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Is Harvard Pilgrim the Canary in the Coal Mine?

September 29, 2010
9:47 am

Massachusetts was the first state in the nation to institute a health reform plan aimed at achieving a fully-insured population.  Now, one of the state’s leading insurers could be starting a new trend being driven by federal policy, and it’s one that won’t be warmly welcomed by consumers.

Harvard Pilgrim Health Care has sent alerts to customers that it will be ending its Medicare Advantage coverage program by the end of the year.  This is an enhanced Medicare plan currently enjoyed by approximately 22,000 customers in Massachusetts, New Hampshire and Maine.

The reason behind Harvard Pilgrim’s decision is clear.  The new health reform law uses cuts in Medicare Advantage funding to help pay for other aspects of reform.  Between reduced revenues and new regulations requiring health plans to construct physician networks  (previously, Harvard Pilgrim allowed their customers to have their choice of physicians), the insurers concluded that its Medicare Advantage program was no longer viable.

According to Harvard Pilgrim’s vice president of customer service, speaking to the Boston Globe, “We became concerned by the longterm viability of Medicare Advantage programs in general.  We know that cuts in Medicare are being used to fund national health reform.  And we also had concerns about our ability to build a network of health care providers that would meet the needs of our seniors.”

Of course, Medicare Advantage has been the object of an ideological struggle in health policy for years, between those who resent the presence of private health plans in the Medicare program and those who believe Medicare beneficiaries and the program itself gain from an injection of choice and competition.

But, the Harvard Pilgrim customers who are going to lose their Medicare Advantage program are less concerned with political struggles than they are with their options for future health coverage.  The larger question is whether this particular Massachusetts development is going to be replicated in other locales throughout the country.

Now Obesity Has A Price Tag

September 22, 2010
12:26 pm

It’s become one of the frequently-quoted axioms of American healthcare that 75 cents of every healthcare dollar we spend in this country is for treatment of chronic disease.

But now, thanks to a new study released yesterday, we know how much one of the leading causes of chronic disease, obesity, is costing individuals.

The study, conducted by a number of academic researchers, found that obesity is costing women who have the condition an average $4879 annually and men $2646.  These are costs resulting from disability, absenteeism and lost wages.  This study documents that obesity is not only causing chronic disease in millions of people, but also economic hardship for many.

One of the study’s authors, Christine Ferguson, said, “Being able to quantify the individual’s economic burden of excess weight may give new urgency to public policy discussions regarding solutions to the obesity epidemic.”

Dr. Ferguson is right.  No matter how success the new health reform law is in getting Americans off the uninsured rolls, creating a sustainable healthcare system and a healthier populace must include a successful attack on chronic disease.  Both the private and public sectors have an imperative need to engage in outreach to the public to emphasize healthier lifestyles and preventive care.  If we don’t take on this challenge, too many people are going to be suffering, as we can now quantify, both economic pain and shorter lifespans.

Bringing Sense to Health Information Technology Investment

September 16, 2010
2:52 pm

The Premier hospital alliance is distributing some important information regarding the “meaningful use” rules that will govern the distribution of federal funds intended to encourage investment in health information technology systems.

The problem with the regulation as written is that it penalizes some hospital systems that have multiple campuses.  Under the rule, a hospital system that has facilities operating under different Medicare provider numbers can receive a separate payment for each facility.  However, a multi-campus system with a single Medicare provider number can only receive one incentive payment. 

Legislation has been introduced to correct this problem, and it deserves support.  To learn more about this issue, please read the Premier communiqué below:

EHR inequity must be fixed

Lawmakers are calling for critical changes to the final rule defining “meaningful use (MU)” of electronic health records (EHRs) to ensure that every eligible hospital receives the same federal incentive payments. As finalized on July 28, the rule would allow only one Medicare incentive base payment per year for multiple inpatient facilities operating under the same Medicare provider number. By contrast, an identical hospital whose inpatient facilities each operate under their own Medicare provider number would receive a base payment for each facility. This has created an arbitrary and inequitable distinction between identical hospital systems based solely on whether a system has multiple inpatient facilities operating under a single Medicare provider number. The Electronic Health Record Incentives for Multi-campus Hospitals Act (H.R. 6072 and S. 3708) would allow multi-campus hospitals to choose one of two incentive calculations that would best meet the needs of their institutions and communities. Read more

Don Berwick’s Maiden Speech

September 13, 2010
1:15 pm

donald-berwick2The head of the Centers for Medicare and Medicaid Services, Dr. Don Berwick, made his first speaking appearance today since President Obama named him to the position in a recess appointment.  Berwick spoke to a meeting of the American Association of Health Plans (AHIP).

I was very pleased to see Dr. Berwick tell the AHIP audience that the contentious relationship between the Obama Administration and the insurers needed to cease.  We have long maintained at the Healthcare Leadership Council that it is counterproductive for political leaders to demonize the various sectors of the healthcare industry that will be on the front lines making health reform work.  In order to continue improving the affordability and quality of healthcare, it is essential that the public sector work with the private sector instead of throwing brickbats.

In his speech, Dr.Berwick reemphasized his commitment to changing the nation’s healthcare system to provide better care while reducing costs.  In striving to reach those goals, he will find strong allies within all sectors of American healthcare.

Reports on the Berwick speech can be found here, here and here.

Cause And Effect

September 08, 2010
9:34 am

na-bh835_ratehi_g_201009072115441According to an article in today’s Wall Street Journal, health insurers are letting it be known that they will be filing applications with some states to raise premiums, primarily on policies for individuals and small businesses, between one and nine percent this fall.

The reason for the requested premium increases is not surprising at all.  The portions of the new health reform law that are already going into effect will elevate costs for insurance companies.  Children can stay on their parents’ health insurance policies until age 26.  Co-payments for preventive care are being eliminated.  Lifetime caps on benefits, as well as certain annual coverage caps, are going away.

That’s not to say these changes are undesirable.  These are, in fact, important steps toward achieving a healthier populace.  But they don’t come cost-free.

Unfortunately, though, we’re in an election season and that means that a perfectly logical result to health reform implementation is being accompanied by finger pointing.  A government spokesperson has alreadyaccused  insurers of using the new reform law as an excuse to raise rates.

I would ask the critics a couple of questions.  First, do they believe it is in the best interests of consumers for health insurers to remain economically viable?  And, second, do they believe that additional health benefits have economic value and, if so, who should be paying the cost for making those valuable benefits available?