October 04, 2011
Yesterday, USA Today devoted its front page to a topic many of us have been discussing intensely for some time – how to address Medicare’s escalating costs.
The newspaper listed five ways to “squeeze” Medicare spending and then discussed the political arguments for and against each. Some, such as gradually raising the Medicare eligibility age from 65 to 67 and requiring higher-income beneficiaries to pay full premiums for their Medicare Part B (physician services) and Part D (prescription drug) coverage are recommendations that the Healthcare Leadership Council has made to the congressional deficit reduction “super committee.”
But, in a number of ways, the USA Today article missed the mark:
• In discussing cutbacks to Medicare providers, including physicians, hospitals and pharmaceutical companies, the newspaper expanded on the likelihood that those health sectors would strenuously argue against any cuts, but there was no reporting on the impact those reductions would have upon beneficiaries.
This is a pet peeve of mine, as I’ve noted previously. Too often, both politicians and commentators speak of the value of cutting providers instead of patients, obscuring the fact that reduced payments to providers has an impact on both the accessibility and quality of healthcare. If, as the Obama Administration has proposed, pharmaceutical companies are required to send over $100 billion in rebates back to the government, can there be any other outcome besides higher prices for consumers and less money available for research and development of new innovative medicines?
Relating to another sector, there was an interesting discussion on the KevinMD blog yesterday that raised legitimate questions over whether cutting physicians’ incomes will make a dent in overall healthcare spending.
• Aside from a quick reference to the controversy over Congressman Paul Ryan’s (R-WI), USA Today quickly dismissed the idea of giving Medicare beneficiaries greater consumer choice among competing health plans, citing one study that showed it would increase out-of-pocket costs.
The concept deserves more consideration than that. If, as the Healthcare Leadership Council and experts like former Clinton budget director Alice Rivlin has proposed, you give beneficiaries the choice of staying in conventional fee-for-service Medicare or moving into a new competitive Medicare Exchange, both health plans and providers would be compelled to find innovative ways to reduce costs while maintaining high quality and value. This is a pro-consumer direction that deserved more than a couple of sentences in a major story on Medicare costs.
• Where was any reference in the USA Today story to medical liability reform? Fixing our nation’s broken medical malpractice system won’t, by itself, fix Medicare’s long-term fiscal problems, but reducing the practice of defensive medicine to protect against exposure to litigation will certainly generate meaningful savings.
September 15, 2011
CEOs From All Health Sectors Call for Creation of New “Medicare Exchange” to Reduce Costs Through Competition, Raising of Medicare Eligibility Age, Changes in Medicare Cost-Sharing, Enactment of Medical Liability Reform
WASHINGTON – Leaders from many of the nation’s leading healthcare companies and organizations today called upon the so-called congressional “super committee” to include in its deficit reduction proposals a set of reforms that would not only generate over $410 billion in savings over 10 years, but would also strengthen Medicare’s long-term sustainability.
Members of the Healthcare Leadership Council – chief executives from for-profit and non-profit companies representing all sectors of American healthcare – today endorsed reform recommendations that, according to HLC President Mary R. Grealy, “will contribute to deficit reduction without placing an unfair or disproportionate burden on patients, healthcare consumers or our most vulnerable citizens.”
Ms. Grealy said the goal of HLC members is also to advocate reforms that address Medicare’s shrinking window of financial solvency. “This ‘super committee’ process is a unique opportunity to do more than simply chop away at budgets. Rather than swing a conventional ax, why not take the bold step of pursuing reforms that save money while confronting the entitlement challenges that become more difficult to solve the longer we wait,” she said.
The group’s recommendations to the “super committee” include:
Create a new “Medicare Exchange” in which private plans would compete on the basis of cost, quality and value.
HLC members acknowledged the proposed Exchange would inevitably be compared to the Medicare reform concept contained in Congressman Paul Ryan’s (R-WI) proposed budget. Differences, however, include the fact that Medicare beneficiaries would have the option of staying in traditional fee-for-service Medicare and there would be a more generous inflation factor – growth in GDP plus one percent – for premium subsidies.
Ms. Grealy said Medicare beneficiaries should have the same freedom of choice as Medicare Part D prescription drug program participants, federal employees and members of Congress participating in the Federal Employees Health Benefits Program, and those who will utilize the new state-level health insurance exchanges created as part of the Affordable Care Act. She said the competitive environment will require healthcare providers, plans, manufacturers and distributors to achieve greater cost-efficiencies while still offering quality and value to beneficiaries.
“If given the choice between deeper provider cuts, which will reduce patient access to care, and reducing costs by using consumer choice to incentivize cost-effective innovation, it doesn‟t seem like a difficult decision,” she said.
Gradually increase the Medicare eligibility age from 65 to 67.
This transition would mirror the increase in the Social Security retirement age and reflect today’s longer average lifespans. The increase would be implemented over roughly a decade, raising the eligibility age by two months annually.
The shrinking ratio of active workers to Medicare beneficiaries makes this change inevitable, Ms. Grealy said. Plus, the Affordable Care Act makes such a change possible in that Americans in their mid-60s not yet eligible for Medicare would be able to purchase health insurance on the new state exchanges without their health status affecting their ability to acquire coverage.
Reform Medicare’s cost-sharing structure.
One reform would involve making the Medicare Part A and Part B beneficiary cost-sharing uniform, with a reasonable deductible and co-pays as well as a cap on annual out-of-pocket costs. This, Ms. Grealy said, would make Medicare costs more predictable and consistent for beneficiaries while also ensuring that seniors wouldn’t be devastated by catastrophic care costs or faced with limits on hospital stays.
The other reform would be a requirement that individuals with annual incomes of $150,000 and up pay their full premium costs for Medicare Parts B (physician services) and D (prescription drug benefit). This would affect less than three percent of Medicare beneficiaries, Ms. Grealy said, and would generate budget savings while protecting financially vulnerable beneficiaries.
Implement medical liability reform.
HLC members said the “super committee” should recommend liability reform measures including a cap on non-economic damages in medical malpractice cases, a one-year statute of limitations from the point of injury to the filing of litigation, and a “fair share” rule to have defendants pay damages commensurate with their responsibility for the injury involved.
Understanding the partisan difficulty in advancing tort reform legislation, Ms. Grealy said her organization would be open to alternative approaches including linking liability protections to healthcare providers’ use of health information technology and practice of evidence-based medicine.
The four recommendations would generate just over $410 billion in budget savings over a 10-year period, based on Congressional Budget Office estimates and other published budget projections.
The Healthcare Leadership Council is submitting the recommendations in writing this week to members of the “super committee” as well as the leadership of both parties in the Senate and House.
August 22, 2011
When we talk about people who don’t have access to healthcare, there’s a natural assumption that it’s because they can’t afford it. A new study shows that’s not necessarily the case.
According to the study published in the journal Health Services Research, 21 percent of American adults said they had delayed care for non-financial reasons compared to 19 percent that cited cost as the primary reason for not seeking healthcare.
Those non-financial reasons included not being able to get to a doctor’s office during working hours, long commutes to the medical office, or not being able to get an appointment soon enough. As the study’s lead author said, “In reality, there are all kinds of reasons why people can’t get the care they need when they need it.”
There are at least a couple of important points to take from this report. One is that healthcare providers have to continue exploring creative ways, from telemedicine to non-traditional office hours, to meet the needs of today’s patient population.
More importantly, though, as we’ve said often over the past several months, coverage and access are not synonymous with each other. The Affordable Care Act makes health coverage available to all Americans, but that doesn’t mean that all of these newly-insured patients will have easy access to quality care. If some patients today, as the study indicates, have difficulty getting an immediate appointment with a physician, that problem may only worsen when an influx of new patients, the aging of the baby boom generation and a future shortage of healthcare professionals converge.
In a post in this column last week, we mentioned that Texas Governor Rick Perry’s candidacy for the presidency may help ignite a national debate over medical liability reform, since Texas has adopted one of the most effective tort reform measures in the country.
It didn’t take long for those battle lines to be drawn. Politico is reporting today that the nation’s trial attorneys are ready to dig deeply into their pockets to make sure Perry is defeated.
August 19, 2011
The Healthcare Leadership Council has never endorsed candidates for public office and we’re not going to start doing that now. I have to say, though, that there is a tangible benefit to Texas Governor Rick Perry (R) announcing his candidacy for President. It presents an opportunity to have a real debate about the merits of medical liability reform.
In his campaign, Perry will undoubtedly talk about the gains Texas has realized since its state legislature passed a measure capping non-economic damages in medical liability suits. Conversely, pundits and bloggers have already started taking shots at Lone Star-style tort reform ever since Perry announced his run for the White House.
A good example was found this week in The Incidental Economist blog. Relying heavily on the work of the interest group Public Citizen, a virulently anti-tort reform organization, the blog makes the case that Texas liability reform has not succeeded in reducing healthcare costs or the number of uninsured citizens.
Those opposed to tort reform tend to make these apples-and-oranges arguments. It’s akin to saying, if reforms make my car insurance premiums go down, shouldn’t I also have safer roads and better gas mileage. The fact is that malpractice insurance premiums and the costs associated with defensive medicine are just two components in the overall healthcare cost equation. (A logical question would be, what would healthcare costs be in Texas had tort reform not been enacted.)
And, as for the uninsured population, Sarah Kliff, formerly of Politico and now with the Washington Post, does a nice analysis here regarding the reasons Texas has a relatively high number of uninsured citizens.
Another piece worth reading is an op-ed in the New York Post this week, written by a Texas tort reform advocate, about the number of New York doctors heading south because of New York’s high malpractice premiums. The op-ed tells the story of an obstetrician whose medical liability premiums were heading toward $200,000 per year, making it impossible to continue to do business.
Now, Texas patients benefit from the services of that doctor and over 1,200 other physicians that have made the New York-to-Texas exodus since the latter state passed liability reform.
With the study released this week in the New England Journal of Medicine showing that three-fourths of the nation’s physicians will likely be sued at some point in their career – with a 99 percent probability in the high-risk specialties – let’s hope that Governor Perry’s candidacy does indeed ignite a national debate over the need for medical liability reform.
June 03, 2011
There was an interesting court case in Alexandria, Virginia this week. It seems that a personal injury attorney from Maryland had established a creative relationship with a Virginia chiropractor. The two of them would hire ‘runners’ who would recruit people willing to pose as accident victims and seek care from the chiropractor. They would then extract insurance settlements to compensate for their ‘injuries.’
Now, it would be wrong to use this case in describing the debate over tort reform as being between those interested in a fair judicial process versus lawyers looking for a quick and unethical payday. That would be tremendously unfair to the many attorneys who represent their clients conscientiously and abide by the highest ethical standards.
Yet, in debates over and coverage of healthcare issues, we frequently see one side or another depicted in ways that don’t fairly describe their behavior or point of view.
Patient privacy is a prime example. I can’t begin to count the number of news stories that have portrayed debates over the confidentiality of medical records as being between “privacy advocates” and the healthcare industry, as if health providers weren’t committed to protecting the rights and interests of patients. On this issue, both sides of the discussion are “privacy advocates,” with the disagreements being over how to achieve both confidentiality and the essential flow of information to medical professionals.
What brings this matter to mind is an Associated Press article published yesterday about President Obama and congressional Republicans being at odds on the issue of medical liability reform. The article characterizes the pro-liability reform position as being all about placing limitations on the damages an injured person can receive. It isn’t until near the end of the article that it’s mentioned that the law in West Virginia – the state focused upon in the story – places a cap on noneconomic damages.
That’s what is not made clear in this article, and so often when this issue is discussed. Those of us who support medical liability reform don’t want to impose a strict cap on damages in general. In states where medical liability reform has been enacted – not only West Virginia, but Texas, California and others – there is no ceiling on the economic damages a plaintiff can receive. Reformers are trying to bring some sense to the question of punitive damages, reining in those multimillion dollar verdicts that juries can award on a whim, and that have an effect on healthcare costs and patient access to care. That distinction all too often doesn’t make it into news coverage.
There’s another interesting bit of oversimplification in that AP article. It mentions that trial attorneys and consumer groups oppose liability reform because it would “lessen the incentive…for healthcare providers to act responsibility.” Of course, this obscures the fact that the vast majority of physicians and hospitals do act responsibly and with the highest degree of professionalism, and that there is a sizeable gap between the number of malpractice suits filed and actual incidents of negligent care.
I could retaliate by talking about Maryland attorneys and Virginia chiropractors, but that would be wrong.