Posts Tagged ‘commonwealth fund’

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Consumer savings from the Affordable Care Act so far a mixed bag

December 21st, 2012

There was much fanfare in the mainstream media over news that Americans saved $1.5 billion thanks to the Affordable Care Act, according to a study by the New York-based Commonwealth Fund. Those savings came about as a result of a new ACA regulation requiring health insurance companies to spend at least 80 percent of premium dollars on actual health care. This financial measure is known as the medical loss ratio (MLR). Health insurance companies that didn’t meet the new rule had to send back the $1.5 billion in the form of rebates to consumers. On its face, this sounded like a win for consumers. However, the real effect of the new MLR rule was more mixed, the study concluded. Although consumers with health coverage in the individual market did see some benefit, for those in small and large-group plans, not so much:

Although the MLR rule, along with other market and regulatory factors, prompted reductions in administrative expenses in all three market segments, in the group markets it appears that insurers were able to retain those cost reductions in the form of increased profits, rather than passing them on to consumers in the form of reduced premiums. By contrast, both administrative costs and profits dropped in the individual market, indicating that consumers benefitted in the form of restrained premium increases. Premiums did increase somewhat, because of the growth in medical costs, but the increases were less than medical cost increases.

Los Angeles-based Consumer Watchdog, pointed to the results of the study as proof that the government needs to do more to regulate premium rate increases.

“Absent rate regulation, health insurers are gaming the health reform law to keep premiums high and increase profits. Health insurers should be required to open their books and justify their charges – including why they haven’t passed on to consumers nearly one billion dollars in savings,” said Carmen Balber, Washington DC director for Consumer Watchdog.

Unlike in some other states, California’s insurance commissioner doesn’t have the power to reject unreasonable rate hikes. Assembly Bill 52, authored by Assemblymember Mike Feuer, would give the insurance commissioner that regulatory authority. Unfortunately, the bill could never make it out of the state Senate, and Feuer decided to shelve it last year. Now that state Democrats are on their way to gaining a supermajority in both houses of the state legislature, there may be hope for a revival of AB 52.

But rate regulation isn’t a panacea. It’s great that some consumers are getting financial relief from Obamacare. However, we can do much better. California could do away with insurance rates altogether by providing health care to all residents as a public service rather than as a commodity. The savings to our state would be far greater.

Sylvia@californiaonecare.org

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Medicare recipients happier than people with private coverage, according to new survey

August 1st, 2012

In yet more evidence of the advantages of single payer, the Commonwealth Fund found in a survey of more than 4,000 adults that people on Medicare are happier than those with private health insurance.

Nationally representative health insurance surveys conducted in 2001 and 2007 showed that in important ways, Medicare works better for its beneficiaries than does coverage available to those under age sixty-five in the employer and nongroup markets. In addition to being more satisfied with their insurance and health care in general, Medicare beneficiaries reported fewer problems with access to care and fewer instances of financial hardship as a result of medical bills, relative to their younger counterparts.

According to the study, only 8 percent of Medicare recipients felt their coverage was fair or poor, compared with 20 percent of people with employer-based insurance and 33 percent with insurance purchased on the individual market. In addition, nearly half of people with private coverage reported at least one bad experience with their care, while only 28 percent of Medicare beneficiaries reported the same. The study concluded,

The evidence reported here from surveys now spanning a decade shows that Medicare is doing a better job than employer-sponsored plans at fulfilling the two main purposes of health insurance: ensuring access to care and providing financial protection.

This Commonwealth Fund study reinforces what the profit-seeking, “wealthcare” industry fears the most: when Americans get on Medicare, they love it. And if Americans over 65 love Medicare, then it stands to reason that if those younger than 65 had access to it, they would dump the idea of private health insurance in droves. Why does Medicare perform better on public satisfaction surveys than private coverage? Why does Medicare do a better job than private insurance at ensuring access and keeping recipients out of the poorhouse? It’s very simple. There is no unaccountable insurance middleman dictating what kind of care people receive and extracting outrageous sums of money from patients in order to line corporate pockets.

Sylvia@californiaonecare.org

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Don McCanne, MD: The Commonwealth Fund compares twelve industrialized nations

August 23rd, 2011

The U.S. Health System in Perspective: A Comparison of Twelve Industrialized Nations

By David A. Squires
The Commonwealth Fund, July 2011

This analysis concentrated on 2010 OECD health data for Australia, Canada, Denmark, France, Germany, Netherlands, New Zealand, Norway, Sweden, Switzerland, the United Kingdom, and the United States.

What is driving higher health care spending in the U.S.?

Spending on health care in the U.S. in 2008 far exceeded that seen in other countries. In both dollar figures and as a percentage of GDP, no country came within 70 percent of U.S. spending ($7,538 per capita, 16% GDP). This higher spending does not seem to simply reflect higher income.

There are many forces driving health care spending. An annual series of Commonwealth Fund-sponsored analyses of OECD health data dating back to 1999 has explored a number of potential factors, including: administrative complexity, the aging of the population, the practice of “defensive medicine” under threat of malpractice litigation, chronic disease burden, health care supply and utilization rates, access to care, resource allocation, and the use of technologically advanced equipment and procedures. These and other studies have found, contrary to often-cited explanations, the U.S. has a relatively young population, average or below-average rates of chronic conditions, and comparatively few doctor visits and hospitalizations compared with other industrialized countries. Instead, these studies suggest major reasons for higher spending include substantially higher prices and more fragmented care delivery that leads to duplication of resources and extensive use of poorly coordinated specialists.

A 2010 cross-national study conducted by The Commonwealth Fund ranked the U.S. sixth of seven countries in terms of quality, with average performance on effectiveness and patient-centeredness and low performance on safety and coordination.

These findings suggest that the U.S. health system is not delivering superior results despite being more expensive, indicating opportunities for cross-national learning to improve health system performance.

With chronic disease on the rise amidst an aging demographic and accounting for ever more health care spending, more effective treatment and management in primary care settings may have the potential to simultaneously improve patient care while preventing the unnecessary use of scarce and expensive resources.

http://www.commonwealthfund.org/~/media/Files/Publications/Issue%20Brief/2011/Jul/1532_Squires_US_hlt_sys_comparison_12_nations_intl_brief_v2.pdf

Comment:

By Don McCanne, MD

This Commonwealth Fund report confirms, once again, that we spend far more than other nations for health care while receiving only mediocrity from a fragmented system. There is much that we can do to improve quality and value, but it needs to begin with a rational system of financing health care.

We don’t have such a system now and will not have it under the provisions of the Patient Protection and Affordable Care Act – a model of reform that is the most expensive and falls far short on goals of reform. We already have learned much from the other eleven nations discussed in this report, but we have failed to act on what we know. Clearly, a single payer national health program with reinforcement of our primary care infrastructure is the redirection that we need.

Re-posted with permission from pnhp.org.

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OMG! Commonwealth study: U.S. MDs spend $83,000 (yearly) on insurance administration costs

August 5th, 2011

by nyceve

The other day, my brother asked me to explain why a simple yearly doctor visit costs $1500?  I started to explain, and he didn’t believe me.  I told him, doctors have to employ armies of people to deal with hundreds of insurance companies, this adds huge and unsustainable costs to our system.   I knew it was bad, but I didn’t know it was this bad.

Fasten your seat belts.  And as you read, keep in mind that the Affordable Care Act, has cemented into place this broken and dysfunctional system.  The for profit insurance industry has also taken our country hostage.

It’s all here, in this chart. And tragically the Affordable Care Act cements the for-profit health insurance industry at the heart of our completely broken profit centered health care system.

The way we bring health care costs under control is to remove profit from our health care system, but that won’t happen as long as the political class is bought and sold by the insurance industry.

A new study comparing health care costs in Ontario Canada which has a single payer system to our for-profit system reveals the terrible and unsustainable costs our for-profit healthcare system extract from the U.S. economy.

If there was any serious intent in Washington to bring our deficit under control, the first place one would look would be the for-profit health care system.  This is why what we just witnessed with the debt ceiling fiasco is so troubling, it was depraved Kabuki theater at its most grotesque.

If you want to know why we pay four, five, six times as much for a routine doctor appointment in the United States, look again at the chart.  It’s nauseating. And it’s because our broken and fragmented health care system is being held hostage by the for-profit insurance industry which .

Don’t believe a word I say, but please believe Dean Baker.

The reason that Medicare, Medicaid, and Social Security are projected to “usurp much of the revenue from federal taxes,” is that health care costs in the United States are out of control. If the U.S. paid the same amount per person for health care as any of these other countries it would be looking at huge budget surpluses in the long-term, not deficits.

The survey research reveals that physician practices in the United States incur nearly $83,000 in administrative costs per physician each year, nearly four times the amount spent by their Canadian counterparts. The U.S. could save almost $27.6 billion in annual health spending if administrative costs were similar to those in Canada.

Administrative costs are a major factor in the high cost of health care in America. One significant component is the expense physicians incur when they have to deal with multiple health insurers. In a new Health Affairs study comparing these costs in the U.S. and Canada, Commonwealth Fund–supported researchers show just how much more U.S. practices spend than their counterparts across the border.

Based on survey research, the authors, led by the University of Toronto’s Dante Morra, report that the time and labor spent by U.S. physician practices on filing claims, billing, obtaining prior authorization for patient services, and dealing with pharmaceutical formularies amounts to at least $82,975 per physician annually. That figure dwarfs the $22,205 spent by practices in Ontario, which operates within Canada’s predominantly single-payer health system.

Commenting on the new study, Commonwealth Fund president Karen Davis cited an inefficient and fragmented insurance system as a contributor to high costs in the U.S. “Greater continuity of insurance coverage and administrative simplification reforms in the Affordable Care Act can begin to streamline health care administration and reduce the time medical staff must spend on billing and authorization issues,” she said.

The authors of the study estimate total savings of about $27.6 billion per year if U.S. physician practices had administrative costs similar to those in Ontario.

Our country is in free fall, we have 55 million without access to health care and those of us still hanging on to our junk insurance are hostage to a government bought and paid for by the health insurance industry.

Nyceve is a board member for California OneCare. Originally posted at the Daily Kos.

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