House bill would make health care a 'right, responsibility'

[News]

Democrats in the U.S. House of Representatives want to define health care as a right and a responsibility for all Americans.

More...

[gdpawel]

I've observed the insesent complaints on various cancer blogs and discussion boards about private insurers "denial of coverage" on the backs of injuried and diseased human beings during their fight with the great crab.

In one case, the patient was denied a CT scan. As the poster said, "because their private insurer is practicing medicine and deciding that such a thing is not medically necessary." Without the CT scan, there was no way for the doctor to definitively tell if a swollen leg is cancer related or a blood clot. The physician couldn't make a diagnosis based on the best avialable technique to make that diagnosis. A good case of a corporate bureaucrat coming between a patient and their doctor.

Another poster presented the case that their private insurer used to cover Pet Scans. Unfortunately, some study came out stating that Pet Scans aren't more effective than CT Sancs to find colon cancer. With that one study, the private insurer had decided not to cover the Pet Scan, even against the physician protest.

And one more described their situation while fighting prostate cancer that had metastasized to the hip bones and a clinical trial using hormone therapy and Helical Tomo Therapy was looking to be the best opportunity to fight the cancer. The studies showed that is was really helping people with bone cancer, it is very precise treatment that does much less damage to surrounding tissues. However, private insurer had denied covering the Helical Tomo Therapy treatment. They said it was just too expensive and the hormone therapy should be enough for the patient.

These are just a few of the numerous complaints happening across the United States. One poster goes on to say, "It would appear to me that we in the USA are rapidly closing in on having all of the drawbacks of socialized medicine, with none of the purported benefits. It is partly privately financed, but the controls are given over to remote corporate bureaucrats who determine who shall live and who just isn't worth it."

Most Americans are aware that what is good for the health care system as a whole often looks very different when it's their own health at stake or the health of someone in their family. Do we Americans view health care as a communal resource that should benefit everyone or do we view it mainly from the standpoint of "what's in it for me"? Do they view themselves as citizens working together for a "greater good," or as patients and consumers of health care, worried about retaining access to all that medicine has to offer? The longer we delay, the higher health care costs rise, while more and more Americans lose their health insurance.

The private insurance health care system controls costs by dropping coverage for many workers, a safety valve of uninsured to dump out of the system. If you can increase prices and have relatively inelastic demand (force people to drop out), you'll find enough people stay paying into the system so that the total amount paid in goes up.

In another five years, the $10,000 cost of family insurance will be $15,000 and more and more employers will have dumped people either into higher-deductible health plans or into the uninsured pool. The continued increases in health care costs will impact virtually everyone before it will create a constituency that will support universal health care.

In the meantime, you'll continue to have a corporate bureaucrat between you and your doctor.

http://krugman.blogs.nytimes.com/200...re-healthcare/

[gdpawel]

A significant number of Americans believe that the answer to our health care problems is to rely on the free market. Health care can’t be marketed like bread or TVs. An explanation was eloquently brought out by Princeton economist Paul Krugman.

There are two strongly distinctive aspects of health care. One is that you don’t know when or whether you’ll need care, but if you do, the care can be extremely expensive.

It must be largely paid for by some kind of insurance. And this in turn means that someone other than the patient ends up making decisions about what to buy. Consumer choice is nonsense when it comes to health care. And you can’t just trust insurance companies either, they’re not in business for their health, or yours.

This problem is made worse by the fact that actually paying for your health care is a loss from an insurers’ point of view, they actually refer to it as “medical costs.” This means both that insurers try to deny as many claims as possible, and that they try to avoid covering people who are actually likely to need care.

Both of these strategies use a lot of resources, which is why private insurance has much higher administrative costs than single-payer systems.

The second thing about health care is that it’s complicated, and you can’t rely on experience or comparison shopping. That’s why doctors are supposed to follow an ethical code, why we expect more from them than from bakers or grocery store owners.

You could rely on a health maintenance organization to make the hard choices and do the cost management, and to some extent we do. But HMOs have been highly limited in their ability to achieve cost-effectiveness because people don’t trust them, they’re profit-making institutions, and your treatment is their cost.

Between those two factors, health care just doesn’t work as a standard market story.

There are a number of successful health-care systems, at least as measured by pretty good care much cheaper than here, and they are quite different from each other. There are, however, no examples of successful health care based on the principles of the free market, for one simple reason: in health care, the free market just doesn’t work. And people who say that the market is the answer are flying in the face of both theory and overwhelming evidence.

And what Krugman says about "medical costs" is explained by former Cigna Insurance Company executive Wendell Potter. The industry is driven by two key figures: earnings per share and the medical-loss ratio, or medical-benefit ratio. That is the ratio between what the company actually pays out in claims and what it has left over to cover sales, marketing, underwriting and other administrative expenses and, of course, profits.

Think about that term for a moment: The industry literally has a term for how much money it "loses" paying for health care.

The best way to drive down "medical-loss," is to stop insuring unhealthy people. You won't, after all, have to spend very much of a healthy person's dollar on medical care because he or she won't need much medical care. And the insurance industry accomplishes this through two main policies. One is policy "rescission." They look carefully to see if a sick policyholder may have omitted a minor illness, a pre-existing condition, when applying for coverage, and then they use that as justification to cancel the policy, even if the enrollee has never missed a premium payment.

Rescission is important to the business model. At a recent House Subcommittee on Oversight and Investigation meeting, Rep. Bart Stupak, the committee chairman, asked three insurance industry executives if they would commit to ending rescission except in cases of intentional fraud. "No," they each said.

Potter also emphasized the practice known as "purging." This is where insurers rid themselves of unprofitable accounts by slapping them with "intentionally unrealistic rate increases."

The issue isn't that insurance companies are evil. It's that they need to be profitable. They have a fiduciary responsibility to maximize profit for shareholders. Potter explained, he's watched an insurer's stock price fall by more than 20 percent in a single day because the first-quarter medical-loss ratio had increased from 77.9 percent to 79.4 percent.

The reason we generally like markets is that the profit incentive spurs useful innovations. But in some markets, that's not the case. We don't allow a bustling market in heroin, for instance, because we don't want a lot of innovation in heroin creation, packaging and advertising. Are we really sure we want a bustling market in how to cleverly revoke the insurance of people who prove to be sickly?

[Rich66]

Currently proposed reductions in care reimbursements to docs and facilities for medicare patients could influence seniors' care. I have been heavily involved in my parents' Medicare navigations and am familiar with the reimbursement rates as they appear on the bills. I have met doctors who have specialized in elder predominated areas that got out of practice because medicare reimbursement wasn't worth their continuing. That was before the proposed cuts. I contend that our current level of services exist because there is a mix of higher private insurance reimbursements that help subsidize Medicare services. When folks say we should have "Medicare for all", I wonder who will be around to deliver it.

[gdpawel]

Something many people do not realize, particularly now doing the health care reform debate, which many seniors do not realize Medicare is a government-run health care system. But when asked if they want to do away with their Medicare, "absolutely not" is their answer.

Medicare pays 80%. My mother pays $96.40 a month for that coverage (this is why people complain that Medicare only pays 80%). She also has Medigap insurance for the remaining 20%, which she pays $122.17 a month for that coverage.

The Medigap insurance is the same kind of program like the Medicare Advantage program. Congress did not want the Medicare program to be totaly administered by the federal government. Instead, it devised a public program run by many competing private plans to supplement the 20%.

However, when you look at what you're paying for ($96.40 for 80% vs $122.17 for 20%), I'll leave that thought up to you.

And Congress guaranteed premium pricing for pharmaceuticals, by prohibiting Medicare from negotiating drug prices and it provided hundreds of billions of dollars in U.S. taxpayer subsidies to pay for these premium drugs costs by subsidizing private insurance Medicare plans.

Medicare has been paying private Medicare Advantage plans much more per enrollee compared with what the same enrollees would have cost in the traditional Medicare fee-for-service program. The monies to pay Advantage insurers is coming out of traditional Medicare.

Now it looks like that discrepancy is finally being rectified. Besides the signed legislation to cut the doughnut hole in half, the House health care reform bill has negotiated drug prices in it and stopping the subsidization of private Medicare Advantage plans.

[Rich66]

I agree that there is a significant lack of understanding of what Medicare is, how it works and how it fits into the larger health care situation. A significant portion of Medicare recipients had health care promised for their retirement packages and wound up on Medicare when the employer realized there was a public option that got them off the hook. But saying Medicare pays 80% misses the larger issue that Medicare usually decides a billed service is worth much less than what the provider bills. So Medicare often cuts the provider submitted bill in half or more and pays 80% of that. This is what I see in the CMS billing paperwork. A Medigap policy to cover the 20% is optional. It can be surprising to see how manageable that 20% is in many cases since the it's 20% of a hugely discounted amount.
There is talk of reducing Medicare reimbursements to providers yet further. The reductions fall disproportionately on Cardiology and Oncology services. I am receiving numerous oncology e-newsletters aimed at providers and they are clearly concerned about this. I know of one cancer facility that limits Medicare patients to 50% of its load...meaning they need a balance to make a go of it. I know of one local hospital that has gone on the record saying that if all reimbursements were at Medicare authorized levels, they would have to shut down. This is before proposed reductions in reimbursements.
I guess my sense is that there is a lot to consider in terms of how the current system works or doesn't work. Will a public option initially offered to augment private insurance eventually remove choices due to the ability to be as insolvent as Medicare? Will service options that currently exist due to a mix of reimbursement levels shut down if this happens. I am all in favor of dealing with pre-existing condition denials and premium/cost of care increases. But it seems major issues aren't even being factored into the discussion or understood at this point..yet there is a push to move things quickly.

[gdpawel]

There is often very little relationship between the bill and the cost of providing medical services. In reality, combined hospital/doctor payment is much closer to what the services are worth. Hospital list price rates are often five to six times what they routinely accept as full payment from insurers. A friend had a surgical procedure done on an outpatient basis. The list price of the bill for the hospital, surgeon and anesthesiologist came to about $14,000. Insurance paid 18% of the hopsital charge and 31% of the doctor's fees with both accepted as full payment.

Of course, another friend had a triple stent procedure last month ($38,000). Her private insurance says it is a pre-existing condition, even though the doctor says it is not, and her insurance is not going to pay a penny!

The private health insurance industry is driven by earnings per share and the medical-loss ratio. And the best way to drive down medical-loss is to stop insuring unhealthy people. And the private health insurance industry accomplishes this by rescission, the "pre-exisiting" cop-out!

Even if I could have afforded health insurance over the last six years (which I couldn't), why would I have purchased it? So six years later they can just not pay for a medical bill by saying I had a pre-existing condition?

I've observed the insesent complaints on various cancer blogs and discussion boards about private insurers "denial of coverage" on the backs of injuried and diseased human beings during their fight with the great crab.

In one case, the patient was denied a CT scan. As the poster said, "because their private insurer is practicing medicine and deciding that such a thing is not medically necessary." Without the CT scan, there was no way for the doctor to definitively tell if a swollen leg is cancer related or a blood clot. The physician couldn't make a diagnosis based on the best avialable technique to make that diagnosis. A good case of a corporate bureaucrat coming between a patient and their doctor.

Another poster presented the case that their private insurer used to cover Pet Scans. Unfortunately, some study came out stating that Pet Scans aren't more effective than CT Sancs to find colon cancer. With that one study, the private insurer had decided not to cover the Pet Scan, even against the physician protest.

And one more described their situation while fighting prostate cancer that had metastasized to the hip bones and a clinical trial using hormone therapy and Helical Tomo Therapy was looking to be the best opportunity to fight the cancer. The studies showed that is was really helping people with bone cancer, it is very precise treatment that does much less damage to surrounding tissues. However, private insurer had denied covering the Helical Tomo Therapy treatment. They said it was just too expensive and the hormone therapy should be enough for the patient.

These are just a few of the numerous complaints happening across the United States. One poster goes on to say, "It would appear to me that we in the USA are rapidly closing in on having all of the drawbacks of socialized medicine, with none of the purported benefits. It is partly privately financed, but the controls are given over to remote corporate bureaucrats who determine who shall live and who just isn't worth it."

It doesn't matter anyway. Plans for Health Care Reform are "dead in the water." The "boogeyman" has scared the "bejeebies" out of the American public! HHS Secretary Kathleen Sebelius says it is not essential that a public option be in the legislation. President Obama said on Saturday that he won't insist on a public option. Without the public option, there will be no competition in the market. The large for-profit insurers will continue to have a huge advantage. The public seems to have no objection to that!

Access to basic health care has deteriorated terribly in this country by the free-market system, because much of the growth in expense is in procedures performed by specialists, and doctors who work in these specialty areas have the most to fear from a public option plan. Big government would be more responsive to the people than big insurance, and doctors would have worked independently, and not for the government.

But private insurers will keep placating physicians because they fit into their overall plan. Doctors will continue becoming employees of the hospitals, instead of remaining as independent contractors, and we'll continue to have a corporate bureaucrat between you and your doctor.

Looking out for "the healthcare bubble!"

[Rich66]

FYI, you posted most of that last post previously in this thread. But this portion was new:
"There is often very little relationship between the bill and the cost of providing medical services. In reality, combined hospital/doctor payment is much closer to what the services are worth. Hospital list price rates are often five to six times what they routinely accept as full payment from insurers. A friend had a surgical procedure done on an outpatient basis. The list price of the bill for the hospital, surgeon and anesthesiologist came to about $14,000. Insurance paid 18% of the hopsital charge and 31% of the doctor's fees with both accepted as full payment."

What insurance did your friend have? Perhaps the scenario you describe is akin to stores that advertise a 25% off sale but their prices have been marked up to compensate.
I think the real issue is whether Medicare reimbursement is less than private insurance and if so..would reducing reimbursement rates further while extending these rates into the previously non-Medicare arena negatively impact the quality and availability of care. As an example..would there even be any Tomotherapy or Cyberknife facilities in operation? What is the wait for the few that exist? Would the next generation of innovative but expensive machine be created? If reimbursements go down, will the medical field be able to increase the numbers of already limited primary care physicians?

I'm not sure removal of the public option would eliminate competition as much as its existence would. I understand Federal employees have many competing plans to choose from...none public option. Maybe extending their plan options to the rest of us would broaden the insurers pool and reduce costs. The largest portion of the uninsured is younger folk who may to some degree be skipping insurance because they think it's not necessary or they don't understand the value of even high deductible plan with catastrophic coverage. I remember a conversation with a young co-worker a while back who initially thought insurance was too expensive until I told him the cost of my policy..at which point he revised his statement to "I just don't think I should have to pay".
Maybe we need to require everyone "in" to the extent of at least catastrophic coverage plans so that we have more healthy folk contributing and spreading the pool of risk.

[gdpawel]

From what I understand, if House and Senate members choose to use the Capitol attending physician and the Army and Navy hospitals while in D.C., they pay an annual fee (equivalent to being part of an HMO). If they seek private medical care while in D.C. or back in their home states, they use their private health insurance. If they are over 65, they use Medicare and whatever private supplemental insurance they may carry. And, of course, they paid into Medicare while working just like everyone else.

Members of Congress are eligible - like all other federal employees - to sign up for one of the "cafeteria" health insurance plans offered all other federal employees. If they sign up for one of these policies, the federal government pays two-thirds of the premium and the Congressman pays the other one-third. This is comparable to insurance offered by many private employers.

The President and members of Congress are among the more than 8 million federal employees, retirees and dependents who get their insurance through the Federal Employees Health Benefits Program, the largest employer-sponsored health insurance program in the country.

Because of its size, the program offers federal workers dozens of health plans to choose from, instead of the two or three that corporations and businesses typically offer their workers.

Like everyone else in the federal plan, what the President and lawmakers pay depends on the level of coverage they choose. On average, the federal government pays 72 percent of the total premium. It's probably similar to coverage that people in large established corporations get.

[Rich66]

"Members of Congress are eligible - like all other federal employees - to sign up for one of the "cafeteria" health insurance plans offered all other federal employees. .... the Federal Employees Health Benefits Program, the largest employer-sponsored health insurance program in the country.

Because of its size, the program offers federal workers dozens of health plans to choose from, instead of the two or three that corporations and businesses typically offer their workers."

Well...since we are already paying into this arrangement, lets see if we can give the rest of us access to these plans, either as individual policies or employer based. If the premiums are reduced by the numbers of fed employees already in, the more the merrier. And we should have a way to assess the Fed employees satisfaction over the years with their choices. I hope they have some higher deductible/HSA options in there too. That kind of option could be very beneficial to youngins that don't realize their snowboarding could go bad.

[gdpawel]

There is this idea that Medicare pays hospitals "below cost." On March 17, 2009, Glenn Hackbarth, the chairman of MedPAC, testified before the House Ways and Means Committee on this very issue. Hospitals, Hackbarth argued, are inefficient. Their costs are too high.

And this was backed up in the data. "MedPAC analysis has identified a set of low-cost hospitals that consistently out-perform other hospitals on a series of quality measures, including mortality and readmissions," Hackbarth explained. "Among this set of hospitals, we found that Medicare payments on average roughly equaled the hospitals’ costs." In less "efficient" hospitals, Medicare's payments were below costs.

Among the major differences between "efficient" and "non-efficient" hospitals was that the less-efficient hospitals were not under financial pressure: They made a lot more money from other sources. As such, they spent a lot more money on things like capital expansion. What MedPAC found was that hospitals under "financial pressure" -- hospitals that made less money, in other words -- managed to control their "cost" better.

Medicare's payments sufficed for them. And their quality outcomes weren't any worse.
Medicare's rates aren't where the hospitals like them to be. But it's still worthwhile for them to do business with Medicare. That suggests there's significant space between where hospitals are today and where they could be in a more efficient system.

That's not true for everyone, of course. As Hackbarth admits, Medicare underpays primary care providers, and it needs to redress that balance. And Medicare itself does a lot to increase costs across the system (in particular, it's fee-for-service payments give doctors incentive to increase volume).

Examine the payments to individual hospitals in more detail and you discover that many hospitals actually make a profit on most Medicare patients. According to the American Hospital Association, 42% of hospitals make a profit on Medicare overall. In the remaining hospitals, most Medicare patients are profitable, but losses are related to a minority of patients who need much more care than average because of longer stays, more complications, and underlying health problems.

http://www.ihatoday.org/issues/payme.../underpymt.pdf

[Rich66]

Hmmm. 42% doesn't sound too sustainable. So I guess the thinking is that Medicare level reimbursements, or lower(to expand coverage), would kick the majority of hospitals in the arse so they become more efficient?

From the link you posted:

FINDINGS
In the aggregate, both Medicare and Medicaid payments fall below costs and the shortfall has been
growing.
�� Combined underpayments rose from $3.8 billion in 2000 to nearly $32 billion in 2007.
�� For Medicare, hospitals received payment of only 91 cents for every dollar spent by hospitals
caring for Medicare patients in 2007.
�� For Medicaid, hospitals received payment of only 88 cents for every dollar spent by hospitals
caring for Medicaid patients in 2007.
�� In 2007, 58 percent of hospitals received Medicare payments less than cost, while 67 percent
of hospitals received Medicaid payments less than cost.



I also wonder about phrases like "fee-for-service payments give doctors incentive to increase volume"

When I hear talk of allocating a specific dollar amount for a diagnosis, I get uneasy. I have to push docs to green light some seemingly fundamental tests for my parents on Medicare. If it was coming out of the "budget", might be even harder.

There are hospitals in Europe that have a set amount given to them to cover whatever the totality of patients need. I hope it's high enough.

[gdpawel]

The situation about Medicare paying below cost is much more complicated than some people would like to suggest. The losses many hospitals report may be real but there are variations depending on management choices, location and the ways in which costs are incurred. Some hospitals are indeed losing large amounts on Medicare services, while others actually are making a profit. Most individual Medicare patients are profitable, many others could make a profit if hospitals improved their operations.

Something else to think about. The obligation to fund Medicare is an obligation of the general fund. The government has spent virtually every penny of the Medicare trust fund on tax cuts for high bracket payers, but they still owe this money to the program. The people who saved billions in taxes at the expense of the trust fund should know that the taxman will be coming back. The government is going to have to put that actual cash they borrowed, back.