 25% to 40% less expensive at these facilities, than at your local pharmacy.
Take Charge of Your Health
The next time you need health care and are without insurance, consider the community clinic and public health alternatives to the emergency department of a hospital. The hospital ED is expensive, will require a lengthy wait (several hours), and misplaces resources for primary care, which are geared to urgent care. According to the Washington State Hospital Association hospitals in the state incurred 217 million dollars in costs for charity care in 2005. Remember there are health care alternatives to the emergency department, right in your neighborhood, accessible to all, and reimbursement is based on your income. Be smart about your health, its better for everybody.
This article was written by Roberta E. Winter, MHA, MPA and may be reprinted with her permission.
CHC-Community Health Center
Community Health Centers were authorized in 1975 to promote health care for medically under-served populations. There are 3,709 federally qualified health care centers in the United States and 89 are in Washington State. One of the most famous federally qualified health centers is the Pike Market Clinic. Other well-known FQHCs in the Puget Sound area are Puget Sound Neighborhood Health Centers and SeaMar Clinics. These clinics must periodically reapply for federal funding to support the health care they provide to rural and poor urban communities. The centers also have to conform to certain governance standards, including community representation on the board, and auditing for government grant compliance. Not all "community health centers" are federally qualified health centers. The federal agency Health Resources Services Administration (HRSA) rate community health centers number one for outcome driven results, which means good value for their patients. The Bush Administration has continued to support CHC’s and increased relative funding for them. Patients must have a primary care provider in a community health clinic in order to have continuity of care. Patients will be expected to contribute to the cost of their care based on their level of household income. Also, the community clinic typically has an on-site pharmacy, so the patient can get his or her prescription filled there as well. All Community Health Clinics with pharmacies offer discounted pharmaceutical pricing, because of a federal provision called 340B Drug Pricing.
PHD-Public Health Department
Public Health Departments are most robust in larger cities, like Seattle, WA or Portland, OR but smaller communities, like Bremerton, WA have public health programs as well. In smaller communities the health department may be more involved in disease surveillance and health inspection of public facilities. However, even in smaller cities the health department is involved in emergency planning, executing public health directives like childhood immunizations, and disease investigation( like E Coli). In urban areas residents can go to the public health clinic for primary care, just like they would go to their family doctor, but payment for services is based on a sliding fee scale according to the patient’s income. Lab work is often done on the premises to save money for the health department. Both community health clinics and health departments also accept insurance for reimbursement. You might wonder why someone would choose to go to a public health department if they have insurance and the answer is convenience and also continuity. For example, if a patient has immunization records at the health department, it may be easier to continue to maintain those in one location.
DSH-Disproportionate Share Hospital
The urban poor do frequent the emergency departments of urban hospitals in droves, which is costly for the community and the facility. Consequently the federal government created a program called disproportionate share funding for hospitals that are designated as serving this population. This is a federal subsidy for hospitals so they can continue to provide care for patients who can’t pay and have no where else to go. There are 1,291 disproportionate share hospitals in the United States and 12 of those are deemed critical access hospitals in Washington State, according to the Health and Human Services administrative agency HRSA. The DSH facility in Seattle is Harborview Medical Center.
340B-Discounted Prescription Drug Program
Qualifying health care facilities are eligible for 340B drug discounts based on the 1992 Veterans Health Care Act. So, you can go to a community health clinic or the public health department or in a true emergency situation, the DSH hospital, for treatment. To obtain discounted prescription drug costs go to a community health clinic with its own pharmacy or to a DSH hospital. You do not have to be admitted to the hospital to have your script filled in the hospital pharmacy. Your script should be 25% to 40% less expensive at these facilities, than at your local pharmacy.
Take Charge of Your Health
The next time you need health care and are without insurance, consider the community clinic and public health alternatives to the emergency department of a hospital. The hospital ED is expensive, will require a lengthy wait (several hours), and misplaces resources for primary care, which are geared to urgent care. According to the Washington State Hospital Association hospitals in the state incurred 217 million dollars in costs for charity care in 2005. Remember there are health care alternatives to the emergency department, right in your neighborhood, accessible to all, and reimbursement is based on your income. Be smart about your health, its better for everybody.
This article was written by Roberta E. Winter, MHA, MPA and may be reprinted with her permission.
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