The Community Living Assistance Services and Supports (CLASS) is a voluntary long-term care program that was included in the Affordable Care Act. The idea was that  workers could pay a monthly premium which would eventually entitle them to monthly cash payments should they become disabled. As TCF fellow Harold Pollack described it, "Recipients could use this money to buy ramps and other equipment, assistance from home health care workers, and other goods or services that promote independence and personal well-being."

Yesterday's bipartisan budget deficit reduction plan that calls for "slashing $3.7 trillion over 10 years" would repeal the CLASS Act in its entirety, in effect pulling the rug out from under the program before it even had a chance to get started. In his most recent post on TCF's Taking Note blog, Pollack says he's not surprised–given Senators Kent Conrad (D-ND) and Max Baucus's (D-MT) dislike of the program. "The depth of opposition among fiscal conservatives is exemplified by Senator Conrad’s description of the CLASS Act as 'a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of.'"

Below,  a guest post on the repeal by Howard Gleckman, Resident Fellow at the Urban Institute and author of the book "Caring For Our Parents," 

Bipartisan Senate Budget Plan Would Repeal CLASS

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Lots of attention has been focused on how over-testing, especially of the “worried well” contributes to high health care costs. To date, much of the focus has been on Medicare which spends a fortune each year on unneeded tests with no proven benefit.

Doctors, hospitals, demanding patients and defensive medicine have all been implicated in contributing to this glut of over-testing and treatment. But there’s another culprit that so far has avoided the scrutiny of government regulators. These are the stand-alone cardiac and similar health-related screening centers that employ heavy-handed consumer marketing techniques on the internet and through telemarketers; in some cases sending mobile screening units to church-sponsored and community events to help drum up business. 

Cardiac screening tests—including a CT scan for detecting the location and extent of calcified plaque in the coronary arteries—are meant to alert seemingly healthy people to the fact that they either have heart disease or are likely to develop it in the next few years. Patients don’t need a referral from a doctor to undergo cardiac testing at these centers and tests are not covered by insurance. The centers, which use direct-to-consumer (DTC) marketing, are not regulated by the Food and Drug Administration and have no mandate to refer patients with positive findings to a physician for follow-up care.

But with so many false positives and inconclusive results, many patients who do elect to have these tests end up undergoing a “cascade” of further interventions that are expensive (and are often covered by Medicare or private insurance). For example, a buildup of calcium in an asymptomatic patient’s artery might be detected yet would never have led to heart disease. Still, that patient may end up having such invasive treatments as cardiac catheterization or balloon angioplasty or be put on a statin or other medication for the rest of his life.

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Can doctors and other health care providers be the driving force in achieving cost-effective health care? In their commentary in the New England Journal of Medicine, Stanford professors Victor Fuchs and Arnold Milstein, call this the “$640 billion question.” That figure represents the savings to the national health care bill if all U.S. physicians and health care organizations could follow the example of individual providers who already deliver high-quality care at a cost roughly 20% lower than the average.

The authors ask “Why don’t cost-effective models diffuse rapidly in health care, as they do in other industries?” The answer, according to Fuchs and Milstein, is that a long list of stakeholders has interests that are effectively blocking the “diffusion of cost-effective care.” These include drug and medical device-makers who tout their new, more expensive products as always better than older (and cheaper) alternatives; insurance companies with high administrative costs; employers who offer just one or two benefit plans to workers; legislators who accept donations from health industry insiders, academic health centers that tolerate cost inefficiency as the price of training residents; and others whose vested interests keep them from fully embracing cost-effective care.

The media is also to blame, write the authors, by publishing articles that tout miracle cures and treatments to boost newsstand sales and failing to convey risk/benefit information accurately.

Trying to cut health care costs has often been compared to squeezing a balloon; pinch the air out of one end and it will fill up the other. Or as the Canadian economist Robert G. Evans recently told a Group Health audience, “look carefully at so-called ‘waste’ in the U.S. health care system. ‘Nothing is ever wasted… Every dollar ‘always goes somewhere, which is what makes it so difficult to bend the (cost) curve.’ In other words, one person’s waste is another person’s income.”

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Low-income people with Medicaid coverage go to the doctor more regularly, have reduced financial stress and generally report feeling happier and healthier than their uninsured cohorts who must depend on safety net services like free clinics or emergency rooms to access care—or forgo it altogether. This may seem obvious, but until the release today of what one expert calls an “historic” working paper published on the website of the National Bureau of Economic Research, there was little evidence to back up the oft-stated benefits of extending affordable coverage to the uninsured.

James Smith, an economist at the RAND Corporation, told the New York Times “It’s obviously a really important paper…It is going to be a classic.”

The study grew out of an unusual state lottery conducted in Oregon in 2008 that added 10,000 additional low-income, uninsured adults (living at 100% of the poverty line) to its Medicaid program—Oregon Health Plan Standard. In 2002, at its peak, OHP Standard had 110,000 people enrolled. But facing budget shortfalls, the state capped enrollment in 2004 and by 2008, only 19,000 adults remained—the rest lost to attrition. That’s when Oregon received a federal waiver to hold the computerized lottery to expand the plan. A total of about 90,000 people applied for the 10,000 openings.

As a side benefit, the lottery system set up the perfect conditions for conducting the “gold standard” of scientific research; a randomized controlled trial. With funding coming primarily from the National Institute on Aging, researchers spent a year collecting data from hospital records, mail surveys and other sources. They compared outcomes in those low-income adults randomly selected to receive Medicaid coverage to outcomes in the applicants who remained uninsured.

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“Empowered patients” and “patient-centered care” are key goals of the current health reform legislation. The idea is to get patients and their families intimately involved in making decisions about treatment and encouraging them to play a more proactive role in the course of their own medical care. In order to do this, patients must have access to up-to-date and evidence-backed information about the comparative risks and benefits associated with many interventions or diagnostic tests. Patient advocates call this the "quantitative imperative" and insist that access to such unbiased information is absolutely necessary to ensure truly shared decision-making.

But in a recent article in The Hastings Center Report, Peter H. Schwartz, an investigator at Indiana University’s Center for Bioethics, challenges this imperative. He raises the question of whether for some patients, there is such a thing as too much information. For individuals with a poor grasp of probability and mathematical concepts, argues Schwartz, quantitative risk and benefit information could actually be confusing and unhelpful; ultimately leading them to make irrational decisions about care. Mandating that all patients receive this information, he believes, is “deeply flawed” from an ethical perspective.

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Here’s a health insurance headache most readers can relate to: My son took a bad fall in an indoor soccer game this winter and fractured his wrist and pinkie toe. He was diagnosed and treated in a specialized emergency room at an orthopedic hospital that accepted our health insurance; in total we were there a very reasonable two hours and my son left sporting a wrist cast, sling and a surgical shoe. Before leaving I stopped by the reception desk to find out about co-payments and other charges we might have incurred: “Don’t worry,” the billing clerk told me, “we will submit all the charges to your insurance.”

The wrist healed quickly, the surgical shoe was abandoned after two days and my son eagerly went back to bouncing off the gym walls. Then the bill from the emergency room came. Among the assorted charges not covered by our insurance was $218 for a “short leg splint calf to foot.” As I mentioned, we left with a “shoe” that consisted of an inflexible sole held in place by Velcro straps—definitely not a “short leg splint.” As my family’s de facto health advocate who has spent countless hours battling overcharges, coverage denials and outright billing errors, I assumed a phone call to the billing service would clear this up. Well, five months and two subsequent statements later, I’ve just received “final notice” that if I don’t pay the splint charge it will be sent to a collection agency.

Undoubtedly there are few among us who haven't encountered similar insurance hassles; substitute blood test, MRI, anesthesia, out-of-network provider, brand-name drug or any number of medical devices or interventions for “short leg splint” and this becomes a universal tale. For cancer patients and those undergoing surgery and hospitalization these disputed charges become a more serious problem, adding up to tens of thousands of dollars in potential debt.

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It’s starting to look like a sure thing: Medicaid will be a sacrificial cow in the battle to hammer out a bipartisan budget deal. The joint federal-state program that provides medical coverage for 69.5 million of the youngest, poorest, most disabled and oldest Americans—hardly a sign-toting, well-connected or politically important portion of our society—is on the chopping block yet again. Worse, the program, which already makes second-class citizens of recipients in most states by providing limited benefits and reimbursing doctors at such a low rate that many refuse to even see Medicaid patients, is denying benefits to the ever-increasing victims of our country’s struggling economy.

The Wall Street Journal, in an article today about the attempt to raise the debt ceiling reports; “Officials familiar with the talks in both parties say they expect Medicaid to be the biggest source of cuts in federal entitlement programs in whatever compromise emerges.”

How can it be that an entitlement program with the least amount of extra fat is being primed for slaughter? According to Ezra Klein, Social Security has been “untouchable” in the budget negotiations and Democrats have made it clear that their top priority is to limit cuts to Medicare. “The safer Medicare is, the more endangered Medicaid is,” Sen. Jay Rockefeller told Klein last week. “Reading the tea leaves and being in a lot of meetings over the last couple of days, I worry that people are saying, ‘great, now we can really cut into Medicaid.’"

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In the decade since the Institute of Medicine’s landmark report, "To Err is Human," revealed an epidemic of preventable medical errors and safety problems in the nation’s hospitals, virtually all of the safety efforts in health care have focused on improving inpatient care. According to the authors of a new study in the Journal of the American Medical Association, these efforts have contributed to an overall 23.3% drop in the number of paid malpractice claims involving physicians between 2005 and 2009.

But the study, which uses data from the National Practitioner Data Bank (NPDB), a repository of all malpractice payments paid on behalf of practitioners, found that while the number of suits filed by patients harmed in hospitals decreased by almost 25%, there was a less significant 19% drop in suits filed by those experiencing adverse events in outpatient settings.

In fact, the proportion of successful lawsuits filed by outpatients or their families has now reached 43% of total malpractice suits and is growing: In 2009, more than half of adverse events leading to malpractice suits occurred in outpatient setting, resulting in settlements that added up to $1.3 billion.

Meanwhile, there are now almost “30 times more outpatient visits than hospital discharges annually,” according to the JAMA study, “and invasive and high-technology diagnostic and therapeutic procedures are increasingly being performed in the outpatient setting.” In an accompanying editorial in the same issue, the authors say that these findings should be a “wake-up call” for physicians who practice in outpatient settings, adding that the “absence of risk management programs in ambulatory care settings across the country, is a cause for concern.”

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Last week the head of the American Hospital Association sent a letter to Donald Berwick, director of the Center for Medicare and Medicaid Services, stressing how “crucial” it is that the agency consider the racial and ethnic backgrounds of patients when it determines how well hospitals are doing on preventing readmissions within 30 days of discharge.

Why so crucial? The Affordable Care Act includes a hospital readmission reduction program (HRRP) that uses incentives and starting in October 2012, penalties to encourage hospitals to enact better follow-up and other procedures that reduce preventable readmissions among Medicare patients. For Medicare patients aged 65 and older, about 19% percent of all hospital stays were readmissions within 30 days, according to a new statistical brief from the Agency for Healthcare Research and Quality. Some 2.3 million rehospitalizations a year racked up more than $17 billion in annual Medicare costs in 2008, and the Medicare Payment Advisory Commission (MedPac) reported that expenditures for “potentially preventable rehospitalizations” were as high as $12 billion in 2005 alone. It’s a significant—yet avoidable—expense that drives up the ever-rising cost of Medicare.

Under the HRRP, those hospitals that report higher than expected 30-day readmission rates for patients who had been hospitalized with heart attacks, heart failure and pneumonia could see their Medicare reimbursements decreased by up to 1% the first year, up to a maximum of 3% in 2015 with an expanded list of relevant health conditions. Hospitals already submit information about readmissions as part of Medicare’s “pay-for-reporting” program and these rates are then published on CMS’s Hospital Compare site. By adding incentives and penalties to this benchmark, the goal of HRRP is to drive quality of care improvements while saving Medicare $710 million each year.

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Children and the overuse of strong psychiatric drugs: It’s an issue that continues to make headlines as the newest class of antipsychotics like Serequel, Abilify and Zyprexa become first-line treatment for an ever-growing population of troubled kids. Although these drugs are only approved to treat schizophrenia and serious bipolar disorders, their use has skyrocketed in the last decade or so—sales topped $14 billion last year—and the media has reported widely on the epidemic of children receiving these and other psychotropic medication for attention disorders, depression, anxiety and even post-traumatic stress disorder (PTSD).

The latest controversy over the so-called “atypicals” involves their use among some of the country’s most vulnerable kids—those housed in state or county juvenile correction facilities, as well as in for-profit, privately-run centers. According to a recent investigation by the Palm Beach Post, for example, in just 25 juvenile jails and 3 programs run by Florida’s Department of Juvenile Justice (a fraction of the state’s 116 residential programs, most run by private companies) the DJJ bought more than twice as much Seroquel as ibuprofen in 2007.

“Overall, in 24 months, the department bought 326,081 tablets of Seroquel, Abilify, Risperdal and other antipsychotic drugs for use in state-operated jails and homes for children,” according to the Post article. “That's enough to hand out 446 pills a day, seven days a week, for two years in a row, to kids in jails and programs that can hold no more than 2,300 boys and girls on a given day.”

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