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Republicans have been pushing reform of the medical malpractice system as a way of solving the problems of medical costs and access.
For example, at last week's White House health summit, Sen. John McCain said, according to a transcript published by the Washington Post, "Here's two examples right now of medical malpractice reform that is working. One's called California, the other called - called Texas. I won't talk about California, because the Arizonans hate California, because they've stolen our water.... But the important aspect of what they've done in Texas is the following. Lawsuit filings are down. Medical cost -- defensive medicine increases annual medical costs by 10 percent."
Malpractice reform isn't a bad thing. Under the current system, a large percentage of payouts goes to cover legal costs. Doctors and hospitals struggle to meet the costs of malpractice premiums, and these costs can be passed on to patients. Some injured patients don't get compensated at all. President Obama is proposing giving grants to states to experiment with reforms.
But while reform might be good, it won't solve the problem of medical costs.
The key idea of the Texas and California reforms is a cap on the amount that juries can award for so-called "pain and suffering." There are two types of damages that can be awarded when a patient is injured as a result of medical negligence. One is monetary damages - compensation for actual medical costs and lost wages - which the Republicans are not suggesting capping. The other - the kind that was capped in Texas and California - is to make up for suffering by the patient for which no clear economic cost can be assigned.
But capping the amount that injured patients can receive doesn't, as the Republicans like to say, "end junk lawsuits" - it just reduces the cost when a verdict or settlement goes for the patient. And capping pain-and-suffering payments does little to control health costs.
As Business Week reported, "Study after study shows that costs associated with malpractice lawsuits make up 1% to 2% of the nation's $2.5 trillion annual health-care bill and that tort reform would barely make a dent in the total."
The non-partisan Congressional Budget Office estimated, during last year's health care debate in Congress, that malpractice reform could trim medical costs by about one half of one percent.
And according to a report by Public Citizen, since the Texas pain-and-suffering cap was imposed in 2003:
- The cost of health care in Texas (measured by per patient Medicare reimbursements) has increased at nearly double the national average;
- spending increases for diagnostic testing (measured by per patient Medicare reimbursements) have far exceeded the national average;
- the state's uninsured rate has increased, remaining the highest in the country;
- the cost of health insurance in the state has more than doubled.
– 03/03/10
If health reform doesn't pass, that doesn't mean we get to keep things they way they are now. As a New York Times analysis points out, "health policy analysts and economists of nearly every ideological persuasion agree" that in the absence of reform, we can expect thinner benefits at higher premiums because of rising health costs.
The unrelenting rise in medical costs is likely to wreak havoc within the system and beyond it, and pretty much everyone will be affected, directly or indirectly.
“People think if we do nothing, we will have what we have now,” said Karen Davis, the president of the Commonwealth Fund, a nonprofit health care research group in New York. “In fact, what we will have is a substantial deterioration in what we have.”
Nearly every mainstream analysis calls for medical costs to continue to climb over the next decade, outpacing the growth in the overall economy and certainly increasing faster than the average paycheck. Those higher costs will translate into higher premiums, which will mean fewer individuals and businesses will be able to afford insurance coverage. More of everyone’s dollar will go to health care, and government programs like Medicare and Medicaid will struggle to find the money to operate.
In the absence of reform, premiums for family coverage, now about $13,000 a year, will nearly double to $24,000 by 2020, according to the Commonwealth Fund. And the number of uninsured, now 46.3 million, will grow to as much as 65.7 million by 2020, [the Urban Institute projects].
And the number of uninsured, now 46.3 million, will grow to as much as 65.7 million by 2020, the Urban Institute projects.
– 03/01/10
Source: Washington Post
I can't believe I watched the whole thing - seven hours of debate on health reform.
The White House's summit on health contained lots of speeches and few surprises. But it did show clearly the major differences between the Democratic approach, embodied in bills that have passed the House and Senate and the plan proposed this week by President Barack Obama, and the approach of Republican opponents:
- The Obama plan and the bills passed by the House and Senate would guarantee affordable coverage for those who don't have it, those who lose it because they lose their job, and those who can't get it because of pre-existing conditions. They would do this by offering subsidies to moderate-income families and to small businesses, and by expanding the Medicaid program for the low income. The Republicans didn't dispute that their own plan would extend coverage to only 3 million more people, compared to 30 million who would gain coverage under the Democratic bills. Republicans said that making sure more people are assured of coverage should come later, after the government has moved "step by step" to reduce costs. As The New Yorker's James Surowiecki wrote, "the Republicans are reasonably satisfied with what's currently in place. The fact that tens of millions of Americans don't have health insurance is not, in their mind, an issue that government should be trying to solve-at least not if it will cost any real money."
- The Obama plan would set standards for insurance companies: preventing denials of coverage for pre-existing conditions; limiting out-of-pocket costs for patients; specifying minimum benefit levels; banning yearly and lifetime coverage limits; and reviewing insurance company premium hikes. Obama said some government oversight is needed to protect consumers. For example, he said by way of comparison, food would be cheaper without federal meat inspection, but it wouldn't be safe. The Republicans generally rejected the idea of "deciding from Washington" on these issues, leaving them to the marketplace. In effect, they're saying, "Just get out of the way of the insurance companies and things will get better."
At the close of the day-long meeting, President Obama offered a challenge to Republicans. He said he would work with them on two issues they have been pushing - medical malpractice reform and insurance sales across state lines - if they would "do a little soul-searching" and see if they can support some aspects of expanding insurance coverage and setting minimum standards for insurance companies.
He said he was hopeful some consensus could be reached over the next month or six weeks, but indicated that, if there is no agreement, Democrats would move ahead.
"When I talk to the parents of children who don't have health care because they've got diabetes," the president concluded, "they don't want us to wait."
– 02/26/10
We've been understandably focused on the details of health reform legislation: Will our benefits get taxed? Will there be a public option? What will premiums be? Who will be eligible for coverage? Of course, we need to think about these questions - it's important to get health reform right. But it's also worth remembering why we need health reform in the first place.
On the blog "Disruptive Women in Health Care," health writer Rosemary Gibson tells a story about a friend getting a treadmill test to check for heart problems. The doctor recommended an additional expensive and invasive test, a catheterization, in which the doctor inserts a thin tube through an artery or vein into the heart.
"My savvy friend knew she didn’t want to have more tests or treatment at that center," Gibson wrote. "Here’s why. While on the treadmill, she overheard the doctor tell the nurse that the [catheterization] center had nine patients a day and needed to increase its census to fourteen a day to generate enough revenue to make it financially viable. It’s true. She walked out and never looked back." A second opinion confirmed she didn't need the catheterization.
Not all doctors are as crass as that cardiologist, ordering tests to put his heart center into profitable territory. Most doctors and hospitals want what's best for their patients. But, as many experts have pointed out, our health system drives up costs by paying doctors to treat people when they're sick, but not to keep them healthy, and pays for volume, not for quality.
The results of the payment system: 25% of Americans say their doctor recommended unnecessary care or treatment, and 17% said their doctor had repeated a test that was already done, according to a survey for the Commonwealth Fund, a health-oriented foundation.
"They are rewarded for more services, not better services. They are rewarded for more care, not better care," said Dr. Elliott Fisher told CNN. "Health care will not be affordable for the middle class in another 10 years if costs keep growing as they are now," said Fisher, of Dartmouth College. "It doesn't need to be that way." Fisher and his colleagues have estimated that up to a third of care is not needed or not effective.
The incentives appear to be affecting not just how many tests and procedures doctors perform, but which ones. A recent study found that "physicians are performing fewer less-profitable services in favor of additional more profitable ones," MedScape Medical News reports (free registration required). "In other words, they are pumping up the volume where it counts."
For example, the study found doctors decreasing the number of "level 3" office exams, which pay $65.67 on average, and upping the number of "level 4" exams, paying $98.51.
How could health reform help? Reform bills passed by the House and Senate wouldn't attempt a radical redesign of the way doctors and hospitals are paid, but would mandate experiments to test models of rewarding quality and coordinated care:
- Allow hospitals and doctors to work together as "accountable care organizations," or to provide "medical homes," rewarding them for delivering quality care at lower cost.
- Create a center to test new payment models for Medicare and Medicaid.
- Reduce payments for hospitals where patients are readmitted needlessly (getting treated twice for the same problem) or where patients pick up infections that add to the cost of care.
- In addition, the Senate bill would set up an Independent Payment Advisory Board to make recommendations to the president and Congress on ways to adjust payments to control costs. The board could not submit proposals that change benefits or ration care.
– 02/24/10
President Obama offered a health reform plan today that attempts to bridge the differences between bills already passed by the House and Senate. The plan will serve as a starting point for discussion at Thursday's bipartisan health summit.
This is the most specific proposal yet from the president, who has previously outlined general goals but left the legislative details to Congress.
Like both the House and Senate bills, the Obama plan would prohibit insurance companies from denying or cancelling coverage based on health problems, would expand Medicaid to cover more low-income workers and families, would offer premium subsidies to make insurance affordable for moderate-income families, would require individuals to maintain insurance coverage, and would take some steps to rein in health inflation.
The Obama plan doesn't include some key provisions from the CWA-endorsed house bill – among missing are a public health insurance option, a national health insurance exchange rather than state-level ones, and a "millionaire's tax." However, it does make several improvements on the flawed Senate bill:
- Although the Obama plan retains a tax on high-premium health plans, it has adopted the improvements negotiated with labor leaders and goes even further. The threshold for the tax would now be a premium of $27,500 for families and $10,200 for individuals, compared to $23,000/$8,500 in the Senate bill and $24,000/$8,900 in the agreement with labor leaders. That means the tax would hit far fewer working families. The agreement with labor delayed the tax until 2018 for collectively-bargained plans; the latest Obama proposal delays the tax until 2018 for everyone.
- The Obama plan junks the heavily-criticized special treatment for Nebraska's Medicaid costs, but adds more federal help to states to pay for Medicaid expansion (similar to the House bill).
- Following the House bill, the Obama plan closes the coverage gap – the so-called "donut hole" – for seniors on Medicare, meaning thousands of dollars a year in prescription savings to millions of seniors.
- While it doesn't require employers to offer coverage, as the House bill does, the Obama plan increases the penalties on companies whose workers end up on publicly-subsidized plans, to $2,000 per worker, up from $750 in the Senate bill.
- It adds new federal oversight on insurance companies that seek excessive premium hikes, a provision not in either the House or Senate bills. The proposal is in response to recent huge [increases sought by insurers such as Anthem Blue Cross], which is trying to raise individual premiums in California by as much as 39%.
- It adds new provisions to curb abuse and fraud, including some taken from three different Republican bills.
For more information, you can read the 11-page full text of the presidents' plan and see the White House's answers to what-does-it-mean-for-me questions. Also, the Wonk Room blog has a chart comparing Obama proposal to the Senate and House bills.
– 02/22/10
Source: University of California, Berkeley
Unions have led the fight against the proposed "Cadillac tax" on high-cost health benefits. And when union leaders, including CWA President Larry Cohen, negotiated adjustments in the tax with the White House opponents of health reform depicted the agreed-upon changes as a sweetheart deal for unions.
For example, Fox News said, "Democratic leaders are once again drawing fire from their critics for extending special treatment to an interest group in exchange for its support of the bill. The latest deal was struck Thursday among the White House, Congress and union leaders over the proposed tax on high-value 'Cadillac' health insurance plans."
As with many issues involving health reform, the reality doesn't match the hype.
The so-called "Cadillac tax" as included in the Senate-passed health reform bill would hit millions of workers, 80 percent of whom are not represented by unions, according to a study released today by the Center for Labor Research and Education at the University of California, Berkeley. And under the proposed amendment negotiated by the union leaders with the White House, 83 percent of those affected would be non-union, the study estimates.
Moreover, most of the savings from the union-White House agreement – 71% – would go to non-union workers, according to the study.
Estimates were based primarily on the Kaiser Family Foundation annual survey of employers about health costs. The employers not only report on costs and benefits, but indicate whether their employees are covered by union contracts.
The authors are Ken Jacobs, William H. Dow, Dave Graham-Squire and Laurel Tan. Jacobs is chair of the Center for Labor Research and Education. Dow, a health economist, was a senior economist for President George W. Bush’s Council of Economic Advisers.
– 02/18/10
Source: Center for American Progress
Health reform, when fully implemented, will create 250,000 to 400,000 jobs a year, according to a new study by David Cutler of Harvard University and the Center for American Progress, and Neeraj Sood, of the health policy center at the University of Southern California.
The new study draws together research that Cutler and Sood had done separately.
Sood and two co-authors had previously analyzed data from 38 industries over 19 years to show that increases in health premiums result in a loss (or slower growth) in jobs. On the contrary, he and his colleagues concluded, slowing health care cost growth generates jobs. (To show that the effect they found was related to health costs and not to other industry factors, Sood and colleagues compared U.S. industries to those in Canada, where the government pays health costs.)
Cutler, along with health economics experts at the Commonwealth Fund, had done previous research estimating the savings from health reform, and predicted it would slow the growth of premiums by .75 to 1.5 percentage points annually. Without health reform, they projected, premiums will rise 71 percent by 2019, but reform could chop 8.4 to 12.3 percentage points off the growth.
Putting the two studies together generates the conclusion: "We estimate that health care reform that reduces premium growth will add between 250,000 and 400,000 jobs annually over the next decade."
– 02/17/10
The five top U.S. health insurance companies rolled up a record $12.2 billion in profits in 2009 – up 56% from 2008, according to a recent report from Health Care for America Now!, a reform coalition of which CWA is a member.
"The outsize earnings are a vivid reminder that without comprehensive national health care reform the gatekeepers of our broken health insurance system always will put the short-term interests of Wall Street before the needs of millions of patients and a national economy plagued by joblessness," the report concludes.
One of those insurers, WellPoint, has recently come under fire for premium hikes of up to 39%. The other four largest insurers are UnitedHealth, Aetna, Humana and Cigna. All but Aetna showed sharply higher profits in 2009. HCAN compiled the earnings data from insurance company filings with the federal Securities and Exchange Commission.
At the same time the insurers were fattening their balance sheets, millions of Americans lost coverage, the report says. The top five insurance companies reported 2.7 million less Americans covered by private coverage, although the number they covered through government programs, such as Medicare and Medicaid, rose by 688,000.
In part, the report explains, fewer Americans were covered because so many lost their insurance when they lost jobs. "But many others – exact tallies are trade secrets – were victims of an industry practice called purging," the report continues, "in which sharply higher premiums push individuals with health problems or employers with sicker or older workforces away from coverage."
– 02/16/10
By a nearly two-to-one margin, voters want both major political parties to keep trying to pass comprehensive health reform, according to a new Washington Post-ABC News poll.
In the poll, 63% said lawmakers should "keep trying to pass a comprehensive health-care reform plan," while only 34% said Congress should "give up." Voters were evenly split on whether President Obama was doing the right amount or not enough to reach out to Republicans, but, by a two-to-one margin, said strongly that Republicans were not doing enough to compromise with the president.
Meanwhile, the president is making another effort to bring the Republicans and Democrats together. President Obama has called a bipartisan health summit for Feb. 25. In discussing his plans, the president said that he was continuing to work toward the goals of controlling costs, ending insurance company abuses and making sure insurance is available and affordable for people. He's not willing to give up on those goals, he said, but will listen to all ideas about the best way to achieve them:
"When I was in Baltimore talking to the House Republicans, they indicated, we can accomplish some of these goals at no cost. And I said, great, let me see it. And I have no interest in doing something that's more expensive and harder to accomplish if somebody else has an easier way to do it.
"So I'm going to be starting from scratch in the sense that I will be open to any ideas that help promote these goals. What I will not do, what I don't think makes sense and I don't think the American people want to see, would be another year of partisan wrangling around these issues; another six months or eight months or nine months worth of hearings in every single committee in the House and the Senate in which there's a lot of posturing. Let's get the relevant parties together; let's put the best ideas on the table. My hope is that we can find enough overlap that we can say this is the right way to move forward, even if I don't get every single thing that I want.
"But here's the point that I made to [Republican Congressional leaders]: Bipartisanship can't be that I agree to all the things that they believe in or want, and they agree to none of the things I believe in and want."
– 02/11/10
We've been understandably focused on the details of health reform legislation: Will our benefits get taxed? Will there be a public option? What will premiums be? Who will be eligible for coverage? Of course, we need to think about these questions — it's important to get health reform right. But it's also worth remembering why we need health reform in the first place.
WellPoint, the country's largest health insurer, is socking individual members in California with premium increases of 30% to 39%, the Los Angeles Times reported. And as if that annual rate hike is not enough, the insurer (doing business in California as Anthem Blue Cross), says it plans to bump premiums up more often than once a year.
WellPoint said it needed the premium increase to cover rising medical costs. But the company itself says that its medical costs increased 8.9% last year — a large amount, to be sure, but hardly 39%. Clearly, the premium increases leave a generous margin for profit and for executive pay.
In the same announcement in which it said costs were going up 8.9%, WellPoint told Wall Street that it rang up $4.7 billion in profit in 2009, including $2.7 billion in the fourth quarter alone — nearly double the profit from the previous year's fourth quarter. Its CEO pockets nearly $10 million a year in pay, benefits and stock options.
"The Company continues to price its business so that expected premium yield exceeds total cost trend, where total cost trend includes medical costs and selling, general and administrative ("SG&A") expense," WellPoint said in the announcement. Translation: We're going to keep raising premiums more than medical costs plus administrative expense — which, by the way, is 17% of the premium dollar — so profits will continue to go up.
Also contributing to the size of the increases is the way insurance group customers to set rates, as explained by The New Republic's health blogger, Jonathan Cohn. Insurers companies create risk pools by grouping people by geography and/or by demographic factors such as age and gender. As the members in one particular pool age, they get more care, and premiums for that group go up faster. That causes young and healthy members to drop coverage, which adds to the number of uninsured and pushes premiums up even faster for those who remain.
WellPoint's hefty increases have caught the attention of Congress and of Kathleen Sebelius, the Secretary of Health and Human Services. But while federal officials can pressure WellPoint, they're limited in what they can do to head off rate-gouging.
Unless health reform becomes law.
How could health reform help? Although they differ in details, bills passed by the House and Senate would:
- Make for fairer risk pooling by combining large numbers of people into insurance exchanges (a national exchange in the House bill, state exchanges in the Senate bill). The bills would prohibit insurers from charging more for women (now a routine practice) and limit the amount that insurers can charge older enrollees relative to younger members.
- Establish minimum percentages of premium that insurers have to spend on care (85% in the House bill, 85% for large employers and 80% for small employers and individuals in the Senate bill). WellPoint is currently at 84.8% -- meaning under the House bill, it would have to cut premiums by a little, not raise them 39%.
- Set up a process to review the justification for premium increases before they could go into effect.
- Also, the House bill would create a public health insurance plan that people could choose if private insurers raised rates too much. The resulting competition should keep private premiums lower.
– 02/10/10
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