HEALTH REFORM:THE GOOD, THE BAD, and THE

UGLY

JEOFFRY B. GORDON, MD, MPH

paradocs2@hotmail.comUCSD: USP 143

The US Health Care SystemJanuary 30, 2014

HEALTH REFORM:THE GOOD, THE BAD, and the UGLY

JEOFFRY B. GORDON, MD, MPHparadocs2@hotmail.com

Part 1 – The BIG PICTURE & VALUES

It was Ronald Reagan who said “freedom is always just one generation away from extinction. We don’t pass it

to our children in the bloodstream; we have to

fight for it and protect it, and then hand it to them so that

they shall do the same, or we’re going to find ourselves

spending our sunset years telling our children and our children’s children about a

time in America, back in the day, when men and women

were free.”

How the Supreme Court Ruled on the Health Care LawIndividual mandate upheld as a tax.Majority opinion by Chief Justice Roberts“The Affordable Care Act’s requirement that certain individuals pay a financial penalty for not obtaining health insurance may reasonably be characterized as a tax. Because the Constitution permits such a tax, it is not our role to forbid it, or to pass upon its wisdom or fairness.”Dissenting minority opinion.“The Court regards its strained statutory interpretation as judicial modesty. It is not. It amounts instead to a vast judicial overreaching. It creates a debilitated, inoperable version of health-care regulation that Congress did not enact and the public does not expect.”Medicaid expansion upheld, but limitedMajority opinion by Chief Justice Roberts“Nothing in our opinion precludes Congress from offering funds under the Affordable Care Act to expand the availability of health care, and requiring that states accepting such funds comply with the conditions on their use. What Congress is not free to do is to penalize states that choose not to participate in that new program by taking away their existing Medicaid funding.”Dissenting minority opinion“Those states that decline the Medicaid expansion must subsidize, by the federal tax dollars taken from their citizens, vast grants to the states that accept the Medicaid expansion. If that destabilizing political dynamic, so antagonistic to a harmonious union, is to be introduced at all, it should be by Congress, not by the judiciary.”

VALUES IN HEALTH CARETHE MORAL AND ETHICAL

IMPERATIVEThe Values of a Healthy Society

(1) MAXIMIZE HEALTHY STATES (provide good, quality medical care)

(2) COMPASSION and CARING (relieve pain, suffering and anxiety)

(3) SOCIAL and ECONOMIC JUSTICE (provide for the vulnerable)

(4) CIVIC RESPONSIBILITY (society as a commonwealth)

(1) MAXIMIZE HEALTHY STATES (provide good, quality medical care)

(2) COMPASSION and CARING (relieve pain, suffering and anxiety)

(3) SOCIAL and ECONOMIC JUSTICE (provide for the vulnerable)

(4) CIVIC RESPONSIBILITY (society as a commonwealth)

The Inverse Care LawJULIAN TUDOR HART The Lancet: Saturday 27 February 1971 Glyncorrwg Health Centre, Port Talbot, Glamorgan, Wales The availability of good medical care tends to vary inversely with the need for the population served. This inverse care law operates more completely where medical care is most exposed to market forces, and less so where such exposure is reduced. The market distribution of medical care is a primitive and historically outdated social form, and any return to it would further exaggerate the maldistribution of medical resources.

Part 2 – ECONOMICS

23%

49%

64%74%

80%

97%

3%

Top1%

Top5%

Top10%

Top15%

Top20%

Top50%

Bottom50%

Population Percentile Ranked by Health Care Spending

Concentration of Health Spending in the U.S., 2004

Notes: Population includes those without any health care spending and excludes those living in institutions. Health spending isdefined as total payments, or the sum of spending by all payer sources.Source: Kaiser Family Foundation calculations using data from U.S. Department of Health and Human Services, Agency for Healthcare Research and Quality, Medical Expenditure Panel Survey (MEPS), 2004.

PATIENTS ARE NOT GOOD CONSUMERS

• Producing, purchasing and using medical care is profoundly different from manufacturing, selling, purchasing and using a car, a blouse, a refrigerator, a haircut, a college class, or an accountant.

• (1) Even among the well educated there is a tremendous asymmetry between the doctor and the patient in the esoteric technical knowledge and judgment needed for the application of competent and effective medical care.

• (2) A person who has an accident or an illness has very little opportunity or capacity to shop around and compare either price or quality. Usually the sicker and more acutely ill the patient, the less this capacity will be.

• (3) During any illness it may be impossible or even catastrophically dangerous for a patient to try to out (consume) one set of treatments and then choose to switch to another.

Arrow, Kenneth J. Uncertainty and the welfare economics of medical care. The American Economic Review 1963;53:941-73.

PATIENTS ARE NOT GOOD CONSUMERS• (4) Enduring and managing an illness or an accident inherently involves a

huge number of emotional factors, thus impairing “rational” consumer choice.

• (5) Under the necessary insurance system the consumer/patient is mostly insulated from the anticipated or actual purchase prices and costs anticipated or actually incurred.

• (6) It is not unusual for a bout of illness to require the sudden purchase of medical care which will be literally catastrophically expensive, yet to forego it is to invite personal tragedy and face ongoing pain, disability or even death.

• (7) The purchaser of most medical services and supplies and thus the generator of most medical spending is the doctor, not the patient. (Yet most doctors are, in fact, usually ignorant of the costs or the charges for most of what they order.)

• (8) Under our current system there are at least 48 million Americans (15.7%) who do not have health insurance and who are overwhelmingly without personal resources. Thus they are unable to buy into the market.

Exhibit 15. High U.S. Insurance Overhead: Insurance Related Administrative Costs

• Fragmented payers + complexity = high transaction costs and overhead costs

– McKinsey estimates adds $90 billion per year*

• Insurance and providers

– Variation in benefits; lack of coherence in payment

– Time and people expense for doctors/hospitals

$76$86

$140$191$198

$220$247

$516

$0

$100

$200

$300

$400

$500

$600

US FR SWIZ NETH GER CAN AUS* OECDMedian

* 2006Source: 2009 OECD Health Data (June 2009).

Spending on Health Insurance Administration per Capita, 2007

•McKinsey Global Institute, Accounting for the Costs of U.S. Health Care:• A New Look at Why Americans Spend More (New York: McKinsey, Nov. 2008).

0%

500%

1000%

1500%

2000%

2500%

1970 1975 1980 1985 1990 1995 2000

Administrators Physicians

Who Delivers Health Care?

Growth in Physicians and Administrators since 1970

Who Delivers Health Care?

Growth in Physicians and Administrators since 1970

Source: BLS & Himmelstein/Woolhandler/Lewontin Analysis of CPS Data

•Among medical debtors, hospital bills were the largest medical expense for 48% drug costs for 19%, doctors’ bills for 15% and insurance premiums for 4%. In 38% of cases, lost income due to illness was a factor.•Out-of-pocket medical costs since the onset of illness averaged $17,943.•For the privately-insured, out-of-pocket costs averaged $17,749.•For the uninsured, out-of-pocket costs averaged $26,971.•Patients with neurologic disorders such as multiple sclerosis faced the highest costs, and average of $34,167, followed by diabetics at $26,971.

•Illness and medical bills were linked to at least 62.1% of all personal bankruptcies in 2007. Based on the current bankruptcy

filing rate, medical bankruptcies will total 866,000 and involve 2.346 million Americans this year – about one person every 15 seconds.•Using identical definitions in both years, the proportion of bankruptcies attributable to medical problems rose by 49.6% between 2001 and 2007.•Most medically bankrupt families were middle class before they suffered financial setbacks. 60.3% of them had attended college and 66.4% had owned a home; 20% of families included a military veteran or active-duty soldier.

Medical loss ratio 2Q 2008 2Q 2009

Aetna 81.9% 86.8%

Cigna 86.0% 86.7%

Coventry 85.8% 86.4%

Health Net 85.3% 86.2%

Humana 85.8% 83.6%

WellPoint 83.3% 82.9%

UnitedHealth Group 83.6% 83.6%

Source: Securities and Exchange Commission

Medical loss ratio 2Q 2008 2Q 2009

Aetna 81.9% 86.8%

Cigna 86.0% 86.7%

Coventry 85.8% 86.4%

Health Net 85.3% 86.2%

Humana 85.8% 83.6%

WellPoint 83.3% 82.9%

UnitedHealth Group 83.6% 83.6%

Source: Securities and Exchange Commission

19 Jan 2009 UnitedHealth Group on Thursday agreed to pay $350 million to settle three class-action lawsuits filed by physicians and health plan members over allegations that the company underpaid for out-of-network medical services, the New York Times reports (Abelson, New York Times, 1/16). On Tuesday, UnitedHealth agreed to settle an investigation by New York state Attorney General Andrew Cuomo (D) that found health insurers understated the portion of reimbursements for which they are responsible for such services by as much as 28% in some cases, or hundreds of millions of dollars over the last 10 years. Under the agreement with Cuomo, UnitedHealth will pay $50 million to finance the development of a new database that an undetermined university will operate (Kaiser Daily Health Policy Report, 1/13). The latest settlement, which requires court approval, will pay health plan members and physicians for out-of-network services provided since 1994 (Fuhrmans, Wall Street Journal, 1/15)…

UnitedHealth Reaches $925 Million Settlement, Associated Press AUG-11-09:A proposed settlement between UnitedHealth and its shareholders has been given the green light by a federal judge, bringing to an end a class action lawsuit stemming from allegations of options backdating. The settlement is for $925 million, $895 million of which will be paid by UnitedHealth, and the remaining $30 million by former Chairman and CEO William McGuire, who was forced to step down as a result of the scandal in 2006. His portion of the payment cancels $3.6 million in stock options. The lead plaintiff in the case is the California Public Employees Retirement System.

Blue Shield, Kaiser among state insurers finedVictoria Colliver, Chronicle Staff Writer San Francisco Chronicle November 30, 2010 04:00 AMState regulators Monday fined seven of California's largest health insurers nearly $5 million for systematically failing to pay doctors and hospitals fairly and on time.The California Department of Managed Health Care issued the fines following an 18-month audit in which investigators looked at a small but statistically significant sample of claims. The investigation found the plans were paying on average about 80 percent of the claims correctly, far below the legal threshold of 95 percent….Regulators fined Anthem Blue Cross and Blue Shield of California $900,000 each. United/PacifiCare was fined $800,000 and Kaiser Foundation Health Plan and Health Net were both hit with fines of $750,000. The fines for Cigna and Aetna were $450,000 and $300,000, respectively, for a total of $4.85 million.

Part 3 – The AFFORDABLE CARE ACT, OBAMACARE

By 2012 'Obamacare' In California: President's Affordable Care Act Has Been 'Lifesaving' For Golden State

**About 8,600 Californians with pre-existing medical conditions have gained access to affordable health insurance. Patients who have illnesses such as cancer or multiple sclerosis - who face high costs or denials on the open market - can buy insurance through the program.**More than 350,000 young adults have been able to stay on their parents' health insurance plans until they are 26.**More than 370,000 low-income people have been covered by an expansion of Medi-Cal, the health insurer for low-income Californians, that is part of the state's "bridge to reform" waiver to alter the state-federal program.** Consumers saved more than 100 million dollars when health insurance rate increases were rolled back or withdrawn as a result of increased regulatory power to review those increases. ** Seniors saved 171 million dollars in prescription drug costs in a plan to close the Medicare limits in coverage. **12 million people who currently have health insurance no longer face a cap on coverage in case of a catastrophic illness.

The Primary Care WorkforceFoundation in the US is Crumbling

Plummeting numbers of new physicians entering primary carePrimary care shortages throughout USGrowing problems of access to primary care and “medical homelessness”

Doctor Shortage Likely to Worsen With Health LawBy ANNIE LOWREY and ROBERT PEAR, THE NEW YORK TIMES, July 28, 2012 RIVERSIDE, Calif. — In the Inland Empire, an economically depressed region in Southern California, President Obama’s health care law is expected to extend insurance coverage to more than 300,000 people by 2014. But coverage will not necessarily translate into care: Local health experts doubt there will be enough doctors to meet the area’s needs. There are not enough now…A government council has recommended that a given region have 60 to 80 primary care doctors per 100,000 residents, and 85 to 105 specialists. The Inland Empire has about 40 primary care doctors and 70 specialists per 100,000 residents — the worst shortage in California, in both cases.Other places around the country, including the Mississippi Delta, Detroit and suburban Phoenix, face similar problems. The Association of American Medical Colleges estimates that in 2015 the country will have 62,900 fewer doctors than needed. And that number will more than double by 2025, as the expansion of insurance coverage and the aging of baby boomers drive up demand for care. Even without the health care law, the shortfall of doctors in 2025 would still exceed 100,000. Moreover, across the country, fewer than half of primary care clinicians were accepting new Medicaid patients as of 2008, making it hard for the poor to find care even when they are eligible for Medicaid. The expansion of Medicaid accounts for more than one-third of the overall growth in coverage in President Obama’s health care law. Across the country, a factor increasing demand, along with expansion of coverage in the law and simple population growth, is the aging of the baby boom generation. Medicare officials predict that enrollment will surge to 73.2 million in 2025, up 44 percent from 50.7 million this year. The proportion of medical students choosing to enter primary care has declined in the past 15 years, as average earnings for primary care doctors and specialists, like orthopedic surgeons and radiologists, have diverged. A study by the Medical Group Management Association found that in 2010, primary care doctors made about $200,000 a year. Specialists often made twice as much.

Family Health Centers of San Diego has 30 community health centers and was founded in 1970. Our mission is to provide caring, affordable, high quality healthcare and supportive services to everyone, with a special commitment to uninsured, low income and medically underserved persons.Everyone is welcome at our health centers, including Medi-Cal, insured and uninsured patients. Many patients qualify for programs that cover the cost of their care. If patients are uninsured and do not qualify for a program, their cost is discounted based on income and family size.

Downtown Family Health Center at Connections

The Great DealmakerThe Obama Administration made a series of deals to pass PPACA:

The insurance industry: Assured that everyone would be required to buy their product -- and there would be no public option

The drug industry: No negotiation on pricesThe AMA: No cut in physician feesHospitals: No cut in reimbursements, only

slower growth in paymentsEmployers: Continued control of health

benefitsNervous members of the public: “You can

keep what you have”

Obamacare architect leaves White House for pharmaceutical industry jobGlenn Greenwald, theguardian.com, Wednesday 5 December 2012

When the legislation that became known as "Obamacare" was first drafted, the key legislator was the Democratic Chairman of the Senate Finance Committee, Max Baucus. As Baucus himself repeatedly boasted, the architect of that legislation was Elizabeth Fowler, his chief health policy counsel; indeed, as it was Fowler who actually drafted it. As Politico put it at the time: "If you drew an organizational chart of major players in the Senate health care negotiations, Fowler would be the chief operating officer."What was most amazing about all of that was that, before joining Baucus' office as the point person for the health care bill, Fowler was the Vice President for Public Policy and External Affairs (i.e. informal lobbying) at WellPoint, the nation's largest health insurance provider (before going to WellPoint, as well as after, Fowler had worked as Baucus' top health care aide).

Whatever one's views on Obamacare were and are: the bill's mandate that everyone purchase the products of the private health insurance industry, unaccompanied by any public alternative, was a huge gift to that industry; To the extent that Liz Fowler is the author of this document, we might as well consider WellPoint its author as well. More amazingly still, when the Obama White House needed someone to oversee implementation of Obamacare after the bill passed, it chose . . . Liz Fowler. That the White House would put a former health insurance industry executive in charge of implementation of its new massive health care law was roundly condemned by good government groups as at least a violation of the "spirit" of governing ethics rules and even "gross", but those objections were, of course, brushed aside by the White House. She then became Special Assistant to the President for Healthcare and Economic Policy at the National Economic Council. Now, Fowler is once again passing through the deeply corrupting revolving door as she leaves the Obama administration for a senior-level position leading 'global health policy' at Johnson & Johnson's government affairs and policy group.

Let's use the Health Reform Subsidy Calculator (from Kaiser Family Foundation http://healthreform.kff.org/SubsidyCalculator.aspx#incomeAgeTables) to check a few examples. In each example, we will assume that the policyholder is 45, has a family of four, and does not have employer coverage available. For this family living in a region with a medium cost factor, the predicted premium for the silver plan (70% actuarial value) is $14,245. In the examples, we will change the level of income only.

Income: $31,155 (133% of poverty)Premium payment: None - covered by MedicaidMaximum out-of-pocket costs: None - covered by MedicaidIncome: $31,156 (133% of poverty plus $1)Premium payment: $935Maximum out-of-pocket costs: $4,167Total Family Cost: $5102 (17% of family income)Income: $93,700 (400% of poverty)Premium payment: $8,901Maximum out-of-pocket costs: $8,333Total Family Cost: $17,234 (18% of family income)Income: $93,701 (400% of poverty plus $1)Premium payment: $14,245Maximum out-of-pocket costs: $12,500Total Family Cost: $26,745 (28% of family income)

Anthem limits number hospitals in NH from which insurance exchange members can seek care By KEVIN LANDRIGAN, THE TELEGRAPH (Nashua, NH), September 5, 2013

CONCORD – Starting Jan. 1, Southern New Hampshire Regional Medical Center and 11 other hospitals will not serve patients who get individual health insurance through exchanges under the Affordable Care Act, officials with Anthem Blue Cross and Blue Shield confirmed Wednesday. Critics quickly said this change will force residents in Concord, the Seacoast and the North Country to travel farther to get to a hospital or their own doctor’s office.Anthem will use this “narrower network” for all customers with individual insurance whether they are in or out of the exchange also known as the marketplace, Anthem lobbyist Paula Rogers told the Joint Health Care Reform Oversight committee. “We are working towards a focused and narrower network,” Rogers said. “We’ve got 26 hospitals. Do we need 26 hospitals to serve the population we expect to see and still provide quality of care? We decided that we didn’t.” This change affects not only hospital care but doctor visits since many primary care physician practices across the state are hospital-owned. Anthem’s stated goal with this narrow network is to reduce what these preferred hospitals and affiliate doctors charge them for care. In return, the chosen hospitals and doctors become exclusive providers for individual insurance, and those plans typically are the most expensive for consumers, Rogers said.Senate Majority Leader Jeb Bradley, R-Wolfeboro, said it was frustrating state Insurance officials recommended Anthem’s proposal to federal officials July 27 but still has not spoken publicly about the details because agency rules require all insurance plans are confidential until their effective date.“It is astounding to me. We are going to be introducing rationing of health care in New Hampshire, and we aren’t talking about it.” The GOP-led Legislature passed a state law in 2012 blocking the state from running its own exchange, and the federally run alternative leaves consumers here with less information and government oversight.(Anthem is the ONLY insurance company offering health insurance plans through the ACA exchange in New Hampshire.)

AIDS advocates say drug coverage in some marketplace plans is inadequateBy Ariana Eunjung Cha, The Washington Post, December 9, 2013

The nation’s new health-care law says insurers can’t turn anyone away, even people who are sick. But some companies, patient advocates say, have found a way to discourage the chronically ill from enrolling in their plans: offer drug coverage too skimpy for those with expensive conditions.Some plans sold on the online insurance exchanges, for instance, don’t cover key medications for HIV, or they require patients to pay as much as 50 percent of the cost per prescription in co-insurance — sometimes more than $1,000 a month.“The fear is that they are putting discriminatory plan designs into place to try to deter certain people from enrolling by not covering the medications they need, or putting policies in place that make them jump through hoops to get care,” said John Peller, vice president of policy for the AIDS Foundation of Chicago.As the details of the benefits offered by the new health-care plans become clear, patients with cancer, multiple sclerosis, rheumatoid arthritis and autoimmune diseases also are raising concerns, said Marc Boutin, executive vice president of the National Health Council, a coalition of advocacy groups for the chronically ill. “The easiest way [for insurers] to identify a core group of people that is going to cost you a lot of money is to look at the medicines they need and the easiest way to make your plan less appealing is to put limitations on these products,” Boutin said.

Clinical Care Transformation ModelTHE ACCOUNTABLE CARE ORGANIZATION (ACO)

Patient

Advanced Primary CareUnder Patient-Centered Medical Home

Medical GroupEnterprise Level Activities

Accountable Care OrganizationHospitals• Service Line Integration• Medical Staff Alignment• Incentives for Efficiency & Lean Six Sigma• Quality (SCIP, Leap Frog)• Safety

Medical Groups• Enterprise Level

Activities• PC-MH Functions

Skilled Nursing Facilities• SNFists• On-site Case Management• Efficiency Rating Systems

“Preferred Facilities”

Ancillary Services• Free-Standing ASC &

Diagnostic Testing Centers

Home Care• Home Safety Visits• Post Discharge Visits• Home Health

Coordinator of Services

Hospice• Transitions

(CHF, COPD, Frailty Syndrome, Dementia)

• PCP/SCP Incentives & Clinical Guidelines• Pay for Performance Initiatives• Hospitalists, Post Discharge Follow-Up Programs DME

• Integration & Oversight with Care Management

• Outcomes & Evidence Based Medicine

• Call Coverage• Consult Services (Stroke,

STEMI)• ER Avoidance Programs• Urgent Care• End of Life (Palliative Care)• Patient Satisfaction & Loyalty

• Personal Health Record• Patient Portal• Health Risk Assessment• Patient Engagement &

Activation

• Prevention & Wellness• Point of Care Analytics & Clinical

Decision Support• Gaps in Care• Population Management & Chronic

Care Registries• Home Visiting Teams• Generic Prescribing

Program

• Cost Effective Medical Management & Utilization of Services (SCP, Ancillary)

• Access, Same Day Appointments, e-Visits

• Patient Satisfaction & Loyalty• Provider & Office Staff Satisfaction

• Care management (Acute, Chronic, Inpatient, SNF)

• Health Coaching (Shared Decision Making)

• Transition of Care• Provider Satisfaction• Behavioral & Mental Health

Lessons from the Physician Group Practice Demonstration — A Sobering ReflectionGail R. Wilensky, Ph.D., N Engl J Med 2011; 365:1659-1661 November 3, 2011

In early August, the Center for Medicare and Medicaid Services (CMS) announced the results of the Physician Group Practice (PGP) Demonstration project. Although the headline of the press release was glowing — “Physician Group Practice Demonstration Succeeds in Improving Quality and Reducing Costs” — the reported information suggests more mixed results.1 These results should dampen unreasonable expectations, particularly in terms of potential savings, for accountable care organizations (ACOs), which were modeled after the PGP demo…. The demo began in 2005 (the first sobering fact is that it took so many years to get it started) and included 10 large PGPs. All were multispecialty groups, many with well-known names, such as the Marshfield Clinic, Geisinger, Park Nicollet, and Billings; two were associated with academic medical centers — the University of Michigan and Dartmouth. Physician groups in the demo received their regular Medicare payments for services provided to beneficiaries but could also share in the savings generated as long as they met certain quality metrics and exceeded a savings threshold of 2%. Thirty-two quality goals were used, most of them process measures related to coronary artery disease, diabetes, heart failure, hypertension, and preventive care. The savings threshold was calculated by using the per capita expenditures for a comparator group in the same geographic area and adjusting for the case mix and severity of illness.2 The PGPs did very well on the quality metrics during all 5 years of the demo. In the fourth year, all 10 groups met at least 29 of the 32 quality goals. The savings are another matter. Even with all their experience, only two of the PGP participants were able to exceed a 2% savings threshold the first year of the demo, and only half managed to surpass that threshold after 3 years…. only half of these 10 experienced PGPs were able to achieve the 2% savings threshold — these results are unexpected and, more important, they suggest (doubts) about the likelihood of success for ACOs. The minimum savings threshold that CMS has proposed for ACOs is also 2% (or 3.9% for plans with fewer patients), but plans will have to share losses as well as gains by year 3.

Effects of Care Coordination on Hospitalization, Quality of Care, and Health Care Expenditures Among Medicare Beneficiaries - 15 Randomized TrialsDeborah Peikes, PhD; Arnold Chen, MD, MSc; Jennifer Schore, MS, MSW; Randall Brown, PhDJAMA. 2009;301(6):603-618. Objective To determine whether care coordination programs reduced hospitalizations and Medicare expenditures and improved quality of care for chronically ill Medicare beneficiaries. Design, Setting, and Patients Eligible fee-for-service Medicare patients (primarily with congestive heart failure, coronary artery disease, and diabetes) who volunteered to participate between April 2002 and June 2005 in 15 care coordination programs (each received a negotiated monthly fee per patient from Medicare) were randomly assigned to treatment or control (usual care) status. Hospitalizations, costs, and some quality-of-care outcomes were measured with claims data for 18 309 patients (n = 178 to 2657 per program) from patients' enrollment through June 2006. A patient survey 7 to 12 months after enrollment provided additional quality-of-care measures. Interventions Nurses provided patient education and monitoring (mostly via telephone) to improve adherence and ability to communicate with physicians. Patients were contacted twice per month on average; frequency varied widely. Main Outcome Measures Hospitalizations, monthly Medicare expenditures, patient-reported and care process indicators. Results Thirteen of the 15 programs showed no significant (P<.05) differences in hospitalizations; however, Mercy had 0.168 fewer hospitalizations per person per year (90% confidence interval [CI], −0.283 to −0.054; 17% less than the control group mean, P=.02) and Charlestown had 0.118 more hospitalizations per person per year (90% CI, 0.025-0.210; 19% more than the control group mean, P=.04). None of the 15 programs generated net savings. Treatment group members in 3 programs (Health Quality Partners [HQP], Georgetown, Mercy) had monthly Medicare expenditures less than the control group by 9% to 14% (−$84; 90% CI, −$171 to $4; P=.12; −$358; 90% CI, −$934 to $218; P=.31; and −$112; 90% CI, −$231 to $8; P=.12; respectively). Savings offset fees for HQP and Georgetown but not for Mercy; Georgetown was too small to be sustainable. These programs had favorable effects on none of the adherence measures and only a few of many quality of care indicators examined. Conclusions Viable care coordination programs without a strong transitional care component are unlikely to yield net Medicare savings. Programs with substantial in-person contact that target moderate to severe patients can be cost-neutral and improve some aspects of care.

The Affordable Care Act can be construed as a transfer of benefits from Medicare, which serves an overwhelmingly white population of the elderly – 77 percent of recipients are white — to Obamacare, which will serve a population that is 54.7 percent minority.

Over 10 years, according to the Congressional Budget Office, the Affordable Care Act cuts $455 billion from the Medicare budget in order to help pay for Obamacare.David Frum recently pointed out in “The Obamacare Ripoff,” that Obamacare poses dangers to Democratic support in the middle class. “The Affordable Care Act was ingeniously designed to deliver benefits to Democratic constituencies and impose costs on Republican ones,” Frum wrote. “The big surprise in the ACA rollout is that this design is going awry. It’s not only plutocrats and one-percenters who will find themselves worse off; not only the comparatively affluent retirees enrolled in Medicare Plus programs.”The Affordable Care Act “is often compared to Social Security and Medicare, but these comparisons are imprecise and misleading,” as Edward Carmines, a political scientist at Indiana University, put it in an email: “The distinctive feature of the new health care law is its redistributive nature, which is mostly absent from Social Security and Medicare. Most of the benefits of the new program will go to the poor and less-well-off and most of the costs will be born by the well off. Neither is true of Medicare or Social Security. When the new law was passed it was hailed by The New York Times as the most redistributive policy in a generation, and they were right. It was not sold as being markedly redistributive, of course, but that is how it was designed and will operate. This does not mean it is a bad policy or doomed to fail. But it does mean that it was bound to be caught up in controversy and heated debate.”

“The redistributive arithmetic of Obamacare’s architecture could never add up,” Steven Hayward, a visiting scholar in conservative thought and policy at the University of Colorado, wrote in Forbes magazine: “The wonder is that Obama’s political team didn’t see this coming and prepare a pre-emptive strategy for dealing with the inevitable exposure of the duplicity at the heart of Obamacare’s logic.”

The first order of business in the new Congress is a Republican attempt to repeal PPACA. A clue to what is really bugging members of the GOP might be that, in Republicanese, the term "job-killing" is often a synonym for "raises taxes on the rich". And, indeed, the PPACA bill does include some new taxes that do exactly that, and in precedent-setting ways which merit more public attention than they have received so far. Two such new taxes of particular interest are: 1) A 0.9% addition to the Medicare payroll tax-rate on earned income exceeding $200,000 for individuals, and $250,000 for families. 2) A new 3.8% tax on unearned income (e.g. dividends, capital gains, interest, rents, etc.) for those in that high-income bracket. These two new taxes constitute more than just an increase in federal revenue. As an article in the June 12, 2010 Wall Street Journal said, "Each tax signals a radical change in policy". This statement might have been meant to alarm the high-income readers of the WSJ…. As the WSJ itself said, "The extra 0.9% levy [in the Medicare payroll-tax] puts a progressive element in what used to be a totally flat tax." In other words, for the first time the Medicare payroll tax rate will have some progressivity built into it. This is a wonderful development, long overdue. And regarding the second new tax, the WSJ noted that "The 3.8% tax on investment income also knocks down a longstanding wall by applying a 'payroll' tax to unearned income. Until now, FICA taxes for Social Security and Medicare have applied only to wages, not investment income." Absolutely, and exactly the right direction to go. FICA taxes are regressive precisely because they have not applied to unearned income, which accrues overwhelmingly to wealthy people. This new tax finally breaks this barrier to tax fairness.

GOP Governors' Obamacare Opposition Is Denying The Poor Health Care

Millions of Poor Are Left Uncovered by Health Law

Because they live in states largely controlled by Republicans that have declined to participate in a vast expansion of Medicaid, the medical insurance program for the poor, they are among the eight million Americans who are impoverished, uninsured and ineligible for help. The federal government will pay for the expansion through 2016 and no less than 90 percent of costs in later years. A sweeping national effort to extend health coverage to millions of Americans will leave out two-thirds of the poor blacks and single mothers and more than half of the low-wage workers who do not have insurance, the very kinds of people that the program was intended to help, according to an analysis of census data by The New York Times.

Nonelderly Poor Uninsured Adults in the Coverage Gap in States Not Expanding Medicaid by Race/Ethnicity

Total, United States:4,832,000 - All races/Ethnicities2,248,000 - White1,327,000 - Black992,000 - Hispanic265,000 - Other

2,584,000 - People of Color

Preventable Deaths from Heart Disease & Stroke

Impact of Health Reform on:

Health Care Costs (Expansions)

All figures reflect spending through 2019

Impact of Health Reform on:

Health Care Costs (Savings)

All figures reflect spending through 2019

…and Costs Will Keep On Rising

$0.0

$0.5

$1.0

$1.5

$2.0

$2.5

$3.0

$3.5

$4.0

$4.5

$5.0

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

PPACA (CMS Actuary)

Current projection

PPACA (Commonwealth Fund)

National Health Expenditures (trillions)

Notes: * Modified current projection estimates national health spending when corrected to reflect underutilization of services by previously uninsured. Source: D. M. Cutler, K. Davis, and K. Stremikis, Why Health Reform Will Bend the Cost Curve, Center for American Progress and The Commonwealth Fund, December 2009. Estimated Financial Effects of PPACA as Amended, Richard Foster, CMS Actuary, April 2010

$4.67$4.5

6.4% annual growth

6.6% annual growth

6.0% annual growth

$4.7

National Health Expenditures as Percent of GDP 17.8 17.9 18.0 18.2 18.8 19.3 19.8 20.2 20.5 21.0

Independent Payment Advisory BoardOne of the most controversial provisions of the Patient Protection and Affordable Care Act was the establishment of an Independent Payment Advisory Board (IPAB). The American Medical Association opposes the IPAB and supports its repeal. The ACA established a 15-member Independent Payment Advisory Board (IPAB) to extend Medicare solvency and reduce spending growth through use of a spending target system and fast track legislative approval process. The IPAB members include: 15 members appointed by the President, by and with the advice and consent of the Senate. In selecting individuals for nominations for appointments to the Board, the President shall consult with: (i) the majority leader of the Senate concerning the appointment of 3 members; (ii) the Speaker of the House of Representatives concerning the appointment of 3 members; (iii) the minority leader of the Senate concerning the appointment of 3 members; and (iv) the minority leader of the House of Representatives concerning the appointment of 3 members. The HHS Secretary, the Administrator of CMS, and the Administrator of the Health Resources and Services Administration (all of whom will serve ex officio as nonvoting members of the Board).By April 30 of each year, beginning in 2013, the Centers for Medicare & Medicaid Services (CMS) Actuary’s Office will project whether Medicare’s per-capita spending growth rate in the following two years will exceed a targeted rateT. If future Medicare spending is expected to exceed the targets, the IPAB will propose recommendations to Congress and the President to reduce the growth rate. The IPAB’s first set of recommendations would be proposed on January 15, 2014. Spending rate reductions will be established at: 0.5 percent in 2015; 1.0 percent in 2016; 1.25 percent in 2017; 1.5 percent in 2018 and beyond. If Congress fails to pass legislation by August 15 each year to achieve the required savings through other policy changes, the IPAB’s recommendations will automatically take effect. The IPAB is prohibited from submitting proposals that would ration care, increase revenues, change benefits, modify eligibility, increase Medicare beneficiary cost sharing (including Parts A and B premiums), or change the beneficiary premium percentage or low-income subsidies under Part D. Hospitals and hospice will not be subject to cost reductions proposed by the IPAB from 2015 through 2019. Clinical labs would be exempt for one year.Beginning July 1, 2014, the IPAB must also submit an annual report providing information on systemwide health care costs, patient access to care, utilization, and quality of care that allows comparison by region, types of services, types of providers, and payers - both private insurers and Medicare.

PART 4 – THE TRAGEDY of the LEAST AMONG US

Part 5 - SINGLE PAYER IS THE REAL ALTERNATIVE(MEDICARE “2.0” FOR ALL)

Conyers HR 676 Expanded and Improved Medicare

for All “single payer national health insurance”

• Automatic enrollment - everyone receives a card assuring payment for all needed care

• Free choice of doctor and hospital• Doctors and hospitals remain independent,

negotiate fees and budgets with public agency• Public agency processes and pays bills• Financed through progressive taxes

Part 6A WORLD WIDE PERSPECTIVEon DISEASE and MORBIDITY

An updated study by the prominent economists Emmanuel Saez and Thomas Piketty shows that the top 1 percent of earners took more than one-fifth of the country’s total income in 2012, one of the highest levels recorded in the century that the government has collected the relevant data.The top 10 percent of earners took more than half of all income. That is the highest recorded level ever. The income share of the top 1 percent of earners in 2012 returned to the same level as before both the Great Recession and the Great Depression: just above 20 percent, jumping to about 22.5 percent in 2012 from 19.7 percent in 2011. The new data shows that incomes for the top 1 percent of earners declined about 36 percent during the recession, and rebounded about 31 percent in the recovery. The incomes of the other 99 percent plunged about 12 percent in the recession and have barely grown since then, on aggregate. Thus, the 1 percent have captured about 95 percent of the income gains since the recession ended. The figures underscore that even after the recession the country remains in a kind of new Gilded Age, with income as concentrated as it was in the years that preceded the Great Depression,

OPTIMAL HEALTH OUTCOMES DEPEND ON SOCIAL and ECONOMIC JUSTICE