POSTED 9/13/09

No matter what station we have in life; our health can change our path.

All of us have heard the debate raging on about the health care issue. So I decided to get some facts for myself and found that the issue is as the elected officials say “very complicated.” I went to the Senate Committee On Finance web site at the suggestion one of our Senators, Sen. Debbie
Stabenow. I was referred there because of questions I had about the issue of QUALITY health care not just health care. The reason for my questioning a difference was the experience our family had with my mother in the last years she was with us. My mother had Parkinson’s and I watched her slowly leave us as this illness got worse and was followed by dementia.  As this happened the family realized health care was needed beyond what we were capable of providing. My wife and I went to find care for her. This is when QUALITY care became an issue to us. We found the QUALITY care we wanted, only after doing personal unannounced visits to see the actual care given patients. We did not realize it was Quality health care we were seeking until I did this research; I was calling it the kind of health care that we preferred.  Preferring QUALITY  health care that provided proper staffing and many other issues. This convinced me to investigate what my wife and children could be facing in years to come for me or we for her, if the nation does not reform health care.

I started reading one testimony given by an expert on the issue of financing QUALITY health care in the debate going on. Then I read twelve other offerings to the committee. I would like to share some of the good, bad and ugly facts I found that stood out to me

The first testimony I would like to present is from Katherine Baicke, Professor of Health Economics Harvard Scholl of Public Health. “Misunderstandings about the general principles of health insurance have the potential to impede the development of a much-needed consensus on how to engineer reform. Uncovering the kernels of truth that underlie these misconceptions can help focus on reform efforts on the critical challenges facing our health care system. A key distinction should be made between health care and health insurance. Insurance works by pooling risks: many pay premiums up front, and then those who face a bad out come get paid out of those collected premiums. Uncertainty about when we will fall sick and need more health care is the reason we purchase insurance – not just because health care is expensive (which it is). Many other things are expensive, including housing and college tuition, but we do not have insurance to help us purchase them because they are not uncertain in the way that potentially needing very expensive medical care is. THE MORE UNCERTAINTY THERE IS, THE MORE VALUABLE INSURANCE IS”.

INSURED SICK PEOPLE vs UNINSURED SICK PEOPLE

 “Insured sick people and uninsured sick people present very different issues of public policy. People who have already purchased insurance and then fall sick pose a particular policy challenge: insurance is not just about protecting against unexpected high expenses this year, but also about protecting against the risk of persistently higher expenses in the case of chronic illness. This kind of protection means that once insured, enrollees’ premiums would not rise just because they got sick, but this is not always the case today. In fact, insurers have an incentive to shed their sickest enrollees, suggesting a strong role for regulation protecting them. Nor are insurers held responsible when inadequate coverage raises the costs of a future insurer, such as Medicare for those over 65. These problems highlight the limited availability of true long-run insurance offerings, a reform issue that is often glossed over in the combining together of health care and health insurance.

Uninsured Americans who are sick pose a very different set of problems. They need health care more than health insurance. Insurance is about reducing uncertainty in spending. It is impossible to “insure” against an adverse event that has already happened, for there is no longer any uncertainty. If you were to try to purchase auto insurance that covered replacement of a car that had already been totaled in an accident, the premium would equal the cost of a new car. You would not be buying car insurance – you would be buying a car. Similarly, uninsured people with known high health costs do not need health insurance – they need health care. Private health insurers can no more charge uninsured sick people a premium lower than their expected costs. The policy problem posed by this group is how to ensure that low income uninsured sick people have the resources they need to obtain what society deems an acceptable level of care and ideally, as discussed below, to minimize the number of people in this situation.

SOCIAL INSURANCE

This highlights one of the many reasons that health insurance is different from car insurance: the underlying good, health care, is viewed by many as a right. Furthermore, we may want to redistribute money from the healthy to the sick, in the same way that we redistribute money from the rich to the poor. This kind of redistribution is fundamentally different from private insurance: it is social insurance, and it is hard to achieve through private markets alone. Medicare, which insures the aged and disabled, is an example of a social insurance program. Private markets can pool risk among people starting out with similar health risks, and regulations can ensure that when some members of those risk pools fall ill, insurers cannot deny them care or raise their premiums, but transferring resources to people who are already sick and uninsured or transferring resources from lower health risk groups to higher health risk groups requires social insurance.

How then do we provide the sick and uninsured with socially acceptable care? Private health insurance alone is unlikely to achieve this goal: no insurer will be willing to charge a premium less than enrollees’ likely health costs. Instead, they could be provided with health care directly or a premium subsidy equal to their expected health care costs. Alternatively, we could force sick people and healthy people to pool their risks, such as through community rating coupled with insurance mandates (to preclude healthy people from opting out of subsidizing sick ones). These kinds of transfers are based on social choices about redistribution.

The advantage of social insurance programs, including a nationalized health care system, is that they can achieve redistribution that private markets alone cannot. They may also provide benefits with lower administration costs although, in the case of moving to a single payer system, the size of administration savings relative to overall health care cost growth is likely to be small.

Spending more to attain universal insurance is not a problem if it generates more value than it costs, and the view that health care is a right is not inconsistent with this framework. First, and sometimes over looked, is the security that insurance provides against the uncertainty of unknown health care expenses. The value of this financial smoothing alone is estimated to be almost as the cost of providing people with insurance. Second, much of the additional health care that the newly insured would receive is likely to improve health. (But this is by no means automatic, for being insured is not enough to guarantee GOOD HEALTH CARE. Extending health insurance coverage is worth it for these reasons – but not because it would save money.

Thus, while health insurance increases the quantity of care patients receive, being insured alone is not sufficient to ensure high quality care.  Insuring the uninsured will give them access to the sort of health care the rest of us receive: a combination of valuable care, overuse of some costly interventions with little proven benefits, and underuse of some vitally important therapies, care that is sometimes coordinated but often fragmented. This is better than no care, but it highlights the problem of collapsing the entire debate about U.S. health care reform down to the issue of uninsurance: health insurance does not guarantee good health”.

FINANCING HIHG QUALITY HEALTH CARE

The issue of financing a reformed health care system brings many different ideas and some passionate views as to how to pay for reform. This also brings out the true knowledge of some who speak about the issue at all levels. The following examples of options suggested for reforming the heath insurance system and also many that say how the health care system should be restructured as well. Some you and I have heard discussion on, others are different than the thirty-second sound bites and the pundits give us on a daily basis.

One option before the Senate Committee on Finance was presented by Stuart H. Altman Ph.D. of the Heller Graduate School of Social Policy and Management Brandies University. He stated the following “I understand there is a strong wish by many to pay for any expansion in health care coverage to the millions of Americans who lack any third party health care coverage with savings generated by either reducing what is now paid for care or by limiting the amount and types of care currently being provided. I share the view that there is substantial waste and excess in our current health care system. But to attempt significant provider payment cuts before we provide adequate financial coverage for all Americans or in conjunction with expanding coverage, I believe, be a serious mistake. Moreover, to make the uninsured, who are mostly the working poor, be the victims of our nation’s inability to curb health care costs is clearly unfair.

Unless we change the way we provide services, any serious reductions in the payment levels for services will, I fear, lead to a reduction in access to care and/or the quality of care provided. To change the delivery system we must move away from our current fee-for-service system to a payment system that rewards not more services, but appropriate services. Appropriate services often involve individuals who coordinate care as opposed to deliver services. Such care is most often found in what have been called “integrated delivery systems”. By developing integrated delivery systems we have the potential to reduce payment levels for services over time without negatively affecting access and quality”.

Dr. Altman also addressed the high cost of re-insurance and the role our doctors are playing in this debate 

“Hospitals play a key role in our health care system and must b a core component of any integrated delivery system. As we transition to more bundled or global payments any future hospital update amounts paid through Medicare PPS system should recognize that as hospitals develop more comprehensive health information technology systems, ………… they should use these systems to develop more efficient and lower cost care.

 It is well known that 80 percent of US health care expenditures are for the sickest 20 percent of the patients. Some private insurers try to protect themselves against the possibility that they could be responsible for the cost of such patients by developing techniques to limit coverage for individuals that might be in this group. Most insurers also limit their financial exposure by purchasing high cost reinsurance. Clearly the former activities should be outlawed and the purchase of re-insurance is expensive and is ultimately passed on in the form of higher premiums. I would suggest that the US could both reduce the overall cost of treating such high cost patients and reduce the cost of reinsurance by establishing a governmental reinsurance system. Such a system could be established through a state all-payer structure or through local or state health insurance exchanges. Each payer group would be asked to pay for a portion of the expenses in relationship to an actuarial estimate of their likely high cost cases. This new reinsurance entity would be responsible for a proportion of the high cost case expenses, e.g., 75%. So as to reduce the overall costs of treating such patients over time each appropriate state or local entity would be required to develop a high cost disease management system in consultation with the federal government. The federal government would evaluate the success of the different disease management systems and help incorporate those that work the best throughout the country”.

In his summarizing for his testimony he states some very important facts. “Most importantly we need to develop a system for providing health care coverage for all Americans. And, yes over time we should and can pay for the added costs of such expansion with efficiencies from our current health care delivery system. But such cost savings can not occur over night and will require some fundamental changes in the way we pay for and deliver care. It would be unfair to ask millions of uninsured Americans to wait for those of us who are well insured or who provide health care services to change our system.  Instead we should follow the lead of Massachusetts and expand coverage immediately while we set in place mechanisms that over a 10 year period will both improve the quality of care and lower its costs”.

Next to address the financing issue is Robert Greenstein, Executive Director, Center on Budget and Policy.

Financing is Critical

“Some 46 million Americans are uninsured, a problem that other western industrialized nations
have been able to address. In addition, rising health care costs threaten the nation’s long-term fiscal and economic health. If health costs per beneficiary simply rose at the same rate as per capita economic growth, rather than growing considerably faster, nearly three-fourths of the massive long-term fiscal gap we face would be closed.

There is a strong argument that national health care reform should be our highest domestic
priority. And, if it is this important, then it is worth paying for. Moreover, given the deeply
problematic fiscal outlook, we should pay for the upfront costs of health reform.

NO EASY OR PAONLESS ANSWERS

I wish there were a number of painless options. There aren’t. As you well know, some types of
improvements in health care hold promise as ways to slow health care cost growth, but either we
don’t have firm knowledge about the savings they would produce or the savings would be unlikely
to materialize on a substantial scale for a number of years. In other words, these initiatives don’t
“score.”

To finance badly needed health care reform, all sides will need to make sacrifices. Tough
measures will be needed — on both the spending and the revenue sides of the budget.
Moreover, the number of spending and revenue offsets that will be needed is likely to be
substantial. There appears to be no single option that is politically viable and that can, by itself,
produce most or all of the savings needed.

Spending offsets

The President’s budget proposes a series of reforms in health care programs, primarily in
Medicare, that CBO estimates would save $295 billion over ten years. Many of these reforms are
consistent with the findings and recommendations of Congress’ Medicare Payment Advisory
Commission (MedPAC). These proposals merit serious consideration.

• They would produce substantial savings to help finance health care reform.
• A number of these measures also could lead to cost-saving reforms in the private sector, as
private insurers followed Medicare’s lead in such areas as the bundling of payments, reducing
hospital readmissions, and basing provider payments on quality of care.
• In addition, these reforms would help strengthen Medicare’s finances, which badly need shoring
up for the long term.

These proposals thus would yield a triple benefit.

A newly released survey of health care leaders conducted by the Commonwealth Fund found
strong support for these proposals. Large majorities of the health care leaders surveyed voiced
approval of eight of the nine Administration Medicare proposals they were asked about.
In its March 2009 report to Congress, MedPAC issued several additional Medicare
recommendations related to other provider payment rates that would generate savings. These
should be considered as well.

ADDITIONAL MEDICARE ND MEDICAID PROPOSALS THAT WOULD PRODUSE SAVINGS

The Finance Committee explored a number of Medicare proposals in its roundtable on health
care delivery reform and discussed some of these in the paper it produced following that roundtable.

Let me suggest consideration of three additional savings proposals — two in Medicaid and one in
Medicare.

1. Delivery system reforms in Medicaid
As noted, the Administration and MedPAC have proposed various Medicare delivery system
reforms. Congress could consider applying these similar delivery system reforms in Medicaid as
well, where that is appropriate.

State Medicaid programs could be encouraged to establish bundled payments and to structure
their Medicaid payments to reduce hospital readmission rates. The federal government also could
facilitate the further use of pay-for-performance both in Medicaid fee-for-service and in Medicaid
managed care. In addition, states could be encouraged to institute promising care-management
programs for certain high-risk populations, including high risk pregnant women (to reduce the
number of neonatal intensive care unit admissions), children with asthma, and people with chronic illnesses.  Finally, more state Medicaid programs could be encouraged to limit Medicaid payment for medical conditions acquired during stays in a hospital; this is already required under Medicare and in some state Medicaid programs.

2. Lowering the Cost of Medicaid Drug Coverage

Congress could take steps to lower federal costs for drugs prescribed under Medicaid. This could
be done through several measures.

First, the minimum Medicaid drug rebate could be increased.

Second, the rebate could be applied to drugs dispensed by Medicaid managed care plans. Drug
manufacturers currently are not required to pay rebates on drugs dispensed to beneficiaries enrolled in Medicaid managed care plans.  This exception was based on the assumption that managed care plans could negotiate discounted drug prices as favorable as those required under the Medicaid drug rebate.  However, recent evidence shows this likely is not the case.  Applying the Medicaid drug rebate to drugs dispensed through managed care plans would ensure that  these plans get the best prices available, and it would allow the federal government and the states to achieve savings in their managed care capitation rates.

Both of these proposals to secure savings in Medicaid were passed by the Senate in 2005. Both
also are included in President Obama’s budget (and are reflected in the $295 billion in savings
referred to above that CBO estimates the President’s proposals would produce).

Several other steps also could be taken that would yield additional savings. Manufacturers of
brand-name drugs are required to pay additional rebates under Medicaid if prices for those drugs rise faster than the Consumer Price Index. The Office of Inspector General at the Department of
Health and Human Services has recommended applying a similar rebate adjustment to generic drugs.

The federal government could also encourage states to adopt Medicaid best practices in managing their prescription drug costs. Some states conduct periodic reviews of prescription drug usage, particularly among high users, to ensure that the drugs prescribed are medically necessary and thereby to limit fraud and abuse and improve patient safety. These states also monitor prescribing patterns by physicians and initiate general provider education efforts known as “counter-detailing” or “academic detailing,” which have been shown to reduce costs that stem from inappropriate prescribing. Some states intervene with specific providers who prescribe an unusually high number of prescriptions.

3. Reducing Costs for Drugs Prescribed through Medicare to “Dual Eligible”
Beneficiaries

Prior to the establishment of the Medicare Part D drug benefit, Medicaid provided prescription
drug coverage to more than 6 million “dual eligibles” (low-income Medicare beneficiaries who also are enrolled in Medicaid). In 2006, drug coverage for these dual eligibles was shifted to Medicare.

When Congress enacted the drug benefit, it assumed that the private insurers participating in Part D would be able to negotiate greater rebates from drug manufacturers than the rebates the
manufacturers had been required to pay, under Medicaid, for drugs dispensed to the dual eligibles.
An increasing body of research demonstrates, however, that the rebates negotiated by Medicare
Part D plans actually are well below the rebates that would have been required under Medicaid. As a result, the federal government is now incurring higher drug costs for the dual eligibles than it
previously incurred under Medicaid.

Harvard health economists Richard Frank and Joseph Newhouse examined SEC filings among
manufacturers of drugs used heavily by dual eligibles, such as anti-psychotic medications. They
found that that Medicare Part D plans were not obtaining prices that approximated the prices for
these drugs net of the Medicaid rebates. As a result, they found “manufacturers have realized
significant gains simply from the change in responsibility for purchasing from Medicaid to
Medicare.”

Similarly, Stephen Schondelmeyer, a University of Minnesota expert on prescription-drug pricing,
has estimated that most of the publicly released Medicare Part D prescription drug prices are 20 to 30 percent higher than the estimated prices in Medicaid net of the manufacturers’ rebates. In addition, in a July 2008 report, the majority staff of the House Committee on Oversight and Government Reform found that had the dual eligible beneficiaries remained in Medicaid in 2006 and 2007, the federal government would have saved $3.7 billion on the 100 drugs most often used by this population. This figure was derived from the Committee’s review of confidential pricing documents provided by insurers and drug manufacturers at the Committee’s request.
To help finance health reform and lower Medicare costs, Congress could require drug
manufacturers to provide, at a minimum, the same level of rebates for prescription drugs provided to dual eligibles under Medicare Part D as would have been required under the Medicaid program.
There is no Congressional Budget Office estimate for this policy option, but the House Oversight
and Government Reform Committee staff estimated it would produce savings of as much as $86
billion over ten years”.

SUMMING UP THE IDEAS PRESENTED.

This is a presentation of facts gathered from presenters to the Senate Finance Committee. There are six more experts that testified and have ideas on improving our failing health care system. Those will be presented in another article later this week. These are not the complete statements give by these experts, only the facts I felt would inform those reading the article about the problem and some of the ideas to fix the problem. The facts prove there are serious problems facing the nation today and in the future. The discussion is how to fix the problem before it consumes the economy and the people of this great nation. The time devoted to this article was done in hopes the reader would think about the facts presented.

-- Jess Minks                    

POSTED 6/15/09

State's top Dem builds on success

Party chairman has defied odds, defeated rivals

(From Lansing  State Journal) During 14 years of leading the Michigan Democratic Party, Mark Brewer has delicately handled disagreements within his often-fractious party and made heavy-duty campaign points the size of a Ford sedan.

He gave Republicans fits last year by running television ads accusing then-Supreme Court Chief Justice Cliff Taylor of sleeping on the bench. Taylor denied the allegation, but lost the November election to Democratic nominee Diane Marie Hathaway, becoming the first incumbent justice to lose in 24 years.

It was one of the party's biggest upsets, along with Debbie Stabenow unseating first-term Republican U.S. Sen. Spencer Abraham in 2000. Brewer hopes to have similar success next year, when Supreme Court Justice Robert Young is up for re-election.

Brewer's never-say-die attitude isn't always echoed in his own party. He had trouble persuading judicial candidates that Taylor was beatable. But he said candidates hoping to take on Young already are pouring in.

"There are more believers this cycle than last cycle," he says wryly.

Sharp focus key

Brewer, who has an undergraduate degree from Harvard University and a law degree from Stanford University, wasn't afraid of going toe-to-toe with former Michigan GOP Chairman Saul Anuzis on radio shows statewide. But while he can argue the big picture, he often wins campaigns by focusing in on just one or two items that can swing the race.

In last year's Supreme Court race, for instance, he spent the year before the election driving around the state in the Ford Five Hundred that Taylor had given back to the state in 2007 as a cost-saving measure.

And several months ago, Brewer brought a rubber duck to a public television interview to criticize current state GOP Chairman Ron Weiser for "ducking" a joint appearance.

"I find that in politics the most powerful campaign techniques are those that are illustrations ... a picture of a sleeping judge, a picture of the car used by Cliff Taylor," Brewer told The Associated Press in a recent interview. "It just helps drive home our point in a way that words can't."

THERE'S MORE - GO TO LSJ STORY     POSTED 6/15/09