This post was written by Niko Karvounis & Maggie Mahar

Consider this headline: “Health insurers reinvent themselves as money managers.”

The short version of the story, which appeared in the Los Angeles Times yesterday, is this:  “insurers are moving away from their traditional role of pooling health risks [and paying for health benefits]” and, instead, are beginning to move into money management as they offer to help consumers save for and pay for their own healthcare. If this strikes you as troubling—if, in other words, you think that health insurance should be about health care and not banking—then a closer look at  Michael Hiltzik’s well-researched piece will make your stomach churn. (Thanks to a Health Beat reader for calling our attention to what he called a “chilling” story.)

Health Beat has written about the health savings accounts (HSAs) that encourage consumers to sock away money away to pay for their own medical expenses in the past. To re-cap briefly: An HSA is like a 401k—you do not pay taxes on the dollars you put into the plan. There’s just one requirement: you can open a HSA only if you also buy a high-deductible insurance plan that typically offers minimal coverage, and a deductible of, say, $5,000. 

Because the premiums of high-deductible plans are so much lower than other health insurance products, they can be attractive to many low-income Americans—even if they do not have the extra cash to put away in an HSA (Remember: if you want an HSA, you must buy a high-deductible plan; but if you buy a high-deductible plan, you are not required to open a HSA.).

High-deductible plans are gaining traction in our health care system: America’s Health Insurance Plans report that, at the start of this year, 6.1 million Americans were covered by high-deductible plans—up from 3.2 million in 2006.

Why such fast growth? One big reason is that powerful health care stakeholders—namely, employers and health insurance companies—see the plans as a way to cut costs by shifting costs to the consumer.  As the Times points out, high-deductible plans offer “fewer overall benefits than traditional plans. They are designed to cover chiefly catastrophic medical expenses. Routine medical care becomes the responsibility of the consumer. Some of the plans exclude maternity benefits, preventive care and mental health services.”

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In discussing what’s wrong with health care in America, we often cite statistics—such as the fact that the U.S. spends 16 percent of its GDP on health care, yet has a life expectancy of 77.8 years, below the average of 78.6 years for OECD countries.

But health care is complex, and numbers can sometimes be too abstract to make a lasting impression on people who aren’t health care wonks. Sometimes what really connects isn’t data, but analogies that put health care in terms that everyone can understand. Of course, there are good analogies that illuminate and bad analogies that mislead, so you always have to be careful. Here are a few of the best and worst analogies that I’ve come across:

(1) The Titanic and Inequality. As The Health Care Blog (THCB) noted recently, it’s hard to come up with a more clichéd analogy than the Titanic. It’s really the poster child for much ballyhooed behemoths that collapse because they’re not nearly as state-of-the-art or invulnerable as people assume. But really, that’s a perfect encapsulation of our health care system. We spend $2.4 trillion on health care annually—the equivalent of bailing out Wall Street twice every year. As Shannon Brownlee of the New America Foundation has noted, as much as 30 percent of this bill is “spent on treatments, tests, and hospitalizations that did nothing to improve our health.” And we still have 47 million people without health insurance. This is not a ship that can keep afloat indefinitely.

But as Sarah Arnquist points out in her THCB post, our health care system isn’t akin to the Titanic just because it’s “a big, fancy expensive ship…[that’s] destined…[to] sink”—but also because survival of its passengers (or, in the case of health care, patient and citizens) is predicted by socioeconomic status. While a lot of people died on the Titanic, survival rates were much better for first class passengers (read: richer people) than for poorer folks: 97.2 percent of first class passengers survived the sinking, where as only 54.7 percent of third class passengers got out alive.

Similarly, in the U.S., your survival is predicted by your socioeconomic status. According to the National Center for Health Statistics, education level—which is strongly correlated with socioeconomic status—is “the most consistent predictor of the likelihood of death in any given year is level of education; persons ages 45-64 in the highest levels of education have death rates 2.5 times lower than those of persons in the lowest level.”

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Because it’s a means-tested program, Medicaid is often thought of as a public program guaranteeing health insurance for America’s poor.

“But that’s just not true,” Susan Reinhard, head of AARP’s Public Policy Institute, told a panel on Capitol Hill last month. Yes, Medicaid eligibility is based partly on income and assets—so you do have to be poor to get it. But under current federal law  Medicaid is not required to  cover adults—no matter how poor—unless they are pregnant, caring for dependent children, severely disabled or elderly. If you’re an able-boded, childless adult under 65 years of age, it doesn’t matter how poor or sick you are—in many states, you’re out of luck.

Another, equally common misconception is that Medicaid is somehow tied up with federal cash assistance, i.e. is a part of “welfare.” That was true before welfare was overhauled in 1996: back then, people enrolled in Aid for Families with Dependent Children (AFDC), the nation’s major welfare program, were automatically signed up for Medicaid. But when AFDC was eliminated and replaced with the more flexible and less generous Temporary Aid for Needy Families (TANF) in ’96, the Medicaid-welfare link was severed.

Unfortunately, many poor families don’t know this. They assume that because they are not receiving “welfare,” they’re not eligible for Medicaid.

So we have two mistaken assumptions: that all the poor get health care through Medicaid, and that only those on welfare can enroll in the program. Both need to be addressed if we want to improve Medicaid and health care for low-income Americans. 

Expanding Medicaid Eligibility

The simplest way to address the misconception that all poor people receive Medicaid is to make it true. That would mean eliminating the five-category eligibility structure mentioned above and instead setting a uniform income level below which everyone would qualify for Medicaid.

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Last week I looked at some of the major problems afflicting the Medicaid program, including low reimbursement rates for doctors, patients’ lack of access to care, a lower quality of available care, stringent eligibility requirements, and complicated enrollment procedures. In this post I’m going to talk about what we can do to address Medicaid’s deficiencies, specifically with regards to physician reimbursement, quality of care, and the relationship between states and the federal government with regards to Medicaid.

Reimbursement and Access

As I’ve noted in the past, Medicaid reimbursement rates for physicians are very low—on average, just 69 percent of Medicare rates. They also vary widely across different states. In New York, doctors are paid $20 for an hour-long consultation with a Medicaid patient; in some higher-paying states, doctors receive an average of $157.92 for the same service—a more than sevenfold difference.

Clearly, increasing Medicaid reimbursement is an important part of making the program more appealing to doctors, and thus improving patients’ access to care. Indeed, studies show that when reimbursement fees are higher, pregnant women are more likely to retain their doctors for long-term care and children are more likely to have regular access to a doctor and to preventive care. Studies from the Center for Studying Health System Change and the New America Foundation have found that “variation in Medicaid reimbursement levels across states contributes to community variations in physicians willingness to accept Medicaid patients,” and that “high fee levels increase the probability that individual physicians will accept Medicaid patients.”

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Every now and then I like to follow-up on recent posts to highlight the fact that so many of the issues we address on Health Beat continue to develop after we write about them.  So, without further ado, some additional coverage of recent post topics:    

AHLTA

I’ve criticized AHLTA, the Defense Department’s computerized medical record system, in three separate posts. And with good reason: the troubled system will ultimately cost tax payers $20 billion, despite the fact that it processes data slowly, is prone to errors, is disliked by military clinicians, and is incompatible with VistA, the Veterans Administration’s successful health care IT program.

I’ll spare you a fourth AHTLA essay and instead direct you to an update by Bob Brewin of Government Executive magazine which ran a few days ago. 

Brewin reports that “AHLTA…poses safety risks…Medication reconciliation — a process that requires developing a complete list of patients’ medications and dosages — is key to ensuring patients are not prescribed drugs that don’t mix well. But, ‘AHLTA does not allow complete and uncompromised medication reconciliation [and] therefore remains a patient safety risk,’ said Lt. Col. Carter Hale…

“Army Lt. Col. Daniel Schissel, president of the Association of Military Dermatologists, reported that the application has decreased his productivity. He commented that before AHLTA, he was able to see 5,000 patients annually and record each encounter with excellent, albeit written, notes. Post-AHLTA, he sees 3,600 patients annually and describes encounters in electronic note templates that he says are so cryptic a follow-on provider would have difficulty visualizing where he had removed a spot of cancerous melanoma. It would be helpful to attach a photo, but Schissel said MHS [Military Health Service, the DoD section that manages AHLTA] clinicians now are discouraged from doing so, ‘as photos are difficult to load and consume large amounts of bandwidth.’

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Writing on The Health Care Blog, D.C. insider Bob Laszewski puts the chances of health care reform—at least in the form envisioned by the presidential candidates and ambitious activists—at about zero in the wake of Wall Street’s meltdown. It’s easy to see why Laszewski is so pessimistic:

“On top of the $500 billion deficit [that the government faces ]in 2009…and the cost of the Freddie and Fannie bailout . . . the Congress is now being told it must take on a total of almost $1 trillion in government long-term costs to try to turn the financial system around.”

That’s a problem. McCain claims his reform plan will cost $10 billion; Senator Obama says his will cost $65 billion. Both are no doubt low-ball estimates. Obama’s plan, for example, is more likely to cost $86 billion in 2009 and $160 billion in 2013, after it’s expanded, according to the Urban Institute. Given these numbers, Laszewski says that the candidates have to “get…real” about how they’re “really going to deal with health care reform in the face of all of these challenges.”

In an upcoming post, Maggie will dig deeper into just how health care reformers can and should ‘get real’ in post-meltdown America. But instead of talking about what reformers should do, I want to discuss another important question we have to pose in the upcoming age of austerity: will the public even care about health care reform anymore, now that the economy has gone south?

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In theory, Medicaid ensures that low-income families receive health care. But in practice, the program leaves much to be desired—and serves as a painful illustration that the existence of an insurance program isn’t enough to ensure access to necessary care.

On paper Medicaid offers pretty comprehensive coverage, seemingly even better than Medicare. For example, Medicaid covers long-term care for the elderly, nursing home care, and offers broader prescription drug benefits than Medicare.

But all the benefits don’t mean a thing if patients can’t find doctors to provide them. In a post last November, I noted that reimbursement rates for Medicaid are abysmally low across the nation as compared to both private insurance and Medicare: in New York, doctors receive $20 for an hour-long consultation with Medicaid patients, whereas a physician could earn almost $200—about 10 times as much—for such a consultation under Medicare. In 2007, the Wall Street Journal reported that Michigan’s Medicaid program pays $20 for a chest x-ray, where as Medicare pays $30 and private insurer Blue Cross, $33. For performing an appendectomy, a Michigan doctor can expect $784 from Blue Cross and just $336—about 42 percent as much—from Medicaid.

There’s nothing inherently easier about treating poor people—in fact,
Americans stuck on the lowest rungs of our socioeconomic ladder tend to
be in poorer health. Yet doctors are paid less under Medicaid and as a
result are closing their doors to low-income patients: a 2006 Center
for Studying Health Care System Change report found that the percentage
of physicians who accepted no new Medicaid patients in 2004-2005 was
“six times higher than for Medicare patients and five times higher than
for privately insured patients.” Reimbursement was a major concern
here: 84 percent of physicians who did not accept new Medicaid patients
in 2004-2005 said reimbursements were a factor; 70 percent of
physicians said billing requirements and paperwork were a factor; and
two-thirds said delayed payments were a factor. (While Medicare, a
federal program, has a reputation for paying providers in a timely
manner, Medicaid—administered by states—is a much more haphazard
affair, and can leave doctors waiting for months).

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I’ve said it before, and I’ll say it again: the doctor-patient relationship is just that—a relationship, a mutual connectedness between two human beings, each with their own values, dispositions, and priorities. Like all relationships, this one is complex, but there is a single concept that manages to capture a lot of what doctors are expected to bring to their partnership with patients: empathy.

Empathy is key to what we’ve traditionally called “bedside manner,” or the ability of doctors to identify with the concerns and emotions of their patients in order to reassure them and more generally ensure effective communication. Every one of us probably has an intuitive understanding of why empathy is a valued trait in doctors, but it’s worth exploring the issue further—especially since it seems to be in short supply amongst today’s doctors, in part thanks to the rigors of medical school.

We’re not talking about warm and fuzzy nonsense here. Empathy is “more than a nice idea,” say Donald Scott and William R. Harper, two professors at the University of Chicago, “it’s a pragmatic skill that stands at the center of the patient-doctor connection, on which so much else depends.” That skill isn’t just about feeling for patients, but also about expressing those feelings, through words, body language, and tone. In 2006, Harper gave the University of Chicago Magazine an example of empathy’s importance: “If the connection is strong, the patient is more likely to follow a doctor’s recommendations. You can order the fanciest test in the world but if the patient does not buy into it, it doesn’t matter.”

The best way for patients to ‘buy into’ treatments is to feel that their doctors understand and appreciate their situation.  “Irrespective of the disease, when you find someone who will feel for you, you feel better,” U of C neuroscientist Jean Decety told the university magazine. Indeed, studies show that a stronger doctor-patient relationship contributes to improved health outcomes by ensuring that health situations are clearly understood and patient priorities are met. Empathy also reduces the burden on the friends and family who care for terminally ill patients.

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The newest edition of Health Affairs includes the story of Michelle Mayer, a patient whose odyssey seems to validate consumer-driven medicine—at least on the surface. But a closer look reveals that Mayer’s tale is no consumerist parable; in fact, it’s a great example of consumer-driven medicine’s shortcomings as a model for health care.

Mayer’s Story

At first glance, Mayer’s story seems to jibe with the ethos of consumer-driven medicine, with a well-informed, assertive patient cycling through obstinate doctors until she finally receives care that she felt was appropriate. The journey begins twelve years ago, when Mayer—a research assistant professor at the University of North Carolina School of Public Health—noticed swelling in her hands and was found to be producing a specific antibody associated with scleroderma, an incurable chronic autoimmune disease. Though Mayer “truly believed that [she] had scleroderma,” doctors diagnosed her with a less serious condition called Raynaud’s phenomenon.

But over the next year, Mayer began to experience symptoms consistent with scleroderma, like sluggishness, hardened skin, and uncontrollable itching. When she finally sought out a new rheumatologist, he confirmed that she did indeed have scleroderma. Irate that her passivity had contributed to the misdiagnosis of her condition, the then-newly graduated Mayer “put [her] new Ph.D. in public health to good use, devouring the medical literature on scleroderma.”

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My last foray into international health care systems focused on Singapore, a tiny island nation whose much-lauded health care system represents an interesting public-private mix. But there’s another island, not too far away, that also makes for a compelling case study in health care — in this instance through a single-payer system: Taiwan.

A handful of commentators have already hooked onto the fact that Taiwan’s health care system provides an instructive example of single-payer: Merrill Goozner and Ezra Klein both noted a well-written Congressional Quarterly article on Taiwan’s system earlier this year, and British analyst Ian Williams writes lauds Taiwanese health care in the winter 2008 edition of Dissent magazine.

The buzz around Taiwan’s National Health Insurance (NHI) system stems from the fact that some of its vital stats are stunning, particularly in comparison to the United States. NHI covers 99 percent of the Taiwanese population; in the U.S., 15 percent of the population lacks health insurance. Taiwan spends a mere 6.2 percent of its GDP on health care; the U.S., 16.3 percent. Administrative costs make up only 1.5 percent of NHI’s budget, while administration accounts for about 7.5 percent of American health care expenditures.

Single-payer critics habitually fret about long wait times, but a 2005 article in the journal International Medical Management (IMM) reports that wait-times are almost non-existent in Taiwan, and that Taiwanese doctors cycle through patients speedily enough to “see approximately 50 percent more patients than their counterparts in the U.S. on a weekly basis.” All in all, Taiwanese are far happier with their health care system than we Americans are with ours: last year the national satisfaction rate with health care in Taiwan was 77.5 percent. By way of contrast, an August Commonwealth Fund poll shows that 82 percent of Americans think that the U.S. healthcare system should be fundamentally changed or completely rebuilt.

Admittedly, Taiwan’s single-payer system certainly isn’t all sunshine and rainbows–but it is instructive for those thinking about how to best reform the U.S. system. 

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