Conditional Cash Transfers: An Interim Model for Health Care Reform?

This past September, New York City’s Mayor Bloomberg welcomed 5,000 families into the pilot program of Opportunity NYC– the nation’s first conditional cash transfer (CCT) program. Based on a Mexican program called Oportunidades, CCT programs like Opportunity NYC (ONYC) provide financial incentives for poor households to “meet specific targets” in three areas: education, employment/training, and health.

I recently spoke with Héctor Salazar-Salame, Advisor to the Center for Economic Opportunity, which operates ONYC, about the health components of the program. I wanted to get an idea of the aims and strategy behind ONYC—and also to learn more about CCT as a potential model for thinking strategically about health care reform. 

According to the city’s press release, ONYC’s health incentives will be offered “to maintain adequate health coverage for all children and adults in participant households as well as age-appropriate medical and dental visits for each family member.” In terms of coverage, families can earn “$20 or $50 per adult per month for maintaining health insurance and $20 or $50 for maintaining health insurance for all the children in the family.”

The point is to encourage low-income families to enroll in health insurance plans. “Many families work for employers that offer insurance,” Salazar-Salame explains, but “many times the necessary employee contribution is quite high for low-income families. We’re providing an incentive for families to opt into their work-based, private health plan—and hoping that the incentives will help them offset the cost of the employee contribution.”

If parents are unemployed—or work for employers that don’t offer coverage—the family can still be eligible for health incentive rewards that keep them enrolled in Medicaid. “We know that to recertify for Medicaid can be a challenging yearly process that takes a lot of time,” says Salazar-Salame. (It’s worth keeping in mind that roughly 30 percent of parents who don’t manage to enroll or re-enroll their children in Medicaid have less than a high school education).  “We’re hoping the incentive will help them maintain the insurance that they’re eligible for,” Salazar-Salame explains.

Maintaining insurance is harder than it sounds. In October, Maggie wrote about  just how difficult it can be to stay enrolled in Medicaid and SCHIP, pointing to a Health Affairs article titled "Why Millions of Children Eligible for Medicaid and S-Chip Are Uninsured."

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Herzlinger’s Meme on Switzerland and Consumer Driven Medicine

In today’s Wall Street Journal, Harvard Business School professor Regina Herzlinger offers an upside-down account of what’s right and what’s wrong with Switzerland’s health care system.  A leading advocate of “consumer driven” health care, Herzlinger assumes that because the Swiss pay for so much of their care out of their own pockets, consumer choice drives their system. 

But the truth is that Swiss patients have relatively little say over either the cost or the quality of the care they receive. Prices are regulated by the government, which also tries to make sure that consumers are getting value for their health care dollars by selecting which drugs, devices and tests insurance will cover. In fact, it is the very visible hand of a smart, largely efficient government that accounts for Switzerland’s relative success.

Before explaining how Herzlinger gets so much so wrong, let’s look at what she gets right. “The Swiss have achieved universal coverage,” Herzlinger points out “at a far lower cost than the U.S.”  In 2003 Switzerland spent 12 percent of GDP on health care while we laid out “a staggering 15 percent of GDP” while leaving roughly 14 percent of our population uncovered. Switzerland also has “far better health outcomes than the U.S., even when Switzerland is compared to socio-demographically similar U.S. states such as Connecticut and Massachusetts,” Herzlinger acknowledges. Moreover, while U.S. insurers in most states can shun sick customers, either by refusing to cover them—or by charging them astronomical premiums—in Switzerland you are not penalized for having cancer. The sick “can afford health insurance and pay the same price” as everyone else.

Finally, while the cost of care continues to snowball in both countries, the Swiss seem to have a better handle on health care inflation. From 1996 to 2003 health care spending in Switzerland rose by an average of 2.8 percent a year, Herzlinger says, versus 4.1 percent in the U.S.  Meanwhile “Switzerland boasts substantially more in the way of health-care resources and . . . tops the world in most measures of user satisfaction.”

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Does the U.S. Have Too Many Doctors?

On the Buckeye Surgeon blog, a general surgeon from Cleveland, Ohio, questions what he calls “the almost dogmatic assumption that the United States is facing a physician shortage is the coming years…We’re always reading that we need to train more doctors, that with the aging population there won’t be enough physicians to satisfy demand. But then I was waiting for the elevator the other day, reading the names of all the doctors on the peg board who practice at one of my hospitals. The board is 4×4 feet and just crammed with names, names, names. It’s unbelievable how many doctors there are.”

“There’s two large GI groups,” Buckeye Surgeon continues. “There’s three general surgery groups. There’s three separate pulmonary groups. The ID group has 7 doctors. (Don’t get me started on ID again). And on and on. What we have isn’t a physician shortage, but rather a physician overabundance. And I don’t think it’s too different at most suburban hospitals across the country. The scenario isn’t one of overworked doctors struggling to keep up with the demands of patients waiting in line for care. Rather, it’s a hyper-competitive world of doctors in the same specialty fighting over a limited supply of patients.”  (Thanks to Kevin, M.D. for calling my attention to Buck Eye’s post.)

Buck Eye Surgeon is offering an anecdotal view of physician supply, but rational research backs up his claim. When the Council on Graduate Medical Education (COGME) warns that we need to train more physicians to meet the demands of aging baby boomers, the Council assumes that the current national physician-to-population ratio is optimal.  Those who call for more physicians “never examine the relationship between physician supply and the health of patients and population” notes Dartmouth’s Dr. David Goodman in a 2005 Health Affairs article, “The Physician Workforce Crisis: Where Is the Evidence?” (For more about Dr. Goodman, his background and his evidence, see "David
Goodman, M.D.: Counting All Doctors" in Dartmouth Medicine )

Take a look at the evidence, and it’s clear that the conventional
wisdom is wrong. As I’ve discussed in the past, in areas of the country
that boast more specialists, patient outcomes are worse—even after
adjusting for differences in age, race and the overall health of the
population. (I have written about this for both Health Beat and Dartmouth)
A greater supply of primary care physicians, on the other hand, leads
to better outcomes. So, Goodman quite sensibly concludes: “If improving
the health and well-being of the population remains our goal we need
more generalists and fewer specialists, today and in the future.”

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Health Beat Hosts Health Wonk Review

Today, Health Beat is hosting Health Wonk Review, a biweekly compendium of the best of the health policy blogs. More than two dozen health policy, infrastructure, insurance, technology, and managed care bloggers participate by contributing their best recent blog postings to a roving digest, with each issue hosted at a different participant’s blog.

Thanks to all of you for your submissions. I couldn’t do justice to all of them, but here’s a sampling of some of the best posts about health care on the blogosphere:

At Health Care Policy and Marketplace Review Robert Laszewski takes on Mitt Romney’s assertion that there are “pots of money” in the states –enough to allow states to follow Massachusetts’ initiative and fund health care reform without raising taxes. Laszewski demolishes the argument, pointing out that even Massachusetts doesn’t have enough money to follow Massachusetts’s initiative. That’s why the state has had to exempt some citizens from the mandate that everyone buy insurance.

On Health Access California, Anthony Wright offers the clearest explanation I’ve seen of Governor Schwarzenegger’s plan for reforming care in California, and its merits and limitations when compared to both HRC’s proposal and the Romney plan in Massachusetts.

On Physician Executive, Zagreus Ammon’s ambitious post “Defining Universal Health Care” begins by addressing the theory that each of us is responsible  for our own health—i.e. “that people do well because they make good choices and people do poorly because of poor choices.”

Here Ammon is responding to Peter Huber of Manhattan Institute fame and his editorial in IBD (Investors’ Business Daily) arguing that universal healthcare is an idle dream because eventually, the “pocket-book healthy” (read: wealthy) will get tired of paying for the “health-careless people” who don’t “live informed, disciplined lives”(read: less well-educated and poorer.) The righteous would rather see that money funneled into products that would provide them with “better hair, skin and sex,” Stern suggests.  For a more generous synopsis of Huber’s argument, see H.G. Stern’s rave review on Insureblog

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Your Yearly Physical Is a Waste of Time

…or at least that’s what some experts have increasingly been suggesting. According to the American College of Physicians (ACP), instead of having an annual physical, “healthy adults should undergo a much-streamlined exam that’s focused on prevention every one to five years depending on a person’s age, sex and medical profile.”

So what does that mean, exactly? According to the U.S. Preventive Services Task Force, doctors should focus on “interventions that help patients change health-impairing habits or that spotlight emerging illnesses for which reliable and effective treatments exist.”  These include “Pap smears, mammograms, cholesterol tests, blood-pressure checks, and counseling to stop smoking, lose weight, get more exercise and eat a healthier diet.” In other words, rather than just checking for everything, doctors should focus on interventions that can be substantively linked to treatments we know work. Currently, most check-ups are comprehensive run-throughs that seem to be administered  just for their own sake, regardless of how, or even if, they relate to meaningful treatments.

For many of us, the annual physical is a fixture of our health care
experience, something we assume to be both necessary and desirable.
Indeed, a study released last month found that 64 million Americans a
year get a physical or gynecological exam, costing a total of $7.8
billion.  Regular gynecological exams are important—they include Pap
smears that have made cervical cancer a rare disease. But the point of
the general physical is less clear.  More people get annual check ups
than visit doctors for respiratory conditions or high blood pressure,
and the price tag for yearly physicals closes in on the $8.1 billion
spent on breast cancer care.

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The Truth about the Politics of National Health Reform

For the past year, progressives have begun to talk about health care reform as if it is inevitable. Listen to the Democratic Party’s presidential candidates, and it seems just a question of what form the health care revolution will take, how quickly it will happen, and how we’ll finance it. After all, the polls show that the majority of taxpayers, employers and even most doctors want to see a major change.  Moreover, health care research shows that if we cut the waste in our system, we could fund universal coverage. What, then, is stopping us?

As regular readers know, I recently attended a Massachusetts Medical Society Leadership Forum where what I heard about the Massachusetts plan made my heart sink. While everyone in Massachusetts wants health care reform, no one wants to pay for it. Those who are receiving state subsidies to buy insurance are enthusiastic. But uninsured citizens earning more than 300% of the poverty level are expected to purchase their own insurance. The state hoped that 228,000 of its uninsured citizens would sign up; as of last month, just 15,000 had enrolled. Many have decided that they would rather pay the penalty than buy health insurance.

At the forum, Robert Blendon, professor of health policy and political analysis at Harvard’s Kennedy School of Government, talked about what Massachusetts’ experience might mean for the national health care debate: “Massachusetts is the canary in the coal mine,” Blendon, who is also a professor at Harvard’s School of Public Health, declared bluntly. “If it’s not breathing in 2009, people won’t go in that mine.”  If the Massachusetts plan unravels, he suggested, Washington’s politicians will say “If they can’t do it in a liberal state like Massachusetts, how can we do it here?” 

I’m not writing Massachusetts off. The state’s leaders are behind the plan and they may be able to persuade the Commonwealth’s citizens to come on board. But it won’t be easy. 

In the meantime, this week I decided to ask Blendon some follow-up questions: Just what would it take, politically, to achieve national health care reform sometime in the next two to four years?  How many seats would reformers have to capture in Congress?  Is this likely?   Some observers say that if a reform-minded president hopes to succeed, he or she will have to ram a plan through Congress sometime in 2009. But health care is complicated; wouldn’t it make more sense for a new administration to take its time and explain what it is doing to the public, while trying to create a sustainable, affordable, high quality health care system?

Finally, what are the biggest barriers to reform?  If major change proves impossible, what more modest back-up plans should a new president have in mind? What other health care legislation could he or she hope to pass?

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Online Doctors, Privacy, and the Almighty Dollar

Last month a
slew of media outlets
caught wind of Jay Parkinson, a 31 year old
Brooklyn-based M.D. who provides care for his patients through the Internet.
Here’s how it works: you get an initial in-person consultation at your home or
office. After that, you can ask Parkinson questions online through instant
message or video chat; e-mail him digital images of minor wounds, rashes, etc.,
that he can then diagnose; have him help contact, call ahead, and inform
specialists when you need their help; and generally fulfill most basic medical
consultation functions online.

Parkinson’s work raises a lot of questions, but first among them may be
this: how come my doctor isn’t
utilizing virtual communication to its fullest potential?

Part of doctors’ technophobia stems from their lack of incentives to engage
with the virtual world: they’re not reimbursed for virtual consultations that
may be deemed “self-management support activities,” or good old fashioned advice
about do-it-yourself care. As little as eight
percent
of patients communicate with their doctors via e-mail—a shame,
considering in the latest issue of JAMA, Tom Delbanco from Harvard Medical
School estimated that 50 percent of visits to the physician are unnecessary and
could probably be dealt with online.

But there are other reasons why doctors are reluctant to take their practice
online. For most doctors, communicating sensitive patient information without
special, government-approved secure platforms is illegal under the Health
Insurance Portability and Accountability Act (HIPAA). HIPAA, originally passed
in 1996, was revised in 2002 by the Bush Administration to incorporate a
privacy rule that came into effect in 2003. The privacy rule regulates the use
and disclosure of private health information (PHI),
which is information about “health status, provision of health care, or payment
for health care that can be linked to an individual.” It’s this privacy rule
that makes so many doctors computer-shy.

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What Rudy–and Most Americans–Still Don’t Understand about Prostate Cancer

Presidential candidate Rudy Giuliani recently made the mistake of trying to turn his brush with prostate cancer into a campaign issue: “I had prostate cancer, five, six years ago. My chance of surviving prostate cancer, and thank God I was cured of it, in the United States, [is] 82 percent. My chances of surviving prostate cancer in England, [is] only 44 percent under socialized medicine,” Giuliani declared.

Rudy, of course, was wrong.

Merrill Goozner has done the best job that I’ve see of cutting through to the truth of the matter. In a Nov. 2  post titled “Columnists Miss Chance to Educate on PSA Testing,” he points out that “Paul Krugman’s column in the New York Times and Eugene Robinson’s column in the Washington Post justifiably attack Rudy Giuliani’s misuse of prostate cancer stats, all but accusing him of lying.

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Why Aren’t More Students Applying To Medical School?

Did you know that there are only two applicants for every place in U.S. medical schools?

In Canada, surprisingly, close to four students apply for each opening. The training in the two countries is very similar; indeed, the Association of American Medical Colleges (AAMC) accredits medical schools in both countries.  And, in the U.S., at the high-end, physicians  can hope to earn far more than Canadian doctors.

Why then do so few Americans apply to medical school?

The answer is that we have priced a medical education well beyond the reach of most middle-class students.  In 2004, tuition and fees at a public medical school averaged $16,153. Students who attended a private school paid $32,588 according to a 2005 study published in The New England Journal of Medicine. 

The author, Dr. Gail Morrison, Vice Dean for Education at University of Pennsylvania School of Medicine, tacks on $20,000 to $25,000 a year for living expenses, books and equipment to calculate that the total cost of four years of medical education comes to a heady $140,000 for public schools and $225,000 for private schools.  I’d add that, in many American cities, students would be hard-pressed to cover rent, food, clothing, utilities and transportation for $20,000 a year—let alone books and equipment.

This helps explain why 60 percent of all medical students come from the wealthiest one-fifth of all U.S. families. Another 20 percent come from families lucky enough to be on the fourth step of a five step ladder.

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We Need to Begin A Conversation About “Cost Effectiveness”

As any policy-maker knows, catering to public opinion, ensuring the public interest, and managing costs can seem an impossible task–especially when what the public thinks it wants is at loggerheads with what it needs. But in the case of health care, there may be an opportunity to do all three at once according to a proposal in the September/October Health Affairs.

The proposal argues for cost-effectiveness analysis (CEA) “to set priorities for Medicare coverage of new or costly interventions” through a citizens’ council made up of “a cross-section of users” who can provide leadership with “well-considered social-value judgments.” This citizens’ council model is borrowed from the UK, where a group of 30 men and women advise the National Institute for Health and Clinical Excellence (NICE) on behalf of the public.

The British experience shows that there are likely to be practical complications with implementing a citizens’ council, but it’s still an idea that’s on the right track. We need to turn “cost-effectiveness” from a bad word into a public interest issue in the US.

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