Medical Cost Reduction

Americans Losing Confidence In Healthcare

J Roberts

Confused about healthcare reform? Don’t worry; you’re not alone. It seems that the majority of Americans are also confused. Read the following article and review the survey to find out just how little we all know about the healthcare reform legislation.

REUTERS

Americans are steadily losing confidence in their ability to get healthcare and pay for it, despite the passage of healthcare reform legislation, according to a survey published on Wednesday.

The Thomson Reuters Consumer Healthcare Sentiment Index found that confidence lost three percentage points from a baseline of 100 in December to 97 in March.

“Strikingly, Americans expect the situation to worsen significantly in the next three months,” said Gary Pickens, chief research officer at Thomson Reuters.

“The thing I thought was interesting was … the level of sentiment about future expectations worsened more. The future outlook seems to be causing the people we interviewed angst.”

Thomson Reuters interviews more than 100,000 U.S. households annually via telephone surveys about healthcare behaviors, attitudes and utilization. This particular index is based in a subset of 3,000 people, representative of the nation as a whole, interviewed every month.

The survey, published at http://healthcarescience.thomsonreuters.com/indexes/, finds a steady erosion in confidence.

“I think it may have something to do with the reform legislation,” Pickens said in a telephone interview. “Getting legislation through hasn’t reassured Americans,” he added. “People are being unclear about what it means for them.”

Pickens said his team is now breaking down the survey by age, political affiliation and other factors to try to get more detail on who, precisely, is losing confidence the most.

“What we saw last summer was a big difference by political party,” he said. Republicans strongly opposed healthcare reform.

Pickens predicts older Americans may be among the most worried. “I think I would have angst because of the prospect of significant cost cuts, cutbacks in federal programs including Medicare,” he said.

In February, when the index fell to 98, a statistically significant number of people said they had delayed filling or did not fill a prescription in the past three months and expected to delay or cancel a diagnostic test in the next three months.

In March, more people said they had lost or reduced their health insurance coverage in the past three months or that they expected to delay or cancel an elective surgical procedure.

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Majority of Americans confused about health care

J Roberts

More than a month after the passing of landmark healthcare reform, Americans are confused more than ever over the legislation; some are down right angry. A recent poll by Kaiser Health illustrates the sentiments felt by Americans across the country. Read on to learn more.

Kaiser Health

The majority of Americans are confused about how the newly enacted health care law will impact them, according to a new Kaiser Health Tracking Poll released Thursday.

“People are struggling to understand how the law will affect them and their families and to separate fact from political spin,” said Kaiser President and CEO Drew Altman.

Nearly a month after its passage, the public remains deeply split over the legislation: 46 percent view it favorably and 40 percent don’t, with another 14 percent undecided. Further demonstrating the division: 31 percent expect the bill to help them, 32 percent expect the bill to hurt them and 30 percent don’t expect it to affect them at all.

The partisan divide is stark: 77 percent of Democrats support the law, while 79 percent of Republicans oppose it. Independents tend to side with Republicans, with 46 percent opposing the law while 37 percent support it.

The poll showed, however, that a clear majority of Americans support many specific provisions that go into effect this year. For example: 86 percent are in favor of tax breaks for small businesses that offer coverage to their employees. Also, 81 percent are in favor of stopping insurance companies from dropping someone who has a major health problem. Even the provision that allows children to stay on their parents’ health plans until age 26, which drew fire from some on the right, was supported by 74 percent of those surveyed.

Americans experience a wide variety of emotions when reacting to the new law – but, according to the poll, confusion wins out over anger and relief. On the whole, 55 percent of the public said they’re “confused” – with 45 percent “disappointed” and an equal number “pleased.” Forty-two percent said they were “anxious,” and 40 percent said they’re “relieved.”

There’s anger, too.

Thirty percent of Americans say they’re “angry” about the law – and 16 percent of that group describe themselves as “very angry.” According to Kaiser, the specific grievances of that 30 percent broke down this way: “9 percent did not like the way the policymaking process worked, 7 percent did not like the final content, and 12 percent did not approve of either.”

The poll, which surveyed 1,208 adults in mid-April, produced one fascinating nugget sure to raise eyebrows in newsrooms around the country: Regardless of how they felt about health care reform, more Americans turned to cable news shows for their updates than any other news source. Asked to choose their “most important” source of news when following the legislation, 36 percent said cable news channels and their Web sites – easily topping the competition of network news (16 percent), newspapers (12 percent), family and friends (10 percent) and radio (9 percent).

Republicans were more likely to watch cable news, while Democrats preferred network news programs.


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Report says health care will cover more, cost more

J Roberts

A recent report says that healthcare costs will continue to rise even though landmark reform has been passed. There are some positive points; Medicare premiums are predicted to decrease and of course more Americans will have health insurance. Read the article, review the report and formulate your own opinion.

By RICARDO ALONSO-ZALDIVAR

The Associated Press

WASHINGTON — President Barack Obama’s health care overhaul law is getting a mixed verdict in the first comprehensive look by neutral experts: More Americans will be covered, but costs are also going up.

Economic experts at the Health and Human Services Department concluded in a report issued Thursday that the health care remake will achieve Obama’s aim of expanding health insurance – adding 34 million to the coverage rolls.

But the analysis also found that the law falls short of the president’s twin goal of controlling runaway costs, raising projected spending by about 1 percent over 10 years. That increase could get bigger, since Medicare cuts in the law may be unrealistic and unsustainable, the report warned.

It’s a worrisome assessment for Democrats.

In particular, concerns about Medicare could become a major political liability in the midterm elections. The report projected that Medicare cuts could drive about 15 percent of hospitals and other institutional providers into the red, “possibly jeopardizing access” to care for seniors.

The report from Medicare’s Office of the Actuary carried a disclaimer saying it does not represent the official position of the Obama administration. White House officials have repeatedly complained that such analyses have been too pessimistic and lowball the law’s potential to achieve savings.

The report acknowledged that some of the cost-control measures in the bill – Medicare cuts, a tax on high-cost insurance and a commission to seek ongoing Medicare savings – could help reduce the rate of cost increases beyond 2020. But it held out little hope for progress in the first decade.

“During 2010-2019, however, these effects would be outweighed by the increased costs associated with the expansions of health insurance coverage,” wrote Richard S. Foster, Medicare’s chief actuary. “Also, the longer-term viability of the Medicare … reductions is doubtful.” Foster’s office is responsible for long-range costs estimates.

Republicans said the findings validate their concerns about Obama’s 10-year, nearly $1 trillion plan to remake the nation’s health care system.

“A trillion dollars gets spent, and it’s no surprise – health care costs are going to go up,” said Rep. Dave Camp, R-Mich., a leading Republican on health care issues. Camp added that he’s concerned the Medicare cuts will undermine care for seniors.

In a statement, HHS Secretary Kathleen Sebelius sought to highlight some positive findings for seniors. For example, the report concluded that Medicare monthly premiums would be lower than otherwise expected, due to the spending reductions.

“The Affordable Care Act will improve the health care system for all Americans, and we will continue our work to quickly and carefully implement the new law,” the statement said.

Passed by a divided Congress after a year of bitter partisan debate, the law would create new health insurance markets for individuals and small businesses. Starting in 2014, most Americans would be required to carry health insurance except in cases of financial hardship. Tax credits would help many middle-class households pay their premiums, while Medicaid would pick up more low-income people. Insurers would be required to accept all applicants, regardless of their health.

The U.S. spends $2.5 trillion a year on health care, far more per person than any other developed nation, and for results that aren’t clearly better when compared to more frugal countries. At the outset of the health care debate last year, Obama held out the hope that by bending the cost curve down, the U.S. could cover all its citizens for about what the nation would spend absent any changes.

The report found that the president’s law missed the mark, although not by much. The overhaul will increase national health care spending by $311 billion from 2010-2019, or nine-tenths of 1 percent. To put that in perspective, total health care spending during the decade is estimated to surpass $35 trillion.

Administration officials argue the increase is a bargain price for guaranteeing coverage to 95 percent of Americans. They also point out that the law will decrease the federal deficit by $143 billion over the 10-year period.

The report’s most sober assessments concerned Medicare.

In addition to flagging provider cuts as potentially unsustainable, the report projected that reductions in payments to private Medicare Advantage plans would trigger an exodus from the popular alternative. Enrollment would plummet by about 50 percent. Seniors leaving the private plans would still have health insurance under traditional Medicare, but many might face higher out-of-pocket costs.

In another flashing yellow light, the report warned that a new voluntary long-term care insurance program created under the law faces “a very serious risk” of insolvency.

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Preventive care key to slowing health costs

J Roberts

Dr. James Proodian

Read the latest about health care reform. Wellness and its effects on reducing chronic illness needs to be addressed if we want to start reducing the ever growing cost of health care.

The effort put into the landmark legislation on the delivery of health care has been about everything but health care. The focus has been on manipulating the process rather than fixing the problem of rising health care costs and making Americans healthier.

The answer is preventive care, which has proven to reduce costs and improve wellness with disease prevention.

Today, the United States ranks 27th in the world in health, characterized by epidemics in obesity, depression, and type 2 diabetes. The bottom line is that 78 percent of all doctor visits are for chronic conditions, such as heart disease, obesity, type 2 diabetes, hypertension and other lifestyle-caused illnesses.

These are highly preventable, but there is no layer in our health care system that is defined, credentialed and committed to treating chronic illness.

Creating this new layer of health care is what legislators should be discussing. With all the focus on the cost of health care reform, no one is talking about the cost of chronic illness which accounts for 78 percent of all health care expenditures.

This means that three out of four patients are visiting their doctor because of chronic illness. Behavioral and lifestyle health changes are the best way to lower health care costs — and, more importantly, improve the health and wellness of individuals of all ages.

While there are health care professionals who are dedicated to chronic disease prevention and wellness, it is an individual’s responsibility to find them in their community. Real health care reform would be establishing a new layer in our health care system that is defined, credentialed and committed to treating chronic illness.

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Study: Riskier surgeries for back pain raise costs

J Roberts

A recent study reveals that certain surgeries are leading to increased costs without producing better and healthy outcomes.  In fact, the article suggests that certain surgeries may be performed too often and for inappropriate reasons.  Perhaps changing the economics of medicine, to reward better care rather than simply providing more care is the answer.

Associated Press

A study of Medicare patients shows that costlier, more complex spinal fusion surgeries are on the rise — and sometimes done unnecessarily — for a common lower back condition caused by aging and arthritis.

What’s more alarming is that the findings suggest these more challenging operations are riskier, leading to more complications and even deaths.

“This is exactly what the health care debate has been dancing around,” said Dr. Eugene Carragee of Stanford University Medical Center.

“You have one kind of operation that could cost $20,000 and another that could cost $80,000 and there’s not good evidence the expensive one is being used appropriately in the majority of cases,” Carragee said.

Add to that the expense for patients whose problems after surgery send them back to the hospital or to a nursing home and “that’s not a trivial amount of money” for Medicare, said Carragee. He wrote an accompanying editorial in the Journal of the American Medical Association where the federally funded study appears Wednesday.

The cost to Medicare, just for the hospital charges for the three types of back surgery reviewed is about $1.65 billion a year, according to the researchers.

All the patients in the study had stenosis in their lower backs, a painful squeezing in the spine that’s most common in people over 50. The researchers compared the risks for three different types of surgery for the condition: decompression, simple fusion and complex fusion.

“All operations aren’t the same and some seem to be associated with higher complication rates than others,” said lead author Dr. Richard Deyo of Oregon Health and Science University in Portland. “It’s not necessarily true that the more aggressive surgery is better, at least in terms of safety.”

There’s little agreement about the best way to treat chronic lower back pain, and much depends on what’s causing the pain.

Patients should ask their doctors about alternatives to complicated operations, Deyo said. Could steroid injections and physical therapy be tried? Would a simple decompression procedure be as helpful as a spinal fusion and with less risk?

In a decompression procedure, the simplest method in the Medicare study, a surgeon cuts away part of the bone that’s painfully pressing on nerves. It can cost about $30,000 in hospital and surgeon fees.

For a fusion, a surgeon binds two or more vertebrae together using a bone graft, with or without plates and screws. The researchers defined a complex fusion as one involving three or more vertebrae or more than one side of the spine. Fusions cost $60,000 to $90,000.

The researchers analyzed data on more than 32,000 Medicare patients who had one of the three types of surgeries in 2007.

About 5 in 100 patients who had simple or complex fusions suffered major complications such as stroke compared to 2 in 100 with decompressions. The risk of death within 30 days after surgery was different too: 6 in 1,000 for complex fusions compared with 5 in 1,000 for simple fusions and 3 in 1,000 for decompressions.

The study didn’t address how successful the various types of surgeries were at relieving pain.

More than half the patients who had complex fusions had a simple stenosis, which usually calls for decompression alone. They did not have the curvature of the spine or a slipped vertebra — additional conditions that might suggest a fusion is needed. There’s not much evidence for doing a complex fusion for a person with simple stenosis, Carragee and other experts said.

“It certainly looks like there’s more complex surgery being done than we have very good evidence to support,” Carragee said.

Rates of complex fusions in Medicare patients rose 15-fold from 2002 to 2007, while decompressions and simple fusions declined, the study found. Although the overall procedure rate fell, hospital charges grew 40 percent.

Aggressive marketing of devices used in complex fusions is likely playing a role in the increase, Deyo said. The marketing includes ads in medical journals and lectures by surgeons on the payroll of device manufacturers.

Allegations of kickbacks to spine surgeons for using products and questionable financial arrangements to doctors as consultants have plagued the multibillion-dollar industry. One company, Medtronic Inc., reached a $40 million settlement with the U.S. Justice Department in a whistleblower case that included allegations the company paid doctors to use its spine surgery products. The company denied any wrongdoing.

Dr. Charles Rosen, a spine surgeon at the University of California, Irvine, founded the Association for Medical Ethics to nudge doctors toward scientific evidence over vested interests. Forty-nine spine surgeons have joined, pledging to refuse any type of compensation or earnings from companies for using a product.

Rosen applauded a provision in the new health care law that requires device makers and others to file annual reports to the government on their financial ties to doctors. Patients will be able to look up possible conflicts in a government database.

“Too much fusion surgery is done in this country and often for inappropriate reasons,” Rosen said. While complex fusions are needed for some conditions, he said, patients “should not hesitate to get a second opinion.”

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Employer Healthcare Costs Outpace U.S. Healthcare Spending in 2009

J Roberts

Another article detailing the rise in healthcare costs particularly for small business and individuals. It’s interesting to note that inflation for 2009 was actually negative, yet healthcare costs continued to rise. What’s the deal?

HFMA

Average healthcare costs for U.S. employers rose 7.3 percent in 2009, up from 6.1 percent in 2008, according to a study by Thomson Reuters. Overall U.S. healthcare spending (including Medicare, Medicaid, and other payers) grew at a more modest 4.8 percent in 2009, according to National Health Expenditures data from the Centers for Medicare & Medicaid Services Office of the Actuary. The U.S. inflation rate was negative in 2009.

Not surprisingly, smaller employers were hit the hardest. Among small employers (less than 5,000 employees), healthcare costs increased 9.8 percent in 2009, up from 5 percent in 2008. Medium-sized employers (5,000 to 50,000 employees) saw cost increases accelerate from 6.5 percent in 2008 to 10 percent in 2009. Among large companies (more than 50,000 employees) costs rose 5 percent in 2009, down from 5.8 percent in 2008.

The study analyzed insurance claims data for 144 small, medium-sized, and large companies that provided health benefits to 9.5 million individuals from 2007 to 2009.

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Caterpillar predicts $100M health care reform cost

J Roberts

It’s a fact that the new healthcare reform will create additional tax burdons for most US companies, including insurance companies. The net result could mean increased premiums or less benefits with greater out-of-pocket expense or both.  Read the expert from the Associated Press about Caterpillar.

(AP) — PEORIA, Ill. – Heavy-equipment maker Caterpillar says the new health care reform law will create a $100 million drag on its first-quarter earnings because of tax law changes. The Peoria company said Wednesday that the health care overhaul President Barack Obama signed this week will reduce the tax deduction it receives for its retiree health care program.

Caterpillar says even though the change won’t take effect until 2011, its liabilities for retiree health care are already reflected in its financial statements.

So Caterpillar expects to record an after-tax charge of $100 million in the first quarter.
And the company says the tax-law change is not reflected in its already cautious 2010 profit outlook of about $2.50 per share.

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New health care law likely to raise benefits costs

J Roberts

Healthcare reform. Yahoo!

Not so fast! Don’t get excited just yet. While it may be seen as progressive and a monumental task to provide coverage to nearly 32 million uninsured, the cost may outweigh the gain. Benefit companies, actuarial firms, employers and most importantly, health insurers have all stated that the passage of such legislation fails to address the fundamental issue that is plaguing the healthcare system: Cost. Under the new legislation Healthcare costs are only expected to rise making it more difficult to maintain affordable healthcare coverage.  In this time of uncertainty, it’s all the more wise you use an advocate to help you maintain your healthcare costs.  Medical Cost Advocate can assist.

By Lydell Bridgeford

March 22, 2010

While the health care legislation passed by House Democrats on Sunday expands coverage to 32 million Americans, the measure is bound to increase the costs of employer-sponsored health benefits.

With the 219-to-212 vote, the House enacted health care legislation that imposes a 40% excise tax on employers that provide high-end insurance coverage, which would take effect in 2018. Companies with health plans that have premiums of $10,200 or more for singles and $27,500 for families are subjected to the tax. The House measure also requires employers with 50 or more workers to provide affordable health insurance or pay a penalty of up to $3,000 per worker.

Government economists estimate that the new health care law comes with a price tag of $938 billion over 10 years. Employers and employee benefits analysts assert that the government will most likely raise business taxes and fees on health insurers, pharmaceutical companies and medical-device manufacturers to foot the bill.

Most corporate leaders and business owners believe that those industries will then levy the costs of the taxes and fees onto their companies, resulting in higher premiums or reduced benefits for workers.

“The legislation significantly expands coverage for millions of Americans, and takes steps toward aligning what we pay for health care and the quality of those services.  But several aspects of the legislation will inevitably increase, rather than mitigate, health care costs; and the overall financial integrity of the measure depends on future Congresses and Presidents making very tough political decisions,” says James A. Klein of the American Benefits Council. “We urge the Senate to make much-needed improvements to the new law – starting this week – as it considers the budget reconciliation measure,” Klein adds.

“The access expansions are a significant step forward, but this legislation will exacerbate the health care costs crisis facing many working families and small businesses,” says Karen Ignagni, president and CEO of the trade association America’s Health Insurance Plan.

Early this month, Helen Darling, president of National Business Group on Health, told a group of HR/benefits professionals and corporate leaders that health care reform will bring increased costs to employers. “The cost of administrating your health plan will go up. We are constantly talking to lawmakers about how expensive the administrative burden will be on some of their ideas about reforming health care,” Darling observed.

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Study Spotlights Provider Market Power to Negotiate Higher Payment Rates

J Roberts

Read how physicians and hospitals are joining together to increase their market share and purchasing power to better negotiate more favorable levels of reimbursement. This is a trend to watch, the net results may lead to an increase in health care premiums and out-of-pocket costs.

HFMA

An underlying driver of higher insurance premiums—the growing market power of hospitals and physicians to negotiate higher payment rates—has gone largely unexamined, according to a Center for Studying Health System Change (HSC) study published online today by Health Affairs.

Funded by the California HealthCare Foundation, the study examined the growing market power of many California hospitals and physicians, finding that providers are using various strategies, such as tighter alignment of hospitals and physician groups, to negotiate significantly higher payment rates from private insurers.

“Provider market power is the elephant in the room that no one wants to talk about in the national healthcare reform debate,” said HSC Senior Consulting Researcher Robert A. Berenson, M.D., of the Urban Institute, a coauthor of the study with HSC President Paul B. Ginsburg, Ph.D., and Nicole Kemper, M.P.H., a former HSC research analyst.

“Health insurers have been squarely in the crosshairs and blamed for the high cost of private insurance, while the role of growing hospital and physician market power has escaped scrutiny,” Berenson said.

The study also points out that California offers a cautionary tale for reform proposals that encourage hospitals and physicians to form tighter relationships through accountable care organizations.

“Reform proposals that encourage hospitals and physicians to integrate have the potential to improve quality and increase efficiency, but the savings may not be passed on to private payers if provider market power to command higher prices goes unchecked,” Ginsburg said.

The authors conclude that “unless market mechanisms can be found to discipline providers’ use of their growing market power, it seems inevitable that policy makers will need to turn to regulatory approaches, such as putting price caps on negotiated private-sector rates and adopting all-payer rate setting. Indeed, some purchasers who believe strongly in the long-term merits of increased integration of care delivery believe that price regulation may be a prerequisite for payment reforms that encourage integration.”

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Race Is On to Pin Blame For High Health-Care Costs

J Roberts

Who’s to blame for rising healthcare costs, insurers or providers, such as doctors or hospitals?  Depending who you ask, either side places the blame on the other.  Whether it’s insurers’ trying to meet the bottom line and remain profitable or physicians and hospitals attempting to increase revenue and improve their margins, one thing is for certain: Healthcare costs continue to rise.

Read on to determine where the blame lies.

By AVERY JOHNSON

A battle over who to blame for rising health-care costs is escalating, as groups seek to pin the problem on each other and say none of the health-care legislation under consideration does enough to solve it. U.S. spending on health care reached $2.5 trillion in 2009, according to federal estimates. It is expected to jump to $4.5 trillion in 10 years.

Insurers contend that they must pass on ever-higher bills from hospitals and doctors. Hospitals say they are struggling with more uninsured patients, demands by doctors for top salaries, and underpayments from Medicare and Medicaid.

And doctors say they are strong-armed by insurance monopolies and hampered by medical malpractice costs.

In the rush to point fingers, few solutions are emerging.

“It’s always someone else’s fault,” said Robert Laszewski, president of health-care consulting firm Health Policy & Strategy Associates. “There is not an incentive for these people to cooperate because the game they are all playing is getting a bigger piece of the pie.”

The issue has come into sharp relief as WellPoint Inc. has sought to defend its plan to raise some prices in California by up to 39%.

In a hearing Wednesday on Capitol Hill, WellPoint Chief Executive Angela Braly singled out dominant hospital systems for demanding 40% rate increases and drug companies for roughly 20% profit margins.

A WellPoint spokeswoman said that at least one hospital had asked for a 220% payment increase.

Many Democrats have cited lack of competition among insurers as a driver of higher prices. On Wednesday, the House of Representatives voted to repeal a longstanding insurance-industry exemption from federal antitrust laws. The bill now heads to the Senate, where its future is less certain.

Doctors complain of a lack of competition among insurers, as well.

A report by the American Medical Association this week argues that 500 insurance-company mergers in the past 12 years have led to markets dominated by one or two health plans.

This year, two insurers control 70% of the market in 24 states, up from 18 last year, the report said.

“There is no other company for doctors to go to” when an insurer comes to them with terms that they find unfavorable, said AMA President James Rohack. But insurers say is it doctors and hospitals that have gotten too powerful through consolidation.

A study published Thursday in the journal Health Affairs appears to back up their point, saying that insurers are weakened in their negotiations by their inability to exclude prominent doctors and hospitals from networks.

Authors from the Center for Studying Health System Change, a nonpartisan research group, conducted 300 interviews with California doctors and hospital and insurance executives in late 2008.

The study said two big networks of providers now dominate the northern part of the state: Sutter Health owns two dozen California hospitals and medical centers, and Catholic Healthcare West runs 33 hospitals.

In addition, the study said, doctors who are increasingly banding together for negotiating power are commanding yearly double-digit payment increases.

Hospitals and doctors shot back that the study was largely anecdotal and said integration improved efficiency.

Catholic Healthcare West said it took on $1.5 billion in bad debt from government underpayments last year; its size, it added, makes it possible to achieve some savings.

Sutter Health said increases in its reimbursement rates from private insurers have been in the single digits.

“We are doing our best to keep costs down because these health-care premium increases are not sustainable,” said Bill Gleeson, vice president of communications a Sutter Health.

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