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Profile Information

Gender: Female
Hometown: Washington state
Home country: USA
Current location: Directly above the center of the earth
Member since: Sat Aug 16, 2003, 02:52 AM
Number of posts: 51,907

About Me

Major policy wonk interests: health care, Social Security/Medicare/Medicaid, election integrity

Journal Archives

Former insurance CEO explains why voucherizing Medicare is a shitty idea

The New York Times
Medicare Voucher Costs
To the Editor:

Re "ruth and Lies About Medicare"editorial, Aug. 19):

As a former chief executive and actuary of an insurance company that once sold both individual and group health insurance, I am particularly mystified by the effort to push Medicare participants into the individual health insurance market.

I thought that we wanted to reduce--or at least control--the cost of health insurance, but individual health insurance is by far the most expensive alternative.

Depending on the size of the vouchers, the government itself may save money, but the entire system will pay more. Someone has to pay for the costs of individual underwriting, marketing and so on, and those expenses will fall on the elderly themselves.

You are also correct in assuming that there is likely to be anti-selection, with the healthier people going to the insurance companies, leaving the sickest and most expensive people in the Medicare plan.

It is certainly true that health insurance needs reform and that President Obama is far from having all the answers, but the Romney-Ryan plan will increase the country?s health care bill with little or any of the increase going to more or better health care.

Stephen Brown
Brewster, Mass.

Comment by Don McCanne of PNHPt: Today's message is important because it comes from an insider in the health insurance industry. Not only does he indicate that it is a terrible idea for Medicare beneficiaries to use vouchers to purchase private, individual plans, but, of even greater significance, is "that health insurance needs reform and that President Obama is far from having all the answers."

For private insurance reform, nobody has all the answers. The nature of the beast is that when you try to fix one defect, others open up. Instead of moving Medicare beneficiaries into private insurance plans, we need to move private insurance victims into Medicare.

Republicans have ALWAYS hated Medicare

I've made this into a 4-up postcard pdf with the following text on the back.

From Reagan’s attack on the first Medicare bill in 1962 to GOP Representative Eric Cantor in 2012, Republicans have been campaigning to end Medicare.

“We've got to protect today's seniors. But for the rest of us?
We're going to have to come to grips with the fact that these programs cannot exist if we want America to be what we
want America to be.”

Why would anyone trust any Republican who says they want to “save” Medicare? If the changes they want are so wonderful, why not offer them to those over 55 as well as those under 55?

This must be a campaign issue in 2012. Republicans are a disaster, but don’t let Democrats compromise on cuts with the excuse that they won’t be as bad as the Romney/Ryan commitment to end our lifeline programs. Demand that all candidates refuse to compromise on cuts.

Toll free for all Congress members 1-866-220-0044

If you want front and back pdfs, PM me with your email address.

Global budgeting for MA health care? Not really.

August 22, 2012
Controlling Health Care Costs in Massachusetts With a Global Spending Target
By Robert Steinbrook, MD

In July 2012, after years of consideration, Massachusetts enacted wide-ranging health care reform legislation that aims to control costs and improve quality. A signature feature of the act, signed into law by Deval Patrick, the state's Democratic governor, on August 6, 2012, is the creation of an annual global spending target for total health care expenditures, which is tied to the growth rate of the state's economy.

For 2013, the health care cost growth benchmark is set at 3.6%. For 2014 to 2017, the benchmark is set at the growth rate of potential gross state product, and for 2018 to 2022, it is set at the growth rate of gross state product minus 0.5%, with some provisions for adjustment. The state will not dictate how the annual benchmark is met.


With a global spending target, health care in Massachusetts is still likely to be very expensive as compared with the United States and all other member countries of the Organisation for Economic Co-operation and Development. Health care may just not be quite as expensive as it could be without a spending target.

Comment by Don McCanne of PNHP: Recognizing that health care reform in Massachusetts enacted when Mitt Romney was governor has failed to control health care spending, Massachusetts has now enacted legislation supposedly designed to limit spending. One of the most important features is the introduction of global budgeting, an important economic tool long advocated by Physicians for a National Health Program. No, wait. It isn't a global budget, but rather a global spending target, and that is the point of today's message.

Massachusetts continues to finance care through a fragmented, dysfunctional system that can never be reined in. There is no state universal budget for health care, so there can be no global budgeting. Even hospitals cannot be globally budgeted because they have to interact with so many different payers. All this legislation does regarding global spending is to identify the various entities that exceed the targeted rate increases and them put them on a naughty boys' list.

Be prepared. A few years from now, when we continue to teach that global budgeting is one of the more effective tools that we should be using to contain costs, we'll have to respond to the claim that Massachusetts already tried that and it didn't work. No they didn't. Erecting targets on the sidelines has nothing in common with crafting a budget using real dollars.

The Democratic Party platform of 1900


We declare again that all governments instituted among men derive their just powers from the consent of the governed, that any government not based upon the consent of the governed is a tyranny, and that to impose upon any people a government of force is to substitute the methods of imperialism for those of a republic. We hold that the Constitution follows the flag, and denounce the doctrine that an Executive or Congress deriving their existence and their powers from the Constitution can exercise lawful authority beyond it or in violation of it. We assert that no nation can long endure half republic and half empire, and we warn the American people that imperialism abroad will lead quickly and inevitably to despotism at home.


We are in favor of extending the Republic's influence among the nations, but we believe that that influence should be extended not by force and violence, but through the persuasive power of a high and honorable example.


We oppose militarism. It means conquest abroad and intimidation and oppression at home. It means the strong arm which has ever been fatal to free institutions. It is what millions of our citizens have fled from in Europe. It will impose upon our peace loving people a large standing army and unnecessary burden of taxation, and will be a constant menace to their liberties. A small standing army and a well-disciplined state militia are amply sufficient in time of peace. This republic has no place for a vast military establishment, a sure forerunner of compulsory military service and conscription.

Aetna Builds Empire: One Denial at A Time


Aetna’s willingness to leverage and to “risk” so much in order to close the Coventry deal tells us much about the profits they expect to gain from it: “In all, Coventry will add more than 5 million customers to the 26.7 million already on medical and prescription drug plans with Aetna, according to the companies’ quarterly reports.” And the company is especially interested in gaining the Medicaid and Medicare (government paid programs) business. Again, that’s cold, hard cash from outside the company.

So, in the short term, how does Aetna shore up the bottom line for investors? How about denying some claims for medications? Over the past three months, all three of the new medications my doctors ordered to help me with serious medical issues were initially denied. One denial was overturned last week on appeal, but two still remain outstanding. That’s a saving to Aetna of about $400 each month. And how does Aetna plan to cover the $2.5 billion in new debt they’ll take out to close the new business deal? As one dear friend of mine said to me recently, “One denial at a time.” It all adds up.

Hmmm, let’s do that math. Aetna could deny just $400 for just a quarter of its 26.7 million current “customers,” sign them up for $400 worth of disease management program support, and end up paying off that debt in no time at all as they’d retain far more of their premium dollars in house rather than paying those dollars out. $400 in profit times 6.5 million patients denied adds up to pay off that $2.5 billion debt.

In the books it would look like they were fully compliant with the medical loss ratios required in the ACA. But in the lives of patients, the pain and suffering could tell a much different story. I know it does in mine. That $400 denial causes me not just gut pain but consequences in my life that are far reaching beyond what needs to be listed here.

If you think your for-profit insurance company is very different from mine, think again. But it’s sure deceptive, isn’t it, when just a few people have to be really hurt to allow for such massive profits. It’s a business, folks. And until we finally decide a Medicare for all for life system would better serve us all, the deceptions will grow ever more complex and deadly.

Pay-for-performance a faulty policy in medicine

Journal editorial: Pay-for-performance a faulty policy in medicine
By Chelsea Conaboy


Programs that reward doctors and hospitals for hitting certain quality targets are being rolled out in Massachusetts and across the country. A major focus of the health care law signed by Governor Deval Patrick last week is that doctors should be paid for keeping patients healthy, rather than for the volume of tests or treatments they order. Yet, several recent publications question whether pay-for-performance systems actually lead to better care for patients.

The programs are meant to push doctors to think about a patient's overall care and to consistently do things that are thought to improve health outcomes, such as give appropriate counseling to people with heart conditions or timely antibiotic treatment to people with pneumonia.

A review of seven studies of primary care programs that paid doctors extra for meeting certain targets, published by the Cochrane Collaboration in September, was inconclusive about the effect on quality of care."Implementation should proceed with caution," the authors wrote.

A study published in March in the New England Journal of Medicine found that a large Medicare pilot program that paid providers more if they met certain process targets -- and docked pay for those who did poorly -- did not reduce short-term patient mortality rates. A version of the program is being rolled out nationally. The authors of the paper called the results "sobering." .

BMJ editorial ($30 fee for access):

Why pay for performance may be incompatible with quality improvement
By Steffie Woolhandler, Dan Ariely and David U. Himmelstein

Beyond the simple criticism that pay for performance can't operate on an extended time frame and that years may elapse between treatment and outcome, the concept of pay for performance in healthcare rests on flawed assumptions about medicine, measurement, and motivation. Performance based pay may increase output for straightforward manual tasks. However, a growing body of evidence from behavioral economics and social psychology indicates that rewards can undermine motivation and worsen performance on complex cognitive tasks, especially when motivation is high to begin with.

Comment by Don McCanne of PNHP: Intuitively, it seems that basing pay on performance, quality, outcomes, or other desirable results would be an improvement that we should look at as we address the very high costs of our health care system. But is this really an answer to our high costs?

Many claim that we should no longer pay for the volume or intensity of services, but pay for good outcomes instead. What is this "instead"? Good medicine requires a lot of intensive labor. The work will have to be done
if we expect optimal outcomes.

When we measure performance, quality and outcomes, precisely what are we measuring? For performance, do we use standard protocols for complex clinical presentations? Even with documentation of simple problems, who is to say that the protocol used is correct when the presenting problem may not be as it appears? As an example, a negative streptococcal screening test is used to default to a diagnosis of a "virus" in a person presenting with a sore throat, when actually the person was experiencing the onset of acute leukemia. Measuring this one encounter might score well on performance and quality, when only later would it be discovered that the outcome may be below that of a resolved viral pharyngitis.

We are now seeing a proliferation of accountable care organizations that are to be rewarded with a potion of the savings that they can produce, providing that they achieve certain standards in measuring performance, quality and outcomes. What about that sore throat? Do you order a peripheral smear on everyone with a suspected viral pharyngitis? Of course not. But if it turns out to be leukemia, do you gets points for performance, quality and cost savings, even though you missed the diagnosis, but you saved the cost of a lab test?

The point is that the concept of paying for performance is a diversion from what we should be doing about much more pressing problems: improving access for everyone by removing financial barriers to care, and improving value in our collective health care purchasing by adopting a financing system that will actually provide that value - a single payer national health program. The impact would be immensely more beneficial than any pay-for-performance scheme.

This does not mean that we shouldn't continue to try to develop methods of improving performance, quality, and outcomes. Of course we should. That is and always has been a primary goal in the art and science of medicine. What it does mean is that we should not use performance measures as a decoy to distract us from our most urgent goal - an improved Medicare for all.

Medicare Surpasses Private Plans in Cost Control

A recent article in the New England Journal of Medicine (NEJM) finds that Medicare controls spending better than private plans do. Yet in the midst of current deficit-reduction debates, where Medicare reform remains front and center, some policymakers claim that Medicare spending is unsustainable. These same policymakers argue that controlling the nation’s deficit requires drastic changes to Medicare’s structure—including making beneficiaries pay more for less health security.

Yet data on Medicare spending does not support such claims. Overall, health care spending slowed towards the end of the decade, but more so in Medicare than among private plans. The report finds that between 2000 and 2010, Medicare spending per enrollee grew at a lower rate annually than did spending among private payers. While the reasons behind this spending slowdown are not well-understood, the report partly attributes a number of specific policy changes, such as measures taken to reduce hospital spending and increased utilization of generic drugs.

Experts at the Centers for Medicare & Medicaid Services (CMS) anticipate that, over the next ten years, Medicare will continue to out-compete private plans on spending measures. While Medicare costs will increase, due to enrollment in the program by baby boomers and growing health care costs overall, CMS predicts that advancements passed through the Affordable Care Act (ACA) will still result in lower expenditures for Medicare than for private plans. Specifically, CMS estimates from 2012 to 2021 show that Medicare spending is projected to grow, per year per enrollee, by 3.1 percent compared to 5 percent for private insurance.

Proposals that would cut Medicare and shift costs to beneficiaries fail to recognize that Medicare is an innovator in delivery—and cost—reform that can improve spending in the health care system as a whole. As the NEJM report concludes, Medicare should not be restructured; rather, policymakers should look to the program for examples of how to successfully contain costs.

Read the NEJM article, “Medicare and Medicaid Spending Trends and the Deficit Debate.”

Read the Center on Budget and Policy Priorities’ summary of the NEJM report.

A comparatively small number of sick people account for most health care spending

National Institute for Health Care Management
The Concentration of Health Care Spending

Spending for health care services in the United States is highly concentrated among a small proportion of people with very high use. For the overall civilian population living in the community, the latest data indicate that more than 20 percent of all personal health care spending in 2009--or $275 billion--was on behalf of just 1 percent of the population. The 5 percent of the population with the highest spending was responsible for nearly half of all spending. At the other end of the spectrum, 15 percent of the population recorded no spending whatsoever in the year, and the half of the population with the lowest spending accounted for just 3 percent of total spending.

The concentration of health care spending has several implications for health policy, particularly as we think about how to control overall spending for health services. First is the obvious need to "follow the
money." With half of the population incurring just $36 billion in health care costs, it simply is not possible to realize significant contemporaneous or short-term savings by directing cost-control efforts at this group.

A second implication of the highly concentrated spending pertains to the acceptance of risk by providers and payers. Emerging payment and delivery system reforms, such as accountable care organizations, rely on integrated provider organizations to accept some degree of risk for a defined patient population. These organizations will need a patient base that is large enough to balance out the sizeable downside risk of attracting just a few high spending cases. Additional risk-adjustment and other means of protection against high-cost outlier cases may also be needed. Similarly, in a world of community rating and guaranteed issue, insurers face a significant risk of adverse selection and negative financial implications if they happen to attract a disproportionate number of high spending patients. Here, too, adequate means of protecting against adverse selection and the risk posed by high spenders are required.

Comment by Don McCanne of PNHP: The healthier half of our population accounts for only 3 percent of health care spending, whereas the top 5 percent was responsible for nearly half of the spending. This study also confirms the 20/80 rule: 20 percent of the population is responsible for 80 percent of health carespending. This concentration of spending is of great importance as we evaluate methods of containing costs.

Perhaps the most significant factor is that cost-containment strategies targeting healthier individuals will have very little impact on total health care spending since so little is spent on this sector in the first place. This explains why the current trend to increase price sensitivity through high-deductible health plans will produce very little savings even though it will act as a barrier to beneficial health care services. Reducing spending by 10 percent in the 150 million people who use only 3 percent of health care will reduce total health care spending by only 0.3 percent - a drop in the bucket of our national health expenditures. It is a small price to pay for being certain that people will seek appropriate care when they should.

What about high-deductible plans for the 5 percent who account for half of our health care spending? The costs for each patient would far exceed the deductibles, thus most care in this group - that provided after the deductible is met - would not be reduced since price is no longer a factor.

The brief mentions problems with other strategies to control costs in populations with skewed concentrations of health care needs. Many strategies under consideration would be ill-advised, both because of the paucity of savings and because of the distortions in access and equity.

We really don't need to look for inevitably-flawed strategies to try overcome these distortions. A single payer system - improved Medicare for all - is an ideal model to cover all appropriate health care expenses no matter how much they are skewed within a population.

My comment: What if the fire department had to be supported only by those people who had fires or other emergencies in any given year? Obviously this is not workable, but for some reason fucking over sick people financially even more than they are already is proposed as a solution to skyrocketing health care expenses.by all too many. Why should we treat a heart attack any differently from a house fire?
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