The Uninsured

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The Uninsured
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Many Specialists Wont See Kids With Medicaid
Bisgaier J, Rhodes KV. N Engl J Med
20113642324-2333
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Under- Insurance
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Rising Economic Inequality
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Persistent Racial Inequalities
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Rationing Amidst a Surplus of Care
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Unnecessary Procedures
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Variation in Medicare
Spending Some Regions Already Spend at Canadian
Level
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ACOsA Rerun of the HMO Experience?
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Profit-Driven ACOsMedicare HMOs Provide a
Cautionary Tale
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Despite Medicares Lower Overhead, Enrollment of
Medicare Patients in Private Plans Has Grown
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Private Medicare Plans Have Prospered by Cherry
Picking
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Medicares Attempt to Improve Risk-Adjustment of
HMO Payment

• Pre-2004 - HMOs were cherry-picking when
  payment adjusted only for age, sex, location,
  employment status, disability, institutionalizatio
  n, Medicaid eligibility
• 2004 Risk adjustment formula added 70 diagnoses

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Risk Adjustment Increased Medicare HMO
Over-Payments30 billion Wasted Annually

• We show that . . . risk-adjustment . . . .
  can actually increase differential payments
  relative to pre-risk-adjustment levels and thus .
  . . raise the total cost to the government. . . .
  The differential payments . . . totaled 30
  billion in 2006, or nearly 8 percent of total
  Medicare spending. . . . recalibration of the
  risk adjustment formula will likely exacerbate
  mispricing.
• Source NBER 16977

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Profit-Driven Upcoding Makes Accurate Risk
Adjustment Impossible High Cost Providers
Inflate Both Reimbursement and Quality Scores by
Making Patients Look Sicker on Paper
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Assumptions Implicit in P-4-P

1. Performance can be accurately ascertained
2. Individual variation is caused by variation in
   motivation
3. Financial incentives will add to intrinsic
   motivation
4. Current payment system is too simple
5. Hospitals/MDs delivering poor quality care should
   get fewer resources

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Pay for Performance

• I do not think its true that the way to get
  better doctoring and better nursing is to put
  money on the table in front of doctors and
  nurses. I think that's a fundamental
  misunderstanding of human motivation. I think
  people respond to joy and work and love and
  achievement and learning and appreciation and
  gratitude - and a sense of a job well done. I
  think that it feels good to be a doctor and
  better to be a better doctor. When we begin to
  attach dollar amounts to throughputs and to
  individual pay we are playing with fire. The
  first and most important effect of that may be to
  begin to dissociate people from their work.

Don Berwick, M.D,
Source Health Affairs 1/12/2005
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We found no evidence that financial incentives
can improve patient outcomes.

• Flodgren et al. An overview of reviews
  evaluating the effectiveness of financial
  incentives in changing healthcare professional
  behaviors and patient outcomes. Cochrane
  Collaboration, July 6, 2011

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Investor-Owned CareInflated Costs, Inferior
Quality
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For-Profit Hospitals Death Rates are 2 Higher
Source CMAJ 20021661399
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For-Profit Hospitals Cost 19 More
Source CMAJ 20041701817
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For-Profit Dialysis Clinics Death Rates are 9
Higher
Source JAMA 20022882449
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Drug Companies Cost Structure
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Mandate Model ReformKeeping Private Insurers In
Charge
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Mandate Model for Reform

• Proposed by Richard Nixon in 1971 to block Edward
  Kennedys NHI proposal

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Mandate Model for Reform

• Government uses its coercive power to make people
  buy private insurance.

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Mandate Model for Reform

• Expanded Medicaid-like program
• Free for poor
• Subsidies for low income
• Buy-in without subsidy for others
• Individual and Employer Mandates
• Managed Care / Care Management

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Mandate Model - Problems

• Absent cost controls, expanded coverage
  unaffordable
• ACOs/care management, computers, prevention not
  shown to cut costs
• Adds administrative complexity and cost retains,
  even strengthens private insurers
• Impeccable political logic, economic nonsense

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Massachusetts Model Reform Massive Federal
Subsidies, Skimpy Coverage, Persistent Access
Problems
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Massachusetts Required Coverage(Income gt 300
of Poverty)

• Premium 5,600 Annually (56 year old,
  individual coverage)
• 2000 deductible
• 20 co-insurance AFTER deductible is reached

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Public Money, Private Control
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U.S. Health Costs Rising More Steeply, 1970-2008
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Canadas National Health Insurance Program
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Quality of Care Slightly Better in Canada Than
U.S. A Meta-Analysis of Patients Treated for Same
Illnesses (U.S. Studies Included Mostly Insured
Patients)
Source Guyatt et al, Open Medicine, April 19,
2007
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A National Health Program for the U.S.
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Public Opinion Favors Single Payer National
Health Insurance
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