Thursday, August 31, 2006

Tax credits for the uninsured 

[Nina Owcharenko, "Provide alternatives to employer-based health care plans," The Atlanta Journal-Constitution, 31 August 2006.]

Heritage Foundation senior analyst Nina Owcharenko suggests moving toward tax credits and away from employer-based coverage as a way to alleviate the problem of the uninsured:

The current system, which is dominated by tax-favored coverage offered through the workplace, has made health insurance affordable for middle-class Americans and made practical sense when workers stayed with one employer until retirement.

But today's workforce is much different. Fewer of us stick with one job or work for one employer throughout our careers. Meaning, each time we change jobs, our health plan changes, and probably so do our doctors. Fewer employers, especially those with small businesses, can afford or offer coverage.

Some argue for expanding government-run health care programs, such as Medicaid. But not only do most workers prefer private coverage over public coverage, public programs already find themselves overextended and fiscally unsustainable. Medicaid is the largest line item in state budgets and is squeezing out other important state services, such as education and transportation. Plus, the more people depend on government-run health programs, the more control the government has in the personal health care decisions of its citizens.

To fill in the gaps of the current health care system and prevent more workers from joining the ranks of the uninsured, we need to create an alternative for those who don't have employer-based coverage. A system of health care tax credits would give those workers a tax break, similar to the one given for employer-based coverage, to purchase private health care coverage of their own.

Those who own their coverage can take their plan with them when they change jobs or quit working. They choose the plan and doctors and services they want. And insurers and providers are accountable to them, not to their employer or government bureaucrats.

[Devon Herrick, "Health insruance is better to own than rent," The Dodge City Daily Globe, 23 March 2005.
Greg Scandlen, "Choice is revolutionizing health care," The Wichita Eagle, 28 September 2004.]

Wednesday, August 30, 2006

Number of uninsured on the rise 

[Alan Bavley and Lynn Franey, "More go without health coverage," The Kansas City Star, 30 August 2006.]

Right on the heels of news that Wichita ranks among the most expensive cities to obtain health insurance, new Census data reveals an increase in the uninsured - with the South and West seeing the greatest growth:

About 37 million Americans were poor last year, and 46.6 million lacked health insurance. The percentage of uninsured Americans, 15.9, was the highest since 1998.

The growth in the uninsured showed up in all income groups, according to the Census.

People with household incomes of $25,000 to $75,000 were the hardest hit.

There were 247.3 million people with health insurance in 2005, an increase of 1.4 million from 2004. But the number without insurance also grew, from 45.3 million to 46.6 million.

The South and West saw the greatest growth in the uninsured. In much of the Northeast and Midwest, the percentage of uninsured remained steady. The 2004-05 average was 10.9 percent for Kansas and 12.4 percent for Missouri.

[Matthew Hisrich, "The Uninsured in Kansas - A Closer Look," The Flint Hills Center, 28 July 2006.

Matthew Hisrich, "Greatest increase in uninsured found among wealthy," The Flint Hills Center, 10 May 2004.]

USA Today argues for price transparency 

[Editorial, "Reveal health care costs," USA Today, 30 August 2006.]

An editorial in today's USA Today draws a link between consumer-driven health care and the move toward price transparency in health care:

No sensible consumers would purchase a new car or refrigerator without knowing the price, or without asking a few questions about reliability.

Yet they'll undergo cardiac surgery or a hip replacement with little thought of the actual cost of treatment, and with virtually no information about their hospital's track record with that procedure.

Traditional insurance, whether government- or employer-based, shields patients from the true costs of care. If someone else is paying most of the bill, patients have little incentive or ability to demand lower prices. Hospitals and doctors face little pressure to publicize their fees or to lower them.

Faced with rising costs, however, employers are pushing workers to shoulder a larger share with higher premiums, deductibles and co-pays. Plans combining low premiums, high deductibles and employee-funded health savings accounts are gaining popularity. Because those plans force people to spend more of their own money, they have more incentive to shop around. But they can't do that without better data.

While hospitals and doctors are dragging their feet, the government and insurers are taking steps to make health care costs more transparent:

• Last week, Bush signed an executive order requiring four federal agencies to compile and release information about the quality and price of health care provided to people they cover.

• In June, Medicare started posting on its website how much it pays for 30 medical procedures in each of the nation's counties, along with data on how many of the treatments each hospital performed last year. In general, the more experience a facility has with a procedure, the better the outcome for the patient, studies show.

• Aetna, which covers 30 million beneficiaries, will make physician-specific information on fees, clinical quality and efficiency available to its members in seven states.

With the right tools, patients can find better values. More honesty about price and quality can lower costs and achieve better outcomes.

[Mary Katherine Stout and Matthew Hisrich, "Price transparency important," The Salina Journal, 12 July 2006.]

Tuesday, August 29, 2006

Canadians still waiting on health care 

["The Waiting Game," The Wall Street Journal, 29 August 2006.]

Unreasonable waits are widespread under the single-payer system to the north:

Last week Ottawa-based Decima Research released results of a poll designed to answer the ultimate question in Canada: "How many wait too long for health care?" The firm says its survey of 3,070 Canadians "reveals that more than one in three Canadian households has tried and failed to get timely access to at least one health service within the last three months."

Nearly half (46%) of those waiting to see a specialist said they experienced an "unreasonable" wait time, as did 30% of those waiting to confirm a diagnosis. Of those who sought emergency hospital treatment, 44% said their wait was too long.

The Vancouver-based Fraser Institute's "Waiting Your Turn" annual report has documented Canada's waiting-time crisis in health care for 15 years. In 2005 it found "total waiting time between referral from a general practitioner and treatment, averaged across all 12 specialties and 10 provinces, was 17.7 weeks."

At issue here is whether it is better to ration a scarce good using prices, as a free-market system would do, or using time, as is inevitably the case with nationally financed systems.

[Charles W. Van Way, III, MD, "The Strength of a Really Bad Idea," The Flint Hills Center, 8 May 2004.]

Monday, August 28, 2006

New report on Kansas farmers' medical debt 

[William Lottero, Robert Seifert and Nancy Kohn, "Losing Ground: Eroding Health Insurance Coverage Leaves Kansas Farmers with Medical Debt," The Access Project, July 2006.]

A recently-released report from The United Methodist Health Ministry Fund and The Kansas Farmers Union reveals that many farmers in Kansas face significant medical debt even if covered by traditional insurance:

Overall, about one respondent in six (17%) reported having medical debt. However, this statistic conceals a significant difference between the experience of respondents age 65 and over and those under 65: Only five percent of those 65 and over reported medical debt, while nearly a third (29%) of the non-elderly respondents said they had debt. These findings combine to raise the question of whether the health insurance covering many of the younger families in farming adequately protects them from financial risk.

Such findings suggest that farming families in Kansas might be better served by consumer-driven health care products like health savings accounts, with high-deductible coverage that has clearly defined maximum out-of-pocket costs. Too often, the fine print of traditional coverage includes co-insurance that can lead to incredibly high liability.

Fortunately, there are signs that HSAs may become more popular among farmers. Earlier this year Cargill announced a program whereby the company offers to set up and contribute to HSAs for farmers willing to guarantee a portion of their grain will go to the company:

"The program, which company officials say is the first in the nation, is aimed at helping farmers who are struggling with rising health insurance costs while guaranteeing business for Cargill in an increasingly competitive grain market."

[Devon Herrick, "Health Savings Accounts: The Future of Health Care for Kansans," The Flint Hills Center, 14 February 2005.]

Is Wichita an expensive city for health coverage? 

[Andi Atwater, "Ranking for Wichita is flawed, insurers say," The Wichita Eagle, 27 August 2006.]

A new ranking from eHealthInsurance places Wichita among the most expensive cities to obtain health insurance, but the numbers are under dispute:

The best and worst rankings -- Wichita made the bottom five of the nation's 100 most populous cities -- are being published in today's Parade section.

EHealthInsurance.com is an online broker of individual health insurance plans. Officials said the company has more than 140 insurance carriers nationwide representing some 5,000 plans. The site provides insurance quotes for individuals and businesses who enter their personal information online.

However, the company does not necessarily represent all of the insurance providers available in a given market. In Wichita, that translated to two carriers when the company surveyed itself last March for its report dated July 19. That report is the basis for the information in Parade.

Industry officials say Wichita has at least a dozen choices when it comes to buying personal health insurance.

EHealthInsurance officials say the report is still a viable tool. Bob Hurley, vice president of customer care, said these types of reports go a long way toward promoting price transparency for consumers.

"I think the value of transparency we're starting to bring to these markets is critical," Hurley said. "Consumers never had one place to go to see three carriers. Hopefully someday we'll have six carriers.

"But there's tremendous value in bringing that to the market, (even) if there needs to be a footnote saying it's only plans available on our Web site."

[Mary Katherine Stout and Matthew Hisrich, "Seeing Through the Cost of Health Care: Consumer-Driven Price Transparency in Kansas," The Flint Hills Center, 6 July 2006.]

Kansas Medicaid financing update 

[Dave Ranney, "Firm’s Medicaid advice may backfire for state," The Lawrence Journal-World, 28 August 2006.]

The Lawrence Journal-World's Dave Ranney peels another layer back in the ongoing Medicaid financing mess in his latest column on the subject:

Ten years ago, state welfare officials fell head-over-heels in love with Maximus, a Virginia-based consulting firm that knew how to coax millions of federal dollars out of the nation’s Medicaid program.

The company’s experts helped the Kansas Department of Social and Rehabilitation Services take in an additional $26 million in 1996 alone. Millions more soon followed.

Maximus, it seemed, could do no wrong.

Now, Medicaid wants — and is taking back — a lot of its money that it gave Kansas.

SRS isn’t happy. Earlier this month, SRS Secretary Gary Daniels announced the department had dropped its “maximization” contract with Maximus.

“It seems they’ve become somewhat of a lightning rod for (auditors),” Daniels said. “We decided it would be best if we managed our own affairs.”

A recent report by the National Academy for State Health Policy noted “the federal government has allowed and even encouraged state fiscal practices that it later determines are problematic.”

But the report also surmised that states “are engaged in a constant game of ‘catch me if you can’ in an effort to maximize receipt of federal funds.”

Tom Lenz, regional administrator at the Centers for Medicare and Medicaid Services’ office in Kansas City, Mo., said he understood the state’s frustration.

“It’s true, (federal) guidance wasn’t always crystal clear,” Lenz said.

But, he said, states shouldn’t expect the federal government to ignore past transgressions.

“When the current administration came in, it decided we needed to enhance the oversight of Medicaid program and strengthen policies as to what’s allowable and appropriate,” he said. “That’s what we’re doing.”

[Matthew Hisrich, "Shutting down Medicaid shell games," The Kansas City Kansan, 26 July 2006.]

Friday, August 25, 2006

What Causes Health Care Inflation? 

[John Goodman, "What Causes Health Care Inflation?," NCPA Consumer Driven Health Care Blog, 24 August 2006.]

NCPA president John Goodman points out a new NBER study that demand is driving rising health care costs:

In the decades prior to the establishment of Medicare and Medicaid, health care spending was relatively moderate, and never rose above 6 percent of GDP. With the expansion of government insurance, however, health care has steadily claimed more and more resources - rising to more than 16 percent of GDP today.

Despite this temporal association, many economic studies suggest that technology is the cause of as much as 65 percent of the growth of medical spending. Now a new study by Amy Finkelstein of MIT sorts through new evidence and finds that the problem is with demand, not with supply. Third-party insurance is responsible for more than half of the growth of health care spending.

A clear implication (but not one made by Finkelstein) is that spending can potentially be slowed by shifting from third-party insurance to individual self-insurance through individually owned health accounts.

Read the full article

Read the coverage in Business Week

[Richard B. Warner, "The Real Culprit," The Flint Hills Center, December 1997.]

USA Today on retail health clinics 

[Julie Schmit, "Could walk-in retail clinics help slow rising health costs?," USA TODAY, 24 August 2006.]

Consumer-driven innovation in health care delivery is gaining steam, as this recent article from USA Today indicates:

The clinics, about 150 nationwide, provide convenient but limited service at a low cost. They treat common ailments only — such as strep throat, ear infections and allergies — and offer an alternative to packed doctors' offices and pricey emergency rooms.

While the clinics vary by company, most treat 25 to 40 medical conditions and charge $45 to $75 a visit. MinuteClinic pioneered the industry in 2000. It has the most clinics, 87, and is being bought by CVS.

HealthPartners, a Minnesota-based health maintenance organization, analyzed two years of MinuteClinic claims data and found total costs about 25% less for MinuteClinic treatments compared with those done at doctors' offices or urgent-care clinics.

The clinics save even more if they keep patients out of emergency rooms, which can cost hundreds of dollars per visit, and which frequently treat the uninsured.

Most clinics do or will take insurance, are walk-in and are open evenings and weekends. They advertise short waits and 15-minute exams, and some give out pagers so clients can shop while waiting. Prices are posted — at MinuteClinic, on an electronic sign, as in a fast-food restaurant.

The retail clinic threat is already sparking change. Several health care providers, including AtlantiCare, the biggest in southeastern New Jersey, are opening their own limited-service clinics in stores.

The American Academy of Family Physicians recently encouraged its 94,000 doctors to expand office hours and same-day appointments. “Hopefully, we'll be able to compete,” says Larry Fields, a physician and head of the AAFP.

[Devon Herrick, "The Changing Face of Health Care," The Salina Journal, 3 July 2006.]

Thursday, August 24, 2006

Health and financial information to combine on new debit cards 

[M.L. Baker, "Coming: Insurance Debit Cards That Reveal Health History," Extreme Nano, 23 August 2006.]

UnitedHealth just announced that they will be delivering on a concept that has been discussed for some time in consumer-driven health care circles - a debit card that patients can use to pay at the time of service that also contains health care data:

Patients covered by UnitedHealth Group will soon receive patient identification cards that they can use as debit cards for medical expenses and that doctors can use to access patients' personal health information electronically.

The new cards, which will carry the MasterCard logo, can be swiped like a credit card at a doctors' office or other certified health provider. But in addition to providing payment, the cards can be used to confirm eligibility for services and provide access to personal health information at the point of care. The cards should be broadly available early in 2007.

UnitedHealth is working on a feature that uses the cards to interface with its electronic systems and determine precisely how much the patient owes at the time of the doctor visit. Besides collecting copayments and other patient-billable expenses easily, doctors' offices can use the cards to submit and process insurance claims more quickly, says UnitedHealth.

The cards will be tied to health savings and flexible spending accounts (HSAs and FSAs), tax-protected funds that generally must be used for health-related expenses. UnitedHealth, whose subsidiary Exante Financial Services is handling this, will also offer credit lines that can cover medical expenses not covered by health insurance and that exceed amounts in an individual's accounts.

"By combining health and financial information, we have greatly simplified a series of fragmented and time-consuming experiences for health care consumers," said John Prince, CEO of Exante Financial Services, in a statement.

[William Short, "HSAs treat ills of health care payment system," The Kansas City Business Journal, 25 March 2005.]

Financial organizations banking on HSAs 

["Financial organizations banking on HSAs," United Press International, 23 August 2006.]

A new survey reveals that the majority of financial organizations see health savings accounts as a solid investment:

Eighty percent of financial organizations either offer Health Savings Accounts (HSAs) or plan to in the next year, a new survey says.

Fifty-four percent of the 137 financial organizations surveyed by financial services firm Walters Kluwer said they were currently offering the accounts, while another 26 percent said they plan to offer them within 12 months.

Generating new accounts and increasing cross-sell opportunities were cited by more than two-thirds of respondents as reasons these organizations were offering or planning to offer health savings accounts.

Other reasons cited by organizations included increasing deposits (62 percent) enhancing commercial account relationships (41 percent) and generating fee income (28 percent).

[William Short, "Mini-meds can help HSAs succeed," The Dodge City Globe, 17 August 2006.]

NPR examines KY, WV Medicaid reforms 

["NPR Examines Kentucky, West Virginia Revisions to Medicaid Programs Under New Federal Law," Kaiser Daily Health Policy Report, 23 August 2006.]

The federal system of government in the United States ideally should allow for 50 "laboratories of democracy," in which public policy can be adapted to local preferences and all can learn from the successes and failures of the others. In the case of the federal-state joint program Medicaid, however, federal regulation has up until recently made such experimentation virtually impossible. New rules are now in effect, though, that are opening the door to creative approaches to solving the currently unsustainable design of Medicaid:

NPR's "Morning Edition" on Tuesday examined revisions to the Medicaid programs in Kentucky and West Virginia, which are the first two states to revise their programs under a new federal law that allows states increased flexibility in determining benefits and out-of-pocket costs.

The complete segment is available online in RealPlayer.

[Michael Bond, "Reforming Medicaid in Kansas: A Market-Based Approach," The Flint Hills Center, 2 February 2006.]

Wednesday, August 23, 2006

A Crisis of Abundance 

[Book Forum, "Crisis of Abundance: Rethinking How We Pay for Health Care," The Cato Institute, 29 August 29 2006.]

The Cato Institute is hosting author Arnold Kling next Tuesday for a forum on his new book, Crisis of Abundance: Rethinking How We Pay for Health Care:

Why do so many pundits say that America's health care system is in crisis? Economist Arnold Kling says that the fundamental challenge in American health care today is that we have many highly trained specialists and advanced technologies but do not know when their use is appropriate or how we should pay for them. He calls this a Crisis of Abundance. Kling argues that markets could do a better job of allocating these resources, and he advocates cutting government health care budgets by two-thirds and reducing third-party payment as a way to encourage better medical decisions.

If you can't make it to the Cato Institute, watch this forum live online.

[Richard B. Warner, "Medical Care Inflation," The Flint Hills Center, August 2003.
Richard B. Warner, "How Would You Like Your Medicine?," The Flint Hills Center, 24 July 1999.
Richard B. Warner, "The Real Culprit," The Flint Hills Center, December 1997.]

Financial advisers liable for LTC oversight 

[Harley Gordon, J.D., "Financial Planners Risk Lawsuits for Failing to Recommend Realistic Plans for Long-Term Care," The Journal of Financial Planning, August 2005.]

Stephen Moses of The Center for Long-Term Care Reform reports in the latest LTC Bullet that financial advisers face significant risk if they do not adequately alert clients to the costs of LTC:

As long-term care planning becomes more and more important, the risk to financial advisors, including lawyers, financial planners, and insurance agents, of failing to cover it becomes much greater. If they carelessly neglect to advise their clients of the need to plan and insure for long-term care, they can be vulnerable to accusations of malpractice. And now it is starting to happen!

[Harley] Gordon's newsletter for his Certified in Long-Term Care graduates (CLTC E-Alert - Putting Advice in Writing, 8/15/2006) reports the following:

"The obvious has happened.

"A story in Registered Rep detailed the travails of a registered advisor who recommended long-term care insurance to his clients. The problem is that he did not put it in writing assuming the clients would take note. They didn't, but the children did. They sued the advisor for malpractice after both parents were diagnosed with Alzheimer's. The article made a number of points that are relevant to financial service professionals, first among them is that failure to discuss a plan for long-term care and protect the plan with long-term care insurance is grounds for professional malpractice. Other points addressed in this first rate article:

* Always put the advice in writing. The article stated that if the recommendation had been clearly stated in a letter, it is unlikely an action would have been filed.

* Check your E&O policy carefully. When the advisor put the claim in the carrier denied coverage claiming that although the policy would have covered an action brought by the clients there was a specific exclusion for third party plaintiffs, in this case the children who filed the suit.

"The full story, "Scary Story," by Janet Arrowood can be read here.

[Stephen Moses, "Its time to end welfare for the well-to-do," The Kansas City Kansan, 26 April 2006.
Stephen Moses, "Estate Recoveries Needed to Help Pay for Medicaid," The Wichita Eagle, 27 September 2005.
Stephen Moses, "Nursing home system in need of reform," The Pittsburg Morning Sun, 22 May 2005.]

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