A Better Deal for Delaware

TRANSPARENCY IN HEALTH CARE COVERAGE
Texas does this; so should Delaware

Health care coverage is about to become clearer for Texas patients, due to a new law (Senate Bill 1731) the legislature passed calling for transparency of health care costs from health insurers as well as hospitals, physicians and other health care professionals. The law will allow patients to make better and more informed health care decisions, says the Texas Medical Association (TMA).

Under the bill:
The Texas Department of Insurance is required to collect and show consumers health insurer, hospital and physician information including billing, coverage areas, plan costs and premium increases, and the number of health care providers.

Physicians, hospitals and insurers will be required to provide patients with billing and collection policies, specific cost estimates and other information related to health care coverage and costs.

The law also requires health plans to report where they spend health insurance premium dollars and how adequate their physician network is — whether the plan has enough in-network specialists nearby to meet patients’ varying medical needs.

A host of other new laws intended to help health care consumer were also passed, says TMA:
House Bill 1594 prevents patients from paying out-of-network costs when seeing a physician whose new medical group already is under contract by a health plan;
House Bill 2015 provides employers with access to health insurance information so they can evaluate employee health care expenditures; and House Bill 522 introduces a pilot project in the Houston area for health insurers to provide patients with their health insurance coverage information using smart-card type technology.

Source: “New Texas Laws Create Transparency in Health Care Coverage,” Texas Medical Association, July 23, 2007.
For text:
http://www.texmed.org/Template.aspx?id=5954

In 2006, federal Medicaid spending grew to 11.9 percent of federal general revenues and 1.5 percent of gross domestic product (GDP). Making conservative assumptions about future growth in Medicaid enrollment and spending per beneficiary, this trend implies an unsustainable growth in federal Medicaid outlays, says Jagadeesh Gokhale, senior fellow at the Cato Institute.

According to Gokhale:
Medicaid outlays over the next 100 years will take up 24 percent of the present value of federal general revenues and 3.7 percent of the present value of GDP calculated over the same period.

By the end of the next 100 years, that is, in the year 2106, Medicaid’s share of federal general revenues will be 48 percent — four times larger than its 11.9 percent share in 2006.
In the year 2106, federal Medicaid spending as a share of GDP is estimated to be 7.4 percent –a fivefold increase from its current share of 1.5 percent.

If the federal government continues to match state Medicaid outlays at the current rate, Medicaid’s share of GDP in the year 2106 will be 13 percent — or one-eighth of GDP.
Further, higher tax rates cannot plausibly cover this growing spending commitment, says Gokhale:

On average, today’s 35-year-old males are projected to have 15 percent of their lifetime federal general revenues returned in the form of Medicaid benefits.

Maintaining that ratio for today’s newborn males would require a 78 percent increase in their lifetime nonpayroll taxes.

Limiting Medicaid spending growth is, thus, an essential component of putting the federal budget on a sustainable course without imposing crushing tax burdens on younger and future generations, thereby harming the prospects for future economic growth, says Gokhale.

Source: Jagadeesh Gokhale, “Medicaid’s Soaring Cost,” Policy Analysis No. 597, Cato Institute, July 19, 2007.

HEALTH CARE WHEN YOU WANT IT

Much of the recent debate about how to reform our inefficient, two trillion-dollar health-care system has revolved around who should pay. However, the problem will not be fixed until we find ways to increase access and reduce costs that have been rising for many years at more than twice the rate of inflation, says Web Golinkin, president and CEO of RediClinic, LLC, and director and co-founder of the Convenient Care Association.
One of the most promising developments is the emergence of retail-based “convenient care” clinics:
These clinics generally are staffed by certified nurse practitioners who diagnose, treat and prescribe medications for a limited set of common ailments, such as strep throat and ear infections.
Treatment for most common ailments ranges from $40 to $70 and preventive services start as low as $15, significantly less than what most physicians, urgent care clinics or emergency rooms charge.
Most are open seven days a week, including extended hours on weekdays; no appointments are necessary, and visits take only about 15 minutes due to the clinics’ limited set of services.
Some physician organizations, however, are pushing for new regulations that would impede the growth of these clinics through expensive permitting requirements, further limitations on the number of nurse practitioners that an individual physician can supervise and prohibitions against advertising that compares the fees of convenient care clinics with those of physicians, says Golinkin. This is exactly the kind of price transparency our health-care system needs.
Instead of opposing convenient care, physicians should be working collaboratively with operators — as many physicians are today — to fill the critical need that all Americans share for easier access to high-quality, affordable health care, say Stern and Golinkin.

Source: Web Golinkin, “Health Care When You Want It,” Wall Street Journal, August 2, 2007.

For text:

http://online.wsj.com/article/SB118601813375385623.html

For more on Health Issues:

http://www.ncpa.org/sub/dpd/index.php?Article_Category=16

Health Savings Plans Start to Falter
Despite Employer Enthusiasm for Consumer-Directed Approach,
Patients Express Dissatisfaction With How the Accounts Work
By VANESSA FUHRMANS

President Bush and many big employers have hailed “consumer-directed” health plans and savings accounts as an effective weapon in the battle against runaway medical costs. But several years after the plans got off to a fast start, the approach appears to be stumbling — largely because of consumers’ unease in using them.

Eight million to 10 million Americans are enrolled in consumer-directed plans, which involve a high-deductible insurance policy that can be combined with a savings account to help pay for out-of-pocket health costs. The plans, which have lower premiums but shift more of the responsibility for health-care spending onto consumers, got a big boost in late 2003 after Congress created portable health-savings accounts that participants can use to sock away pretax dollars and let them grow tax-free. Employers often put money in the accounts to subsidize the higher deductibles.

SPEED BUMP

Enrollment in consumer-driven health plans

Source: The Kaiser Family Foundation

The plans are accomplishing some of what they intended: A raft of data show that people enrolled in the plans do tend to spend less on care than others. That is encouraging more employers to introduce such plans to their workers over the next two years.

But low enrollment and low satisfaction among workers who are offered them raise the question of whether consumer-directed plans will stall before they ever hit the mainstream. Few employers are focusing on the costly measures — such as offering better coverage or more consumer education — that may be needed to accelerate these plans.
Enrollment is growing faster on the individual market and among sole proprietors, but that may be because the plans are often the only affordable option.

Where employees do have a choice, only 19% choose the newfangled plans, the Kaiser study estimates. In the Federal Employees Health Benefits Program, which has offered the plans for several years, only about 50,000 of its eight million members were enrolled in them in 2006, according to industry estimates. At lightbulb-maker Osram Sylvania, just 5% of employees enrolled in the plans in 2006, their first year.
In addition, those who are in consumer-directed health plans often report lower satisfaction and confusion about how the plans are supposed to work.

Though the consulting firm says consumer-directed plans have much potential, its executives were surprised consumer responses were so negative.

“If I were a product manager in any other industry and saw scores this low in customer satisfaction and understanding, I’d be thinking of pulling that product from the shelves or retooling it,” says David Guilmette, managing director of Towers Perrin’s health-care consulting practice.

One reason for the frustration is the uphill battle many consumers describe in trying to shop for their health care. Six years ago, Howard Katz, an industrial-design research consultant in rural eastern Pennsylvania, bought a family health plan with a savings account and a deductible that is now $5,650. But getting specific price information on which to base purchase decisions for MRIs, doctor visits and blood work has been difficult, he says.

And the money in the health savings account gets spent; only once has enough remained to roll over to the next year.

Now, he says, he has rejoined a company as an employee after working on his own, and one of the perks is regaining traditional health coverage. “Now I don’t have to act like a medical examiner anymore,” he says.

A growing number of industry experts believe that for consumer-directed plans to succeed, they have to offer coverage that is at least as rich as traditional plans. That means providing upfront coverage of most preventive services and treatments and a generous contribution to employees’ accounts.

“If you’re just trying to cost shift, and you only get 10% of your employees in, they are the youngest and healthiest, and you haven’t accomplished anything in terms of health-care costs,” says Bill Sharon, a senior vice president at Aon Consulting, the human-resources consulting arm of insurance broker Aon Corp.

“We’d heard concerns from employees that they weren’t going to get the right care,” says Julie Thibodeau, co-director of human resources at Osram Sylvania. This year enrollment between the two consumer-directed plans rose to 15%.