Beware of Cost-Cutting Health Care Reform

A majority of Americans have told opinion pollsters (read the opinion poll results here) that they want good health care to be a right enjoyed by everybody--rich or poor. Americans have said they wouldn't mind paying higher taxes to make it so. Americans want single-payer universal health care (which, by the way, would cost LESS than what is now spent on health care because it would eliminate insurance company profits and the enormous administrative waste that a multiple-payer system imposes on every hospital and doctor's office.) A February, 2009 poll found that, "When given a choice of the current system or one 'like Medicare that is run by the government and financed by taxpayers,' voters overwhelmingly chose the latter. A solid majority (59%) say they would prefer a national health insurance program that covers everyone, over the current system of private insurance offered to most through their employer."

It is bad enough that the politicians (fronting for the corporate elite they serve, and with backing from the elite-controlled mass media) have ruled out single-payer, which they most certainly have done. But it is worse than that. They are planning to introduce reforms that will make our health care system even worse than it already is. In the name of providing health care for all, they are implementing reforms that actually aim to reduce health care for the masses.

There is method in their madness. First, they want Americans to feel insecure so that we will be easier to control, and not having health care when one really needs it makes one feel very insecure indeed. Second, they want everybody to be enrolled in a health insurance plan in order to more directly control and restrict how much care people can get. They don't want people without health insurance getting their care at the emergency room of a hospital where more dollars might be spent on their care than the elite want. The elite intend to use health insurance as a means of limiting health care, by providing poor Americans with health insurance policies that severely restrict how much care they will pay for. This is already happening in Massachusetts, where the state now requires everybody to purchase health insurance and offers a "public option" policy to compete with private insurers, similar to what Obama's proposed plan would do. Here is how The New Ledger on March 26, 2009, reported on the reality behind the hype:

"First, it [the state] expanded subsidies for low-income (below 300% of the federal poverty line) residents to obtain health insurance. While this sounds like a valuable benefit being provided to indigent Massachusetts residents, the funding for those subsidies was primarily pulled from the state’s so-called “free care pool,” which had provided medical and mental health services to poor Bay Staters at locations ranging from community clinics to emergency rooms, regardless of their insurance status. As an ironic result of this program, more poor residents had access to subsidized insurance, but fewer could afford care when faced with a deductible and coinsurance – meaning the amount the patient had to pay up front before insurance kicked in, and the percentage of treatment costs past the deductible that fall on the policyholder. The burden of paying for service the Health Care Reform Act placed on the state’s indigent population, combined with the draining of resources from facilities that had previously cared for the poor free of charge, left a larger number of poor Massachusetts residents without access to care than before the system was ostensibly “reformed” to help them gain more affordable access to care."

Massachusetts, while expanding health insurance coverage to poor people, is dismantling the hospitals and health care services that provide health care to those people. The details about how this is being done are described in the Boston Globe August 10, 2009 Op-Ed by Ellen Murphy Meehan, titled "The state's fraying health safety net," which I have copied below. Meehan writes:

"In our state and around the nation, poor whites, African-Americans, Latinos, and Asian-Americans get their care at certain hospitals - the hospitals in their backyard. These hospitals have been the state’s partners in providing care for those who have gained coverage under reform. Despite this unique role, the hospitals have been abandoned and are compelled to deliver care with fewer resources...healthcare reform will fail in its objectives if it serves to dismantle healthcare services for the disadvantaged that it was designed to serve."

Meehan describes the true effect of health care reform but writes that it was "designed to serve" the poor; had she told the truth--that it was designed to ration health care for the poor but not the rich--her article would probably not have seen the light of day.

[FLASH: On September 14, 2010 the Boston Globe front page headlined the fact that the Boston Medical Center, which serves Boston's poorest residents, is being forced to make severe cuts in staff and it faces a budget crisis. The full article is copied below.]

The corporate elite has given the politicians and mass media the job of persuading the American public to view cuts in our health care as a positively good thing: no mean task. How are they going about it?

They are telling us that the problem with our current health care system is not just that some people lack health insurance, but that "health care expenses are out of control" and something has to be done to contain and eventually reduce them: "bend the curve down" as they say.

The message is that we need to ration health care. Thus, after President Obama's grandmother died following hip replacement, he told a New York Times Magazine interviewer, "Whether, sort of in the aggregate, society making those decisions to give my grandmother, or everybody else's aging grandparents or parents, a hip replacement when they're terminally ill is a sustainable model is a very difficult question." This interview gave Op-Ed columnists a green light to start talking about the wisdom of rationing health care spending "at the end of life," when a disproportionate amount of health care dollars are spent. How much is it worth, really, to extend Mother's life a few weeks if she has a terminal illness? Which is more important, keeping Dad alive past the age of 88, or paying for a new elementary school?

This "don't waste money on keeping old people alive" theme is couched in oh-so-rational rhetoric. But it is in fact shockingly despicable. Let us be clear about why, exactly, it is despicable. It's not that rationing health care, per se, is wrong. It is undeniable that society has only a finite amount of wealth to spend, and we have more needs than just health care. So one way or another, by explicit or implicit decisions, we will limit how much we spend on health care in total and for different categories of people, and this means rationing.

The question is not whether to ration health care, but when to do it. The time to tell somebody, "We're sorry but we, as a society, can't afford to pay for health care that could keep you alive or make your life more enjoyable, because we need that money for something more important," is AFTER, not before we have begun telling people, "We're sorry but we, as a society, can't afford to pay for your multiple mansions and your yacht and your Lear Jet and your personal team of physicians and your personal chefs and fitness trainers and butlers and chauffeurs and maids and nannies and pilots etc. that make your life so enjoyable, because we need that money for something more important." Until the latter rationing has kicked in, it is just morally reprehensible to advocate the former.

One way they are trying to introduce overt health care rationing in Massachusetts was revealed by the Boston Globe on July 17, 2009, when it reported that a state commission including key legislators and Governor Patrick's administration "wants private insurers and the state and federal Medicaid program to pay providers a set payment for each patient that covers all that patient's care for an entire year and to make the radical shift within five years. Providers would have to work within a pre-determined budget, forcing them to better coordinate patient's care, which could improve quality and reduce costs." (As if "improving quality" would be as likely as "reducing costs"!)

Another way they are trying to persuade Americans to support reducing our own level of health care is by telling us that it is important that health care reform legislation not increase the federal deficit with increased health care spending in the federal budget. Thus the Republicans make a big deal about asking the Director of the Budget Office if Obama's health care plan will increase or decrease federal spending on health care, and when he replies, "increase," they say, "Aha! It is going to cost Americans even more than the already bloated cost of health care." What they don't mention is that true health care reform, meaning a single-payer system, would reduce the overall cost of health care by eliminating the insurance company middle man, so that the rise in federal taxes to pay for it would be more than offset by the reduction in premiums people now pay to private insurance companies.

Related to the aim of reducing medical care for the masses is the theme that electronic medical records are good for patients. No doubt there are some advantages to patients (and doctors and hospitals) in converting medical records to electronic files that can be shared easily within and between institutions. My medical record is presently mostly electronic, and it is a convenience to me to have it readily available to all of the doctors I see, even when they are in different buildings. There is another advantage of electronic medical records: they can more easily be used for medical research to learn what treatments work better than others. Privacy protection is a challenge, but that might be a solvable problem.

These pluses, however, are not the main reason that the elite are advocating making medical records electronic. Their chief motive here was revealed by a Boston Globe editorial July 21, 2009, which I have copied below because it illustrates elite health care propaganda so nicely. This editorial supports the state commission's proposed radical shift to paying a set amount for the year for a patient (i.e. "accountable care") and explains why electronic medical records are important to make it work: "One carrot [to persuade providers to make the radical shift] will have to be tax credits or outright subsidies to speed up doctors’ and hospitals’ adoption of electronic medical records. Such records are crucial to the coordination that accountable care organizations should be able to provide." Electronic medical records will be used, in other words, to ensure that no patient gets more care in a year than the predetermined set amount.

Beware of health care reformers who speak of "cost cutting," "accountable care," "electronic medical records," "end of life health care costs," "rationing care" or "making sure everybody has health care" when they don't speak about the importance of making sure that everybody--rich and poor alike--has equal status (and I don't mean "some are more equal than others") when it comes to the amount of health care they are entitled to in our society. For many of us, our very lives are at stake.

The fight for good health care for all is fundamentally a revolutionary fight for real democracy and equality. The reason we don't have good health care for all is very simple: the ruling corporate elite doesn't want us to have it; they want to keep society very unequal, they want to make sure real power stays in their hands, and they want us to feel so insecure that we will be easily controlled by them. These are the same reasons our government wages unjust wars and supports Israel's ethnic cleansing and so many other morally wrong things. The struggles against all of these injustices are fundamentally the same struggle for real democracy and equality.



Boston Globe editorial:

How to pay doctors

July 21, 2009

PAYING FOR healthcare on a fee-for-service basis is an inflation engine that, unless something changes, will cause health spending in this state to double by 2020. A legislative commission wants to replace fee-for-service with per-capita payments that would be handled by groups of healthcare professionals with full responsibility for an individual’s care. One-fifth of doctors in the state are already paid this way. Making it the norm could be the secret to better, less costly medicine.

Ideally, this shift in incentives will mean that a patient, for instance, will leave a hospital with enough discharge support so that she won’t be re-admitted a week later. Or, a primary-care physician checking an overweight patient for a strep throat will have enough time to talk to the patient about exercising more to lose some pounds. A well-crafted “global’’ payment system should pay for such preventive measures in ways that fee-for-service does not.

The commission issued its report on the same day last week that the head of the Congressional Budget Office told Congress that its various health reform proposals, including ones with a public insurance plan to compete against high-overhead private plans, would all raise federal spending. This state’s three-year experience with its health reform supports his conclusion. Less than 3 percent of the population is now uninsured, but costs have escalated.

A switch to global payments in the hands of so-called accountable care organizations with doctors, labs, imaging specialists, and even hospitals could bring costs under control. When health insurers used a capitation system in the 1990s, patients were denied care unfairly. To avoid such problems, the commission calls for rigorous monitoring and a focus on quality.

A first step will probably be legislation to create some kind of public board or authority to work out the specifics of the sticks and carrots that would wean providers from fee-for-service. One carrot will have to be tax credits or outright subsidies to speed up doctors’ and hospitals’ adoption of electronic medical records. Such records are crucial to the coordination that accountable care organizations should be able to provide.

To help ensure that any new payment system produces better care and not just cheaper care, the oversight panel should include at least one representative of a consumer group. The Legislature should also give the board more direction than the report provides. In 2006, lawmakers opted to let the Commonwealth Health Insurance Connector Authority work out many details of new health plans for the uninsured. But totally revamping health payments is a far more complex task that will require more explicit marching orders from Beacon Hill.

Boston Globe Op-Ed

The state’s fraying health safety net

By Ellen Murphy Meehan
August 10, 2009

AS NATIONAL policy makers fashion a healthcare bill modeled in no small part on Massachusetts’ landmark health reform law, they need to address a major flaw that has emerged here.

Three years into our healthcare experiment, health coverage gains have been remarkable. Medicaid enrollment is estimated to have grown from less than 1 million before the reform law to 1.2 million in 2010, and altogether, in Medicaid and private plans, more than 428,000 have gained coverage. Families and individuals who had never had health coverage have access to health plans and services that were previously unattainable.

At the same time, however, hospitals that serve the largest proportion of those newly covered and low-income populations have seen their state-funded payments diminish or be eliminated. By receiving lower rates, they have helped to subsidize health reform. But the consequence of their diminished rates is financial losses and the prospect of the loss of critical services for poor and disadvantaged populations.

By design, the state’s landmark health reform was supposed to “true-up’’ Medicaid rates, raising them closer to cost than the current 60 percent to 70 percent reimbursement of cost, a critical step since Medicaid enrollment growth has been a key component of health reform. Instead, as health reform has been implemented, rates have declined for many hospitals, and special payments for hospitals that serve a disproportionate share of low-income patients have been eliminated - long before the current recession began.

That is the core issue surrounding Boston Medical Center’s lawsuit against the state - a grave concern that other safety-net hospitals seek to compel the Commonwealth to address.

In Washington now, as in Massachusetts in 2006, who will pay for this coverage is hotly debated. In Massachusetts, officials took the federal Medicaid disproportionate-share payments designed by federal law to support hospitals that serve the needy and built them into expanded Medicaid and subsidized Commonwealth Care coverage. But this has left those hospitals, located in the state’s poorest urban communities - Lawrence, Holyoke, Brockton, Boston, Fall River, Cambridge, and others - with no compensation from Medicaid for the vast amount of care they deliver at rates that are still well below cost.

In our state and around the nation, poor whites, African-Americans, Latinos, and Asian-Americans get their care at certain hospitals - the hospitals in their backyard. These hospitals have been the state’s partners in providing care for those who have gained coverage under reform. Despite this unique role, the hospitals have been abandoned and are compelled to deliver care with fewer resources.

Healthcare for these populations is largely separate and it is rapidly becoming unequal.

A word of caution to the Obama administration: Policy makers looking to Massachusetts as a model for national health reform had better keep a watchful eye on Boston Medical Center’s suit, and reconsider the wisdom of redirecting scarce Medicare and Medicaid disproportionate-share dollars away from hospitals that serve the poor. Expanded coverage must go hand in hand with financially stable providers. In the worst-case scenario, coverage that’s financed by eliminating the payments that underpin health care services to the disadvantaged is a road map to rationing of care.

Many of us who have advocated for universal coverage applaud the dramatic gains and successes of Massachusetts’ health reform law. It shows that innovative policy can overcome longstanding obstacles. Our experience also shows, however, how carefully and cautiously the redirection of scarce dollars must be made. The role of hospitals in poor communities is especially important in our society, but they have not been treated fairly in Massachusetts, and the gross inequities are becoming more apparent.

While we recognize that the present fiscal crisis means we must focus attention on bottom-line numbers, Massachusetts really needs a policy based on substance and the reality that people are directly affected by the plight of safety-net hospitals. The Boston Medical Center suit points out that healthcare reform will fail in its objectives if it serves to dismantle healthcare services for the disadvantaged that it was designed to serve.

Ellen Murphy Meehan is a healthcare consultant and executive director of the Massachusetts Alliance of Safety Net Hospitals.

BMC will cut 119 jobs, push for funds

Facing $175m loss, hospital wants more Medicaid money

HOSPITAL FACING DIRE STRAITS “We can not cut our way to prosperity or to even break even. We need additional revenue,” said BMC’s CEO, Kate Walsh.

By Kay Lazar Globe Staff / September 14, 2010

Boston Medical Center announced yesterday that it would reduce its workforce by 119 people as it scrounges for savings to reverse losses projected to reach $175 million in the fiscal year that ends Sept. 30.

The hospital, which employs almost 6,000 people and treats many of the city’s neediest patients, said that the layoffs would account for only a small portion of the savings it needs and that it is hopeful additional Medicaid money requested earlier this year by the Patrick administration will soon be approved by the federal government.

The hospital also is seeking additional payments through a lawsuit it filed last year against the state, accusing it of illegally cutting payments made to the hospital for treating thousands of poor patients.

If no additional funding is found, the hospital, the state’s largest provider of medical care to poverty-stricken families, projects that it will run out of cash reserves by next fall.

“We can not cut our way to prosperity or to even break even. We need additional revenue,’’ Kate Walsh, Boston Medical Center’s chief executive, said in an interview. She added that she did not expect the hospital would get to the point of running out of money, but if that happens, it would probably lead to significant downsizing of staff or consolidation of services with another provider.

“It’s important that we preserve the mission of Boston Medical Center,’’ she said.

The 119 layoffs include 44 nurses and 30 management staff. The union that represents many of the workers, 1199SEIU United Healthcare Workers East, said the cuts will affect a wide swath of services including nursing, patient access coordinators, dieticians, and clinical engineers.

Walsh said if the federal government approves the new money — $90 million a year for two years — by the end of this month, the hospital plans to use some reserves to bring its losses for this year to about $35 million.

Patrick administration spokeswoman Jennifer Kritz said the state is “committed to working closely’’ with BMC and several other hospitals that care for many poor patients to help them receive additional federal funding, but could not say when that money might be coming.

In the meantime, Walsh did not rule out further belt-tightening. She is scheduled to address staff members today in a series of meetings to outline six task forces that will be charged with finding ways to further streamline operations.

“We will be redeploying people and staffing more directly to demand,’’ Walsh said. “If we have people on days and there is more clinical need in the evenings, we will be matching our workforce to where our patients need us.’’

Earlier, BMC had projected a $134 million loss for this fiscal year, but Walsh, who became chief executive in March, said several key factors changed, creating the larger $175 million budget hole. She said the hospital’s growth in revenue from outpatient services was not as great as anticipated, and the hospital cared for more Medicaid patients than it had expected and was paid less than expected for that care. She said the hospital is reimbursed for about 60 cents for every dollar it spends on Medicaid patients.Continued...

That Medicaid reimbursement is at the heart of the hospital’s lawsuit against the Patrick administration, which was filed in July 2009. The state calculated the new Medicaid rate by considering the average cost of caring for Medicaid patients at Massachusetts hospitals and paying 75 percent of that amount to encourage efficiency, the lawsuit contends.

The Patrick administration declined to comment yesterday on the pending lawsuit. In an e-mailed statement, the state’s Health and Human Services secretary, Dr. JudyAnn Bigby, said the state recognizes the “vital role’’ safety-net hospitals such as BMC play in caring for low-income patients.

“In the face of unprecedented budget challenges, everyone funded and served by state government has felt the impact,’’ Bigby said. “We remain committed to continuing our work with Boston Medical Center.’’

In earlier interviews, state officials have said that Boston Medical Center’s costs are 20 percent to 30 percent higher than those at similar hospitals, suggesting that cost savings are possible.

Walsh in yesterday’s interview said the hospital does have a large proportion of veteran staffers who are unionized and are paid at the higher end of the scale. But she said that is not out of line with other city hospitals.

“I believe we have demonstrated that we are in the middle of the pack of Boston teaching hospitals and our cost structure is derived by that and is further challenged by the kind of patients we care for,’’ she said.

“I believe,’’ she added, “that the state now recognizes we share their goal of delivering the right care to the right patient at the right place as effectively as possible.’’

Veronica Turner, executive vice president of 1199SEIU and a former BMC employee, said in a statement that Boston Medical Center is already among the most efficient in Massachusetts, a reference to the notice the hospital sent the union explaining that the layoffs were 1/8intended to make the hospital more efficient.

“Patient care access is suffering because the state has failed to provide fair reimbursement for care, and its management is not effectively communicating with staff about a plan for the hospital’s future,’’ the statement said.

Kay Lazar can be reached at klazar@globe.com.

© Copyright 2010 Globe Newspaper Company.