Continuing its remarkable transformation into a force for positive change in America’s Rube Goldberg health care system, Wal-Mart announced last week that it supports legislation requiring employers to provide health insurance for their workers.
The so-called employer mandate has been a centerpiece of the Big O’s plans to provide health insurance for nearly all Americans.
“We are for an employer mandate which is fair and broad in its coverage,” said Wal-Mart Chief Exec Mike Duke in a letter to the Coronated One.
Wal-Mart’s current stance represents a hard-to-believe metamorphosis from just a few years ago, when its reputation was sullied and its stock price pummeled by repeated run-ins with organized labor.
The letter was co-signed by Andrew Stern, president of the Service Employees International Union, and John Podesta, who ran the Obama transition team and is now chief executive of the lefty think tank, Center for American Progress.
Wal-Mart has, in fact, already put its money where its mouth is. Only 5.5% of its employees lack health insurance. That compares favorably with the national rate of uninsured employees, which stands at 18%.
Support from the retail giant flies in the face of most other companies that have spoken publicly about the matter. Even the Chamber of Commerce opposes the mandate, claiming it would lead to lay-offs, wage cuts and a wave of bankruptcies.
And Neil Trautwein, a VP for the National Retail Federation said he was “flabbergasted” by Wal-Mart’s insolence. The mandate is “the single most destructive thing you could do to the health-care system shy of a single-payer system.”
During Tuesday’s press frolic, the Big O put some mustard on his pitch for a public option, dismissing as “not logical” suggestions that a government plan would sink Big Insurance faster than the Titanic.
He followed quickly with a favorite refrain, which is that good, old-fashioned competition from a public plan would be an “important tool to discipline insurance companies.”
Then, in a denouement worthy of at least runner up at a Harvard Law Debate Club, he triple-dog-dared anyone to come up with a better plan that met his 2 etched-in-stone requirements. “Reform has to control costs and it has to provide relief to people who don’t have health insurance or are underinsured,” he said.
Big Insurance, destined in this match to play Smokin’ Joe to the Big O’s Ali, released a wild haymaker of its own 2 hours before the Big O even showed up.
“We do not believe it is possible to create a government plan that could operate on a level playing field,” quoth Karen Ignagni, president of America’s Health Insurance Plans, and Scott Serota, president of the Blue Cross and Blue Shield Association in an open letter to the Senate.
“Regardless of how it is initially structured, a government plan would use its built-in advantages to take over the health insurance market,” the letter continued.
No doubt the Big O smirked when he read that.
Meanwhile, Kent Conrad, the intrepid Senator from North Dakota has created a stir with his suggestion that nonprofit consumer-owned cooperatives could be an alternative to the government plan.
He foresees the Feds forking over $3-4 billion to jumpstart the co-ops, after which time they would sink or swim on premiums and investment income, just like Big Insurance.
The Big O knows he can live with this or any approach that covers most everybody without breaking the bank, but on this day he was playing offense.
“If private insurers say that the marketplace provides the best quality health care, if they tell us that they’re offering a good deal, then why is it that the government — which they say can’t run anything — suddenly is going to drive them out of business?” Obama asked.
Mr. Spock himself couldn’t have asked a more logical question.
In 2006, Massachusetts enacted a law requiring that all residents obtain health insurance.
Ever since, developments there have been watched closely since what happens in the state might play out nationally should the Great American Health Care Do-Over include an individual mandate.
Unfortunately, the Bay State’s program has been plagued by unsustainable cost escalations since Day 1, and the situation has been exacerbated recently by recession-related budget shortfalls and rising unemployment.
It was a matter of time before cuts had to be made, and that happened yesterday when state policymakers announced they’re cutting $115 million, or 12% from the budget of Commonwealth Care, a centerpiece of the state’s initiative which subsidizes premiums for poor residents.
The cuts amount to a forced slowdown in Commonwealth Care enrollment. According to the Boston Globe, about 18,000 residents who qualify for subsidies but who have not designated a health plan will no longer be automatically enrolled in program.
Tentative cuts in dental coverage for 92,000 Commonwealth Care enrollees and health insurance for 28,000 legal immigrants have also been proposed, although these proposals must be approved by governor Deval Patrick.
He has until Monday to decide.
Commonwealth Care currently has 177,000 members. It’s projected to have 212,000 by year end, 2010.
“No decision has been made’’ on the immigrant coverage issue, Leslie Kirwan, Patrick’s secretary of administration and finance told the Globe. “It’s certainly going to be at the top of the list’’ of items Patrick might restore to the budget, she added.
Leaders of Health Care for All, a Bay State consumer group, said the proposal would be tough on non-English-speaking residents who find it hard to navigate the complex enrollment process for Commonwealth Care.
“My concern is people will not get the care they need,’’ lamented the group’s representative, Lindsey Tucker to the Globe.
Everyone knew the US’ Rube Goldberg healthcare system was plagued by high costs for billing- and insurance- related activities, but few would have believed it was this bad.
A recently concluded 3-year study of the matter has revealed that administrative (non-physician) costs associated with these 2 activities add up to $51,221 per FTE physician per year.
That’s not including the astonishing $34,052 per year per FTE physician to account for the physician’s own time spent on billing and insurance.
Summing the 2 brings the annual spend on these activities to $85,273 per FTE physician, or 10% of the total operating revenue for an average practice.
Approximately 0.67 FTE non-clinical personnel per FTE physician is allocated to billing and insurance, according to the study.
To reach their conclusions, Julie Sakowski and colleagues at the Sutter Health Institute interviewed business office personnel, observed office work flows, conducted budget and expense reviews and implemented a survey to assess clinician time spent on billing and insurance.
The study was funded by the Commonwealth Fund and the Robert Wood Johnson Foundation.
In a separate study just released by the Medical Group Management Association, investigators found that physicians spend about 43 minutes per workday interacting with insurance plans.
MGMA estimated that system-wide, overall staff time spent on insurance matters alone equaled $21-$31 billion per year, or $68,000 per physician per year, a number that can be reconciled with results from the above-mentioned Commonwealth Fund study.
“Minimizing billing and insurance-related activities is not the only goal of (health system) reform, (but) standardizing health plan features and processing requirements presents a tremendous opportunity for improving efficiency in a multi-payer health care system,” Sakowski told HealthCareITnews.
The Senate Finance Committee has circulated a draft health reform proposal that features an individual mandate, authorizes an expansion of Medicaid, and–hold the presses!–dumps the Big O’s pet project, a government-sponsored plan that would compete with Big Insurance.
The draft also includes scaled-back coverage provisions that limit costs associated with the overhaul.
One such provision cuts the number of middle-class folks that would qualify for tax credits designed to render insurance more affordable.
The Big O, HHS Secretary Kathleen Sebelius, and many House Democrats including Nancy Pelosi favor a public option to keep Big Insurance honest. Senate Democrats have been divided on the issue since Day 1.
In lieu of a public option, the draft proposes consumer-owned cooperatives similar in design to rural telecom and electricity providers. They would be “subject to government oversight and funded with federal seed money,” according to the Washington Post.
Meanwhile, House Democrats are divining ways to pay for the overhaul. They’re considering a Robin Hood tax on the rich, increased payroll taxes on employees, sin taxes on sugary drinks and alcohol, and a new value-added tax.
The House is also considering the Senate’s preferred approach to paying for reform, which is to tax health benefits received by Americans through their employers, as well as the Big O’s idea to limit itemized deductions for the rich.
A particularly controversial issue, according to the Post, is the extent to which employers must subsidize public coverage for employees if they don’t offer coverage to employees themselves.
People worry that if lawmakers don’t get this right, employees will flee to federal plans and send government costs through the roof.
Two Democratic senators in the eye of Hurricane Health Reform are butting heads over the most explosive political issue in the process—whether or not to establish a public health insurance plan.
Massachusetts’ Edward Kennedy favors a Medicare-like government-sponsored plan that would compete with Big Insurance.
Montana’s Max Baucus, who has been holding hands with Republican Senator Charles Grassley for months in an attempt to craft legislation that is at least vaguely bipartisan, prefers to bag the public plan or at least play it down initially.
For his part, Grassley, who seems to have forgotten how to count to 60, told the New York Times, “we cannot afford the public health plan we have already,” a slap at Medicare.
The Big O believes a public plan would “keep the private sector honest,” but says he can live without it.
Most House Democrats, including the 3 committee chairmen who are drafting the House bill, are in Kennedy’s camp.
In the Baucus compromise, a public plan would be formed only if Big Insurance fails to provide affordable coverage to all Americans by some deadline, presumably during the lifetimes of our great-grandchildren.
Meanwhile, New York Senator Charles Schumer has floated yet another proposal, in which the public plan would have to comply with the same rules and standards that apply to Big Insurance, including a requirement that it sustain itself with premiums rather than a money-tree over at Treasury.
Opinion polls show that health consumers would like a public plan, but Big Insurers worry it would drive them out of business and lead to a government-run, single-payer system.
No one knows how the dispute will be settled, but the Big O has offered to host a winner-take-all game of H-O-R-S-E during halftime of an NBA Finals game.
Everyone in policyville slept well last night on news that key stakeholders agreed in principal to help the Big O tackle health care cost escalation.
Today it’s back to a thicket of problems that lie between us and reformland.
One particularly thorny issue is that government-sponsored health plan Obama had proposed during the campaign, the one supposedly designed for Americans who had problems acquiring private coverage.
The plan has been supported by House Speaker Nancy Pelosi, HHS Secretary Kathleen Sebelius and a cavalcade of devotees on the left.
In the afterglow of yesterday’s announcement, the pessimistic few remind us that just last week, every one of those devotees gasped collectively when administration officials implied The Man was open to compromise on the idea.
Was Obama going to cave before serious negotiations got underway?
No, Obama spokesperson Linda Douglass insisted. The Big O simply stated a willingness to consider any proposal that meets his broad goals. “The administration is open to all ideas for achieving those goals,” she reiterated to the Washington Post.
That did little to placate more than 70 House Democrats who told party leaders they’d reject any bill that failed to include a government-sponsored policy, not to mention 2 unions, which abruptly withdrew from a prominent health reform coalition after it said it would not endorse a public plan.
“It’s way too early” to punt on what the SEIU believes should be a central component of reform, a disappointed Andy Stern told the Post. The union’s president pulled his support from Health Reform Dialogue while taking a swipe at the Big O.
“I took that as a signal to Senator Grassley” a Republican who has vehemently opposed the idea, seethed Len Nichols, director of health policy at the New America Foundation.
In Q4 2008, WellPoint lost 288,000 covered lives, half of which were caused by rising unemployment and lost employee benefits.
“Economic conditions will continue to deteriorate and unemployment will continue to increase,” CEO Angela Braly sighed to analysts at the time. “This will impact commercial membership in 2009.”
The nation’s largest private insurer, which covers nearly 35 million lives, reported last week that it lost nearly half a million more members in Q1 2009, nearly 65% of which were due to layoffs or employees simply opting out of employer coverage.
That jaw-dropper was topped the next day by UnitedHealth Group Inc., the second largest insurer. The Minnesota-based company reported a drop of 900,000 in the number of people enrolled in its commercial health plans.
The news prompted economists to estimate that the uninsured population has swelled by at least 4 million people since the 2007 estimate by the Census Bureau pegged the number at 45.7 million.
The Kaiser Family Foundation estimates for example that for each percentage-point increase in the unemployment rate, the population of uninsured Americans grows by 1.1 million.
The findings were confirmed by Tenet Healthcare, a hospital chain that recently reported a 2% drop, year-over-year, in the number of admissions of patients with private coverage.
“It’s probably not a surprise that with all these people losing jobs, a lot will lose their health insurance,” Paul Ginsburg, president of the Center for Studying Health System Change told the Wall Street Journal.
With apologies to GE, Disney and the 8 US citizens who remain optimistic about prospects for our health care system.
Welcome to the US Health Care Carousel of Progress!
Normal carousels just spin ’round and ’round and don’t get you anywhere, but ours is different.
The Health Care Carousel makes progress every year.
And progress isn’t simply moving forward, it’s working together and dreaming and assuring better health care for all.
Progress is the whiz-BANG of an MRI machine in use for the evaluation of a 22 year old with a headache. It’s the drug-induced smile on the face of a woman that became depressed after losing her home to foreclosure.
Progress is the rhythmic lub-dupp of a heart beating normally following a transplant for preventable cardiac disease. It’s the sound of an uninsured child wheezing in a crowded emergency room.
Why, you can hardly imagine all the amazing gadgets they’ve got in ERs nowadays!
Remember the sixties when folks got their exercise doing the Twist? Well, today we keep our cholesterol down with pills!
And our food safety system has never been better.
Our generation may be the first in 300 years to experience a decrease in life expectancy, but think how much worse it would be without $10,000 cancer drugs and blood thinners that prevent complications from hardware we’ve inserted into people’s bodies.
It’s never been easier to find a PCP, and would you believe it? They’re building our city’s 17th PET scanner right where that run-down urban health clinic used to be.
You should hear physicians rave about how those newfangled EMRs save them time.
And progress even has a smell! It’s the smell of money lining the pockets of a hundred-thousand physicians that have been bought off by Big Pharma.
With all these marvels, it’s hard to believe things could get better than they are right now. But as you join us for a spin around our Carousel of Progress, you’ll surely agree. Anything’s possible.
Ethics In a referenced essay titled, Transparency in the Pharmaceutical Industry, Brain Blogger’s Jennifer Gibson describes how the impending passage of the Physician Payments Sunshine Act has motivated Big Pharma to disclose financial relationships with physicians. She warns there may be adverse consequences from this otherwise laudable development: some physicians will be discouraged from forging socially beneficial collaborations with the private sector.
Last week, the FDA’s Psychopharmacologic Drug Advisory Committee unanimously rejected AstraZeneca’s application to market its atypical anti-psychotic drug Seroquel for generalized anxiety disorder and major depression.
Merrill Goozner at GoozNewsapplauds the decision, but wonders whether the agency may have left itself open to charges of bias by seating a patient representative on the panel who had lost a son to cardiac arrest while taking the drug.
Health Care Renewal contributor Roy Poses has reviewed an unseemly side show to the Madoff scandal. The antagonist is Ezra Merkin, a hedge fund director charged with fraud for misrepresenting his investment strategies.
Merkin and Madoff had served on the board of Yeshiva University, which lost $110 million to the Ponzi scheme. Their unholy alliance leads Poses to consider possible negative consequences of having too many financial types on the boards of academic institutions.
Insurance
In the latest chapter of her neverending odyssey to navigate Big Insurance and the health care system generally, Colorado Health Insurance Insider’s Louise Norris describes what happened when her husband needed knee surgery. The savvy couple planned for every contingency, yet still they encountered a system failure in the form of an out of network charge.
Jaan Sidorov at Disease Management Care Blog has proposed a frightening, unintended consequence of health care reform which is that private health insurers might, like AIG, become too big to fail.
Sidorov thinks creation of a new public insurer will prompt a wave of consolidation in Big Insurance, and the remaining behemoths will seek cover in the form of regulatory oversight from the Feds.
After characterizing utilization review and PCP gatekeeper systems as well-intentioned but poorly executed efforts, he proposes that tricked-out workplace-based clinics (“onsite clinics”) may be a solution, and cites facilities on the premises of Cigna as shining examples.
He concludes however, that the proof will be in the pudding. After all, everyone thought UR and gatekeepers were good ideas, too.
There’s a great, big, beautiful tomorrow,
Shining at the end of every day
Man has a dream and that’s the start
He follows his dream with mind and heart
When it becomes a reality
It’s a dream come true for you and me
Access, Cost Escalation InsureBlog’s Bob Vineyard reviews interim results from Massachusetts’ much publicized universal health care plan, which many believe should be a model for national health care reform. The plan has left at least 200,000 state residents uninsured while utterly failing to rein in costs. And to make it right Vineyard warns, Bay state lawmakers are either going to have to squeeze providers even more or (gasp!) ration care.
At Managed Care Matters, Joe Paduda has posted a dispassionate, fact-based treatise designed to calm the knee-jerk anxiety that normally surrounds concepts like universal health care and rationing.
He points out for example that Big Insurance already engages in rationing through pre-certification processes, provider agreements and so forth.
He then dismantles the claim that universal health care leads to longer waiting times for care. Paduda concludes that if we manage to institute such programs, “access will go up and waiting times may well go down.”
Amid a fusillade of jabs and an occasional uppercut to the jaws of the Big O and his admirers, JD Bell reveals over at It Takes Work that Howard Dean has launched a web site to promote his own vision for health care reform.
According to Bell, Dean is concerned the Big O is waffling on his campaign promises, and wants nothing more for the American people than what Obama promised them prior to November 4.
Writing for Workers’ Comp Insider, Jon Coppelmen observes that employers’ most effective tools for managing comp losses vanish after they lay off employees. The trust, indeed the entire relationship between employer and former employee, is lost. This leaves claims adjusters, who are typically overworked and not properly incented, to manage workers’ compensation costs.
With unemployment approaching historical levels, Copplemen’s antidote, three proactive steps employers can take to manage the regrettable situation, is timely indeed.
Quality and Safety A recent NEJM article on the cost and quality implications of readmissions has prompted Maggie Mahar to review the subject over at Health Beat. Mahar summarizes the views of White House budget director Peter Orszag and others on the matter, and then offers several home-grown suggestions about how to tackle the problem.
Mahar explores for example, the concept of bundling payments to hospitals and physicians who are responsible for care immediately following discharge, and directing special attention towards states in which the readmission problem is particularly severe.
Jeffrey Seguritan at Nuts for Healthcare summarizes the surprising development then expands into an informative discussion of the efficacy with which drug trials assess cancer risk.
There’s a great, big, beautiful tomorrow
And tomorrow’s just a dream away
Man has a dream and that’s the start
He follows his dream with mind and heart
When it becomes a reality
It’s a dream come true for you and me
Legal HealthBlawg’s David Harlow is generally supportive of the deal struck by CVS and Google, in which prescription data from the retail pharmacy giant can now be directly imported into Google Health, the search giant’s personal health record. On balance Harlow says, the gains in patient safety and quality outweigh the increased risk of breaches in patient confidentiality, at least for people who have not recently given birth to octuplets or are named Britney Spears.
Health IT When a healthcare journalist came down with a touch of bronchitis, he blew off the last vendor meeting at HIMSS and went to the doctor.
His encounter underscored a yawning gap between today’s reality of spotty EMR adoption and a future-state of nirvana that has been promised by so many.
The real-life story appears at Niel Versel’s Healthcare IT Blog.
We hope Neil feels better, by the way.
At the Health Business Blog, David Williams has posted a transcript of his interview with Wayne Guerra, the co-founder and chief medical officer of Healthagen, the maker of a way-cool iPhone application known as iTriage.
In the interview, Guerra explains how his mobile triage and health information tool can be used, the types of people most likely to benefit from it, and how he hopes to monetize the idea.
The Healthcare IT Guy invited Paul Nuschke, a software design expert at the IT consultancy Electronic Link to comment on the subject of EMR usability. Nuschke asserts there are three keys: the EMR should be easy to learn, efficient, and prevent errors automatically.
Nuschke appends a series of baffling screen shots which make it laughably clear that some of the mainstream players in the space aren’t quite there yet.
Policy Over at the Healthcare Economist, Jason Shafrin asks, “Why have disability rates decreased?” To answer the question, Shafrin reviews a scholarly piece from the National Bureau of Economic Research. He notes that the apparently heartening trend has occurred despite an increasing burden of illness in the general population. The beneficial trends, he concludes, are attributable primarily to non-medical advances like “internet shopping, amplifying devices for phones and street ramps” rather than health care-specific interventions.
Damn, we thought we had something there for a moment.
In 2005, Wal-Mart employees had to work 2 years before qualifying for the company health plan, which most considered to be an expensive joke, anyway.
Then, an activist group publicized a confidential company memo saying that health expenses could be cut by not hiring sick people.
This was going down just when towns were protesting store openings, unions were underwriting nasty campaigns, teachers were telling students to take their back-to-school business elsewhere and the company’s stock price was languishing.
But the world’s largest company has made great strides since then.
First, Wal-Mart cut the wait to enroll in the health plan to one year for part-timers and 6 months for full-timers. That made 50,000 more employees eligible in one year.
Then it expanded the menu of insurance coverage options and extended to some employees a credit of up to $500 to offset any health-related expense.
Next, it extended its popular $4 generic drug plan from the 350 drugs available to consumers to greater than 2,000 for employees.
The retailer subsequently cut a preferred-provider deal with Mayo Clinic of all places to cover transplant services for its employees.
The company’s latest foray, Life with Baby, targets premature birth rates among Wal-Mart employees, which are twice the national average.
Expecting moms get paired with a nurse who advises them on diet, smoking, stress reduction and the like. Lactation counseling and vaccination programs are available to moms after that.
“Wow, it was really good. It helped me so much,” Cristina Majano told the Washington Post. The 23-year-old new mom works for Wal-Mart in Virginia.
Nowadays, only 5.5% of Wal-Mart employees lack health insurance. That’s much lower than the national rate, which is 18%.
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Continuing its remarkable transformation into a force for positive change in America’s Rube Goldberg health care system, Wal-Mart announced last week that it supports legislation requiring employers to provide health insurance for their workers.
Big Insurance, destined in this match to play Smokin’ Joe to the Big O’s Ali, released a wild haymaker of its own 2 hours before the Big O even showed up.
“If private insurers say that the marketplace provides the best quality health care, if they tell us that they’re offering a good deal, then why is it that the government — which they say can’t run anything — suddenly is going to drive them out of business?” Obama asked.
Unfortunately, the Bay State’s program has been 
Tentative cuts in dental coverage for 92,000 Commonwealth Care enrollees and health insurance for 28,000 legal immigrants have also been proposed, although these proposals must be approved by governor Deval Patrick.
A recently concluded 3-year study of the matter has revealed that administrative (non-physician) costs associated with these 2 activities add up to $51,221 per FTE physician per year.
The draft also includes scaled-back coverage provisions that limit costs associated with the overhaul.
Massachusetts’ Edward Kennedy favors a Medicare-like government-sponsored plan that would compete with Big Insurance.
Meanwhile, New York Senator Charles Schumer has floated yet another proposal, in which the public plan would have to comply with the same rules and standards that apply to Big Insurance, including a requirement that it sustain itself with premiums rather than a money-tree over at Treasury.
Today it’s back to a thicket of problems that lie between us and reformland.
“Economic conditions will continue to deteriorate and unemployment will continue to increase,” CEO Angela Braly 
Normal carousels just spin ’round and ’round and don’t get you anywhere, but ours is different.
Our generation may be the first in 300 years to experience a decrease in life expectancy, but think how much worse it would be without $10,000 cancer drugs and blood thinners that prevent complications from hardware we’ve inserted into people’s bodies.
Last week, the FDA’s Psychopharmacologic Drug Advisory Committee unanimously rejected AstraZeneca’s application to market its atypical anti-psychotic drug Seroquel for generalized anxiety disorder and major depression.
Jaan Sidorov at 
At 
When a healthcare journalist came down with a touch of bronchitis, he blew off the last vendor meeting at HIMSS and went to the doctor.
In 2005, Wal-Mart employees had to work 2 years before qualifying for the company health plan, which most considered to be an expensive joke, anyway.
