October 09, 2013
Let’s set aside for the moment the glitches taking place with the Affordable Care Act health exchange websites. It provides grist for late-night comedians, but we can presume the software problems will be fixed. Besides, there are more important aspects of the exchange that warrant attention and discussion.
There was an analysis by Bloomberg Government published yesterday that shouldn’t escape notice. Bloomberg found that competition between health insurance plans within the state-based insurance exchanges is driving down costs, by as much as one-third. Bloomberg found what it called an “unmistakable pattern” – the more insurers operating in a given market, the lower the price of coverage for consumers.
Now, let’s stipulate that it’s early in the process and we don’t yet know how rates will be affected over time, particularly if the Administration is not successful in bringing young, healthy, currently uninsured Americans into the health coverage marketplace. Nonetheless, the linkage between competition and a downward push on prices is significant.
This evidence should be considered in discussions about Medicare’s future. It’s ironic that some of the same politicians who are praising the success of the ACA exchanges in making insurance affordable don’t want to improve Medicare by opening it up to more competition between private plans.
That’s an unsustainable argument. The Medicare Trustees report confirms each year that the program will face insolvency unless there are changes made to the status quo. Congress and future Administrations can continue to squeeze down on what Medicare pays for healthcare goods and services – thus having a negative impact on both healthcare access and quality – or it can look at the Bloomberg study, among others, and see the benefits that can be gained from competition and consumer choice.
You can’t praise the apparent success of the exchanges, but then take a ‘preserve Medicare as we know it’ position. That falls short as both good logic and good policy.
September 18, 2013
Yesterday, the Healthcare Leadership Council, through its Medicare Today initiative, released its annual survey of seniors nationwide regarding their perceptions of and experiences with the Medicare Part D prescription drug program. As has been the case since we began these surveys, the program is extraordinarily popular with seniors. This year’s survey showed that 90 percent of respondents are satisfied with their Part D coverage. They find their plans easy to use. They’re saving money. And, for many, their Part D plan is the difference between adhering to their doctor’s prescriptions and having to skip their medications.
That’s the what. In this space, I want to discuss the why. Why does it matter that the Medicare Part D program is so popular? As some in Congress press to fundamentally change Part D by decimating its current pricing structure — either through mandatory drug company rebates to the government or shifting pricing authority from Part D plans to the Secretary of Health and Human Services — it’s worth noting three reasons why policymakers should take careful note of this program’s high approval ratings.
1) The program is popular largely because it provides quality pharmaceutical coverage at an affordable price. The Centers for Medicare and Medicaid Services announced this summer that average premiums in 2014 will be about $31 per month. That’s the fourth straight year premiums have stayed level. Obviously, competition between Part D plans is proving effective in keeping coverage affordable, a critical factor for seniors on fixed incomes.
2) The Part D program has defied expectations since its inception. Skepticism was abundant immediately after its enactment. Plans wouldn’t participate. Then, there would be too many plans participating and seniors would get confused. The program would be a boondoggle for taxpayers. Well, the results are in, and each state has an ample selection of plans. Our survey shows seniors are negotiating the program without difficulty. And overall program spending is 45 percent below original Congressional Budget Office projections.
3) At a time in which citizens’ faith in government is at a disturbing low, a program that is overwhelmingly popular and that is spending at a rate far below expectations — certainly a rarity in Washington — is worth protecting, not remaking.
We’ll be sharing these survey results with members of Congress. It’s our hope that lawmakers who are eyeing changes to Part D will realize that the program clearly isn’t broken and doesn’t need fixing.
August 22, 2013
Building on my last post about U.S. healthcare leaders making a difference – one for which they’re often not given full credit – in containing health system costs while still elevating care quality and improving patient outcomes, I want to bring attention to a speech made by Dr. Steven Corwin, the CEO of New York-Presbyterian Hospital. Dr. Corwin is a member of the Healthcare Leadership Council.
What I particularly like about Dr. Corwin’s remarks, covered in the Jamestown Post-Journal, is that he doesn’t bemoan the challenges facing hospital leaders, but rather sees progress as inevitable. As he put it, “What I want you to keep in mind today as we discuss the problems with our health care system is: They are solvable. This is a great country with great minds. We can address these problems. And, we can continue the art of progress, so that we can reduce the burden of disease in our society.”
The article about his speech includes two particular points worth highlighting. One is that New York-Presbyterian, one of the nation’s most well-respected health systems, plans to cut costs by $150 million over the next three years, but will do so without sacrificing the quality of care it provides patients. He pointed out that savings can be achieved through evidence-based medicine, team-based care and reduced variations in care.
Dr. Corwin also emphasized that, as the healthcare system moves forward, there must continue to be investment in research and innovation.
As I read the coverage of Dr. Corwin’s speech, it just drives home the point that patients will be better served and our healthcare system made more sustainable if we address our cost challenges through innovation and improvements in care that lead to a healthier population rather than arbitrary government-imposed cutbacks that can have an adverse effect on both access and quality.
July 01, 2013
Even if we can’t find a way to eliminate ‘Mediscare’ political tactics altogether, shouldn’t we be able to at least limit retiree-scaring strategies to election years?
This weekend, Glenn Kessler, the Washington Post’s fact checker, pointed out that even odd-numbered years are open season for frightening seniors with outrageously misleading hyperbole. Kessler spotlighted a television ad sponsored by two political action committees, Patriot Majority USA and Senate Majority PAC, aimed at Congressman Tom Cotton (R-AR). The video accuses Cotton of supporting a plan that would “essentially end Medicare” and cost some seniors more than $6000 a year.
This ad is, of course, absolute nonsense that has been repeated — and discredited — many times before. Kessler, in fact, gave it his highest (or is it lowest) rating of “four pinocchios,” meaning it is highly deceptive messaging.
The two PAC groups are tying Cotton to an early iteration, since revised, of Congressman Paul Ryan’s (R-WI) Medicare reform plan. That plan, of course, wouldn’t end Medicare, but rather open the program up to participation by private health plans. And since the early Ryan version that the ad is referencing, the proposal has been revised to give seniors the option of remaining in conventional fee-for-service Medicare instead of opting for the private choice-and-competition plan.
Patriot Majority PAC and Senate Majority PAC know all of this, of course, but having a legitimate and necessary debate over Medicare’s future takes a back seat to using the program as a cudgel to pound down a political opponent’s approval numbers.
I don’t know if Congressman Cotton will be hurt by this ad but, regardless, he isn’t among the biggest losers here. Those would be the Arkansas voters who are being led to believe something that simply isn’t true, and current and future Medicare beneficiaries who need and deserve a genuine discussion over how to improve and sustain the program.
Mediscare tactics are deplorable enough in election years, but can’t we at least have one year out of every two in which we can have an honest conversation about the issue?
May 31, 2013
Washington, D.C. has long had a tendency to avoid decisive action until crises make continued delays untenable. This being the case, there should be a great sense of joy and relief in the Nation’s Capitol over the Medicare Trustees pushing the projected date of Medicare insolvency two more years into the future, to 2026.
That would, of course, be the wrong way to look at this issue.
Whether it’s 2024 or 2026, the fact remains that Medicare insolvency is still where it shouldn’t be, on the foreseeable horizon. And with the number of retirees rapidly climbing and utilizing, on average, three dollars of healthcare services for every one dollar they paid in payroll taxes during their working years, the Medicare status quo is no more sustainable today than it was before the Trustees Report was issued.
(A side note here: Yes, there are those who will insist that insolvency is not really all that catastrophic, that there will still be sufficient revenues to pay 85 or 90 percent of benefit obligations and, anyway, Congress would never allow Medicare to fail in meeting beneficiary needs. I have no doubt this is true, but assurances like these gloss over the actions that would be necessary in order to make up for this financial shortfall – higher taxes, greater burdens on beneficiaries, further cuts in payments for Medicare services, or some combination of all of the above.)
Treasury Secretary Jack Lew was correct in saying today that we need to act sooner rather than later to address Medicare’s financial challenges. The longer we wait, the more draconian the remedies in trying to forestall insolvency.
And it remains true that solutions are right in front of us. The Medicare Part D program continues to be incredibly successful in keeping federal costs well below projections and in keeping medications highly affordable for seniors. Medicare Advantage plans are achieving health outcomes superior to the conventional Medicare fee-for-service program. What these two programs have in common are a reliance on consumer choice and competition to drive value, the same components that are central to the Affordable Care Act’s health insurance exchanges.
As we discuss Medicare’s future, it only makes sense to examine how the lessons learned from these already-existing success stories can be utilized to ensure healthcare security for future generations.
So, as we examine the 2013 Medicare Trustees Report, let’s focus not on the fact that insolvency is delayed by two years, but at the fact we’re still talking about insolvency at all. Then, let’s begin the discussion on how to remove that prospect from the imminent horizon.