November 30, 2011

Dear Readers,

See Naomi’s note below. I urge you to visit her new blog.

I also am no longer working at The Century Foundation.

Please note:  This website no longer accepts Comments . It may appear that you comment has been accepted, but if you go back to the website, you will find that it does not show up.

I hope to begin a new blog sometime soon. I’ll let you know where you can find it.  To make sure that you receive a notice, e-mail me at

If you or your institution is interested in sponsoring (or co-sponsoring) my new blog, please e-mail me at

In the meantime, you can follow me on Twitter where I will link to posts I am contributing to other sites, as well as news that might be of interest.

I thank all of you for your support, your intelligence, your civility, and comments that often forced me to think a little harder, and dig a little deeper  to answer your questions.  I’ve always been very proud of  HealthBeat’s readers.

Maggie Mahar

"Premium Support" Is Just Another Way To Privatize Medicare

Note: This post comes from my new blog I have left The Century Foundation and can be reached at

Out of the rubble of the failed budget deficit negotiations, it seems a new movement is afoot to transform Medicare into a “premium support” program with the goal of moving more seniors and the disabled into the private insurance market.

As Robert Pear reported last week in the New York Times;

“Members of both parties told the [budget deficit] panel that Medicare should offer a fixed amount of money to each beneficiary to buy coverage from competing private plans, whose costs and benefits would be tightly regulated by the government.”

Before we go any further, let’s be clear: Premium support means very different things to different people. And the “supercommittee” Democrats flat-out rejected any notion of privatizing Medicare once it became clear that their Republican counterparts wouldn’t budge on accepting revenue increases (i.e. raising taxes on the very rich) to go along with cuts to entitlements like Medicare, Social Security and Medicaid.

To Republicans who support Rep. Paul Ryan’s (R-WI) plan to “change Medicare as we know it,” premium support means providing seniors and other beneficiaries with a government voucher that is paid directly to private insurance companies. These private policies will be more expensive than traditional Medicare with its enviable rate of scale and bargaining power. And because the value of the vouchers in the Ryan scenario would increase at a rate slower than actual medical costs, many seniors will end up having to pay a huge portion of their insurance premiums—or be forced to enroll in inadequate plans that leave them unable to access needed services.

The Congressional Budget Office issued a report on Ryan’s budget plan last April that gave ammunition to critics of his Medicare voucher idea. “Under the proposal, most beneficiaries who receive premium support payments would pay more for their health care than if they participated in traditional Medicare,” according to the CBO. And because some seniors might choose to not buy coverage— “the number of older Americans without health insurance would be higher.”

If, as the Times reports, some Democrats are warming to the idea of premium support for Medicare, they are not embracing Ryan’s draconian voucher plan. Instead, they may be reconsidering the merits of a premium support plan championed by Alice Rivlin, director of the Office of Management and Budget during the Clinton administration and Pete Domenici, former chairman of the Senate Budget Committee. During the budget deficit negotiations, Rivlin urged the supercommittee members to consider an insurance exchange for Medicare beneficiaries—with a public option; “Private plans would compete with the traditional Medicare program and would have to provide at least the same benefits. The federal contribution in each region would be based on the cost of the second-cheapest option, whether that was a private plan or traditional Medicare,” the New York Times article explains. The idea of the Rivlin-Domenici plan is to move Medicare toward a premium support model, “without destroying the individual entitlement at the heart of the program.”

Continue reading ""Premium Support" Is Just Another Way To Privatize Medicare" »

November 22, 2011

You Heard It Here First: Medicare Spending Slows

Sunday, a New York Times editorial confirmed that "Since January 2010 the growth in Medicare spending has actually slowed to an annual rate of about 4 percent, less than half the annual rate for the previous decade. No one is quite sure why, but one theory holds that hospitals are scrambling to squeeze a lot of fat out of the system even before the health care reforms pressure them to do it."

 HealthBeat first reported the slowing of Medicare spending to 4 percent on August 12, noting that: "While our elected representatives wrangle over slicing entitlements, virtually no one seems to be paying attention to an eye-popping fact: Medicare reimbursements are no longer accelerating at a break neck-pace. The new numbers should be factored into any discussion about healthcare spending:  From 2000 through 2009, Medicare’s outlays climbed by an average of 9.7 percent a year. By contrast, since the beginning of 2010, Medicare spending has been rising by less than 4 percent a year. On this, both Standard Poor’s Index Committee and the Congressional Budget Office (CBO) agree. (S&P tracks healthcare spending with the help of Milliman Inc., an independent actuarial and consulting firm.)

In that post, I quoted Zeke Emanuel, an oncologist and former special adviser for health policy to the White House Office:  “This is not mere chance: this is directly related to the initiation of health care reform.”  It is not the result of reform, Emmanuel emphasized.  The reform measures that will rein in Medicare inflation have not yet been implemented.  But, he explained, providers are “anticipating the Affordable Care Act kicking in.”  They can’t wait until the end of 2013: “They have to act today.  Everywhere I go,” Emanuel, added, “medical schools and hospitals are asking me, ‘How can we cut our costs by 10 to 15 percent?’

“This is doable, since there is so much fat in the system” added Emanuel, a doctor who is well aware of just how often pricey, but unnecessary tests and procedures hike medical bills, while exposing patients to needless risks.

At the time, the mainstream media was ignoring the deceleration in Medicare inflation. Much of the press was caught up in reporting that Medicare spending was "out of control."  Acknowledging the slow-down would undermine the fear-mongering.

 When I published the post in August, former OMB director Peter Orszag e-mailed me to say that he was glad I written about it. Orszag he was well aware of the slow-down, and was planning to write about it himself. Within a few days, he published an Op-ed on Bloomberg.

There, Orszag explained:  “We don’t yet have enough data to tell for sure what’s causing the recent deceleration in Medicare spending -- or whether it will last. But some evidence suggests it may be a shift toward value in the health-care sector. Various hospital executives have told me they have already begun to prepare for less generous reimbursement from Medicare as the new federal health-care-reform law takes effect and there is a greater focus on value. They are therefore trying to become more efficient now. That’s the discussion taking place in the strategic planning process at Mount Sinai Medical Center in New York, where I recently joined the board of directors.

“The Mount Sinai experience may be instructive,” he continued. “From September 2010 to May 2011, the hospital’s Medicare revenue rose only 2 percent over the previous year -- in part because the number of inpatient cases fell. Why was that? One important reason was that the number of patients readmitted to the hospital within 30 days of discharge was 5 percent less than what it had been the previous year.

“Reducing readmissions is one of the objectives of the federal health-care-reform law enacted last year. Historically, nearly 20 percent of Medicare patients have been readmitted to a hospital within 30 days of being discharged, in part because their doctors and other health-care providers have not managed patient handoffs very effectively. The Affordable Care Act included, among other remedies, a modest penalty for hospitals with high readmission rates.

“At Mount Sinai, patients at risk of rehospitalization are now identified when they first come in and assigned to a special team of doctors and nurses that works to minimize that risk. Apparently, the effort is working. And as more hospital systems begin to use information-technology systems to measure and manage value, we could see progress in other areas of patient care as well.”

The Mt. Sinai example is extraordinarily important because it shows that hospitals can rein in costs. This suggests that we don’t need to slash Medicare benefits. . Over the next year or two, if more hospitals respond to the financial carrots and sticks embedded in the Affordable Care Act, and begin squeezing some of the waste out of the system, many could follow Mt. Sinai lead, and reduce annual growth of Medicare spending on hospital care to 2% -- or less. At that point Medicare’s outlays for hospital care would be growing no faster than GDP, in other words, they would be sustainable.

Of course,  spending on hospital services represents only about one-third of the nation’s Medicare bill.  More importantly, as Orszag points out, “even if the slowing does represent the early stage of a shift toward value and reducing the fat in the health-care system, the improvement will not be sustainable unless certain further changes are made in the existing payment system.”  Today, if a health care provider becomes more efficient in treating Medicare patients, it is punished: as Mt. Sinai reduced readmissions, its Medicare revenues fell.  Medicare needs to revise its payment system so that hospitals and doctors are rewarded for value--better care at a lower price.

The good news is that the Affordable Care Act contains many provisions that would do just that: for example, physicians who create medical homes that keep patients out of the hospital will receive bonuses; doctors and hospitals that form Accountable Care Organizations will share in the savings.  This, in turn, means that surgeons will have an incentive to avoid using over-priced “cutting edge” that are, in fact, no more effective than the older products they are trying to replace, and hospitals will have a reason to pay close attention to which patients are actually helped by more expensive drugs and which patients do just as well on tried and true medications. 

Finally, reform legislation puts an emphasis on patient safety.  Today, measurable medical errors that harm patients cost roughly $17 billion a year according to a study published in the April issue of Health Affairs. Going forward, as the Affordable Care kicks in, hospitals will be penalized for avoidable errors. Starting in 2014, Medicare will cut payments to hospitals with the highest rates of preventable patient injuries by 1 percent. At the same time, hospitals with lower infections rates will be acknowledged with higher payments.   

Moreover in April, HHS Secretary Kathleen Sebelius announced a new $1 billion funding initiative called Partnership for Patients that is designed to achieve two goals: reduce preventable injuries in hospitals by 40 percent; and cut preventable hospital readmissions by 20 percent. “Reaching those targets would save up to $35 billion over the next 10 years,” Sebelius said, adding that $10 billion of that would come from Medicare savings. “That's a return of up to $10 for each dollar we're investing.

Keep in mind, today, it is estimated that one-third of Medicare dollars are squandered. Given the amount of waste clogging the system, it should be possible to trim growth in Medicare spending per patient by more than 2 or 3 percent.  Over time, as baby-boomers age, the savings could easily pay for the increase in the number of Medicare patients. And private insurers are sure to follow Medicare’s lead. Other nations provide high quality care for less. We can too.

November 21, 2011

HealthBeat Readers

For some reason, HealthBeat is not recording comments.

If you would like to reach me directly, e-mail me at

Thanks, Maggie

November 19, 2011

The State of Heatlhcare Reform--and the Challenges

Health Beat readers may be interested in listening to the speech that Dartmouth’s Elliott Fisher delivered at the Lundberg Institute’s inaugural event at the Commonwealth Club of California on October 25. Fisher does an excellent job of summing up where health care reform stands today, reformers’ goals, and the challenges they face. The Question & Answer session may be of particular interest. Fisher handled it beautifully. Click here:

November 10, 2011

Are Doctors Prescribing Too Many Pain Medications?

In October, I was asked to speak at a Mayday Foundation meeting about blogging and using social media to spread a message. The Mayday Foundation is a global organization dedicated to pain relief.

At the meeting I met Bob Twillman, a 2011-2012 Mayday Fellow, who also is the Director of Policy and Advocacy at the American Academy of Pain Management. After the meeting he wrote a blog post for's Congress Blog focusing on what he describes as “the much-ballyhooed issuance of three papers (including one Morbidity and Mortality Weekly Report) from CDC last week on the issue of overdoses and deaths involving prescription opiods. ” 

Twillman’s essay reminds us that limiting access to pain medications is not the way to limit overuse. As regular HealthBeat readers know, I am concerned about overtreatment. But most patients who overdose get their pain medications from someone else’s medicine cabinet—not from a prescription that a doctor wrote for them. Physicians should be able to prescribe these drugs for the many patients who truly need them.

Continue reading "Are Doctors Prescribing Too Many Pain Medications?" »

On Tour Now: The Balancing Act at the Center of Reform

After writing about “Essential Health Benefits” for HealthBeat, I wrote a shorter post for (the online version of Time magazine), updating what I had written here. 

This month, the public will have a chance to weigh in how they think “essential” should be defined.  See below for a link to places, times, and dates where “listening sessions” will be held in cities across the nation, as well as information on how to register. Time is of the essence. Insurers are calling for the Secretary of Health and Human Services to spell out the essential benefits that must be included in all policies sold to individuals and small employers by the end of December. 

This post appeared Tuesday. Below, the first half of the post (You can read the full piece on’s  “Moneyland”)  

At the end of the excerpt below, I comment on how both tax credits and the state-based Purchasing Exchanges will make insurance more affordable for small employers and individuals who are buying their own policies.      

Continue reading "On Tour Now: The Balancing Act at the Center of Reform" »

November 04, 2011

There Is No "Silver Lining" in Repealing Insurance Mandate

Earlier this week, as the Supreme Court continued to mull over which of the four legal challenges to the health reform law they will choose to tackle, I found out that, in fact, there could be a “silver lining” to the repeal of the individual mandate—the requirement that all Americans purchase health insurance.

In a post on Politco, Jennifer Haberkorn writes that some “Democrats and supporters of the law” believe that if “the least popular part of the law goes away, they think what’s left could become stronger and more popular with the public."

And who are these Democrats and supporters who take such a rosy view of what could be a huge disaster for Obama’s health law? The article quotes “strategists” and “pollsters” whose main concern is whether the President will be reelected next year. These folks, who supposedly are taking the pulse of Americans, report strong support among consumers for some of the Affordable Care Act’s provisions like guaranteed coverage for preventive care, maternity benefits, and the ability to keep children up to age 26 on their parent’s health plan.

Sure, these are popular provisions, but they are not the most important parts of the ACA. The real power to transform health care and extend coverage to the 50 million uninsured is the requirement that no one be denied affordable insurance because of age, pre-existing condition or sex. It is also vitally important that the government offers subsidies to those who can’t afford premiums, and that Medicaid is extended to cover the working poor who make up the largest group of uninsured. There are many more provisions of the health law that we’ve discussed in great length on this blog over the last two years; reforming Medicare and the way services are delivered; increasing funding for community health centers; and insurance exchanges that allow consumers to choose coverage that best fits their needs.

Without the individual mandate, many of the so-called “popular” parts of the health law become unaffordable and unlikely to come to fruition. Without every one “in the pool,” a significant number of the young, healthy, so-called “invincibles” will opt out coverage, while the majority of those who are sicker, older and utilize the most services will opt in. Like we just saw with the ill-fated CLASS Act and long-term care, without a mandate, real, transformative health reform becomes impossible.

While formulating my own response to the absurdity of the “silver lining” reasoning, I came across a great piece by Aaron Carroll at The Incidental Economist site  that puts the whole silver lining argument to bed:

Carroll writes, “I have yet to see any convincing data that show there’s a significant portion of America that loves the ACA, but hates the mandate. I see no politicians running on a platform of removing the mandate, but leaving the rest of the law intact. I see no reason to believe that dropping the mandate will do anything to increase support for the President, the Democrats, or the ACA.

“But that’s besides the point,” he continues. “The politics are silly. What matters is what will happen to actual people.”

Carroll fashions some simple, yet compelling graphs using data originally derived from this post by Jonathan Gruber at The Center for American Progress to show how getting rid of the mandate will increase insurance premiums, while at the same time decreasing the number of people who will be covered. 

Insurance premiums will go up, by an average of 25% over the next decade if we repeal the individual mandate:



And the number of uninsured now covered will drop from 32 million under the ACA to 7 million without the mandate:


The bottom line is that there is no sliver lining if the Supreme Court strikes down the individual mandate. It is a necessary part of the health legislation and repealing it will not signal the end of the other provisions signed into law last year. It will be very difficult for opponents to dismantle the ACA—but without the mandate, the financial viability of universal health coverage becomes far less certain.

November 02, 2011

In CLASS Act Demise, Wake-Up Call For Action in Long-Term Care Crisis

If the demise of CLASS has any greater meaning, perhaps it will serve as a wake-up call for Americans that we need an enduring solution to the long-term care problem. The CLASS legislation, part of the Affordable Care Act, would have created a voluntary, long-term care insurance program that could eventually provide a modest benefit to its enrollees—up to $75 per day to help pay for assistance in carrying out daily activities, a health aide, medical supplies, or to help defray the yearly costs of living in a nursing home.

The CLASS Act was a small step in addressing what is shaping up to be a looming problem. Fewer than 10% of older Americans have long-term care insurance and many still cling to the mistaken belief that Medicare will cover these expenses. Instead, as our population ages and we face the largest growth in the number of the old-old (those over 85) ever, people will have to plow through their savings, their children’s savings, depend on exhausted family caregivers and then finally, turn to Medicaid to foot the bill for long-term care. As a recent AARP/Commonwealth Fund “scorecard” report finds, “The cost of services, especially in nursing homes, is not ‘affordable’ in any state. The national average cost of nursing home care is 241 percent of the average annual household income of older adult.”

Long-term care has been an afterthought to most lawmakers. Yet the job of caring for the elderly parent, the chronically ill spouse, the profoundly disabled child, and the destitute, mentally-ill homeless man falls to millions of individuals, institutions and agencies around the country. This mix of care-givers and range of services is not guided by any consistent policy or funding state to state, or overseen by any federal agency. It¹s a patchwork approach to a major rent in our social fabric and an issue that is quickly reaching a crisis point.

Continue reading "In CLASS Act Demise, Wake-Up Call For Action in Long-Term Care Crisis" »

October 31, 2011

Breast Cancer-- Living with the Disease, Part 2

“The Best Care America Has To Offer”

Below, Amy Berman describes her recent journey through our health care system as “eye-opening.”  In part 1 of this post, she explained why she decided on palliative treatment for breast cancer, rejecting aggressive procedures such as mastectomy and chemo.

A year after her diagnosis, she remains comfortable with her decision: “The likelihood is that I will live as long-- if not longer--than if I had made another choice.” In fact, studies of palliative and hospice care suggest that patients who choose these alternatives suffer less stress, and as a result, may well outlive other terminal patients.

Amy is delighted with the care she has received at Maimonides Hospital in Brooklyn, New York. At the same time, she reports, in the year since she was diagnosed with Stage IV breast cancer, “I have witnessed the remarkable capabilities and the stunning shortcomings of our health care system firsthand.”

This essay originally appeared on the John A. Harford Foundation blog in January

 Can Good Care Produce Bad Health?

By Amy Berman

At the cancer’s earliest appearance, I consulted with a well-regarded oncologist in New York. After the tests were done she regretfully informed me that my disease was not curable. Because my cancer is hormone-receptor-positive, she recommended an evidence-based course of medications aimed at slowing the progression of the disease. Before I committed to this course of care, I wanted to get a second opinion. I secured an appointment with the pre-eminent researcher/clinician in the field of inflammatory breast cancer, at a top medical institution in Philadelphia.

The building was beautiful, the staff attentive. They even assigned a nurse, whom they assured would follow me throughout my course of care. I had no doubt that the care would be top-notch.

Continue reading "Breast Cancer-- Living with the Disease, Part 2 " »

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