1 - Affordable Health Choices Act
Senate HELP Committee
2 - America’s Affordable Health Choices Act
3 - Patients’ Choice Act
S.1099 & HR 2520
4 - US National Health Care Act
Rep. John Conyers (D)
5 - National Health Insurance Act
Rep. John Dingell (D)
6 - Empowering Patients First Act
Rep. Tom Price (R)
7 - American Health Security Act
Sen. Bernie Sanders (D)
8 - Americare Health Care Act
Rep. Pete Stark (D)
9 - Healthy Americans Act
Sen. Ron Wyden (R) & Sen. Bob Bennett (R)
While many healthcare reform bill incorporate similar concepts, there are certainly key differences. Bills 1,2,3,6, and 9 are variations on private insurance with the possibility of a publicly funded government regulated competitor, the so-called ‘public option’. Bills 4,5,7, and 8 are universal health plans run completely by the federal government. At the current time, the universal plans do not enjoy wide support. Though somewhat similar to the first two Senate and House Democratic bills, the legislation offered by Republicans is also not likely to see the light of day. Here are a few of the highlights of the major bills with a brief explanation of each, which bills incorporate these specific concepts, and our analysis of what these concepts, if passed, might mean to you, your patients, and the nation.
Bills 1 and 2 mandate that everyone has to buy insurance, but doesn’t say it has to be a government plan. A tax would be levied on the individual (up to 2.5% of gross income, capped at the cost of the basic plan premium) or employer (up to 8% of payroll) who could not prove that they were insured. The ‘public option’ of a government sponsored insurance company modeled after or simply an expansion of Medicare, may or may not be in a final version of either. Bill 1 hopes to create a state sponsored insurance company that would compete with private insurers in an attempt to make them more efficient.
3,6, and 9 make it easier for everyone to get insurance, but stops short of requiring it.
4,5,7,8 are universal health plans run by the federal (4,5,8) or state (7) governments.
The ‘public option’, expansion of Medicare/Medicaid or the creation of a state run insurance company to include more people and possibly compete with private insurance would get closer to universal coverage than the tax incentives that the Republicans propose, but might prove less effective than believed. For instance, it is estimated that nine million people are currently eligible for Medicare or Medicaid but have never signed up. Since they won’t pay anything either way, what is the motivation for applying for this insurance? Access has not really been considered. Providing universal access should increase utilization, and coupled with adding 46 million new insureds to the system could overwhelm our resources. Another hot button issue is whether insurance will cover illegal aliens. Sponsors of most bills say no. But this group makes up a large portion of the uninsured. The upside is that we’ll finally be compensated for this care. Unfortunately, as a taxpayer, you’ll be paying for it. However it is decided, it is not likely to make much difference since it would probably require people to self identify as ‘undocumented’. Illegals would likely see this as a back door to exposure and elect to stay underground. Moreover, many fear that the public option creates a situation where private insurance could no longer compete with a subsidized competitor. This would lead to a gradual slide into a government takeover of all health care. So our opinion is that ‘universal coverage’ will not occur regardless of what bill is passed. Your vote is likely to fall along the lines of whether you feel the Medicare/Medicaid model is the best, most efficient way to improve access.
All but the universal health bills call for the creation of health insurance exchanges where patients can compare (standardized benefit plans that meet minimum criteria that fall into three or four levels), purchase them (with or without subsidies), and achieve complete portability. Bills 1,2 require that the plans offered in such exchanges conform to a government model, to be “qualified” by HHS. HR 3200 (2) has a complicated scale of increasing taxes on small businesses with various sized payrolls who do not have all employees covered by “qualified” insurance plans.
Attempts to standardize plans will make it much easier for patients/consumers to make an apple-to-apple comparison between plans. Opening the exchanges to all competitors is likely to drive down costs through wider competition. However, if the government has to “qualify” the plan or one of the competitors is subsidized by the government, it could either make them more efficient or drive them out of the market. Our view is that competition is basically a good idea. But limiting the exchanges to plans that are ‘qualified’, as determined by some government entity will require more government intervention and equals insurance regulation by Washington. Everyone agrees on guaranteed issuance and renewability of insurance. Disagreement occurs when everyone is forced to buy a policy that covers services that don’t apply to them. Our view is that this is a good idea, but the devil is in the details. Much more study is necessary before being written in stone. And simply punting this ‘detail‘ to a medical advisory council is insufficient.
Insurance Premium Credit/Subsidy
Bills 1,2, and 3 all have some form of subsidy or tax credit for low income citizens. Bills 1 and 2 have schemes that calculate the subsidy as a per cent of income (not to exceed 12%) and goes up to 400% of the federal poverty line. So, a family of three with an income of $75,000 would qualify. The subsidy can only be applied to purchase one of the three lowest providers. Bill 3 is a voucher for insurance and only applies to those below 200% of the FPL. There are no restrictions on which provider is chosen. Individuals purchasing a plan less expensive than the voucher amount would be able to put the remaining amount into a health savings account that would accrue.
Making insurance affordable, either through making it tax deductible, a tax credit or subsidizing it in some way will motivate everyone from low income on up to have insurance. The levels at which the government subsidizes insurance, however, will have no impact on holding down costs. And it might even add to health care inflation and/or overutilization.
Our view is that everyone wants something from the government that is paid for by someone else. Higher subsidies could be reflected in higher utilization and will place tension between the patient and the provider who is trying to limit services. The only way to control costs will be to put the burden on the provider to deny unnecessary care. It is important to recognize that the current administration still believes that many ED visits are unnecessary, adding to the cost burden on the health care system. Without a paradigm shift, we could expect initiatives to deny ED claims and divert our patients elsewhere. Maintaining cost controls in this environment is unlikely. The option of transferring responsibility for health over to the patient by allowing them to benefit from underutilization of services and saving in a tax-free HSA is a good idea, but it will take education for it to be taken advantage of by the poor and less sophisticated insurance purchaser.
Expansion of State Medicaid, CHIP & Medicare
Bills 1,2, and 4 call for an expansion of the eligibility for the above programs with the feds picking up the difference. Bills 3 and 6 take the opposite approach and attempt to move patients from public insurance programs to subsidized private insurance. Care rendered by Medicaid is limited to acute care only and a few other specific conditions.
Expansion of government programs is simply the ‘public option‘ by another name. If Medicare is going broke, expanding it will only make it go broke faster with more catastrophic results. Medicare was scheduled to reduce physician reimbursement 21% in the coming year by enforcement of the Sustainable Growth Rate formula. The AMA threw its support behind the H.R. 3200 (2) when the sponsors agreed to scrap the SGR. But it will be back...in another form. The federal government has agreed to take over this portion of state Medicaid for a time and reimburse at the Medicare rate. At current rates, this would be a real positive in most states. However, nobody is talking about what next year’s rates will be. Eventually, it must go back to the states as an unfunded mandate.
Bills 1,2,4,5,7, and 8 all have a large emphasis on funding preventive care with the assumption that it will lower the total cost for chronic and acute care. President Obama’s stated goal is to have preventive care with no copay and a mandatory part of any ‘qualified plan’ offered through an insurance exchange.
Bills 3,6, and 9 have less emphasis on preventive care though they do allow tax free contributions to HSA accounts for these and other services.
The greatest risks to health continue to be obesity, tobacco, alcohol, drug use, and other risks induced by life style. Tobacco and alcohol are already heavily taxed without significant decreases in usage. Proposals to tax sugary drinks will face heavy opposition because they will tax the young and similarly fail to show results. Other attempts to tax lifestyles will fail as well. Giving people benefits, that is cash in their pockets through premium savings, may, repeat may, have some beneficial effects.
The notion, however, that preventive care will reduce medical expenditures overall is simply false. Better detection of breast cancer will be accomplished by earlier, more frequent, and wider breast screening. This costs more, not less. Preventive care is going to be the Trojan horse that balloons the cost of care in the future. It will result in more tests, more medication for longer periods, and more surgery. The voters will have to decide if we have the pocket book to fund the incremental improvement in quality. In order to address preventative care, GME restructuring has been proposed to add more primary care residency slots. It is very likely that this would result in a redistribution of residency slots, not additional slots. So, if EM is not considered primary care, we could see contraction of our workforce.
The Senate bill (1) focuses its quality improvement aspects on the formation of study groups, interagency working groups, and agencies for evaluating health care research and quality. It establishes the Center for Health Outcomes Research and Evaluation. It also provides grants to community health teams, medical home implementation, and regional emergency care and trauma systems. HR 3200 (2) establishes the Center for Comparative Effectiveness Research and Quality. But an amendment has been offered to prevent this research from being used to deny or ration care. HR 3200 (2) also strengthens the ‘medical home’ concept by increasing payments to primary care and fund projects to test different payment incentive models, such as the medical home, payment bundling, and accountable care organizations. The Republican model is more incentive oriented, allowing providers to form accountable care organizations and receive bonuses from Medicare for improving quality and satisfaction while lowering costs. The Patients’ Choice Act (3) also allows for competitive bidding for Medicare Advantage plans.
There is no disagreement that health care can be streamlined to be more efficient and effective through a variety of methods. Savings can be achieved without sacrificing quality. But the degree of savings remains debatable. And whether the savings, through efficiency is sufficient to fund a huge expansion of services is highly doubtful. Moreover, physicians and patients remain concerned about ‘quality improvement’ projects funded by the government that may have the effect of rationing care to those who need and deserve it. Private insurance has denied care for profit reasons. Government has done the same. Research efforts that are heavily controlled by government or industry will naturally reflect the interests of those funding the research and should be suspect. Given the complexity and sometimes long-term nature of medical research, the potential for a bureaucrat in Washington establishing “best practices” will be difficult, if not a little scary. Furthermore, guiding care by this method will be problematic, if not ineffective, without meaningful tort reform. It is our opinion that the best outcomes will come through a broad research effort that is positively motivated and funded. Let the physicians and hospitals who produce the best results at the best cost enjoy the benefits of their efforts.
Tort reform is nowhere to be found in any of these bills. Yet lurking behind every effort to streamline the system and lower costs is the specter of increasing the risk of being sued when a bad outcome inevitably occurs. Defense lawyers will agree that cost effectiveness is not an argument that can be successfully made in today’s litigious environment. Caps on malpractice awards have been successful, where they have been enacted, in lowering the cost of insurance. But it is the fear of being sued, not losing, that drive excessive testing and treatment. Therefore, it is our opinion that tort reform, whether it is clearer standards of care, binding arbitration, or a completely new system of medical courts, is a vital part to bringing down the total cost of medicine.
Financing the Plans
When all the rhetoric is done, ultimately health care reform is about money. The country cannot afford to continue to pay for health care at its current pace of increase. In short, the expectation will be to provide more care for less compensation. Adding many more insureds in the context of reducing cost can bring you to no other conclusion. Although taxation will infuse capital into the system, it will fall short of covering the expenses of any proposed plan. President Obama maintains he will not tax the middle class to pay for his plan. However, he has defined middle class as anyone making less than $250,000 per year, effectively increasing the pool of those to be taxed. The President has also promised that he will not sign any health care bill that raises the federal deficit, although every current proposal would do just that. Ultimately, the success or failure of health care reform will be about finding a level of spending that is sustainable.
In closing, let us say that these are but a few of the highlights with the skimpiest of details. Look up the bills online and read them for yourself. You might be ahead of your congressman or senator. It is obvious that health care needs improvement. Some of the ideas presented in these bills are good starts and are certainly well intentioned. But this is a complicated system developed over a long history. It is our hope that everyone will step back, take a deep breath, forget the timetable, and work the problem. America knows that the time for health care reform is ripe. If we work the problem we might get it right. If we rush to conclusions, we could crash the system and cause untold suffering.