Author: Joe Paduda

May
25

Physician fees will change – are you paying attention?

Posted by Joe Paduda on Tuesday, May 25th, 2010 | Comments

Congress and the White House are working to come up with a fix for Medicare’s big-and-getting-bigger physician reimbursement (RBRVS) problem. And as I’ve been saying for months, when (not if) this happens, it will have dramatic effect on health care delivery, health care costs, and insurance premiums for work comp, group, and (obviously) Medicare and Medicaid.
Briefly, the change will increase reimbursement for primary care/cognitive services/99xxx CPT codes and slightly raise payments for surgery, radiology, and similar services. The changes occur over time, with a 1.3 percent raise this year plus another 1 percent in 2011. In 2012 and 2013, primary care and preventive services get an additional raise equivalent to the increase in the gross domestic product at the time plus 2 percent, non-primary care would see a raise of GDP plus 1 percent.
The reasons Congress must address Medicare physician reimbursement are twofold; docs are increasingly dropping out of Medicare, and the current SGR process (Sustainable Growth Rate, the methodology in place today that determines what Medicare pays docs) is both responsible for that problem yet ‘fixing’ SGR will mean Congress has to recognize a quarter-trillion dollar addition to the deficit.
It’s not quite that straight forward, but pretty close. For those who want way more detail, read this.
What is clear is that Congress has to act; what’s holding up resolution now is the GOP wants the fix to be deficit neutral, while the Democrats don’t. This will get resolved this week or early next (the current fix expires May 31) but there will be plenty of political point-making over the next few days. How they handle the budget issue, while significant in the large scheme of things, is a longer-term problem. Over the near term, payers and providers will have to figure out how the revisions will impact the industry.
Here are a couple scenarios to ponder.
Work comp – I discussed this in detail a couple weeks ago; the net is 33 states base their WC fee schedule on RBRVS, the key word being ‘base’. A few directly tie their fee schedule to RBRVS, but most adjust the conversion factors, alter the RVUs, add a multiplier, or otherwise tweak RBRVS. And, some states do this thru the regulatory process, while others require legislative action to make significant changes to their fee schedules.
As a result, the state-level implementation of any changes CMS/Congress makes to RBRVS is unclear, state-specific, and politically influenced.
Group – Many network contracts are based on Medicare’s RBRVS; if the Feds change, provider compensation will too. Think about the potential impact, and think deeply. The trickle-down will likely cause specialists to seek higher network reimbursement for two reasons – first the base from which their reimbursement (RBRVS) has declined, and second, they’ll want to make up their lost revenue from Medicare by increasing reimbursement from private payers.
Finally, there’s an inherent problem with the SGR approach – SGR attempts to use price to control cost. The complete failure of the SGR approach to control cost is patently obvious, as utilization continues to grow at rapid rates. This was a problem four years ago, and its done nothing but get worse. Not only does the RBRVS/SGR approach contribute to cost growth, it also ‘values’ procedures – doing stuff to patients – more than listening to them. Sure, the changes will somewhat address that issue, but only somewhat. And we’ll still be stuck with a system that almost entirely bases physician compensation on paying for procedures.
And the more procedures that are done, the more docs make, and the higher costs are.
What does this mean for you?
Pay attention to the news on this change, and think thru the long term impact on your business.

May
24

Medicare Set-Asides – the real problem

Posted by Joe Paduda on Monday, May 24th, 2010 | Comments

As CMS seeks to ensure taxpayers don’t pay for care due to comp, liability, or other causes, Medicare Set-Asides will become more common. And as we’ve seen recently, one of – if not the – biggest cost areas is pharmaceuticals.
NCCI’s studies show that the older claims are, the greater percentage of spend is for drugs, which can account for as much as forty percent of spend in older claims. That, and the recent news that CMS is revising its position re some issues related to projecting future drug costs, have brought much-needed attention to this issue.
My read on the drug-cost-projection issue is simple: to a large extent, the problem is self-inflicted by the work comp industry. With some notable exceptions, most payers have simply not done enough to manage the long term drug therapies of their long term claimants. Understanding that in some states this can be problematic; that many claimants have legal representation; that evidence-based guidelines and research on the science of pain is not as robust as we’d wish; and that patients drive much of the decision making and big pharma has huge dollars to influence physicians and consumers, there’s still much that can be done.
Here, in no particular order, are a few strategies worth considering.
1. Partner with a PBM that has a strong clinical orientation coupled with data mining expertise.
2. Motivate adjusters and case managers to identify potentially problematic drug usage and give them the tools and clinical back-up to do something to forestall issues.
3. Put in place early warning processes and flags to identify claims that appear to be heading towards questionable drug use or use of medications with uncertain benefits for the comp injury.
4. Assess the various evidence-based clinical guidelines and determine if they can help your claims staff.
5. Identify physicians with appropriate and potentially inappropriate prescribing patterns, assess those patterns, and determine how best to use that information to direct claimants and ‘mange’ physicians.
6. Encourage treating physicians to use opioid contracts and drug testing in their normal course of practice.
Most importantly, be proactive. Don’t whine, complain, and blame the system, pharma, bad docs. They all may be contributors, but blaming them doesn’t solve the payer’s problem – action does.
What does this mean for you?
Addressing drug usage early and intelligently can dramatically reduce MSA settlement costs. Oh, and it can certainly help cut indemnity and reduce disability duration as well.

May
21

CMS, MSAs, and credit where credit is due

Posted by Joe Paduda on Friday, May 21st, 2010 | Comments

My post on Monday about the internal memo released by CMS regarding MSA allocations triggered a round of name-calling, motive-assumption, and general nastiness by people in the MSA business furious that I awarded PMSI much of the credit for the change.
That, and/or the change has been described as not material and raising more questions.
Here’s how I put it Monday.
“[MD Kent] Takemoto has been working with CMS for over a year in an effort to revise/revamp/redo the methodology used by CMS to calculate/estimate drug costs in Medicare Set-Aside allocations.
After multiple meetings, lots of analysis (both mathematical and scientific) of drugs commonly used in comp v drugs not commonly used, drug substitution, and plenty of persistence Kent’s efforts have borne fruit…The methodology developed by PMSI and approved last week by CMS is a major step in the right direction.”
I was contacted by several individuals who claimed that they or their organization were at least partially responsible for the revision; I asked each to provide documentation of their activity, noting I’d “be happy to amend my post if necessary.” I’d hasten to add that some correspondents were professional and courteous; others engaged in name-calling and inferred I wrote the post to somehow ingratiate myself with PMSI, or because PMSI is a client, or was somehow duped by PMSI.
Let me address each in turn.
Name-calling – either grow up or shut up.
Clients – As long-time readers are well aware, I ALWAYS note when a client is mentioned on the blog. Therefore, insinuating that I wrote this to aid a client is flat out wrong.
Marketing – I have written complimentary posts about numerous companies and organizations that are NOT clients, including Aetna, Harbor Health, Broadspire, SRS, Progressive Medical, Mitchell, Medata, Datacare; heck, I’ve even written nice things about Coventry. Inferring that I wrote the post to schmooze PMSI, a company I’ve taken to task rather bluntly in the past, reflects poorly on those who would make that inference.
Duped – There’s ample evidence that PMSI did, in fact, help CMS develop solutions to several key issues, solutions that will help the entire industry. Yes, this will certainly help PMSI, as their methodology was approved by CMS; it will also help payers, PMSI’s competitors, and CMS over the long run.
As I stated in the original post, the CMS memo came “After multiple meetings, lots of analysis (both mathematical and scientific) of drugs commonly used in comp v drugs not commonly used, drug substitution…”. I’ve seen research documents, email correspondence, visitor passes, and other materials pertaining to PMSI’s efforts. It is abundantly clear that PMSI and Takemoto expended a lot of effort and brain power to develop a solution.
I spoke with PMSI CEO Eileen Auen about this (Auen is a highly respected and very well regarded executive and a person for whom I have the utmost regard). She verified my understanding of the research and analytical work put into the problem by PMSI, noting the level of effort was commensurate with the result. But what Auen really wanted to focus on was the positive impact of the revision on all payers, and her desire to see the industry working more closely together on this and other issues. As Eileen told me, “others have also worked to advocate for change – we applaud their efforts. Perhaps the lesson out of this, is that the MSA industry should find ways to collaborate more closely (like we have in Pharmacy and Ancillary Service) to drive an industry agenda.”
I asked two of my critics to provide me with documentation of their role in effecting this change at CMS. One said they wouldn’t as PMSI is an HSA client, the other said they would provide such documentation but as of this moment has not.
I’ve no doubt that many individuals and organizations spoke to CMS, sent letters, complained, called, sent emails, and met with individuals at CMS about issues related to MSA allocation calculation bases and methodology. Their efforts and attempts to resolve a very difficult issue are laudable. If any of them played a material role in effecting this change, they have yet to share evidence of that role with me. If and when they do, I’ll review it, give credit where credit is due and write it up for your reading pleasure.
Until then, I stand by my post.
Now – could we please get back to work?

May
19

Drug cost inflation 2009 – generally under control…except prices

Posted by Joe Paduda on Wednesday, May 19th, 2010 | Comments

This morning ended with Medco’s annual Drug trends report, which focused on their top 200 clients that account for the vast majority of Medco’s annual spend. As one of the big three PBMs (along with Caremark/CVS and Express Scripts), their numbers are a good indication of overall industry trends, and provide a benchmark for program evaluation.
(as a cautionary note, be careful with semantics here, as trend, inflation, and increase can mean the same or slightly different things depending on context)
In 2009, overall trend (cost inflation) was 3.7%. This was driven by a utilization increase of 1.3%, cost increase of 2.4%. In turn, the cost inflation was primarily affected by a brand drug price increase of 9.2% compared to a mere 0.3% for generics. Also contributing to the cost inflation result was a positive change in generic mix, where generic usage increased 3.2%.
Here’s an important take away – Medco’s clients where mail order accounted for more than 50% of their spend saw much lower cost increases – 0.1%, versus over 5% for those w less than 50% of spend obtained via mail order..
The most disturbing note regarded children.
20% of kids are on a chronic maintenance drug. Medco is seeing significant growth in Type 2 diabetes among kids – more among adolescent girls v boys. Their sense is this is probably driven mostly by obesity, as they are also seeing kids with lipid reduction and hypertension meds. According to Medco, there’s “Lots of adult drugs popping up in children.”
When asked about the brand drug price increase, CEO Dave Snow credited health care reform as the most likely driver. Specifically, Snow noted the tax on brand pharma contained within the reform bill may well be correlated with the higher brand drug prices, as pharma passes these taxes through to consumers. He believes the price jump is evidence of this ‘pass through’ occurring.
I’m a bit confused about this as the price increases occurred before the passage of reform, and likely some prices on individual drugs were raised while it was unclear whether reform would go thru. When asked about this, Snow noted that pharma had agreed to the $80 billion tax early on in the process, so went ahead under the assumption that this tax would occur. Makes one wonder if prices would have been reduced if reform hadn’t occurred… (he said with tongue firmly in cheek)
Asked about any data on usage or trends of narcotic opioids, Schedule drugs – more to come on that.

May
19

A look back at RIMS – DME formularies, claim triage, and drug costs

Posted by Joe Paduda on Wednesday, May 19th, 2010 | Comments

Following RIMs, it was off to NCCI for their conference, then a furious few days to catch up and follow up and get a couple deliverables out.
Now that there’s a few minutes to go back thru my notes from RIMS, there were a couple interesting takeaways.
First, I met with Healthcare Solutions (HCS) (the product of the Cypress Care and Procura ‘merger’). While there’s been a good deal of drama around the company of late, I was there to discuss their recent work with Broadspire to develop a process whereby a payer can develop a ‘formulary’ for DME, thereby using clinical guidelines to determine and prospectively approve specific DME for specific conditions – and excluding ‘non-approved’ items.
DME has long been a bit of a black box in comp; equipment is tough to categorize or code; while some items are pretty straightforward, others can have varying options or functions (think wheelchair – then think power; high-weight-capacity; long-term usage v temporary usage; narrow v wide; wide tires for outdoor usage v normal width…). HCS’ approach enables payers to exert more control over which equipment is pre-approved and which requires an additional OK to authorize.
There’s two parts to this – the clinical guidelines, which are developed by, unique to, and managed by the payer (in this case Broadspire) and the infrastructure/technology which was developed by HCS.
The infrastructure can be adapted to other payers’ ‘formularies’; HCS will likely seek to work with other payers a few months down the road.
Linking the notoriously difficult-to-manage DME supply business with clinical guidelines makes sense; implementing this, and addressing those DME scripts that are questionable may be a bit tougher. This wouldn’t be much different from ‘regular’ UR, where there are always appeals processes and mechanisms to work thru uncertainty.
Sticking with Broadspire, I also viewed a demo of their eTriage technology. eTriage is a predictive modeling tool that has been in place at Broadspire/Crawford for some time, and has undergone revisions and updating since its adoption a few years back. According to Broadspire’s Gary Anderberg, eTriage takes a good bit of the mystery out of determining which claims are going to go bad, an ongoing challenge for the entire work comp industry. eTriage is an algorithm-based ‘guided’ interview tool that includes questions about pain, functionality, the employer-employee relationship, and other issues that have been found to contribute to disability duration.
The next question is usually based on the response to the last question, enabling the interviewer to dig into behaviors, beliefs, and patterns. While there is a free-form text-entry capability, the app is heavily oriented towards pre-filled responses based on drop down menus.
eTriage is designed to help payers identify those claims that may appear relatively benign but turn long and costly. These ‘middle’ claims fall between the other two general claim ‘types’ (my definition not their’s) which are much more readily categorized – routine bumps and cuts, and catastrophic or near-catastrophic claims.
I also met with Progressive Medical to hear about their just-released drug trends report. Jason Winters, RPh, told me Progressive’s book of business had experienced good results in 2009, despite an increase in brand drug prices of 8.1%. According to Winters, “overall reduction for the year per drug-using injured party was 1.9 percent, despite blended awp increase of 5.2 percent and an increase in total days supply prescribed of 2.6 percent.” Among the favorable data points, Actiq costs were down 28%, duragesic costs declined 10%, and Oxycontin costs also dropped.
To some extent Opana may be increasing share at the expense of Oxycontin, as costs for Opana trended up over the previous year.
(none of the firms mentioned herein are HSA clients)

May
17

Good news on a Monday – CMS’ change in MSA ‘accounting’

Posted by Joe Paduda on Monday, May 17th, 2010 | Comments

When you get a call late on a Friday, it’s usually good news – if it was bad, they’d usually wait till Monday rather than ruin your weekend.
The call I received from Kent Takemoto, MD, President of PMSI Settlement Solutions on Friday was definitely good news. Takeomoto has been working with CMS for over a year in an effort to revise/revamp/redo the methodology used by CMS to calculate/estimate drug costs in Medicare Set-Aside allocations.

After multiple meetings, lots of analysis (both mathematical and scientific) of drugs commonly used in comp v drugs not commonly used, drug substitution, and plenty of persistence Kent’s efforts have borne fruit.
An internal CMS memo obtained from sources states:
“For a Part D drug to be covered by Medicare, and thus included properly in a WCMSA, the drug should be prescribed for an outpatient use that is approved under the Federal Food, Drug, and Cosmetic Act [21 U.S.C.A. Sec. 301 et seq.]”.
So…that means…what?
Some background would be helpful…
First, understand that the whole MSA process/regulation/motivation is to to make sure private industry pays for the medical care for work comp – and other – conditions, injuries, and illnesses and not taxpayers.
Unfortunately, in attempting to implement a process to achieve this noble goal, CMS came out with what most in the industry were rather heavy-handed and inappropriate ways for payers to calculate their liability for drug costs. When one considers that drugs accounted for 26% of MSA costs for PMSI’s pre-6.1.2009 MSAs, that’s a lot on the table.
Moreover, about 17% of open work comp claims were for individuals that were already Medicare beneficiaries, half of whom were under 65. Settling these claims cost an average of 63% more to settle due to CMS’ drug pricing methodology. In addition, CMS required payers to price drugs at the lowest Redbook published rate (not factoring in the discount which most PBMs provide, which tends to be somewhat to significantly less than Redbook AWP) for the entire life expectancy or rated age of the claimant. This essentially assumed the claimant would be taking the same drugs, at the same frequency and dose at list price, as long as they were alive; CMS specifically refused to consider the potential change in drug usage due to Drug Utilization Review tools and processes.
It’s no wonder many payers stopped settling claims, as the cost would have been prohibitive.
The methodology developed by PMSI and approved last week by CMS is a major step in the right direction and incorporates what Takemoto feels is the most significant change to the calculation of MSA drug allocations – the exclusion of drugs not covered by Medicare Part D. Drugs that are not covered by Part D comprise approximately 2/3 of the most commonly prescribed drugs in workers compensation including the overutilized and exorbitantly expensive opioid, Actiq.
Although CMS is implementing this change on June 1, 2010, PMSI has been excluding non-Part D medications from MSAs for about 9 months now. This requires a deep understanding of occupational diagnoses and how they relate to the FDA approved uses of a medication as well as appropriate medication substitution for the disallowed medications. When done properly,their experience shows that about 70% of CMS submitted MSAs contained drugs that were excluded from coverage under Medicare Part D.
So…why is this a big deal?
It will mean big reductions in the amounts payers have to ‘set aside’ for Medicare for drugs – Takemoto’s estimates range from ‘tens of thousands of dollars to hundreds of thousands per MSA’.
And payers can go back to settling claims.

May
14

Where the work comp world is headed – part 5, physician reimbursement

Posted by Joe Paduda on Friday, May 14th, 2010 | Comments

Earlier this week we discussed the impact of pending changes in the world of big pharma will affect workers comp.
Changes to Medicare physician reimbursement, also just over the horizon, will have a dramatic impact on workers comp in ways both obvious and subtle.
First, a quick primer on how Medicare pays docs and ancillary providers.
Medicare adopted the resource-based relative value scale (RBRVS) along with a predecessor to the Sustainable Growth Rate mechanism called the Volume Performance Standard (VPS), eighteen years ago as a new way to pay physicians. The RBRVS incorporates three components of physician services – physician work, practice expense, and professional liability insurance.
A relative value unit (RVU) is assigned to each of these components; RBRVS system uses the definitions and procedure codes developed and owned by the American Medical Association in their Current Procedural Terminology (CPT). The reimbursement for a given CPT code is determined by taking the total RVU’s for the service and multiplying by the conversion factor, then multiplying by a geographic adjustment factor (GAF) is applied to account for regional cost differences.
As an example, in 2005, a generic 99213 (office visit) was worth 1.39 relative value units, or RVUs. Adjusted for North Jersey, it was worth 1.57 RVUs. Using the 2005 Conversion Factor of $37.90, Medicare paid 1.57 * $37.90 for each 99213 performed, or $59.50. (thanks to Wikipedia)
Got that?
So, what’s the problem? Well, as Gail Wilensky wrote, “The primary problem with the SGR is that while it can control total spending by physicians (assuming it is actually implemented), it does not affect nor is it driven by the volume and intensity of spending of individual physicians. In fact, there is some concern that expenditure targets may actually exacerbate the incentives for individual physicians to increase the volume and intensity of services they provide.” [emphasis added]
Late last year the Senate tried to address the issue, coming up several votes short on a bill that would have ended the SGR ‘program’. Senators from both parties evidently decided that approving a bill that would have a) immediately added about a quarter trillion to the deficit and b) thereby forced the CBO to factor higher physician reimbursement into its calculation of the cost of reform was not a (politically) good idea.
As a result, Congress has had to pass at least two (it’s easy to lose count) bills so far this year, both at the eleventh hour, temporarily blocking implementation of the 21% cuts. At some point Congress will have to ‘fix’ the SGR program, either by changing the calculation methodology, dumping it and replacing it with something else, or fundamentally changing RBRVS.
What’s likely to happen?
Expect that reimbursement for Evaluation and Management codes (office visits, etc) will go up – CMS has suggested by eight percent, while reimbursement for some subspecialties will decline, some more than others. This has been in the works for at least three years, and I’d expect a permanent change to occur later this year when Congress is forced to deal with the SGR mess once again.
Impact
First, the most obvious. 33 states base their WC fee schedule on RBRVS, the key word being ‘base’. A few directly tie their fee schedule to RBRVS, but most adjust the conversion factors, alter the RVUs, add a multiplier, or otherwise tweak RBRVS. And, some states do this thru the regulatory process, while others require legislative action to make significant changes to their fee schedules.
As a result, the state-level implementation of any changes CMS/Congress makes to RBRVS is unclear, state-specific, and politically influenced.
(for an excellent overview of this issue, see Barry Lipton, John Robertson, and Dan Corro’s NCCI Research Brief) (pdf)
More generally, basing WC reimbursement on Medicare is simple, but not appropriate. WC is a state-based disability compensation system where physician reimbursement is controlled by a political process completely unconcerned about its implications for comp insurers, employers, physicians, or injured workers.
A study completed in 2007 illustrated the problem – low reimbursement rates mean few physicians are willing to treat comp claimants. Among the five states that based their fee schedule on low percentages of Medicare (109% to 125% of Medicare), the percentage of neurologists and orthopaedists that participated in workers’ compensation tended to be a fraction of the available population (9% to 27% for neurologists, 23% to 46% for orthopaedists).
Among the states using Medicare’s RBRVS as the basis for physician reimbursement are Florida, Pennsylvania, West Virginia, Hawaii, Maryland, California, Michigan, Ohio, Tennessee, Minnesota, Oregon and Texas.
Yes, most pay above the Medicare rate, and many have built-in inflation adjustments. But physician compensation is still primarily controlled by the politics of Washington.
Third, even less obvious, but nonetheless critical. Many network contracts are based on Medicare’s RBRVS; if the Feds change, provider compensation will too. Think about the potential impact, and think deeply. The trickle-down will likely cause specialists to seek higher network reimbursement for two reasons – first the base from which their reimbursement (RBRVS) has declined, and second, they’ll want to make up their lost revenue from Medicare by increasing reimbursement from private payers.
On a related note, it’s utilization, stupid! The SGR attempts to use price to control cost. The complete failure of the SGR approach to control cost is patently obvious, as utilization continues to grow at rapid rates. This was a problem four years ago, and its done nothing but get worse. Not only does the RBRVS/SGR approach contribute to cost growth, it also ‘values’ procedures – doing stuff to patients – more than listening to them (I realize this is an unfair comparison, but read on).
According to an excellent piece by Robert Berenson in HealthAffairs,
“FFS, discretionary “harmless” services, self-referral, and, sometimes, patient demand all combine to produce the explosive growth in quantity of physician services [in Medicare] — but only for some kinds of services, provided by some kinds of physicians. In policy shorthand, the resultant disproportionate reimbursements and incomes (as private plans emulate Medicare payment approaches) are often described as primary care losing out to proceduralists. The more accurate summary would describe the winners as niche specialists and the losers as generalists — across and within specialties. So, general surgeons are compensated less well than many surgical specialists, and general orthopedists and ophthalmologists less well than spine surgeons and retina specialists, respectively. General internists (and “cognitive” specialists like endocrinologists) are near the bottom of the income totem pole, while gastroenterologists and, particularly, invasive cardiologists are near the top, even if they once trained together in internal medicine residency training programs.
By applying to all services equally, an SGR-imposed fee limit further accentuates income and service disparities originally created by misvaluations within the RBRVS system and the differential opportunity physicians have to increase the volume of services they provide. A root problem is that the Medicare fee schedule based on “relative values” does not permit consideration of the value of services to beneficiaries or the Medicare program. Rather, it relies on attempts to determine the relative resource costs of producing the thousands of services for which Medicare reimburses physicians and a sophisticated, but inherently subjective and, as it has been allowed to develop, highly political process.
What does this mean for you?
Watch what Congress does about Medicare’s SGR, and monitor NCCI’s site for updates. Change is acomin’, and success favors the prepared.

May
13

Bias and credibility – a cautionary tale

Posted by Joe Paduda on Thursday, May 13th, 2010 | Comments

I’ve been somewhat reluctant to write this post, as it takes issue with one of the key presenters at a workers comp conference that I believe is consistently the best I’ve attended. It’s here for one reason: it illustrates how a public podium must be treated with respect and the audience given all the relevant information so each can draw their own conclusion.
Scott Harrington PhD, was on the podium at NCCI last Thursday afternoon discussing the future of Federal healthcare reform, reform legislation, and the implementation of reform. He’s a very knowledgeable and highly intelligent guy, but his presentation was marred by what I consider rather striking bias.
Harrington led off by noting that he is a rare professor in that he is an avowed conservative. No problem with that; many in the insurance community tend to be more on the conservative side, but there’s no shortage of liberal-leaning insurance execs either (although they tend to be relatively quiet about their inclinations).
No, the issue was he allowed his bias to affect what was an important topic, and one of interest to most of the attendees – of health reform and the goings-on in Washington. At the end of Harrington’s talk, I was left wondering what was reality, what was his slanted interpretation of reality, and whether anything he said could be taken at face value.
Here’s what caused my consternation.
The uninsured population
Harrington contended that of the 46 million uninsured, 10 million are eligible for coverage thru their employers but have not signed up, and an additional 11-12 million have incomes above 300 percent of the Federal poverty level, and therefore could buy insurance if they wanted to. Harrington’s point was people are uninsured because they choose to be.
That’s just not true. 300% of the federal poverty level is $66,150 for a family. The average health insurance premium is over $15,000, not including deductibles, copays, coinsurance, and the cost of healthcare for conditions not covered by insurance. Health insurance is unaffordable for many people. Is that a ‘choice’ issue? Perhaps – many ‘choose’ to pay rent and buy food instead of insurance.
Moreover, individuals with pre-existing conditions can’t get any coverage for those conditions in many states and have to pay a big upcharge in others. If you have diabetes and hypertension, what insurance company who doesn’t have to cover you will?
The employer-sponsored issue is less clear, but still problematic. Many smaller employers offer insurance but require workers to pay a big chunk of the premiums; this is especially prevalent among smaller employers. Workers in the lower income brackets would have to pay their part of the premium – typically between 20% and 50% of the total cost, plus the additional deductibles, copays, and coinsurance. For a worker making $20 an hour with a family of three, that’s a little over $40k per year. If their employer requires them to pay a third, that’s $5000 before the deductible, which in many cases is at least a couple thousand bucks.
The Medicaid picture is cloudier still, but Harrington’s inference that many who are eligible haven’t sign up is quite simplistic. Research indicates many of the eligible-but-unenrolled are those with language barriers, live in states that have done little to promote the program or educate potential enrollees, and/or have significant mental issues that inhibit efforts to enroll them or are kids.
Harrington’s attempt to pooh-pooh the uninsurance problem would have been more compelling had he treated it objectively. There is no question some individuals go without health insurance out of choice – Rush Limbaugh comes to mind. But Rush makes just a bit more than $66k a year.
Deficits
Harrington next took on the Medicare deficit, pointing out (accurately) it would rise to $38 trillion by 2008. He then shared a bunch of scary statistics about the size of the debt, amount per person; all in an attempt to point out the unaffordability of the current system.
That wasn’t exactly new news. Where Harrington went off the reservation is his inference that this was somehow the fault of the Democratic Congress and President. In his concluding remarks, Harrington claimed that if the GOP takes over Congress and the White House, the mandate and insurance provisions could be repealed, reductions in Medicare would be legislated, and this would lead to lower costs and deficits.
I’m not sure which Republican party Harrington was talking about; it certainly wasn’t the one we’ve seen in power for most of the last decade.
For example.
Medicare Part D was passed and signed by Republicans, with “no dedicated financing, no offsets and no revenue-raisers; 100% of the cost simply added to the federal budget deficit”. The same Medicare Actuary quoted by Harrington, in the 2009 report to Congress, (pdf) reported that the GOP-passed Part D program has contributed $9.4 trillion to the $38 trillion Federal healthcare deficit. (page 126)
I’d also point out that the same Republican Congress and Administration was responsible for preventing Medicare from considering any cost-benefit criteria in determining whether and what Medicare would pay for procedures, drugs, treatments, devices, etc. Yep, these deficit hawks thought it was just fine for we taxpayers to be forced to pay for procedures with very little efficacy.
(the pertinent language from the 2003 Medicare Modernization Act reads as follows – CMS will pay for items or services “reasonable and necessary for the diagnosis and treatment of illness or injury or to improve the functioning of a malformed body member” (Fed Reg 65-95, p 31124- 31129, 2003 MMA); there is no mention of cost)
Finally, I think it is important to reflect on a simple fact. If private industry had been able to control health care costs, we wouldn’t be having this discussion. The fact is, for whatever reason, the for-profit, and not-for-profit health care insurance and delivery system has been unable to control costs and consistently deliver quality care.
There’s no question the current health reform bill has major flaws; a lack of cost control is perhaps the most glaring. I’ve taken issue with the law, its future cost, the lack of attention to cost, and the failure of both parties to deal with these tough issues. I will continue to do so, and will continue to keep in mind the singular importance of presenting the facts, data, and logic supporting my views, and address opposing opinions that are similarly supported.
And I’m sure you’ll keep me honest.

May
12

Is there justice in North Dakota?

Posted by Joe Paduda on Wednesday, May 12th, 2010 | Comments

Not if your case is highly visible, politically sensitive and focuses on unethical and possibly illegal activity by an Assistant State’s Attorney.
I’m referring to Sandy Blunt’s pending appeal before the ND Supreme Court.
Blunt has been waiting – and waiting – and waiting for the Court to issue a ruling in the appeal of his conviction on (highly suspect) charges of inappropriate use of state funds.
Fifteen months ago Blunt’s lawyer filed his appeal, The appeal was in part based on their contention that the prosecutor didn’t give Blunt’s attorney exculpatory evidence that would have proven that the most important charge against Blunt wasn’t a crime.
Among other transgressions, the prosecutor didn’t give the memo from the state auditor, a memo that clearly exonerated Blunt, to Blunt’s attorney.
Yesterday, the Court issued 20 new opinions. Each and every one of the opinions was from an oral argument that took place after Blunt’s. Adding insult to injury, 18 of the 20 opinions were from 2010 oral arguments with many of the 18 from March and April dates (one even from just 8 days ago on May 3).
Oral arguments in Blunt’s case were heard ten months ago.
Why hasn’t the Court issued their ruling?
Could it be the Court is delaying issuing their ruling until after the June 8 primary elections for (among other offices) District Court Judge? What does that have to do with Blunt’s case? Well, the Burleigh County Assistant State’s Attorney who is the object of the appeal happens to be running for – you guessed it – District Court Judge.
Reports from ND indicate Cynthia Feland is running a nonstop campaign for office, complete with Facebook page (check out the recipes…), an effort that has her taking time out of her valuable workday to stick campaign signs into supporters’ yards.
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Yep, this is the same ‘Cynthia Feland’ currently under investigation by the State Police for potential crimes including conspiracy. The state Bar Association has also determined Feland’s actions during the Blunt trial merit investigation.
So let’s sum this up.
Blunt’s conviction may well have been obtained illegally. And the ‘illegality’ isn’t some technicality, but rather a blatant and successful, effort to mislead the jury.
The prosecutor may well have committed a crime during the case, and if not, has at the very least caused two separate organizations to begin investigations into her (possibly criminal) activities.
The state Supreme Court has refused to issue a ruling in the case that triggered the two investigations, despite it’s clear and public commitment to speedy trials. (which includes this statement – “A goal of the judicial system of North Dakota is prompt disposition of cases.”
Except when that case is politically sensitive and affects a prosecutor accused of criminal behavior.
(Disclosure – I’ve had the honor and privilege of working with Sandy Blunt on two engagements. I met Sandy after I began writing about the goings-on at ND’s state work comp fund)>