It’s time for a reality check: According to the latest U.S. Census Bureau survey, the number of uninsured Americans rose from 16.1% to 16.3 % of the population in 2010, representing 49.9 million people who have no health coverage. Many of these folks lost their jobs as a result of the persistent weak economy and along with those jobs went employer-provided health benefits.

To make matters worse, as the economy shows no sign of recovering anytime soon, two key federal stimulus programs—one that subsidized COBRA benefits for laid-off workers and another that temporarily increased the federal matching rate for Medicaid—have ended in recent months.

The new Census survey finds that the percentage of people covered by employment-based health insurance decreased to 55.3 percent in 2010 from 56.1 percent in 2009. Meanwhile, the percentage of Americans covered by private insurance has been decreasing each year since 2001, with little accompanying rise in the number of adults covered by Medicaid.

The options for coverage have decreased further—even for those families or individuals who try to purchase private insurance. Earlier this year, a Government Accountability Office study of 459 insurers found that an average 19% of applicants nationally were denied health care coverage when they applied for plans.

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When it comes to Medicare, a fundamental question still begs an answer: If seniors are forced to use more of their own money to pay for their care, will they scale back on unnecessary doctor visits and other medical services that needlessly increase Medicare spending? In other words, with more “skin in the game” would Medicare spending really go down?

As Congress works on coming up with ways to cut the federal budget deficit, Medicare is clearly in the crosshairs. Proposals are circulating that would introduce more cost-sharing for seniors—including having wealthier seniors chip in more for their care and reducing coverage for specific services like home health care or expensive cancer drugs. Cost sharing is used in most Medicare Advantage plans in the form of tiering; by giving patients an incentive to use preferred providers in a particular network.

But the most recent proposals are geared toward increasing cost-sharing in fee-for-service Medicare Part B, which covers out-patient care—i.e. doctor visits and other services received outside of the hospital. The rationale is that if seniors have to pay more out of pocket in terms of deductibles and co-payments, they will be less likely to seek out “inappropriate” or unnecessary care.

The problem is that there is scant evidence that having more “skin in the game” would cause seniors to suddenly become active “consumers” of health care—using the same skills they deploy when hunting for bargains in grocery stores to avoid useless doctor visits and medical services. There is some evidence that cost-sharing can reduce inappropriate care for relatively healthy, non-poor, younger individuals, but the data is out-of-date and can not be extrapolated to the Medicare population. According to advocates for seniors, when researchers looked at how cost-sharing affected the most vulnerable in these studies—those who were poor and chronically ill and, therefore, most similar to the highest utilizers of Medicare—increased cost had a negative effect, reducing access to needed care.

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While no one was looking, Medicare spending quietly began to slow early in 2010. As I explained in Part 1 and Part 2 of this post, from 2000 through 2009, Medicare reimbursements snowballed by an average of 9.7 percent a year. Then, in 2010 Medicare payments rose by just over 4 percent. So far this year, Medicare inflation is running a little under 4 percent. Yet Medicare has not sliced benefits for seniors, nor has it trimmed payments to providers in any significant way.

Why, then, are Medicare payouts no longer spiraling? Both Zeke Emanuel, a White House health care adviser during the first part of the Obama administration, and his boss at the time, Peter Orszag, former director of the Office of Management and Budget (OMB), agree that many health care providers are trying to rein in costs as they prepare for full implementation of the Affordable Care Act in 2014. Today, hospitals and most doctors are rewarded for “volume”: those who “do more” (more tests, more surgeries, more hospitalizations) earn more. Inevitably, perverse financial incentives lead to unnecessary care.

By contrast, under the ACA, Medicare will begin paying for “value” (better care at a lower cost”), not volume.  Hospitals are keenly aware of the changes that are coming. “My conversations with various hospital executives . . .  suggest they anticipate less generous reimbursement and more focus on value in the future,” Orszag told me while I was writing the second segment of this post. “Therefore they are trying to become more efficient now.”  Emanuel also has been traveling the country:  “Everywhere I go,” he reported in Part 1, “medical schools and hospitals are asking me, ‘How can we cut our costs by 10 to 15 percent?’ Hospitals know that “either [they] get volume under control, or prices paid both by private insurers and Medicare will drop.” Medicare won’t pay top dollar for unnecessary tests, and private sector insurers have told the Medicare Payment Advisory Commission (MedPAC) that if Medicare takes the lead, they will follow.

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The last time the states were rallied to rise up against federal legislation was during the civil rights battle over forced integration of schools. A similar call for organized state-level resistance is now being made in a manifesto recently published by the American Legislative Exchange Council (ALEC), a powerful but “discreet” group that counts some 2,000 conservative state legislators as well as representatives from some of the nation’s largest industries as members.

The Council’s publication, “The State Legislators Guide to Repealing ObamaCare”, urges lawmakers to “Decline to Build the ObamaCare Edifice” and offers 14 practical steps states can take to undo or impede the Affordable Care Act. These steps include having states return federal grants for setting up health insurance exchanges, encouraging them to opt completely out of Medicaid, and urging them to file federal waiver petitions to block the medical loss ratio requirement (the new rule requiring insurers to spend 80-85% of premiums on patient care).

When it comes to health care reform, ALEC is perhaps best known as the group that drafted the “Freedom of Choice in Health Care Act;” model state legislation drawn up in 2008 that would block any state or federal “public option,” bar the individual mandate and obviate other major provisions of the Affordable Care Act. According to the Council, eight states (including Virginia, Idaho, and Arizona) have actually enacted such model legislation and it has been “introduced or announced” in 42 others. The mission of ALEC’s health and human services care task force is to promote “free-market, pro-patient health care reforms at the state level.”

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Below, a guest post by Paul Raeburn, a journalist and author, and a media critic at the Knight Science Journalism Tracker

This weekend, those of us who live in New York and on the East Coast were treated for days to front-page news about Hurricane Irene. Meanwhile, other important stories were mostly ignored or relegated to back pages. (I use the term “front and back pages” figuratively, to refer to the emphasis given to stories in newspapers, radio and television, and on the web.)

Over the past few weeks, scattered stories have begun to appear in the media about one particular event that should, in my view, be front-page news. The U.S. is suffering from a serious shortage of cancer drugs, particularly generic drugs given by injection and used in hospitals to treat serious conditions such as breast and testicular cancer. Patients whose cancer requires a regular schedule of drug administration over a period of weeks are being forced to delay treatment, quit early, or skip treatments. There’s little question that this will cost lives. It’s unilateral disarmament—while treatments are stopped or delayed, tumors take no notice. Their unrelenting growth continues.

Yet the story has received only middling coverage.

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When it comes to reducing health care spending, everyone agrees that ferreting out the fraud and abuse in the system is absolutely imperative. But despite this urgency, because fraud pervades almost every facet of our health care system, routing it out will be a formidable task. Will an injection of funding, new anti-fraud initiatives coming from the Affordable Care Act, and a fundamental change in the way the government pays for certain services allow us to finally make a dent in health care fraud?

First of all, getting a fix on the total cost to taxpayers from health care fraud is like guessing how many jellybeans are in a jar. Some estimates calculate only “improper billing”—payments made in the wrong amount to the wrong person or for the wrong reason—reported by the Medicare and Medicaid programs. Other figures include private insurance fraud in the mix. Still other estimates factor in waste and abuse as well (this includes improper use of procedures and tests, preventable errors and hospital readmissions and defensive medicine costs; for example.)

Louis Saccoccio, executive director of the National Healthcare Anti-Fraud Association—whose members include about 100 private insurers and public health agencies—testified recently at a House Ways and Means Committee hearing that financial losses due to health care fraud range from $75 billion to a staggering $250 billion a year. Meanwhile, the Centers for Medicare and Medicaid Services (CMS) estimated that in fiscal year 2010, government health programs made a total of over $70 billion in improper payments, about $48 billion of them paid by Medicare alone.

Even more confounding, “fraud” can be perpetrated on vastly different scales: by multi-state organized crimes rings that improperly bill Medicare for $40 million dollars of home health care, by a single physician who brings in an extra $20,000 a year by regularly “up-coding” office procedures (i.e. like the dermatologist my daughter used to see who squeezed a pimple at each visit and billed our insurance $250 for “acne surgery”), and by giant health care companies like HCA who systematically defrauded Medicare of hundreds of millions of dollars.

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It is an article of faith, at least among conservatives, that as long as Medicare remains a government program, outlays will rise relentlessly, year after year. Only “the market” could possibly tame Medicare inflation, they say. The fear-mongers argue that unless we either shift costs to seniors; raise the age when they become eligible for Medicare; or turn the whole program over to private sector insurers, Medicare expenditures will bankrupt the country.

Here is the truth: Both Standard & Poor’s (S&P) and the Congressional Budget Office (CBO) now have 18 months of hard data showing that Medicare spending has begun to slow dramatically. Health reform legislation has not yet begun to kick in to pare Medicare payments, but something is changing on the ground. As I pointed out in Part 1 of this post, Medicare spending began to plunge in January of 2010. After levitating by an average of 9.7 percent a year from 2000 to 2009, CBO’s monthly budget reports show that Medicare pay-outs are now rising by less than 4 percent a year. (Over the year ending June 2011, Standard & Poor’s reckons that the cost of Medicare claims rose by just 2.5 percent.  But S&P’s Medicare index does not include Medicare Advantage, the private sector option that costs the government significantly more than traditional Medicare.)

Pessimists argue that Medicare pay-outs often fluctuate, and that this is just a short-term drop.  Moreover, the naysayers insist, over the next few years, a horde of aging Hippies will push Medicare’s outlays higher. But hard numbers fly in the face of their assertions. Over 40 years, Medicare pay-outs have rarely dipped, and even a cursory glance at U.S. birth rates makes it clear that the baby-boom bulge will not have a significant impact on Medicare expenditures for another ten to fifteen years. By then, the Affordable Care Act (ACA) will have had a chance to rein in health care spending.

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For a while now, diabetes has been at epidemic proportions in this country, with nearly 24 million Americans currently suffering from the disease. The great majority have Type-2 diabetes, the kind that is linked to obesity and physical inactivity and is responsible for 90-95% of all cases in people over 40. The costs associated with this epidemic are also enormous: $218 billion each year in medical expenses and lost productivity. In fact, about 10 percent of all U.S. health care spending and a whopping one-third of Medicare dollars is spent on people with diabetes.

The epidemic shows no signs of abating. In the next 25 years, the number of cases is expected to double. According to a report on obesity released last month by the Trust for America’s Health, “Since 1995, diabetes rates have doubled in eight states. Then, only four states had diabetes rates above 6 percent. Now, 43 states have diabetes rates over 7 percent and 32 have rates above 8 percent.

Finally, according to the Robert Wood Johnson Foundation, as a result of the U.S. having the highest rate of obesity among all developed countries, we now have the highest rate in the world of hospitalization of diabetes patients.

The only glimmer of hope in this epidemic is that for a while now there has been incontrovertible evidence that relatively inexpensive community-level prevention efforts can really pay off. This evidence includes results of a national comparative effectiveness trial that included 27 centers with over 3,000 participants, all at high risk of contracting diabetes. The trial, funded by the National Institutes of Health back in 1999, compared how effective three interventions were in preventing the onset of diabetes in these high-risk  individuals: 1) basic advice that you might get at the doctor’s office once a year or twice a year, 2) diabetes medication to lower blood sugar levels and 3) an intensive lifestyle intervention.  It was the intensive lifestyle intervention that worked the best.

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Imagine that you been in labor for 18 hours, and the resident who will be delivering your baby tells you that he hasn’t had any sleep for 25 hours. Would you ask for a new doctor?  On the one hand, this resident has been checking you since the beginning of labor. You like him. But, he confides, that this is his second 28 hour shift in three days. He adds that he hasn’t had 24 hours off for two weeks.
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An Institute of Medicine (IOM) investigation released in December 2008 concluded that physician fatigue accounts for a growing number of medical errors: “the scientific evidence base establishes that human performance begins to deteriorate after 16 hours of wakefulness” wrote the authors of the report. They called for elimination of resident shifts exceeding 16 hours without sleep. The Accreditation Council for Graduate Medical Education (ACGME), the organization charged with setting and enforcing standards for graduate medical education, has finally responded. New rules regulating how long residents and interns can be asked to work while caring for patients went into effect last month.

In the past, the ACGME let residents work 30 hours at a stretch. But as of July 1, interns (a.k.a first year residents) will be limited to 16-hour tours of duty, following IOM’s recommendation. But, to the dismay of patient safety advocates, under the new rules second and third-year residents still will be permitted to work 28 hours at a time. Moreover, “time off” in between long shifts has been cut from ten hours to eight. This gives residents eight hours to go home, sleep, shower, grab something to eat, and get back the hospital for another 28 hour shift. At best, they may catch seven hours of sleep.

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