This past week frustration reigned in my office as I saw more cancer patients in one week than I have ever seen in a week. The big problem is that 2 of these patients with advanced disease have no health care insurance or their insurance that they have will not cover their surgery and further treatment. What to do? Wait for the Democrats running for President to give us Medicare for all??
People have to understand that one of the patients has a type of Medicare, however, her policy will not cover further treatment. Remember this for those of you who still believe that Medicare-for-all will solve all our problems.
The other fairly young patient with advanced cancer has a job but no healthcare insurance. But as a dedicated physician, I am going to operate on her in the office only charging her for supplies, which is probably what I will do for the “Medicare type of coverage.
But doctors can’t do this on a routine basis otherwise they couldn’t pay their bills, pay salaries to their staff and pay for their malpractice, healthcare insurance, pay their mortgage and put food on the table. What then? Less and fewer students would choose to go into medicine and care for us all.
And what happens when both of these patients need chemotherapy, radiation treatment, and or immunotherapy? Who is going to pay for their advanced care?
Harris Meyer reported that Healthcare-spending growth would raise at an annual average of 5.5% over the next decade, slightly faster than in the past few years, due to the aging of the baby boomers and healthcare price growth, the CMS Office of the Actuary projects.
Because that growth will exceed gross domestic product growth, the CMS predicts healthcare’s share of GDP will rise from 17.9% in 2017 to 19.4% in 2027, according to a report in Health Affairs released Wednesday. That’s close to the 19.7% the CMS actuary predicted in its last national health expenditure report a year ago.
Price increases are expected to account for nearly half the growth in personal healthcare spending from 2018 to 2027, with an increase in utilization and intensity of services accounting for an additional third of spending growth. The authors of the report said prices will increase by 2.8% for outpatient prescription drugs, 2.6% for hospitals, and 1.8% for physicians.
Overall outpatient drug spending is projected to increase by an average of 6.1% per year over the next decade, driven by increased utilization of new drugs and a modest increase in prices.
These spending trends could boost public support for policy proposals to regulate prices and boost competition for healthcare services and drugs. For instance, Democratic proposals for Medicare-for-all and public plan options would pay providers at Medicare prices, which generally are significantly lower than what private insurers pay.
“The cost trend will make it easier to fund a Medicare-for-all or public option plan, because the price differential between what Medicare and the private sector pay allows you to save money by paying Medicare rates,” said Gerald Anderson, a health policy professor at Johns Hopkins University.
But he and other experts say the projected spending growth over the next decade—which is sharply less than the 7.3% average annual growth from 1990 to 2007—may not be sufficiently alarming to spur politically thorny policy changes.
“There’s nothing here that ought to catch people by surprise,” said Gail Wilensky, a health economist at Project Hope who formerly served as Medicare administrator. “These (projections) offer no reason to celebrate, but they’re not unreasonable. And they’re probably higher than what we’ll actually see because there will be public or private-sector interventions of some sort.”
The projected 5.5% annual rate of growth from 2018 to 2017 would exceed the 5.3% rate during the Affordable Care Act coverage expansion period from 2014 to 2016, as well as the 3.9% growth rate during the Great Recession period of 2008-2013.
Medicare spending is expected to grow faster than Medicaid or private insurance spending due to the aging of the large Baby Boom population into the program, peaking this year. That will produce a 7.4% average annual Medicare spending growth rate over the next decade, compared with 5.5% for Medicaid and 4.8% for private insurance.
Medicaid expenditures will rise partly because of the new Medicaid expansions in Maine and Virginia and expected expansions in Idaho, Nebraska, and Utah.
Per-capita spending growth rates for Medicare, Medicaid, and private insurance are expected to be similar, at 4.7%, 4.1%, and 4.6%, respectively.
The 2017 congressional repeal of the Affordable Care Act’s penalty for not buying insurance, effective this year, will moderate national health spending growth by reducing private insurance enrollment, the report said. That repeal is projected to result in a net increase in the number of uninsured Americans by 1.3 million, to 31.2 million in 2019.
Still, 90.6% of Americans are expected to have coverage in 2019, down from 90.9% last year.
Overall price inflation for healthcare goods and services is expected to average 2.5% over the next decade, compared with 1.1% for 2014 to 2017. The CMS actuaries said prices will rise at least partly because of the weakening of restraining factors such as patient cost sharing, selective contracting by insurers, and improvements in productivity in physicians’ offices.
“Half the growth in spending will be price growth in spite of the fact that all these Baby Boomers are entering Medicare,” said Anderson, citing a famous 2003 Health Affairs article he co-authored. “It’s still the prices, stupid.”
Hospital spending will grow an average of 5.7% per year over the next decade, up from 5.1% in 2019, the actuaries said. Hospital prices will rise due to tighter labor markets and continued wage increases for hospital employees, including nurses.
Average annual spending growth for physician and clinical services is projected at 5.4% for the coming decade, as physician pay is driven up by the shortage of doctors to meet the needs of the aging population.
The economists in the Office of the Actuary who wrote the report acknowledged that their projections can be off for various reasons. For instance, last year they projected that healthcare spending in 2018 would increase by 5.3%. In their new report, they projected spending in 2018 grew only 4.4%.
Sean Keehan, one of the authors, said the 2018 projected spending growth was lowered in the new report due to slower-than-expected Medicaid enrollment and spending increases, smaller out-of-pocket spending hikes, and a more sluggish jump in prescription drug costs.
Anderson said the overall takeaway from the new CMS report is that the U.S. still hasn’t seriously bent the cost growth curve. “There’s no turndown,” he said. “We keep waiting for that turning point and the actuaries aren’t seeing that turning point at least through 2027.”
So, what do we do? Do we listen to the Democrats running for President and wrap our arms around Medicare for All or do we fix the Affordable Care Act or do we design another system?
Seattle Mayor signs Medicare-for-all resolution
Can the left’s ‘free-for-all’ Medicare work?
Fox News Brie Stimson noted that as the national health care debate rages on, Seattle has decided to support Medicare-for-all.
Last month, Seattle Rep. Pramila Jayapal introduced a bill, the Medicare for All Act of 2019, that would transition Americans to single-payer government-paid health care but does not explain how the government will pay for the plan.
This week, Seattle Mayor Jenny Durkan signed a City Council resolution in support of Jayapal’s bill, making Seattle the first city to back a Medicare-for-all bill.
COST OF ‘MEDICARE-FOR-ALL’ HEALTH CARE PLAN IS ‘A LITTLE SCARY,’ DEMOCRATIC CAMPAIGN CHIEF SAYS
“The U.S. has among the worst health outcomes in the developed world despite spending roughly 19 percent of our nation’s gross domestic product (GDP) on health care,” Seattle Council member. Lorena González said in a statement. “A single-payer system would improve health outcomes while lowering the cost of medical care and insurance.”
Editorial: Medicare for All isn’t the only way to go
Merrill Goozner reported that Healthcare providers and insurers are gearing up to oppose Medicare for All. No surprise there. Insurers can’t look kindly on legislation that would put them out of business. And providers are deathly afraid of losing the high rates from private insurers that cross-subsidize government-funded patients.
But at the same time as they mobilize to defeat M4A, shouldn’t they be outlining what they support?
Here’s what M4A advocates want to achieve. The first is universal coverage. Sadly, we’re again moving away from this basic human right due to actions by the Trump administration to undermine the Affordable Care Act. They want lower prices. Insurance premiums for employers and out-of-pocket expenses for individuals and families continue to rise faster than wages or economic growth.
Finally, they want an end to the frustration engendered by a system that erects roadblocks between physicians and patients. These range from insurer rules requiring prior authorization to seemingly arbitrary limits on what doctors can perform or prescribe.
Is M4A the only way to solve these problems? Of course not. When it comes to covering the uninsured, the ACA worked just fine. Massachusetts, the first state to implement an ACA-like program, had an uninsured rate of 2.5% in 2017. That’s not the 0% of most Organisation for Economic Co-operation and Development countries, but pretty close.
Politics are at the root of the ACA’s failures—not its Rube Goldberg design. The Supreme Court allowed states to opt out of the Medicaid expansion. And when the GOP-controlled Congress eliminated the individual mandate, key to making rates on the exchanges affordable, it reduced sign-ups, raised premiums and stopped the expansion dead in its tracks.
How about service prices? M4A would set prices at Medicare rates, which are well below private insurance rates but higher than Medicaid rates (both Medicaid and the Children’s Health Insurance Program are eliminated in Sen. Bernie Sanders’ M4A bill). But that’s not where most of its savings come from.
According to a sympathetic analysis from the University of Massachusetts at Amherst, half of M4A’s savings come from reducing provider and insurer administrative overhead. Another quarter comes from lower drug prices.
But these are one-time savings that will do little to stop the upward spiral of hospital and physician costs, which account for two-thirds of all spending. That’s where we get to the third issue supposedly addressed by M4A: the administrative hassles and limits imposed on obtaining care.
These aren’t eliminated by an expanded public system. They simply transfer the policing of waste, fraud, and abuse from private hands to public hands and change the motivation from padding profits to protecting taxpayers. In the past, Medicare has done a better job than private payers for one simple reason: it can impose price controls. Providers have responded by shifting much of the shortfall to their private-paying patients.
There are alternatives for achieving M4A’s goals. They include private companies offering exchange policies with well-defined coverage rules and strict limits on out-of-pocket costs; all-payer rate-setting or global budgets to slow the rate of price increases; merging Medicaid with Medicare (leaving long-term services and supports to the states), which would give private employers and families rate and tax relief; and establishing all-stakeholder oversight councils to develop medically appropriate utilization rules.
There’s more. The point is that in the post-Trump era, the U.S. will once again begin moving toward a healthcare system that is universal and affordable with high-quality care for everyone.
A multipayer approach could be like Germany and Switzerland, which rely on private insurers that are regulated to a much greater extent than currently exists in the U.S. Or it will be a single-payer system like Canada, Great Britain or France. Each delivers better results at a lower cost than the U.S.
I’m agnostic on which way to go. I’m still waiting for providers and insurers to articulate their vision.
Some ‘Cheaper’ Health Plans Have Surprising Costs
Julie Appleby reports that one health plan from a well-known insurer promises lower premiums — but warns that consumers may need to file their own claims and negotiate overcharges from hospitals and doctors. Another does away with annual deductibles — but requires policyholders to pay extra if they need certain surgeries and procedures.
Both are among the latest efforts in a seemingly endless quest by employers, consumers, and insurers for an elusive goal: less expensive coverage.
Premiums for many of these plans, which are sold outside the exchanges set up under Affordable Care Act, tend to be 15 to 30 percent lower than conventional offerings, but they put a larger burden on consumers to be savvy shoppers. The offerings tap into a common underlying frustration.
“Traditional health plans have not been able to stem high-cost increases, so people are tearing down the model and trying something different,” said Jeff Levin-Scherz, health management practice leader for benefits consultants Willis Towers Watson.
Not everyone is eligible for a subsidy to defray the cost of an ACA plan, and that has led some people to experiment with new ways to pay their medical expenses. Those experiments include short-term policies or alternatives like Christian-sharing ministries — which are not insurance at all, but rather cooperatives through which members pay one another’s bills.
Now some insurers — such as Blue Cross Blue Shield of North Carolina and a Minnesota startup called Bind Benefits, which is partnering with UnitedHealth Group — are coming up with their own novel offerings.
Insurers say the two new types of plans meet the ACA’s rules, although they interpret those rules in new ways. For example, the new policies avoid the federal law’s rule limiting consumers’ annual in-network limit on out-of-pocket costs. One policy manages that by having no network — patients are free to find providers on their own. And the other skirts the issue by calling additional charges “premiums.” Under ACA rules, premiums don’t count toward the out-of-pocket maximum.
But each plan could leave patients with huge costs in a system in which it is extremely difficult for a patient to be a smart shopper — in part because they have little negotiating power against big hospital systems and partly because the illness is often urgent and unanticipated.
If these alternative plans prompt doctors and hospitals to lower prices, “then that is worth taking a closer look,” says Sabrina Corlette, a research professor at Georgetown University’s Health Policy Institute. “But if it’s simply another flavor of shifting more risk to employees, I don’t think in the long term, that’s going to bend the cost curve.”
Balancing freedom, control, and responsibility
The North Carolina Blue Cross Blue Shield “My Choice” policies aim to change the way doctors and hospitals are paid by limiting reimbursement for services to 40 percent above what Medicare would pay. The plan has no specific network of doctors and hospitals.
This approach “puts you in control to see the doctor you want,” the insurer says on its website. The plan is available to individuals who buy their own insurance and to small businesses with one to 50 employees. It’s aimed at consumers who cannot afford ACA plans, says Austin Vevurka, a spokesman for the insurer. The policies are not sold on the ACA’s insurance marketplace but can be purchased off-exchange from brokers.
With that freedom, however, consumers also have the responsibility to shop around for providers who will accept that amount of reimbursement for their services. Consumers who don’t shop — or can’t because their medical need is an emergency — may get “balance-billed” by providers who are unsatisfied with the flat amount the plan pays.
“There’s an incentive to comparison-shop to find a provider who accepts the benefit,” says Vevurka.
The cost of balance bills range widely but could be thousands of dollars in the case of hospital care. Consumer exposure to balance bills is not capped by the ACA for out-of-network care.
“There are a lot of people for whom a plan like this would present financial risk,” says Levin-Scherz.
In theory, though, paying 40 percent above Medicare rates could help drive down costs over time if enough providers accept those payments. That’s because hospitals currently get about double Medicare rates through their negotiations with insurers.
“It’s a bold move,” says Mark Hall, director of the health law and policy program at Wake Forest University in North Carolina. Still, he says, it’s “not an optimal way” because patients generally don’t want to negotiate with their doctor on prices.
“But it’s an innovative way to put matters into the hands of patients as consumers,” Hall says. “Let them deal directly with providers who insist on charging more than 140 percent of Medicare.”
Blue Cross spokesman Vevurka says My Choice has telephone advisers to help patients find providers and offer tips on how to negotiate a balance bill. He would not disclose enrollment numbers for My Choice, which launched Jan. 1, nor would he say how many providers have indicated they will accept the plan’s payment levels.
Still, the idea — based on what is sometimes called “reference pricing” or “Medicare plus” — is gaining attention. Under that method, hospitals are paid a rate based on what Medicare pays, plus an additional percentage to allow them a modest profit.
North Carolina’s state treasurer, for example, hopes to put state workers into such a pricing plan by next year, offering to pay 177 percent of Medicare. The plan has ignited a firestorm of opposition from hospitals in the state.
Montana recently got its hospitals to agree to such a plan for state workers, paying 234 percent of Medicare, on average.
Partly because of concerns about balance-billing, employers aren’t rushing to buy into Medicare-plus pricing just yet, says Jeff Long, a health care actuary at Lockton Companies, a benefits consultancy.
Wider adoption, however, could spell its end.
Hospitals might agree to participate in a few such programs, but “if there’s more take up on this, I see hospitals possibly starting to fight back,” Long says.
What about the bind?
Minnesota startup Bind Benefits eliminates annual deductibles in its “on-demand” plans sold to employers that are opting to self-insure their workers’ health costs. Rather than deductibles, patients pay flat-dollar copayments for a core set of medical services, from doctor visits to prescription drugs.
In some ways, it’s simpler: There is no need to spend through the deductible before coverage kicks in or wonder what 20 percent of the cost of a doctor visit or surgery would be.
But not all services are included. Does this sound familiar? As I started this post with my examples…ladies and gentlemen, we have a problem!!
Patients who discover during the year that they need any of about 30 common procedures outlined in the plan, including several types of back surgery, knee arthroscopy or coronary artery bypass, must “add in” coverage, spread out over time in deductions from their paychecks.
“People are used to that concept, to buy what they need,” said Bind CEO Tony Miller. “When I need more, I buy more.”
According to a company spokeswoman, the add-in costs vary by market, procedure, and provider. On the lower end, the cost for tonsillectomy and adenoidectomy ranges from $900 to $3,000, while lumbar spine fusion could range from $5,000 to $10,000.
To set those additional premiums, Bind analyzes how much doctors and facilities are paid, along with some quality measures from several sources, including UnitedHealth. The add-in premiums paid by patients vary depending on whether they choose lower-cost providers or more expensive ones.
The ACA’s 2019 out-of-pocket maximums — $7,900 for an individual or $15,800 for a family — don’t include premium costs.
The Cumberland School District in Wisconsin switched from a traditional plan, which it purchased from an insurer for about $1.7 million last year, to Bind. Six months in, according to the school district’s superintendent, Barry Rose, the plan is working well.
Right off the bat, he says, the district saved about $200,000. More savings could come over the year if workers choose lower-cost alternatives for the “add-in” services.
“They can become better consumers because they can see exactly what they’re paying for care,” Rose says.
Levin-Scherz at Willis Towers says the idea behind Bind is intriguing but raises some concerns for employers.
What happens, he asks, if a worker has an add-in surgery, owes several thousand dollars, and then changes jobs before paying all the premiums for that add-in coverage? “Will the employee be sent a bill after leaving?” he wonders.
A Bind spokeswoman says the former employee would not pay the remaining premiums in that case. Instead, the employer would be stuck with the bill.
Next week back to finding a way to improve the Affordable Care Act/ Obamacare.