The Uninsured

Many Specialists Won’t See Kids With Medicaid

Bisgaier J, Rhodes KV. N Engl J Med 2011;364:2324-2333

Under- Insurance

Wealth Matters

Planning for Retirement? Don’t Forget Health Care Costs

“Medicare . . . Covers only 51% of health care services. . . . For a 65 year old couple retiring this year, the cost of health care in retirement will be $240,000.

Rising Economic Inequality

Persistent Racial Inequalities

Rationing Amidst a Surplus of Care

Unnecessary Procedures

Profit-Driven ACO’s:Medicare HMOs Provide a

Cautionary Tale

Despite Medicare’s Lower Overhead, Enrollment of Medicare

Patients in Private Plans Has Grown

Medicare’s Attempt to Risk- Adjust HMO Payment

• Pre-2004 - HMOs were “cherry-picking” when payment adjusted only for age, sex and other demographics

• 2004 – Risk adjustment formula added 70 diagnoses

How Could a Medicare HMO Profit on CHF Patients?

• A CHF diagnosis increases the HMO’s capitation rate by 41%

• Among F-F-S Medicare enrollees with CHF: The costliest 5% averaged > $37,000/year The least costly 5% averaged $115/year• Universal echocardiogram screening would

label many asymptomatic seniors as having CHF

Source: MedPAC data for 2008

ACOs:A Rerun of the HMO Experience?

Spinning the Research Findings

on ACO Costs

The Headline On Massachusetts ACO Results

BUT Buried in the Text

“Our findings do not imply that overall spending fell. . . . [because] Ten of the eleven organizations [earned] a budget surplus payment. . . . All organizations earned a 2010 quality bonus, and most received infrastructure support. This result makes it likely that total Blue Cross Blue Shield payments to groups in 2010 exceeded medical savings.”

Source: Song et al. Health Affairs 2012;31:1885

ACOs = Medical Practice Owned by

Corporate Oligopolies

Insurers Morphing into ACOs:Purchases of Clinics and Practices, 2011

• UnitedHealth bought Monarch Healthcare – a Pioneer Medicare ACO with 2,300 physicians

• Wellpoint paid $800 million for CareMore – a chain of 28 clinics with employed physicians

• Humana purchased SeniorBridge – an in-home care manager with 1500 providers - and Concentra for $790 million – an urgent care and occupational health clinic firm

Source: Business Insurance, 1/15/12

Half of Americans Live Where Population Is Too Low for Competition

Source: NEJM 1993;328:148

A town’s only hospital will not compete with itself

Pay for Performance“I do not think its true that the way to get better doctoring and better nursing is to put money on the table in front of doctors and nurses. I think that's a fundamental misunderstanding of human motivation. I think people respond to joy and work and love and achievement and learning and appreciation and gratitude - and a sense of a job well done. I think that it feels good to be a doctor and better to be a better doctor. When we begin to attach dollar amounts to throughputs and to individual pay we are playing with fire. The first and most important effect of that may be to begin to dissociate people from their work.”

Don Berwick, M.D,Source: Health Affairs 1/12/2005

Assumptions Implicit in P-4-P

1. Performance can be accurately ascertained

2. Individual variation is caused by variation in motivation

3. Financial incentives will add to intrinsic motivation

4. Current payment system is too simple

5. Hospitals/MDs delivering poor quality care should get fewer resources

Cochrane Review 2011

“We found no evidence that financial incentives can improve

patient outcomes.”

Flodgren et al. “An overview of reviews evaluating the effectiveness of financial incentives in changing healthcare professional behaviors and patient outcomes. Cochrane Collaboration, July 6, 2011

For-Profit Hospitals’ Death Rates are 2% HigherSource: CMAJ 2002;166:1399

For-Profit Hospitals Cost 19% MoreSource: CMAJ 2004;170:1817

For-Profit Dialysis Clinics’ Death Rates are 9% Higher

Source: JAMA 2002;288:2449

Mandate Model Reform:Keeping Private Insurers

In Charge

“Mandate” Model for Reform

1. Expanded Medicaid-like program Free for poor Subsidies for low income Buy-in without subsidy for others

2. Employer Mandate +/- Individuals3. Managed Care / Care Management

Massachusetts: Required Coverage(Income > $32k); 70% Actuarial Value

• Premium: $5,616 Annually (56 year old)

• $2000 deductible

• 20% co-insurance AFTER deductible is reached for next $15,000 of care

Impact of ACA on the Uninsured

• # of uninsured reduced from ~50 million (Pre-ACA) to ~30 million in 2019, i.e from 17% to 11% of population.

• Safety-net hospitals funding through Medicare cut by $36 billion through 2019.

• Community health centers receive extra $1 billion annually - MAYBE

Under the ACA:

Income = $46,136, Premium = $10,193

+ $6,250 out-of-pocket maximum

Public Money, Private Control

The U.S. Trails Other Nations

Canada’s National Health Insurance Program

1

1.5

2

2.5

3

1980 1984 1988 1992 1996 2000 2004 2008

Year

Ch

an

ge

in

Me

dic

are

Co

st/

Se

nio

r (1

98

0=

1)

Canada U.S.

Cost Control in a Parallel Universe:Growth in Medicare Spending Per Senior in the U.S. and

Canada, 1980-2009

Source: Himmelstein & Woolhandler, Arch Intern Med, December, 2012

A National Health Program for the U.S.