Tuesday, January 29, 2013

Isbah-Care: Getting Health Coverage as a Young Adult

Isbah Raja, a 23-year-old student at the University of Texas, suffered from lupus, an autoimmune disease that attacks her organs, causing pains in her joints and clumps of hair to fall out. Like too many other young adults prior to passage of the health care law, she had to worry about getting and staying well while also trying to get health insurance.

She�s now covered by her father�s health plan and will be until she�s 26, because of the health care reform law. More than 3 million young adults now have health coverage because the Affordable Care Act requires insurers to allow young adults up to 26 to be covered by their parents� health plans.

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The Affordable Care Act �directly had an impact on my life,� Isbah says. �I don�t have to worry about not being able to see a specialist, not being able to get the medications I need.�

And, Isbah notes, that when she ages off the plan and has to secure health insurance on her own, the health care law will bar insurers from denying her coverage because of her pre-existing condition.

�That�s a comforting feeling,� Isbah says. �There�s no more anxiety anymore.�

Monday, January 28, 2013

Health Care and Profits, a Poor Mix

Thirty years ago, Bonnie Svarstad and Chester Bond of the School of Pharmacy at the University of Wisconsin-Madison discovered an interesting pattern in the use of sedatives at nursing homes in the south of the state.

Patients entering church-affiliated nonprofit homes were prescribed drugs roughly as often as those entering profit-making �proprietary� institutions. But patients in proprietary homes received, on average, more than four times the dose of patients at nonprofits.

Writing about his colleagues� research in his 1988 book �The Nonprofit Economy,� the economist Burton Weisbrod provided a straightforward explanation: �differences in the pursuit of profit.� Sedatives are cheap, Mr. Weisbrod noted. �Less expensive than, say, giving special attention to more active patients who need to be kept busy.�

This behavior was hardly surprising. Hospitals run for profit are also less likely than nonprofit and government-run institutions to offer services like home health care and psychiatric emergency care, which are not as profitable as open-heart surgery.

A shareholder might even applaud the creativity with which profit-seeking institutions go about seeking profit. But the consequences of this pursuit might not be so great for other stakeholders in the system � patients, for instance. One study found that patients� mortality rates spiked when nonprofit hospitals switched to become profit-making, and their staff levels declined.

These profit-maximizing tactics point to a troubling conflict of interest that goes beyond the private delivery of health care. They raise a broader, more important question: How much should we rely on the private sector to satisfy broad social needs?

From health to pensions to education, the United States relies on private enterprise more than pretty much every other advanced, industrial nation to provide essential social services. The government pays Medicare Advantage plans to deliver health care to aging Americans. It provides a tax break to encourage employers to cover workers under 65.

Businesses devote almost 6 percent of the nation�s economic output to pay for health insurance for their employees. This amounts to nine times similar private spending on health benefits across the Organization for Economic Cooperation and Development, on average. Private plans cover more than a third of pension benefits. The average for 30 countries in the O.E.C.D. is just over one-fifth.

We let the private sector handle tasks other countries would never dream of moving outside the government�s purview. Consider bail bondsmen and their rugged sidekicks, the bounty hunters.

American TV audiences may reminisce fondly about Lee Majors in �The Fall Guy� chasing bad guys in a souped-up GMC truck � a cheap way to get felons to court. People in most other nations see them as an undue commercial intrusion into the criminal justice system that discriminates against the poor.

Our reliance on private enterprise to provide the most essential services stems, in part, from a more narrow understanding of our collective responsibility to provide social goods. Private American health care has stood out for decades among industrial nations, where public universal coverage has long been considered a right of citizenship. But our faith in private solutions also draws on an ingrained belief that big government serves too many disparate objectives and must cater to too many conflicting interests to deliver services fairly and effectively.

Our trust appears undeserved, however. Our track record suggests that handing over responsibility for social goals to private enterprise is providing us with social goods of lower quality, distributed more inequitably and at a higher cost than if government delivered or paid for them directly.

The government�s most expensive housing support program � it will cost about $140 billion this year � is a tax break for individuals to buy homes on the private market.

According to the Tax Policy Center, this break will benefit only 20 percent of mostly well-to-do taxpayers, and most economists agree that it does nothing to further its purported goal of increasing homeownership. Tax breaks for private pensions also mostly benefit the wealthy. And 401(k) plans are riskier and costlier to administer than Social Security.

From the high administrative costs incurred by health insurers to screen out sick patients to the array of expensive treatments prescribed by doctors who earn more money for every treatment they provide, our private health care industry provides perhaps the clearest illustration of how the profit motive can send incentives astray.

By many objective measures, the mostly private American system delivers worse value for money than every other in the developed world. We spend nearly 18 percent of the nation�s economic output on health care and still manage to leave tens of millions of Americans without adequate access to care.

Britain gets universal coverage for 10 percent of gross domestic product. Germany and France for 12 percent. What�s more, our free market for health services produces no better health than the public health care systems in other advanced nations. On some measures � infant mortality, for instance � it does much worse.

In a way, private delivery of health care misleads Americans about the financial burdens they must bear to lead an adequate existence. If they were to consider the additional private spending on health care as a form of tax � an indispensable cost to live a healthy life � the nation�s tax bill would rise to about 31 percent from 25 percent of the nation�s G.D.P. � much closer to the 34 percent average across the O.E.C.D.

A quarter of a century ago, a belief swept across America that we could reduce the ballooning costs of the government�s health care entitlements just by handing over their management to the private sector. Private companies would have a strong incentive to identify and wipe out wasteful treatment. They could encourage healthy lifestyles among beneficiaries, lowering use of costly care. Competition for government contracts would keep the overall price down.

We now know this didn�t work as advertised. Competition wasn�t as robust as hoped. Health maintenance organizations didn�t keep costs in check, and they spent heavily on administration and screening to enroll only the healthiest, most profitable beneficiaries.

One study of Medicare spending found that the program saved no money by relying on H.M.O.�s. Another found that moving Medicaid recipients into H.M.O.�s increased the average cost per beneficiary by 12 percent with no improvement in the quality of care for the poor. Two years ago, President Obama�s health care law cut almost $150 billion from Medicare simply by reducing payments to private plans that provide similar care to plain vanilla Medicare at a higher cost.

Today, again, entitlements are at the center of the national debate. Our elected officials are consumed by slashing a budget deficit that is expected to balloon over coming decades. With both Democrats and Republicans unwilling to raise taxes on the middle class, the discussion is quickly boiling down to how deeply entitlements must be cut.

We may want to broaden the debate. The relevant question is how best we can serve our social needs at the lowest possible cost. One answer is that we have a lot of room to do better. Improving the delivery of social services like health care and pensions may be possible without increasing the burden on American families, simply by removing the profit motive from the equation.

Sunday, January 27, 2013

Eyes On Election, Governors Hedge On Health Care

July 15, 2012

Listen to the Story 4 min 2 sec Playlist Download Transcript  

As governors from around the country meet this weekend in Williamsburg, Va., health care is near the top of their agenda. Specifically, what to do about the federal health law, now that the Supreme Court has given states new options.

Republican governors in particular said they were genuinely surprised by the Supreme Court ruling. The justices declared the health law in general constitutional, but gave states the option of whether or not to dramatically expand their Medicaid programs. They'll now get to choose whether to put most people who earn more than about $15,000 a year on the program or not.

"I think a lot of us, certainly on the Republican side, believed it would be found unconstitutional. So I think it's just added more confusion to the issue rather than settling the issue," said Utah Gov. Gary Herbert, "and probably more impetus on the November election to really find out and sort out what the implications are going to be going forward."

Indeed, the meeting's host, Virginia Gov. Bob McDonnell, said he wasn't planning to say yet whether his state would expand its Medicaid program, even with the federal government picking up the vast majority of the costs.

"Honestly, I don't think it's responsible fully for my state to make a decision now because there's still more information we need," he said.

Many Democratic governors see things differently, however, including Delaware's Jack Markell, the incoming chairman of the National Governors Association.

"This is not political. This is a financial analysis of what does it mean to cover, in our case, an additional 30,000 people," he said, "and my view � and we're clarifying that we're understanding it all properly � ... is that this is absolutely a good deal for Delaware taxpayers."

Unlike Republicans, who say the Supreme Court decision confused matters, Democrats like Maryland's Martin O'Malley also insisted that it should have ended the debate.

"I think most governors understand that the Supreme Court's decision was a final and clear ruling," he said.

Other Democrats were less charitable. Vermont's Peter Shumlin said some of his Republican colleagues aren't being honest by calling for the repeal of the health law on the one hand, while declining to say whether they'll accept the federal Medicaid funding that flows from it on the other.

"Have a spine. The American people are sick and tired of spineless politicians. [Either] say, 'I believe the Affordable Care Act is the wrong thing, so I will not take the loot,' or say, 'I believe the Affordable Care Act will help my state cover uninsured Americans, grow jobs, economic opportunities, and I'm taking the loot,' " Shumlin said. "But to say, 'I'm gonna criticize the plan, but I won't tell you whether I'm taking the loot or not until after the election,' that's what breeds cynicism among the American people."

O'Malley of Maryland thinks most of those Republican governors will eventually come around and take the money for economic � if not political � reasons.

"Once the posturing of the election is past, I think that a lot of these governors are going to have a hard time going home to their doctors, nurses, hospitals and explaining to them why they are passing up an opportunity to transform these dollars into better economic uses for job creation in their states," he said.

But for many Republican governors, like Nebraska's Dave Heineman, it's about something bigger than parochial interests.

"They all say it's free federal money. No, it's not. That's our tax dollars," he says. "It's costing every one of us."

Behind the scenes at the meeting, however, governors did seem to agree on one thing. There are still lots of questions they want the federal government to answer about how they will all work together as the health law's implementation proceeds.

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Saturday, January 26, 2013

When Going Back To The Hospital Is Good News

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Progress Continues in Setting up Health Insurance Marketplaces

Ten months from today, Americans in every state can begin to choose health insurance in new state marketplaces where they will have access to affordable coverage.� Many will have never had health insurance, or had been forced to make the decision to go without insurance after losing a job or becoming sick.� It is a groundbreaking time for health care in our country.

Today, we�re announcing that six states who applied early have made enough progress setting up their own marketplaces or Exchanges that we are ready to conditionally approve their plans�meaning they are on track to meet all Exchange deadlines.� These early applicant, early approval states include: Colorado, Connecticut, Massachusetts, Maryland, Oregon, and Washington.�

We are excited to be reviewing applications from other states making progress in building their Exchange.� We will make many more announcements like this in the weeks and months to come and expect that the majority of states will play an active role operating their Exchanges.

Some states have requested additional information to help guide their work implementing the health care law.� We value the hard work states are undertaking and to ensure that states have all the information they need to move forward, today we are providing more information that will answer some questions states have been asking.� You can read the letter I sent to Governors here.

This letter follows information we have provided to states in the past month to help them build their Exchanges, expand and improve their Medicaid programs, and make health care coverage more affordable for every American.� It answers frequently asked questions by state officials, summarizing previous guidance and offering new information.�

For example, we explain how Exchanges and Medicaid administrative costs will be funded and how we will continue exploring opportunities to provide States additional support for the administrative costs of eligibility changes.� We clarify in our new guidance that states have the flexibility in Medicaid and the Children�s Health Insurance Program to provide premium assistance for Exchange plans as well as to adopt �bridge plans� that offer coverage through both Medicaid and Exchanges � keeping individuals and families together when they cross the line between Exchanges and Medicaid.� And, while the law does not create an option for enhanced match for a partial or phased-in Medicaid expansion to 133 percent of poverty, we will consider waivers at the regular matching rate now and, in 2017 when the 100 percent federal funding for the expansion group is slightly reduced, broad-based State Innovation Waivers.�

We hope states will take advantage of the substantial resources available to help them insure more of their residents. As an independent report highlighted, �Accounting for factors that reduce costs, states as a whole are likely to see net savings from the Medicaid expansion.�

Today�s approval for these six early states and our continued effort to give states the guidance and tools they need to move forward, ensures that starting in October 2013, consumers in all states can begin filling out applications for private health insurance in affordable, quality plans. ��And our work with states will continue.� If states decide they want to play a larger role in running the new marketplace in their state in 2015, 2016 and beyond, we will work with them so they can have the opportunity to take on that role. �We are excited about the progress we�re announcing today, and we will continue to work side-by-side with states as they implement the critical reforms to our health care system that our citizens need and deserve.���

Could The Health Law End Up Back In Court? Opponents Think So

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