Fein Columbia P PACA

7/28/2019 Fein Columbia P PACA

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Health Care Reform?P-PACA

vsSingle Payer

Oliver Fein, M.D.Professor of Clinical Medicine and Public Health

Associate DeanOffice of Affiliations

Office of Global Health Education

Weill Cornell Medical College

Internal Medicine Residency ProgramColumbia University Medical Center

NewYork-Presbyterian HospitalFebruary 3, 2012


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PRESENTATION OUTLINE

1. History of recent U.S. Health Reform

2. Challenges facing U.S. Health CareSystem

3. Comparison of Single Payer and2010 Health Reform (P-PACA)


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DISCLOSURES

Dr. Oliver Fein has no relevant financialrelationships with commercial interests

Dr. Oliver Fein is immediate past President ofPhysicians for a National Health Program

(PNHP), a non-profit educational and advocacyorganization. He receives no financialcompensation from PNHP.


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Disclosure Information

A) Relationship with companies who manufacture products used in the treatmentof the subjects under discussionYes____ No __X__ If "Yes," list company(ies) with the relationship(s) below.

Relationship Manufacturer(s)

Research Support ________________________________Speaker's Bureau ________________________________Consultant ________________________________Share Holder ________________________________Other Financial Support ________________________________Large Gift(s) ________________________________

B) Relationships with any of the commercial supporters of this CME activity:

C) Discussion of unlabeled uses: Yes _____ No___X__


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HEALTH REFORM:OBAMAS FATEFUL CHOICE

He did not want to start from scratch

He had two fundamental choices:

1) to build on the public sector (Medicare)

or

2) to build on the private sector

Which did he choose?


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Progress(?) of US Health Reform

Employer mandate

Public option**

Individual mandate*

* each eligible individual must

enroll in an applicable health plan

for the individual and must pay any

premium required with respect to

such enrollment. (S.1775)

** you can choose to enroll

in the new public plan

Medicare

??
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WHAT HAPPENED TO THEPUBLIC OPTION?

The original robust Plan March 2009

Open enrollment: Medicare foreveryone who wants it

Medicare rates, backed by the

government 119 million members (Lewin)


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The greatest lobbying effort inhistory

June 29, 2009


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$1.2 Billion Spent on Health CareLobbying!

Center for Public Integrity, March 26, 2010


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WHAT HAPPENED TO THEPUBLIC OPTION?

The House Plan November 2009

Restricted enrollment (only the uninsured)

6 million members (


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THE PATIENT PROTECTIONAND

AFFORDABLE CARE ACT(P-PACA)

March 23, 2010


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P-PACA(a MANDATE MODEL)

Everyone is required to have healthinsurance or pay a penalty.

1. Individual mandate: penalty =$695 for

singles; $2,085 for families

2. Employer mandate (50 or moreemployees): penalty =$2,000/employee

3. Necessary for the survival of private HI.Private HI lost 3.2% (6.3 million) enrolleesin 2009 and more than 15 million in the

last decade.


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ImprovedMEDICARE FOR ALL(a Single Payer Model)

Build on the original Medicare

1. Improve Coverage: preventive services,oral surgery, long term care

2. Reduce or eliminate deductibles and co-

payments3. Expand drug coverage: eliminate the

donut hole

4. Re-design physician reimbursement


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CHALLENGES FACING

HEALTH CARE REFORM

1. Declining access

2. Escalating costs

3. Lack of comprehensive benefits

4. Restricted choice

5. Uneven Quality

6. Insufficient primary care

7. How to pay for reform


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CHALLENGE #1

DECLINING ACCESS


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The Epidemic of Underinsurance

0

10

20

30

40

50

60

70

2000 2007

Insured Uninsured

Source:Too Great a Burden, Families USA, December 2007

Number of people spending more than 10% of income on health care (Millions)


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RISE IN PERSONALBANKRUPTCIES

62% of personal bankruptcies are dueto medical expensesand over 75% hadhealth insurance at the outset of their

bankrupting illness.*

* Himmelstein, et.al. Am J Med, August, 2009


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ImprovedMEDICARE FOR ALL

Automatic enrollment

Federal guarantee

All residents of the United States

Everybody in, nobody out


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HEALTH INSURANCE REFORM(P-PACA)

Mandates purchase of private HI (2014)

Expands Medicaid eligibility to 133% FPL

(2014) - single $14,403; family $19,378

Subsidizes premiums up to 400% FPL

(2014) - single $43,320; family $88,200

Insurance market reforms: Coverage upto age 26; no pre-existing condition

exclusions; no annual/lifetime limits


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Millions Will Remain Uninsured (andMillions More Poorly Insured)

Millions

Note: The uninsured include about 5 million undocumented immigrants.

Source: Congressional Budget Office.

51 51 51 52 53 5354

51

2323232328

35

50 50

0

20

40

60

80

2012 2013 2014 2015 2016 2017 2018 2019

Current law

PPACA


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CHALLENGE #2

ESCALATING COSTS


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Insurance Premiums Workers Earnings Inflation

1999-2008

Kaiser/HRET Survey of Employer-Sponsored Health

Benefits, 2000-2008. Bureau of Labor Statistics,

Consumer Price Index

119%

34%

29%

0%

20%

40%

60%

80%

100%

120%

140%

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Health Insurance PremiumsWorkers' Earnings

Overall Inflation


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High Cost of Health InsurancePremiums: Its Even Too Expensive for

the Middle Class Today

National Average for Employer-provided Insurance

Single Coverage $ 5,503 per yearFamily Coverage $15,073 per year

Note: 31% high-deductible ($1,000-2,000) policies

Source: Kaiser Family Foundation/HRET Survey of Employee Benefits, 9/27/2011


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Low Administrative Costs = Single Payer

Administrative cost and profit

- Medicare: 2-3 %

- Private insurance: 16-30%

$400 billion* redirected to cover the uninsured

and to expand coverage for the underinsured

* NEJM 2003:349;768-775 updated to 2010

C i E d S i M


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Covering Everyone and Saving Moneythrough Medicare for All

Additional costsCovering the uninsured and poorly-insured +6.4%

Elimination of cost-sharing and co-pays +5.1%

Savings

Reduced insurance administrative costs -5.3%

Reduced hospital administrative costs -1.9%

Reduced physician office costs -3.6%

Bulk purchasing of drugs & equipment -2.8%Primary care emphasis & reduce fraud -2.2%

Source: Health Care for All Californians Plan, Lewin Group, January 2005

134

107

241

-111

-21

-76

-59

-46

-313

$ B

Total Costs +11.5%

Total Savings -15.8%

Net Savings - 4.3% - 72


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Private insurers High Overhead


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SINGLE PAYER OFFERS TOOLSTO BEND THE COST-CURVE

Global budgeting of hospitals

Capital investment planning

Emphasis on primary care; coordination of

care; alternative ways of paying for care

Bulk purchasing of pharmaceuticals

HEALTH INSURANCE REFORM


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Market Theory:

Mandate the young, healthy uninsured

buy private health insurance(they usually dont get sick and dont get

health insurance = low risks)

Then, the premiums for everyone will

go down.


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WILL MARKET THEORY WORK?

Premiums*

Single Coverage $5,503 per year

Family Coverage $15,073 per year

*national average for employer-provided insurance

Penalties under P-PACA

Individuals $695 per yearFamilies $2,085 per year

Employers $2,000 per employee


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Offers unproven tools to contain costs

Health Information Technology (HIT)

Chronic Disease Management

Payment reforms (e.g., ACOs, bundledpayments, value-based purchasing)


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and Costs Will Keep On Rising

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

$4.5

$5.0

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

PPACA (CMS Actuary)

Current projection

PPACA (Commonwealth Fund)

National Health Expenditures (trillions)

Notes: * Modified current projection estimates national health spending when corrected to reflect underutilization ofservices by previously uninsured.Source: D. M. Cutler, K. Davis, and K. Stremikis, Why Health Reform Will Bend the Cost Curve, Center forAmerican Progress and The Commonwealth Fund, December 2009. Estimated Financial Effects of PPACA asAmended, Richard Foster, CMS Actuary, April 2010

$4.67$4.5

6.4% annualgrowth

6.6% annual

growth

6.0% annualgrowth

$4.7

National Health Expenditures as Percent of GDP17.8 17.9 18.0 18.2 18.8 19.3 19.8 20.2 20.5 21.0


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CHALLENGE #3THE DEFINITION OF ESSENTIAL

HEALTH BENEFITS

Service Coverage: Doctors, NPs,

Hospitals, Drugs; Dental, MentalHealth, Home care/nursing home

Financial Coverage: Copays anddeductibles


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Comprehensive coverage

- Preventive services

- Hospital care

- Physician services- Nurse practitioner services

- Dental services

- Mental health services

- Medication expenses- Reproductive health services

-Home Care/nursing home care

All medically necessary services

Any exclusions? How decided?


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Eliminates Co-Pays or Deductibles

Reduce use of needed and unneeded

services equally

Result in under use of primary care services

Not as effective in reducing over use oftechnology intensive services, as

- Eliminating self-referral to MD owned facilities

- Reducing defensive medicine


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No Standard Benefit Package mandated

Eliminates co-pays and deductibles, but only on

preventive services

No regulation of the magnitude of premiums,deductibles and co-pays just the stipulationthat benefits have an actuarial value of 60% or

higher

Stipulation that health insurers have medical lostratios (MLR) of 80-85%

HHS DEFINES


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HHS DEFINESESSENTIAL HEALTH BENEFITS

(January 2012)

States choose a benchmark plan that reflects the scope of services

offered by a typical employer plan

Four benchmark options:One of the three largest small group plans in the state by

enrollment;One of the three largest state employee health plans by

enrollment;One of the three largest federal employee health plan options by

enrollment;The largest HMO plan offered in the states commercial market by

enrollment.If states choose not to select a benchmark, HHS intends to propose

that the default benchmark will be the small group plan with the

largest enrollment in the state.

Consequence: 50 Different Benefit Packages


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CHALLENGE #4RESTRICTED CHOICE

42% of employees have no choice

Private health insurance limits choice to

the network of doctors and hospitals with

whom they have negotiated contracts

You pay more to go out of network


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Expands Choice for Everyone

No limit to a network of providers

Free choice of doctor and hospital

Delinks health insurance fromemployment


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Creation of HI Exchanges Expands Choicefor Some

Limited to the individual and small group market

Market-place of private HI plans

No public option

State-based with federal backup

No state single payer until 2017

VERMONTS PATHWAY TO


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VERMONTS PATHWAY TO

SINGLE PAYER

Elected Peter Shumlin governor: 11/6/2010

William Hsiao, Ph.D., Harvard economist,reports 3 options: 2/2011

- Option 3: Public-private hybrid single payer Standard benefit package Uniform prices Administered by a public benefitcorporation

Pathway legislation passed: 5/25/11


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Restricts Choice: The case of abortion

Allows states to prohibit abortion coverage

in state-run exchanges

If states allow abortion coverage, requires

enrollees or employers to send two checks

Insurers must keep abortion coverage money

separate from federal subsidies


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CHALLENGE #5:UNEVEN QUALITY

In 2008, U.S. was last among 19industrialized nations in

mortality amenable to healthcare.

In 2006, we were 15th.

* Commonwealth Fund (2011)


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National data on health care quality vs.

proprietary data held by private HI

National standards and public reporting

HIT for the nation with patient protections

every patient their own medical record on acredit card


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Comparative Effectiveness Research

Innovation Center in CMS to test new paymentand service delivery models PCMH + ACOs

(2011)

Value based purchasing hospital paymentsbased on quality reporting measures (2013)

Readmission penalties (2013)

Reduce hospital payments for hospital-acquiredconditions (2015)


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CHALLENGE #6:LACK OF PRIMARY CARE

Average medical school debt =$160,000

Primary care is under-reimbursed

Medical school graduates goinginto specialties


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Debt forgiveness for primary care

Malpractice payment for primary careproviders (MDs, NPs and PAs)

Patient-Centered Medical Homes (team

based care, open access, coordination ofcare; phone/internet medicine)


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10% Primary Care Bonus Payments (2011-2017) estimate = $4,000/provider/year

Increase Medicaid payment to Medicarerates for primary care (2013)

Independent Payment Advisory Board

I-PAB (2014)


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CHALLENGE #7

HOW TO PAY FOR REFORM

I d


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Public funding

- Payroll tax

- Corporate taxes

- Income taxes- Tax on unearned income (stocks, bonds, etc.)

No premiums: regressive

No increase in overall health care spending,because of administrative savings

I d


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Non-profit/private delivery system underlocal control

- Doctors not salaried by government- Hospitals not owned by government

- This is not socialized medicine

A publicly funded-privately deliveredpartnership

HEALTH INSURANCE REFORM


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1. Increased taxes- Excise tax on Cadillac health insurance plans (2018)- Medicare payroll tax increase from 1.45% to

2.35% if income greater than $200-250K- 3.8% tax on investment income

2. Savings from Medicare- Advantage: ($132 bill over 10 yrs)- Cut DSH payments ($36 million)- Cut Medicare payments to hospitals

($136 bill over 10 yrs)- Cut payments for home care/nursing homes ($60 bill)

3. Revenue from cracking down on fraud and abuse

HEALTH REFORM (P PACA)


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HEALTH REFORM (P-PACA)1. Expanded coverage, but not universal

2. Cost control by market means

3. No definition of benefits

4. Choice thru State-based exchanges,

but no public option

5. Limits on abortion

6. Primary care/ACO pilots

7. Funding: Excise tax on high cost (comprehensivecoverage) private HI and Medicare cutbacks

Si l P


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Single PayerMEDICARE FOR ALL

THE PHYSICIANS PROPOSAL(JAMA, August 13, 2003 p. 798-805)

1. Universal coverage/automatic enrollment

2. Low administrative costs=single payer3. Comprehensive coverage without co-pays

and deductibles4. Maximum choice of Doctor, NP, Hospital5. Improved quality through nationwide HIT6. Expanded primary care7. Publicly-funded/privately delivered

MEDICARE 2.0

Conyers HR 676


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Conyers HR 676Expanded and improved

MEDICARE-FOR-ALLSingle Payer NH Care

(55 Co-sponsors in House of Rep)

Automatic enrollment

Comprehensive benefits

Free choice of doctor and hospital

Doctors and hospitals remain independent

Financed through progressive taxes

Costs contained through capital planning, budgeting,

quality reviews, primary care emphasis

S (& )


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Sanders (& McDermott):American Health Security Act

S 915 (HR 1200)

1.Automatic enrollment

2.Comprehensive benefits3.Operated by States using Federal standards

4.Free choice of doctor and hospital

5.Doctors and hospitals remain independent6.Public agency processes and pays bills

7.Financed through payroll taxes


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April 14, 2010Overall, do you think the benefits from government

programs such as Social Security and Medicare are worth

the costs of those programs for taxpayers, or are they notworth the costs? (results in %)

Worth It Not Worth It DK/NA

National Sample 76 19 5Tea Party Sample 62 33 6


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Summary

A system based on private insurance plans-- will not lead to universal coverage

-- will not create affordable insurance

A Medicare for All System-- can lead to universal, comprehensive coveragewithout costing more

-- has the greatest potential to increase choice,improve quality and expand primary care

-- can be financed fairly

Will We Get Real Health Care Reform


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Will We Get Real Health Care ReformBefore the Premium Takes All our Income?

Source: American Family Physician, November 14, 2005

Today

CONTACTS AND REFERENCES


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CONTACTS AND REFERENCES

PNHP National: www.pnhp.org

PNHP-NY Metro: www.pnhpnymetro.org

Bodenheimer TS, Grumbach K, Understanding HealthPolicy: A Clinical Approach. McGraw-Hill, 2005

Fein O, Birn AE. (editors), Comparative Health Systems. AmJour Public Health 2003; 93: 1-176

OBrien ME, Livingston M (editors), 10 Excellent Reasonsfor National Health Care. New Press, 2008

Potter W, Deadly Spin: An Insurance Company InsiderSpeaks Out on How Corporate PR Is Killing Health Care

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