Princess Health and Health advocacy group says revised Medicaid program should improve health and manage cost, without creating barriers. Princessiccia

Princess Health and Health advocacy group says revised Medicaid program should improve health and manage cost, without creating barriers. Princessiccia

health care costs health insurance insurance coverage Medicaid

Gusty 14:16 Add Comment

By Melissa Patrick
Kentucky Health News

A health-care advocacy group says the redesign of the Medicaid program should build on the expansion of eligibility and not include any more costs for patients.

�Kentucky has made tremendous gains in improving the health of its people since the expansion of Medicaid. More Kentuckians are receiving preventive services, substance use treatment and other critically needed care than ever before,� Emily Beauregard, executive director of Kentucky Voices for Health, said in a news release. �Any changes to the program should build on this success.�

Under federal health reform, then-Gov. Steve Beshear expanded Medicaid to households with incomes up to 138 percent of the federal poverty level, which added about 400,000 more Kentuckians to the rolls. The federal government pays for the expansion through this year, but next year the state will be responsible for 5 percent, rising in annual steps to the reform law's limit of 10 percent in 2020. In all, about 1.3 million Kentuckians get free health care through Medicaid.

Gov. Matt Bevin has said the state can't afford to have more than a fourth of its population on Medicaid and has charged his administration to come up with a revised program that will improve health outcomes while making the expansion financially sustainable. Bevin hopes to accomplish this through a waiver from the federal government.

Bevin has said he favors a waiver program like Indiana's, which includes premiums and co-pays in some tiers of coverage, but has also said that he is not limited by this model and will develop a waiver to best fit the needs of Kentucky.

Kentucky Voices for Health is a coalition  of organizations that favor federal health reform, some of of which lobby the government. It said changes should engage consumers in their care and develop new ways to deliver care, without any obstacles to coverage such as premiums.

�Coverage is foundational,� Rich Seckel, executive director of Kentucky Equal Justice Center, said in the release. �It empowers us with tools to achieve and maintain health.�

The coalition also said the program should focus on coordination of care in areas with high use, and build on Kentucky's Health Data Trust, which provides complete and transparent information about healthcare utilization and outcomes to improve public health and quality of care delivery. Click here for the full report.

The group stressed the importance of meaningful stakeholder input to ensure the waiver is designed to meet the unique needs of Kentucky. So far, the administration has had no formal stakeholder meetings on the issue.

Under federal law, states seeking a waiver must hold at least two public hearings; one before it is submitted to the Centers for Medicare and Medicaid Services and the second after CMS accepts the application.

Amanda Stamper, press secretary to Bevin, told The Courier-Journal that the administration welcomed "this sort of thoughtful input," and when asked if the waiver would include any premiums or co-pays said, "Everything is on the table and no decisions have been finalized."

Princess Health and Study says if Ky. cut its smoking rate to the national average, it could save $1.7 billion in health-care costs the very next year . Princessiccia

Princess Health and Study says if Ky. cut its smoking rate to the national average, it could save $1.7 billion in health-care costs the very next year . Princessiccia

health care costs local government research smokeless tobacco smoking ban smoking bans smoking cessation smoking ordinances state government tobacco prevention

Gusty 14:50 Add Comment

Illustration from University of California-San Francisco

By Melissa Patrick
Kentucky Health News

If Kentucky could cut its smoking rate to the national average, it would save an estimated $1.7 billion on healthcare the following year, a study says.

Kentucky's smoking rate is 26 percent, and the national average is 18 percent.

The study at the University of California-San Francisco estimates that a 10 percent decline in the national rate would save $63 billion the next year in health-care costs.

"What it adds to our knowledge is that we can save money quickly," Ellen Hahn, University of Kentucky nursing professor and director of its smoke-free policy center, told Kentucky Health News. "We are not talking 18 to 20 years down the road. ... If we reduced our smoking rate at least 10 percent, we would see dramatic reductions in health-care cost in just one year."

The study also found that smoking makes Kentucky spend $399 more per person per year on health care than it would if the state's rate equaled the national rate. That was the highest figure of any state.

Conversely, low rates of smoking save Utah and California, respectively, $465 and $416 per person per year compared to what they would spend if their smoking rates were the national rate.

�Regions that have implemented public policies to reduce smoking have substantially lower medical costs,� the study's authors said in a news release. �Likewise, those that have failed to implement tobacco control policies have higher medical costs.�

Lexington's smoking rates dropped 32 percent in just one year after it enacted its smoking ban, which amounted to an estimated $21 million in smoking-related healthcare costs savings, according to a University of Kentucky study led by Hahn and published in the journal Preventive Medicine.

The UCSF study, published in PLOS Medicine, looked at health-care spending in each state and the District of Columbia from 1992 to 2009, and measured the year-to-year relationship between changes in smoking behavior and changes in medical costs.

Many studies have shown that smoking bans and other smoke-free policies decrease smoking rates, reduce smoking prevalence among workers and the general population, and keep youth from starting to smoke.

These have been some of the arguments for a statewide smoking ban, but efforts to pass one have stalled because new Republican Gov. Matt Bevin opposes a statewide ban and says smoke-free policies should be a local decision.

Bevin won big budget cuts from the legislature to set aside hundreds of millions of dollars for shoring up the state's pension systems, but the study hasn't made the administration look at a smoking ban as a source of savings. A ban passed the House last year but died in the Senate.

Asked how this study might affect the administration's position on a statewide smoking ban, Doug Hogan, acting communications director for the Cabinet for Health and Family Services, said in an e-mail, "Smoking bans are a local issue, rather than a one-size-fits-all solution." Bevin's office and Senate President Robert Stivers did not respond to requests for comment.

Hogan said the cabinet is committed to helping people quit smoking: "Education and proper policy incentives are critical tools that the state can use and as our commonwealth crafts its Medicaid wavier, it is looking very closely at ways to best incentivize smoking cessation to improve health and decrease cost to the commonwealth."

Dr. Ellen Hahn

Hahn said, "Kentucky has the dubious honor of leading the nation in cigarette smoking, and we have for many years. ... it is a major driver of health-care cost. And in a climate where we are trying to save every dollar ... I think that we should pay attention to this study because what it really says is that we can save a boatload of money if we help people quit and we can save it quickly."

Other possible tobacco-control measures include raising cigarette taxes, anti-smoking advertising campaigns and better access to smoking-cessation programs. Hahn said the state gets some money from the federal Centers for Disease Control and Prevention and the tobacco master settlement agreement for prevention and cessation efforts, but the state needs to do more.

"We spend very little on the things that we know work, like helping people quit smoking, like doing widespread media campaigns on television, radio and print," she said. "We just don't do that in our state. We never have. In fact, we spend very little, about 8 percent of what the CDC say we should."

The study says significant health-care savings could occur so quickly because the risks for smoke-related diseases decreases rapidly once a smoker quits.

"For example, the risk of heart attack and stroke drop by approximately half in the first year after the smoker quits, and the risk of having a low-birth-weight infant due to smoking almost entirely disappears if a pregnant woman quits smoking during the first trimester," says the report.

"These findings show that state and national policies that reduce smoking not only will improve health, but can be a key part of health care cost containment even in the short run," co-author Stanton Glantz, director of the UCSF Center for Tobacco Control Research and Education, said in the release.

Hahn said, "People don't realize how effective quitting smoking really is, how much money it really saves. So that is the value of this paper. It is a wake-up call for those of us doing this tobacco control work and for elected officials who are trying to save money and redirect funds and shore up the economic health of Kentucky. ... Doing all we can to reduce smoking saves lives and money. What's better than that?"

Princess Health and Medicaid stakeholders OK with healthy behavior incentives, oppose penalizing recipients who don't take part in cost sharing. Princessiccia

Princess Health and Medicaid stakeholders OK with healthy behavior incentives, oppose penalizing recipients who don't take part in cost sharing. Princessiccia

federal spending health care costs health insurance insurance coverage managed care Medicaid obamacare Patient Protection and Affordable Care Act state government

Gusty 13:11 Add Comment

By Melissa Patrick and Al Cross
Kentucky Health News

Groups of people concerned about changes in Kentucky's Medicaid program are open to the state offering incentives for healthy behaviors, but they don't want to penalize recipients who can't or won't pay premiums, deductibles or co-payments.

So reports the Foundation for a Healthy Kentucky, which convened a meeting May 12 to hear from people with stakes in the program: individual health-care providers, health systems, consumers, consumer advocates, payers, public-health professionals and representatives of higher education.

�Participants were unified in opposing penalties to enforce cost-sharing provisions� such as premiums, deductibles or co-payments, the foundation's consultant said in a report on the meeting.

However, they supported cost sharing for procedures not deemed medically necessary and �had diverse perspectives on this matter, ranging from opposing any cost-sharing in Medicaid to proposing specific premium and co-payment amounts,� such as $5 monthly premiums.

Also, �Participants were generally very supportive of implementing incentives for healthy behaviors such as smoking cessation and health risk assessments,� the report said. �Incentives might be reductions in the amount of cost-sharing or themselves supportive of healthy behavior,� such as gym membership.

Gov. Matt Bevin has said he wants Medicaid recipients to have "skin in the game" through cost-sharing, arguing that Kentucky can't afford to have more than a fourth of its population getting free medical care.

Under federal health reform, then-Gov, Steve Beshear expanded Medicaid eligibility to households with incomes up to 138 percent of the federal poverty level, adding more than 400,000 more people to the rolls. The federal government pays for the expansion through this year, but next year the state will be responsible for 5 percent, rising in annual steps to the reform law's limit of 10 percent in 2020.

Bevin's administration is working on getting a waiver from the federal Centers for Medicare and Medicaid Services to create new ways to cover those in the expansion. Six states have such waivers, including Indiana, which Bevin has cited as an example of how Kentucky might change its program.

In Indiana, recipients who pay premiums based on income levels, ranging from $1 a month to 2 percent of income ($27 a month for those at 138 percent of poverty) get expanded benefits and are charged co-payments only for non-emergency use of emergency rooms, according to the Kaiser Family Foundation. Those above the poverty level who fail to pay are disenrolled and barred from re-enrolling for six months, in what is known as a "lock-out" rule.

Bevin has indicated that he wants to announce his plan this summer. By law, states that seek a waiver must hold at least two public hearings: one at least 20 days before submitting the application to CMS, and the second after CMS accepts the application.

Stakeholders who attended the foundation's May 12 convening wanted to make sure their voices were heard early on in the process.

"Our goal is to help inform the process of changing the way Kentucky provides Medicaid services to ensure that we maintain the gains achieved under the Affordable Care Act, while also enabling the state to try new methods of ensuring access to affordable quality health care for Medicaid beneficiaries," Foundation President and CEO Susan Zepeda said in a news release.

"The biggest takeaway for me was the energy and commitment in the room," Zepeda said in a telephone interview. "A lot of thoughtfulness clearly went into sharing their experience and making suggestions on how to make the system more cost effective."

Before breaking into groups to offer their imput, stakeholders were given an overview of the state's Medicaid expansion and an overview of an issue brief created by the State Health Access Data Assistance Center at the University of Minnesota that looked at how waiver provisions are set up in five other states. Foundation staff wrote the 25-page "Stakeholder Input Report" that summarized suggestions and concerns and broke them into eight areas:

Cost-sharing and penalties: Health-care providers strongly opposed any cost-sharing, and uniformly opposed to any measure that involved "lock-out" penalties for failure to pay premiums, co-pays or deductibles.

"Our shared experience has been that we�ve been prohibited from denying care if a patient refuses or is unable to pay," the Physical and Oral Health Provider group said. "Therefore, the desired behavior isn�t actually enforced."

The Behavioral Health Provider group offered a compromise: �If the administration chooses to explore lock-outs we recommend that lock-outs be immediately lifted (upon payment) and payment be retroactive to the date the consumer re-enrolls.�

Participants in general were open to the idea of low co-payments, cost-sharing for non-medically necessary services, using Medicaid dollars to pay premiums for employer-sponsored insurance plans and charging co-payments for non-emergency use of the ER. They also agreed that certain groups, like those with chronic illnesses or disabilities, should be exempted.

Incentives: Most post-ACA waiver programs have implemented incentives for healthy behavior, and those at the meeting generally supported implementing evidence-based incentives, such as smoking cessation and health-risk assessments.

Zepeda said that most of the stakeholders wanted to see healthy behavior incentives used as credits against premiums, especially for recipients who can't afford them. "There is a recognition that people have a role to play in their own health care and the health decisions that they make," she said.

Benefits: Benefits include services covered under the health insurance plan. Some participants opposed any changes to current benefits; others wanted to expand existing benefits and still others suggested adding new benefits like housing. All agreed that medically necessary services should be covered for all enrollees.

Reimbursement: Kentucky shifted Medicaid in 2011 to managed care, in which managed-care organizations (usually insurance-company subsidiaries) are paid a flat fee per person as an incentive to limit claims. Providers have complained about the slow and low reimbursement, and participant suggestions included streamlining and accelerating the reimbursement process, increasing provider reimbursement rates, and adding new categories of reimbursed services and providers, like telehealth.

Systems improvement: Participants suggested simplifying administrative processes for providers; expanding providers' scope of practice; adding review panels; reducing the number of managed-care organizations; and creating a single list of drugs for all MCOs.

Health system transformation: Waivers allow states to explore ways to provide care differently through various transformation approaches. Suggestions included creating price transparency, through an all-payer, all-claims database; improving consumer health literacy; and moving beyond coverage issues to addressing access and quality.

�There was also interest among our group in examining a PCMH (patient-centered medical home) or health homes model to promote care coordination, and we feel strongly that pharmacists are essential part of the team and should be used in novel and more expansive ways,� the Colleges and Universities group said.

Evaluation: Waivers require states to perform an evaluation and make it public. Participants agreed that the process should include stakeholders and that findings should be made public periodically.

The Physical and Oral Health Provider group suggested the evaluation should answer the questions, �Have we maintained coverage levels? Have we improved access to care?�

Overarching themes: Many of the stakeholders mentioned two issues that were not included in the issue brief or discussion: integrating behavioral, physical and oral health services, and addressing the wide set of social factors that shape Kentucky's relatively poor health.

�Waivers should include methods to address social determinants of health as these areas are proving most effective in improving outcomes and reducing cost,� the Physical and Oral Health Provider group said. �We encourage inclusion of community health workers, peer support, medical respite care and other innovations to support social needs of patients.�

Zepeda said the Medicaid waiver drafting team faces many challenges. "We consider the rich conversation that happened on May 12 to be the start of the conversation," she said. "We have to find the cost effective win/win strategies that can reduce the cost of Medicaid going forward and let us continue to serve this expanded number of Kentuckians who now have health insurance."

Princess Health and Health-care consumers get little help resolving complaints, columnist says, citing some horrific examples. Princessiccia

Princess Health and Health-care consumers get little help resolving complaints, columnist says, citing some horrific examples. Princessiccia

consumers health care costs health insurance hospitals lung disease Medicare politics state governments

Gusty 18:08 Add Comment

By Trudy Lieberman
Rural Health News Service

Who protects consumers of health care?

Two recent emails from readers got me thinking about that question. I don�t mean consumers in their role as patients whose medical well-being is looked after by state medical boards and health departments that police doctors and hospitals. Those organizations don�t always do a perfect job protecting patients from harm, but at least they are in place.

But who protects patients when things go wrong on health care�s financial side? What happens when you receive a bill you didn�t expect and can�t afford to pay? What happens when insurers send unintelligible explanations of benefits you can�t understand? What about questionable loan arrangements to avoid medical bankruptcy? Consumers of health care are pretty much on their own.

From the 1960s though the 1980s when people complained, they got action from consumer organizations, government and even businesses that set up departments to handle complaints. That consumer movement is now but a flicker.

�We don�t have as many public-interest minded regulators, and officials who try to grab these issues by the horns and deal with them,� says Chuck Bell, director of programs for Consumers Union.

The emails I received show that although it�s an uphill battle to get redress, fighting back as an individual can get attention and may ultimately lead to better protections for everyone.

John Rutledge, a retiree, got snared in Medicare�s three-day rule by a hospital near his hometown Wheaton, Ill. At the end of March he took his wife, who was having breathing problems, to the hospital where she was held for three nights of �observation.� Patients must be in a hospital for three days as an in-patient before they are entitled to Medicare benefits for 100 days of skilled nursing home care, as I noted in a recent column.

Thousands of families have been caught when hospitals decide their loved ones are admitted for �observation,� a tactic that allows them to avoid repaying Medicare if government auditors find patients should not have been classified as �in-patients.� Playing the �observational� game is worth millions to hospitals but costs families tens of thousands of dollars when someone doesn�t qualify for Medicare-covered skilled nursing care.

Rutledge knew about the three-day rule. Both his doctor and a pulmonologist at the same medical practice recommended an in-patient stay, and Rutledge refused to sign a hospital document saying his wife was admitted for observation. Still, the hospital prevailed, claiming a consultant made the decision to keep her for �observation.�

Rutledge was stuck with a bill that, so far, totals over $15,000 for the skilled nursing care his wife did need. He said he had been a �significant donor� to the hospital foundation, and �I have told the foundation that what I spend as a result of �observation� will come out of what I planned to give them, starting with the annual gift.�

The second email came from Kathryn Green, a college history professor who lives in Greenwood, Miss. Green is fighting an air-ambulance company, which transported her late husband to a Jackson hospital after he suffered a fatal fall in their home. This �nightmare,� as she calls it, is a bill from the transport company that claims it�s outside her insurance network, and says she owes them $50,950.

�I am 63 and will have a devastated retirement if this is upheld,� Green told me.

Blue Cross & Blue Shield of Mississippi, the administrator for her insurance carrier the State and School Employees� Health Insurance Plan, paid $7,192 of the $58,142 the transport company billed. Blue Cross has told Green that she should be held harmless and should not be charged for the �balance after payment of the Allowable Charge has been made directly to that provider.�

Green is raising a ruckus and has taken her case to state and national media, members of Congress, the state attorney general, and the Mississippi Health Advocacy Program. The company has told her it will begin collection efforts.

In both cases there�s a legislative solution. The three-day rule can be fixed by counting all the time a patient spends in the hospital whether they�re classified as an �in� or as an �observational� patient. The ambulance problem can be fixed by changing the 1978 airline deregulation law that prevents states from interfering with fares, services, and routes. But money and politics block the federal changes that would help people like Rutledge and Green.

�It�s like playing a game of health-insurance roulette,� Bell says. �Your coverage exposes you to these gaps that have been normalized. It�s become the way of doing business.� A resurgent consumer movement could change all that.

What consumer problems have you had with balance billing? Write to trudy.lieberman@gmail.com.

Princess Health and Many Americans, including those on Obamacare plans, can't afford their health-insurance deductibles, studies show. Princessiccia

Princess Health and Many Americans, including those on Obamacare plans, can't afford their health-insurance deductibles, studies show. Princessiccia

health care access health care costs health insurance obamacare Patient Protection and Affordable Care Act prescription drugs

Gusty 12:14 Add Comment

The United States has entered the era of high out-of-pocket medical cost as a way to keep insurance premiums low, but recent studies have found that many Americans are having trouble paying them, and the presidential candidates are hardly talking about this issue, Harris Meyer reports for Modern Healthcare.

Graph: Urban Institue's Health Reform Monitoring Survey

Nearly 25 percent of Americans surveyed last September who had coverage through employer plans, the Affordable Care Act, or individual plans outside health-insurance exchanges reported problems paying family medical bills in the previous 12 months, according to the Urban Institute's Health Reform Monitoring Survey. That compared with 16 percent of people on Medicaid and 27.8 percent of the uninsured.

The Kaiser Family Foundation also found that people on Medicaid or policies bought through the federal or state exchanges, also called marketplaces, couldn't afford their deductibles. This 2016 focus group study of 91 low-income Medicaid and exchange-plan enrollees in six cities found that "all reported that they had trouble affording some aspect of their current coverage, including premiums, deductibles, and/or co-payments." It also found that "nearly all marketplace participants" said they had received unexpected bills for services they thought were covered, and fear of this often led them to forgo care.

The latest Kentucky Health Issues Poll found that affordability is also a problem in Kentucky, with 28 percent of Kentucky households having at least one person who reported struggling to pay their medical bills in the previous 12 months. This rate was about the same as in 2014 and didn't vary much between those with insurance or without insurance.  In addition, the poll found that 20 percent of Kentucky households did not get the medical care they needed, or delayed care because of cost in the past 12 months.

This lack of affordability also affects health-care providers. Meyer reports that the chief financial officer for Community Health System told analysts at the first-quarter earnings report meeting that the fourth quarter of 2016 will be his company's best quarter, because patients will have hit their insurance deductibles and only then be able to afford needed care at their facilities.

�As individuals take on high deductibles and higher co-pays, they are essentially taking on insurance risk they can't necessarily afford,� Trevor Fetter, CEO of Tenet Healthcare Corp., told Meyer. Fetter told Meyer that his company now focuses on helping patients understand how to pay their bills, "including pressing for cash payments at the point of service."

What are the presidential candidates saying?

Meyers writes that Democratic front-runner Hillary Clinton offers the most help for those who can't afford their high deductible. She says she "would require health plans to: cover three annual visits to a doctor for illness without applying the deductible; give insured people a $5,000-per-family refundable tax credit for out-of-pocket costs exceeding 5 percent of their income; cap out-of-pocket costs for prescription drugs; bar providers and insurers from charging patients out-of-network bills for services received at an in-network hospital; and strengthen states' authority to block excessive insurance premium increases."

"Vermont Sen. Bernie Sanders, Clinton's Democratic opponent, wants to eliminate premiums and cost-sharing entirely by establishing a tax-funded, government single-payer insurance program covering the full range of healthcare services, including long-term care," Meyer writes.

"Donald Trump, the presumptive Republican nominee, has released a seven-point health policy agenda that doesn't directly address out-of-pocket costs. It would offer households a tax deduction for buying coverage, expand health savings accounts, and let insurers sell plans across state lines," Meyers writes.

Meyers calls the issues surrounding high deductible plans and high prescription drug costs "the domestic policy elephant in the room," and says these issues are not getting enough attention.

Princess Health and Poll finds many Kentuckians continue to struggle with cost of health care, though fewer are uninsured and struggling. Princessiccia

Princess Health and Poll finds many Kentuckians continue to struggle with cost of health care, though fewer are uninsured and struggling. Princessiccia

Foundation for a Healthy Kentucky health care costs health insurance health reform Medicaid poll

Gusty 17:21 Add Comment

While having health insurance certainly eases the cost burden of health care, nearly one-third of Kentucky adults struggle to pay their medical bills whether they have health insurance or not, and two in 10 say they often delay or skip needed medical care because of the cost, according to the latest Kentucky Health Issues Poll.

The poll, taken Sept. 17-Oct 7, found that in 28 percent of Kentucky households, someone had trouble paying medical bills in the previous 12 months. This didn't vary much between those with or without insurance, and was about the same as in 2014.

However, fewer Kentucky adults without insurance said they had difficulty paying their medical bills in 2015 than in 2014: down to 31 percent from 47 percent. In 2014, the Patient Protection and Affordable Care Act was fully implemented in Kentucky with expansion of the federal-state Medicaid program to people with incomes up to 138 percent of the federal poverty level.

According to the Kaiser Family Foundation, the average annual out-of-pocket cost per person for health care in the United States in 2014 was $1,036,which includes costs for any expenses not covered by insurance, says the report.

The Kentucky Health Issues Poll also found that 20 percent of Kentucky households did not get the medical care they needed, or delayed care because of the cost, in the past 12 months. This was more common among Kentucky's uninsured (27 percent) than those with insurance (19 percent).

However, these figures were an improvement from 2009, when 58 percent of uninsured Kentucky adults said they delayed or didn't get needed care, and from 2014, when 38 percent said so.

Poorer adults, those eligible for Medicaid, were more likely to forgo health care because they can't afford it; 29 percent of them said they had in the previous year, while only 16 percent of people with higher incomes said so.

"Being able to access medical care and being able to afford that care are two important factors to improve health in Kentucky," Susan Zepeda, CEO of the Foundation for a Healthy Kentucky, said in a news release. "KHIP data indicate that fewer Kentucky adults are delaying medical care. This helps Kentuckians get and stay healthier, getting timely preventive services and early help with management of chronic conditions like diabetes and asthma and with smoking cessation counseling."

The poll was conducted by Institute for Policy Research at the University of Cincinnati and for the foundation and Interact for Health, formerly the Health Foundation of Greater Cincinnati. It surveyed a random sample of 1,608 adults via landline and cell phone, and has a margin of error of plus or minus 2.4 percentage points.

Princess Health andWashington Post columnist looks at data, talks to experts and concludes Obamacare is working, at less cost than expected.Princessiccia

Princess Health andWashington Post columnist looks at data, talks to experts and concludes Obamacare is working, at less cost than expected.Princessiccia

health care costs health insurance health reform obamacare politics president

Gusty 15:47 Add Comment

The federal health-reform law "has accomplished its goal of expanding coverage � at a significantly lower cost than expected," columnist Ruth Marcus writes for The Washington Post "after talking to numerous health-care experts and examining the data."

Marcus writes up front, "There is a legitimate ideological debate about whether it is a wise use of federal power to require individuals to obtain health insurance or a wise use of federal resources to spend so much on subsidizing coverage. What�s more puzzling, and more disturbing, is the still-raging division over the real-world effect of the ACA."

She says President Obama "over-promised when he told people that, if they liked their health insurance, they could keep it; by its own terms, the law set new standards for required coverage. Certainly, some individuals, particularly younger and healthier customers, find themselves paying more; again, such winners and losers were an inevitable consequence of the individual mandate and minimum-coverage rules. Meantime, the scariest warnings � of employers rushing to drop coverage and insurance markets ensnared in death spirals of ever-rising premiums � have not come to pass.
Where the law has yet to fully deliver on its promises � and some wonder whether it will � is in the area of cost containment and quality improvement."

Marcus backs up her assessment with facts. For example, "Health-care costs and premiums for employer-sponsored insurance (the way most of us obtain coverage) have been rising at their lowest levels in years. On the exchanges, premium increases during the law�s second year mirrored that modest growth � averaging 2 percent on some mid-range plans and 4 percent on the lowest-cost ones, according to the Kaiser Family Foundation."

Princess Health andHealth reform law has been good for hospital finances, health-care costs, Obama administration says.Princessiccia

Princess Health andHealth reform law has been good for hospital finances, health-care costs, Obama administration says.Princessiccia

health care costs health insurance health reform hospitals managed care Medicaid obamacare Patient Protection and Affordable Care Act

Gusty 20:15 Add Comment

U.S. hospitals have saved billions of dollars because the federal health-reform law has provided coverage for patients who were once charity cases, the Obama administration announced Monday, the fifth anniversary of the Patient Protection and Affordable Care Act.

"Hospitals also saw fewer emergency room visits, which rack up far higher costs and often leave hospitals with the tab," Sarah Ferris writes for The Hill, which covers Congress. "The government�s report, which focuses on the benefits of Medicaid expansion, is an effort to entice states that have been politically resistant to expanding the program."

Kentucky hospitals have acknowledged that the law has reduced their losses from "uncompensated care," but say other aspects of the law have created a mixed effect, depending partly on hospitals' ability to adapt. The increase in coverage has brought hospitals much more money, but they say continued problems with managed-care Medicaid have cause them financial difficulty.

From paying patients' point of view, the law appears to have reduced inflation in health-care costs, but has not achieved advocates' goal of reducing costs. A White House report said, "Since the Affordable Care Act was enacted, health care prices have risen at the slowest rate in nearly 50 years. Thanks to exceptionally slow growth in per-person costs throughout our health care system, national health expenditures grew at the slowest rate on record from 2010 through 2013."

For the White House's Kentucky-specific list of benefits of the law, click here.

Princess Health andReform law 'quietly accomplishing the goals it was created to achieve,' McClatchy Newspapers reporter writes.Princessiccia

Princess Health andReform law 'quietly accomplishing the goals it was created to achieve,' McClatchy Newspapers reporter writes.Princessiccia

health care costs health insurance health reform obamacare Patient Protection and Affordable Care Act

Gusty 08:25 Add Comment

The federal health-reform law is still controversial and still facing a legal challenge, but "is quietly accomplishing the goals it was created to achieve," Washington correspondent Tony Pugh reported for McClatchy Newspapers on the occasion of the law's fifth anniversary. (The Lexington Herald-Leader is a McClatchy paper.)

"The nation�s uninsured rate has plummeted as more Americans enroll in Medicaid or in federal and state marketplace coverage," Pugh notes. "The law�s consumer protections and insurance-benefit requirements have improved the quality of coverage for millions of people who get health insurance outside the workplace. Premiums for marketplace health insurance have largely been reasonable and have increased only moderately thus far. Long-term cost estimates for providing coverage under the law have been falling."

Howver, Pugh writes, "The law may never overcome the bitter politics that surrounded its enactment and that partly define its legacy. Long viewed as a government overreach, the health-care law has been problematic for those who want the private insurance market to dictate who gets health insurance and what it should cost. . . . Moreover, the law�s requirement that most Americans have health insurance is seen as an infringement on individual freedom. The Supreme Court ruled in June 2012 that the so-called individual mandate didn�t violate the Constitution."

The White House issued a state-specific list of the law's benefits. For Kentucky's, click here.

Princess Health and Princess Health andAnthem gives hospital group grant to improve perinatal care, including discouraging early, medically unnecessary deliveries.Princessiccia

Princess Health and Princess Health andAnthem gives hospital group grant to improve perinatal care, including discouraging early, medically unnecessary deliveries.Princessiccia

Caesarean section health care costs health insurance hospitals infant mortality neonatal care obstetrics perinatal care philanthropy premature birth

Gusty 11:24 Add Comment

The foundation of Anthem Blue Cross Blue Shield has awarded nearly $259,000 to an arm of the Kentucky Hospital Association to improve perinatal care and outcomes for mothers and their babies by discouraging early, medically unnecessary deliveries and encouraging breastfeeding.

Perinatal care, provided in the time around childbirth, is critical to ensure the good health of newborns, Anthem notes in a news release, pointing out that Kentucky's infant mortality rate is 6.6 deaths per 1,000 births, while the national rate is 6.1, and the state's rate of premature births, almost 14 percent, is well above the 9.6 percent goal set by the March of Dimes.

"The closer the baby is to full term, the better; but sometimes babies are born before they fully develop, weighing only a few pounds," the release notes. "When this occurs, long stays in the hospital neonatal intensive care unit (NICU) are necessary as these babies fight health complications while learning to breathe on their own without the use of a ventilator."

NICU stays are usually expensive. In 2012, Kentucky hospitals charged about $400 million for such treatment.

The hospital association says it has been working to reduce early, elective deliveries, with the Anthem foundation's help, and the latest grant is designed to build on that work. It says the grant to its subsidiary, the Kentucky Institute for Patient Safety and Quality, will also promote breastfeeding, reducing blood infections in the hospital, and reducing complications related to inducing labor, including Cesarean sections.

"KIPSQ will work with all Kentucky hospitals that deliver babies to assure the best care during delivery and the best outcomes for mothers and babies," the KHA release says. "KIPSQ will collect data to measure progress and provide resources, tools and technical assistance in quality improvement techniques to reduce prematurity, unnecessary Cesareans and improve the long-term health of newborns.

KHA says 76 of Kentucky�s 131 hospitals are members of KIPSQ, which is expanding its membership to include long-term care facilities and physicians' practices. "The Anthem grant will improve the delivery of perinatal health care to all of the state�s birthing/neonatal hospitals, regardless of their participation in KIPSQ," the release says.

Anthem Blue Cross and Blue Shield is the trade name of Anthem Health Plans of Kentucky, an independent licensee of the Blue Cross Blue Shield Association. The Anthem Foundation Inc. is a private, non-profit foundation.

Princess Health and Princess Health andKentucky does well in national comparison of premiums and tax credits in new health-insurance system.Princessiccia

Princess Health and Princess Health andKentucky does well in national comparison of premiums and tax credits in new health-insurance system.Princessiccia

health care costs health care law obamacare Patient Protection and Affordable Care Act rural-urban disparities

Gusty 14:22 Add Comment

Under the Patient Protection and Affordable Care Act, health-insurance costs vary from region to region and state to state, and federal subsidies won't remove all of the differences, Christopher Snowbeck and MaryJo Webster write for the St. Paul Pioneer Press. According to data from the U.S. Department of Health and Human Services and state-run health insurance exchanges, Kentucky's cost of coverage compares favorably; most areas in the state have prices that are between 2.63 and 8.68 percent of annual income. Of course, the lower prices in Kentucky�and in other states�might be correlated to narrower networks of health-care providers, which insurers are using to limit costs. Here's a screen grab of an interactive map showing costs of coverage for different ages and incomes; for the actual interactive map, click here.

In more urbanized areas, where insurance competition is greater and prices are lower, smaller tax credits are needed, but more subsidy is needed in places with higher premiums�such as rural areas of the South. "Because there is so much geographic variation in cost, the government does have to pitch in a larger portion of premium in higher-cost areas to make coverage affordable," said Cynthia Cox, a researcher at the California-based Kaiser Family Foundation.

Though some people feel that the law is unfair and that they don't receive the tax credits as high as in other areas, the PPACA exists to ensure that "people at certain income levels pay no more than a set share of income to buy the midlevel 'benchmark' health plan where they live," Snowbeck and Webster write. Some variation in price disappeared, though, because insurance companies can no longer refuse to cover people who have pre-existing health conditions, said Jonathan Gruber, a Massachusetts Institute of Technology economist who helped craft the law.

Coverage prices differ because of factors such as health status, cost of living and competition among insurance companies. However, though the same plan sells for $170 per month in Pittsburgh and $450 in areas of Georgia, federal subsidies based on income brign the latter cost below $300. "The tax credits can help us bring that premium cost down and say to people: 'It's now in the achievable range,'" said Tracy Brosius of the Wyoming Institute of Population Health.

Sometimes the tax-credit system actually allows people in higher-cost cities to pay less than those from lower-cost cities. "Assessing which consumers wind up with the 'better deals' can be complicated, policy experts say, because the lowest-cost silver plans available in different regions likely have different coverage details, such as deductibles and networks of doctors and hospitals," Snowbeck and Webster write. Though some argue that the new system doesn't offer incentives for regions that more provide more effective health care, Cox said "Insurers still have a financial incentive to keep premiums low to attract enrollees, particularly young enrollees who might not be tax-credit eligible." (Read more)

Princess Health and Fewer families report having trouble paying medical bills; near-poor struggle more than poor families.Princessiccia

Princess Health and Fewer families report having trouble paying medical bills; near-poor struggle more than poor families.Princessiccia

health care costs health insurance poll poverty

Gusty 11:14 Add Comment

Fewer American families are having problems paying medical bills, but 20 percent of them, particularly those without insurance and those that are "near poor" but not :poor," still struggle with health costs, says a study released Tuesday by the National Center for Health Statistics.

The report says 54.2 million people, or 20.3 percent of families headed by someone under the age of 65, had difficulty covering medical expenses in the first half of 2012. During the first half of 2011, 21.7 percent of families, or 57.8 million people, found it difficult to pay medical bills.

Hispanics (25.2 percent) and blacks (27.9 percent) were more likely than whites (20.1 percent) or Asians (10.3 percent) to report trouble paying their medical bills, says the report. It says families with incomes from 100 to 199 percent of the poverty line were most likely to have difficulty paying medical bills, probably because those below the poverty line qualify for Medicaid. State income limits vary; in Kentucky, income-based Medicaid is available to those with incomes less than 70 percent of the poverty line.

'Poor' are below the poverty line. 'Near poor' had incomes of 100 to 199 percent of the poverty line. 

Among families with insurance, 14 percent of those with private insurance and 25.6 percent  with Medicaid or other public insurance had similar problems paying bills in the first half of 2012, which represents a 1.7 percent and 2.5 percent decrease from 2011, respectively. For a report on the study, click here.

Princess Health and Business leaders discuss possibility of expanding Medicaid through private insurance.Princessiccia

Princess Health and Business leaders discuss possibility of expanding Medicaid through private insurance.Princessiccia

Affordable Care Act business federal government governor health care access health care costs health insurance Medicaid Patient Protection and Affordable Care Act state government

Gusty 13:32 Add Comment

By Molly Burchett
Kentucky Health News

Some Kentucky business leaders are discussing a possible endorsement of expanding Medicaid through private insurance, in a plan similar to one the federal government approved for Arkansas.

The Health Policy Council of the Kentucky Chamber of Commerce discussed the idea last Friday. A talking paper for the meeting highlighted presumed benefits of the approach, in which people newly eligible for Medicaid could use federal funds to buy private insurance through the insurance exchange that the state is constructing.

The health council has yet to decide the chamber's position on Medicaid expansion, but the council's talking paper said expanding Medicaid privately might be a better option than expansion of traditional Medicaid, considering the state's tight budget and already problematic managed care system.

The paper says a private plan would be beneficial to Kentucky because it would allow market forces to control costs and ultimately result in better health care. Private expansion would also prevent a flood of newly eligible people from entering the managed care system. "If Kentucky accepts the traditional Medicaid expansion, everyone that qualifies would be put into the already struggling managed care system, which until changes are made, cannot support the influx," the paper asserted.

The Obama administration has encouraged states to consider the Arkansas approach, the paper says.  To do so, states need to apply for a waiver, and the administration has provided information on how a state would apply. "Florida, Ohio, Louisiana, Maine and Pennsylvania are all looking into this option," the paper said.

An estimated 181,000 uninsured adults would become eligible for Medicaid in 2014, if Kentucky decides to accept the funds offered by the health law to provide coverage to those earning up to 138 percent of the federal poverty level.

Gov. Steve Beshear has said he will make his decision about Medicaid expansion no later than July 1. His office has declined to say whether the privatized option is under consideration, saying, "The governor is considering multiple issues as he determines whether Kentucky will expand Medicaid eligibility.  Along with affordability for the state, he is also looking at potential economic impact through jobs and investment created by possible expansion, as well anticipated changes in health outcomes for newly-eligible Kentuckians."

Princess Health and Poll shows health care costs are a burden for many Kentuckians.Princessiccia

Princess Health and Poll shows health care costs are a burden for many Kentuckians.Princessiccia

health care costs health insurance insurance insurance deductibles over-the-counter medicine poll prescription drugs

Gusty 11:14 Add Comment

A recent statewide survey shows health-care costs are a burden for many Kentuckians, especially for those who are poor and don't have insurance and put off getting care they need because they can't afford it.

More than 60 percent of Kentucky adults in the poll said high costs forced them or a family member living in their home to delay getting care in the past year. Not surprisingly, almost 90 percent of uninsured respondents reported going completely without care in the past year.

The Kentucky Health Issues Poll also showed that 48 percent have relied on home remedies when they are sick instead of going to a doctor, 43 percent have postponed care they needed, 37 percent have not filled a prescription or skipped a dental visit or checkup, 36 percent skipped a recommended medical test or treatment, and 16 percent have cut pills in half or skipped doses of medicine for financial reasons. Overall, 64 percent answered "yes" to at least one of those questions.

�Although our economy is improving, many Kentucky families are still struggling financially. Our research shows healthcare costs have a significant impact on Kentuckians� actions,� said Dr. Susan Zepeda, president and CEO of the Foundation for a Healthy Kentucky, which co-sponsored the poll. �Timely access to quality, affordable healthcare is important to restore and maintain Kentuckians� health and productivity. When we delay or go without care, illness severity and costs can escalate. Based on the KHIP results, many Kentuckians are taking risks with their overall health because of the expense.�

Rising costs of health care do not affect all Kentuckians in the same way; almost 40 percent of Kentucky adults reported that paying for health care and health insurance is not a financial burden. Those who did say costs were a burden said they were burdened equally by the costs of doctor visits, prescription drugs and insurance premiums or deductibles.

The poll was funded by the foundation and the Health Foundation of Greater Cincinnati. The poll was conducted Sept. 20 and Oct. 14 of last year by the Institute for Policy Research at the University of Cincinnati. A random sample of 1,680 adults from throughout Kentucky was interviewed by telephone, including landlines and cell phones, and the poll has a margin of error of plus or 2.5 points.

Princess Health and Beshear vetoes prompt-pay bill but takes several steps to address problems in Medicaid; he and Haynes say it's working.Princessiccia

Princess Health and Beshear vetoes prompt-pay bill but takes several steps to address problems in Medicaid; he and Haynes say it's working.Princessiccia

General Assembly governor health care costs health insurance legislature managed care Medicaid prevention

Gusty 12:10 Add Comment

Gov. Steve Beshear has vetoed the bill designed to make Medicaid managed-care firms pay health-care providers more quickly, but is taking administrative steps to address the issue.

Beshear said he agreed with the intent of House Bill 5 but it might have interfered with the contractual relationship between the state and the four managed-care companies. The bill would have subjected that relationship to the state Department of Insurance's review and investigation process for private-insurance payment complaints. 

"That language would have resulted in excessive costs for state government and taxpayers due to the expansion of the review process beyond the current parameters used for private insurance," Beshear's office said in a press release.

Instead, Beshear ordered the department to take over responsibility for review of prompt-payment complaints from the Department for Medicaid Services. "If improper payment practices are discovered, DOI can impose sanctions," the release said. He also ordered the department to audit each of the managed-care firms operating statewide � Wellcare, Coventry Cares, and Kentucky Spirit � at their cost.

Meanwhile, the firms have agreed to meet with every hospital they have under contract to reconcile outstanding accounts.  "This effort will begin immediately and continue until every hospital�s accounts receivable has been reconciled," the release said.  "The results will . . . be made public, in order to provide transparency and accountability." The firms have  agreed to meet with any other provider who wants a meeting.

Also, the Cabinet for Health and Family Services will hold eight regional forums for providers, managed-care firms, and Insurance Department representatives to discuss concerns and how to improve the system. Part of this effort will focus on "emergency room management that meets community needs without an ER operating as a de facto primary-care office," the release said. "A key component of controlling costs and improving health in a healthcare system is to provide the right treatment in the most cost-effective setting."

CHFS Secretary Audrey Tayse Haynes said the switch to managed care, made in November 2011, is working. �We are already seeing a tremendous increase in the use of preventive services, which improve health-care outcomes, while also reducing the enormous costs for treating chronic health conditions� such as diabetes-related amputations, she said.

Beshear said his plan would solve "lingering implementation problems" with managed care "while preserving the significant improvements in patient care and health care cost savings."

"Getting our people healthy and keeping them that way is not just good health policy, it�s good economics," Beshear said. "That�s why we will never return to the old fee-for-service system.  This is a significant cultural shift in medical care that has already happened across the country in both the private insurance market and in the Medicaid system."

Princess Health and Confused or concerned about the impact of health reform on Kentucky businesses? There's a seminar for that..Princessiccia

Princess Health and Confused or concerned about the impact of health reform on Kentucky businesses? There's a seminar for that..Princessiccia

health care health care access health care costs health care law health care reform health reform insurance insurance exchange

Gusty 11:13 Add Comment

To address possible confusion or concern of business people and the public about the Patient Protection and Affordable Care Act, or "Obamacare," health-care reform experts will address its impact on small and large companies across Kentucky at half-day seminars in Lexington and Louisville on May 8 and 9.

The Kentucky Health Care Reform Seminar will include specific discussions about expected cost increases and tax implications for businesses once reform is implemented, including the role of the health insurance exchange and the changing ways that coverage premiums will be determined. The seminar will be presented by The Iasis Group Inc., The Lane Report and the Kentucky Chamber of Commerce, says a chamber release.  

Guidance to employers will be provided on complying with the new rules surrounding insurance reforms and insight to whether Kentucky companies can truly afford it. The seminar is part of a statewide partnership that includes Commerce Lexington, Greater Louisville Inc., the Kentucky Society for Human Resource Management and the Northern Kentucky Chamber of Commerce (Click here for more details or to advance register)

Princess Health and Feds letting Arkansas privatize Medicaid expansion; idea could spread like wildfire, as in Florida, but cost questions remain.Princessiccia

Princess Health and Feds letting Arkansas privatize Medicaid expansion; idea could spread like wildfire, as in Florida, but cost questions remain.Princessiccia

Affordable Care Act health care costs health care reform health insurance health policy insurance Medicaid Patient Protection and Affordable Care Act politics state governments

Gusty 18:58 Add Comment

Arkansas has turned heads nationally with its preliminary plan to expand Medicaid using the private insurance market, showing that the Obama administration is willing to give states more flexibility than expected in expanding the program.

Health and Human Services Secretary Kathleen Sebelius has agreed to a proposal by Arkansas Gov. Mike Beebe to reject the Medicaid expansion but use federal money to buy private health insurance for the 200,000 people who would have been covered under ordinary expansion, reports Sandhya Somashekhar of The Washington Post.

States that have come down on either sides of the Medicaid-expansion issue may reconsider their decision in light of the Arkansas proposal, said Sara Rosenbaum, a health law professor at George Washington University. "If Arkansas is allowed to do this, I expect it to spread like wildfire," Rosenbaum told the Post.

The first place could be Florida, where a state Senate committee rejected Republican Gov. Rick Scott's expansion plan and proposed a privatization plan like that in Arkansas. Last week, a House committee voted to reject any expansion of the program. Scott "made it clear he was not going to lobby the Legislature on Medicaid," preferring to emphasize other issues, The New York Times' Lizette Alvarez reports. For coverage from the Tampa Bay Times and The Miami Herald, click here.

Could the wildfire spread all the way up to Kentucky?

Gov. Steve Beshear has said he wants to expand Medicaid in Kentucky if the state can afford it, but many Republican lawmakers oppose the idea, saying it would not be fiscally responsible. On the national level, 26 states and the District of Columbia have expressed a desire to expand Medicaid, 17 have said they reject it and seven are undecided, according to the nonpartisan Kaiser Family Foundation.

A more flexibile arrangement could be a game changer because it makes expansion more appealing, especially for states where expanding Medicaid has been politically unpopular and polarizing. in Arkansas, which has a Democratic governor and a Republicna legislature, officials say that from an ideological standpoint, using private insurance appeals to lawmakers from both parties, reports Somashekhar. She reports that even Democratic-led states might prefer this arrangement because it gets rid of some bureaucratic hurdles.

However, there are questions about cost. The Congressional Budget Office estimates that private insurance plans cost $3,000 more per person than Medicaid, reports Somashekhar. On the other hand, Arkansas officials say the move could ultimately save money in administrative charges along with other cost-control measures.

Although the Arkansas proposal is not concrete, it provides proof that the Department for Health and Human Services encourages innovative, state-based approaches to promote expansion. Many states may develop a new route best suited to their specific needs, without having to leave federal money on the table. (Read more)

Princess Health and Survey finds employees pay greater share of health costs, and most large employers penalize them for using tobacco.Princessiccia

Princess Health and Survey finds employees pay greater share of health costs, and most large employers penalize them for using tobacco.Princessiccia

employers health care costs health insurance health reform smoking tobacco tobacco prevention

Gusty 18:46 Add Comment

As large employers respond to changes influenced by health care reform and rising costs of care, employees are paying a greater portion of their health-care costs. That trend that is likely to continue over the next few years, says a new report on employer-based health plans.

Although employers cover most costs of work-based plans, employees contribute 42 percent more for health coverage than they did five years ago, while employers paid 32 percent more, according to the study from the benefits consultant Towers Watson and the National Business Group on Health. Overall, costs went up 34.4 percent.

When employers were asked if they thought health plans would change by 2018, which is the year the excise tax on high-cost plans takes effect, 92 percent said plans would be different, and nearly half said they expect a significant or transformative change. Such change will increase both accountability and engagement for employees.

% of large employers saying they were "very confident" they would offer health benefits in 2022

Nearly two-thirds of employers surveyed offer employees financial rewards to encourage participation in health programs, according to the report, which said tying employee contributions to successful completion of specific tasks, such as health assessments and screenings, remains the most popular contribution strategy. Growth in the use of penalties to engage employees in health-program participation has slowed over the last two years, but the use of surcharges for tobacco use continues to grow. By 2014, 62 percent of surveyed companies are expected to apply tobacco-use surcharges.

"While U.S. employers remain committed to health care benefits for active employees over the next five years," the report says, "they are redifining their financial commitment in the short run and are more reluctant to commit to coverage for employees over a longer period."

The 18th annual Towers Watson/National Business Group on Health Employer Survey on Purchasing Value in Health Care tracks employers' strategies and practices. It was completed by 583 employers,between November 2012 and January 2013. The report says it identifies the actions of the best performing companies as well as current trends in health-care benefit programs of U.S. employers with at least 1,000 employees. Survey respondents collectively employ 11.3 million full-time employees and have 8.5 million employees enrolled in their health care programs. Download a report PDF by clicking here.

Princess Health and Commission says drastic changes to doctor pay and cuts to wasteful services can fix Medicare problem without tax hikes.Princessiccia

Princess Health and Commission says drastic changes to doctor pay and cuts to wasteful services can fix Medicare problem without tax hikes.Princessiccia

health care costs health reform Medicaid Medicare physicians taxes

Gusty 12:51 Add Comment

A national advisory panel says �drastic changes� in how Medicare reimburses doctors and other providers are needed to shore up Medicare's finances, improve patient outcomes and rein in health care costs, and there is no need to seek more taxpayer money.

Medicare needs $138 billion over the next decade to avoid steep cuts in physician pay, and avoiding those cuts has become an annual scramble in Congress known as "the doc fix."  A panel dominated by internal-medicine specialists, The National Commission on Physician Payment Reform, has concluded that reduction of wasteful medical services can help solve the problem and "our nation cannot control runaway medical spending without fundamentally changing how physicians are paid," it says in its report.

Source: Henry J. Kaiser Family Foundation and Congressional
Budget Office, Budget and Economic Outlook, January 2011

The U.S. spends nearly $3 trillion a year on health care, and that level of spending is unsustainable. The report says that as a proportion of the federal budget, the cost of Medicare has risen from 3.5 percent in 1975 to 15.1 percent in 2010 in 2010). In 2020, it is projected to consume 17 percent, or 4 percent of the U.S. gross domestic product.

Recognizing the way that physicians are paid contributes substantially to the high cost of health care, The Society of General Internal Medicine convened the commission in March 2012 to make recommendations for payment reform. According to the report, some of the factors that drive up health care expenditures are:

• Fee-for-service reimbursement
• Consolidation in the health-care industry
• Reliance on technology and expensive care
• Reliance on a high proportion of specialists
• Paying more for the same service or procedure when done in a hospital setting as opposed to an outpatient setting
• A disproportionate percentage of health care spending directed to a small number of people who are very sick and costly to treat
• High administrative costs
• Fear of malpractice lawsuits
• Fraud and abuse

The commission says increased taxes are not needed to fix the Medicare problem, and the Medicaid shortfall could be entirely found by reducing overuse of services within Medicare. See the chart to the right for a breakdown of those excess medical costs.

The commission developed 12 recommendations to reduce health costs, calling for drastic changes to the current fee-for-service payment system and a five-year transition to a physician payment system that rewards quality and value-based care and not the volume of care.

The 12 recommendations were based on the principles that payment reform should improve care quality and efficiency, encourage care for the medically disadvantaged, reduce marginal and ineffective services, increase transparency to the public and should reward patient-centered comprehensive care. (Click here to see those recommendations)

Princess Health and Herald-Leader says state running out of time to fix Medicaid managed care, with decision on expansion looming.Princessiccia

Princess Health and Herald-Leader says state running out of time to fix Medicaid managed care, with decision on expansion looming.Princessiccia

health care access health care costs health reform managed care Medicaid newspapers state government state government; General Assembly

Gusty 10:45 Add Comment

A recent editorial in the Lexington Herald-Leader called for swift legislative action to fix the problems of Medicaid managed care. Timely action is even more necessary since the state is considering expanding the program, some critics have said.

Fifteen months ago the administration of Gov. Steve Beshear made a quick transition to managed care that privatized Medicaid for 550,000 poor, elderly and disabled people and was projected to save Kentucky $375 million in three years.  If the state expands Medicaid, that number of covered individuals could grow to more than 1 million � or roughly a quarter of all Kentuckians.

Although Medicaid is encouraging preventive care, such as more well-child visits and diabetes testing, providers haven't been paid for some of their services. The state recently granted the managed care companies a seven percent rate increase, and the companies have said they're losing money here and one is pulling out in July. But at the end of the first eight months of managed care Medicaid, the state had paid $500 million more to the companies than the companies had paid to providers.

"The delay and denial of payments are creating financial crises for providers and pharmacies and forcing small hospitals to lay off employees, deplete reserves and default on bonds," the editorial said. "This is creating a massive transfer of wealth from Kentucky medical practices and hospitals to for-profit companies based in other states. . . . For patients, the companies are putting up barriers to care that would be illegal in the private sector. The new burdens that have been placed on vulnerable Kentuckians and their medical providers threaten to unravel not just the safety net but, in some places, the whole health care system."

The editorial called on the General Assembly to pass legislation to curb abuses such as "the stiffing of hospitals that provide emergency care as required by federal law. . . . House Bill 299 and Senate Bill 178 would also curb the false economy of severely limiting in-patient mental-health care for children while referring them to nonexistent out-patient care."

The legislation would also require Medicaid managed care companies to:

• Meet the same provider network standards, including distance to hospitals and obstetrical care, as other insurers operating under Kentucky law.
• Decide claims based on nationally recognized clinical standards and provide specific reasons for denials so providers would know what's allowable.
• Participate in an appeals process for denied claims.

Appalachian Regional Healthcare wants to sue the U.S. Department of Health and Human Services and others, alleging that the new system is out of compliance with federal law.

"The feds shouldn't have to be dragged in," the editorial says. "The federal government covers roughly 70 percent of Kentucky�s $6 billion Medicaid program. Expanding Medicaid to include more low-income people is a linchpin of federal health care reform," and Beshear has said that he wants to expand Medicaid if the state can afford it. "Kentucky can't wait much longer to get Medicaid right." (Read more)