The New End-of-Life Counseling Benefit

By Greg Scandlen

The New York Times article by Robert Pear (who, by the way, is the best health care writer in the nation, notwithstanding his employer) that alerted the world to the latest sneaky Obama deal, said the following —

“Advance care planning improves end-of-life care and patient and family satisfaction and reduces stress, anxiety and depression in surviving relatives,” the administration said in the preamble to the Medicare regulation, quoting research published this year in the British Medical Journal.

Well, let’s take a look at that research. As the Times reports, it was published in the British Medical Journal. It is all of one – ONE – study conducted in Australia at one – ONE – location and involved patients that were aged 80 or older. Twenty-nine patients (that is – 29) got the intervention and another 27 were a control group (no intervention), and all 56 patients died within six months. The people who got the intervention and their families were more satisfied with the care and had their wishes followed better than the control group.

But that isn’t saying much. These folks got more attention in the last six months of life, so of course they were more satisfied. And they were asked what their wishes were, so of course those preferences were more likely to be followed. Decent research would have tested the particular intervention against a “placebo,” not against no intervention at all.

That is how drug trials are conducted. One group gets the drug being tested and the other group gets a placebo. The placebo group usually does better, too, but not as well as the test group. Honest research would have given each group the same amount of attention, but provided a particular set of interventions to one but not the other.

This research in no way supports providing everyone on Medicare with annual “advance planning counseling.” Most people on Medicare are relatively healthy and their wishes at age 65 may be far different than at six months before their death.

The Australian research was also notable for all of the things it left out. No one asked the patients if they had a will, for instance. There was no mention of assigning a durable power of attorney to anyone. In fact, there were no legal or estate issues involved whatsoever.

Even more shocking is that there was no mention of clergy involvement and the patients were not even asked about their religious affiliation. There were no hospital chaplains involved, no prayers, no last rites for Catholics, no discussion of funeral arrangements.

How can you have end-of-life counseling without dealing with these critical issues?

More importantly, how can Obama’s little Czars and Czarinas use the experience of 56 patients at a single hospital in Australia as a justification for a new benefit for 45 million Americans? And a benefit that has already been considered and rejected by the Congress of the United States?

If this is what is considered “evidence-based decision making” by this administration, we are in deeper trouble than I realized.

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Death Panels – American Style

By Greg Scandlen

The new Medicare benefit for end-of-life counseling that was snuck in by the Obama Administration over the objections of Congress and the American people, is the fourth and final step of a process that will indeed lead to “death panels.”

Now, don’t misunderstand. You will not go before a panel of bureaucrats to plead for your life. That was Franz Kafka’s early twentieth century Bohemia. We are much more sophisticated today. In twenty-first century America, your sentence will be delivered by your friendly family doctor.

STEP ONE — We started two years ago with the appropriation of $20 billion to set up a mandatory Health Information Technology (HIT) system. This was part of the wonderful “stimulus” bill that was enacted well before ObamaCare. This law requires every physician’s office and every hospital to be wired up to a centralized database, so the government may know exactly what each doctor is doing with every single patient.

All of the research available says that HIT does not improve care or lower costs. Quite the opposite — it worsens care and raises costs. What it does do is enable the government to know with precision what a doctor is doing.

STEP TWO — The next step was also funded in the stimulus bill – the “Comparative Effectiveness Research” (CER) initiative. This will allow a panel of experts to determine what works and what doesn’t work in medical treatment. By “work,” they mean what is the best use of the available dollars. If something is quite expensive and doesn’t prolong life by many months, it will be deemed to “not work.”

That might be useful knowledge to have for a physician who is looking at treatment options. It could be one more piece of information in his understanding of what to do for a patient. But it becomes a problem only once the next step is implemented.

STEP THREE – Now we get to ObamaCare, and the presumption that the best (only?) way to finance health care is through “Accountable Care Organizations” (ACOs), that pay physicians on a “Pay-For-Performance” (P4P) basis. P4P says that doctors will get paid more when they do the “right thing,” and less when they do the “wrong thing.”

Now we’ve got something. Now we have HIT telling the government what every doctor is doing, and we’ve got CER determining what is the right and what is the wrong thing to do, AND now we have a payment system that will “incentivize” doctors to do what the government says. There is only one thing missing – how to tell the patient.

STEP FOUR – “End-of-Life Counseling.” There is no acronym for this as yet. End-of-Life  Counseling will pay physicians to deliver the bad news to the patient — “I’m afraid your breast cancer is quite advanced and there isn’t anything further we can do. How can I help you get your affairs in order?” Now, notice the physician is not explaining there IS something that can be done, but the government decided to not pay for Avastin because it costs too much. Or any of the other life-enhancing treatments that would be available if not for federal intervention. No, Medicare would not pay the doctor to deliver this information because it might upset the patient.

So, there you have it. In twenty-first century America, our Death Panel is good old kindly Dr. Marcus Welby. Don’t you feel better already?

Protocols versus Individualized Care

By Marcy Zwelling-Aamot, MD FACEP

We have started to see the downside of government interference in the patient/doctor relationship.  No surprise, it is not what doctors have warned their patients about.

Recently United HealthCare announced a new way to pay for cancer treatment —  “The new fee is meant to encourage doctors to follow standard treatments rather than opting too often for individualized and unproven courses of therapy.”  (New York Times, 10/19/2010).

Like every relationship, the patient/doctor relationship is complex.  But in medicine it is further complicated by a financial relationship that removes the patient from any decision making process. Third-party payers, particularly the government, distorts any opportunity to offer direct accountability and responsibility for our work.

The government payer system is predicated on a pot of money that must be divided among all doctors.  It is further complicated by political pressures.  In the end, doctors who do procedures have always been paid much better than those of us who only have our brain and time to sell.  Most private insurers follow the government when it comes to doctor payment.

Oncologists have never been paid for their consultative services.  To keep their offices open, they have had work directly with pharmaceutical companies to save their patients’ lives, keeping large inventories of drugs in their office at huge expense.  With this as background, medicine and genomics has advanced to the point where we can create individualized treatment strategies in cancer management that saves our patients’ lives.

Protocol management has dominated oncology therapy.  Cancer therapy is so risky, protocols move slowly to prove themselves successful. But, our thinking about cancer management has changed with the evolution of genomics.  We have proven that some patients are not genetically able to metabolize certain therapies. Now individual patient management dominates the discussion and lives are being saved.  No sense in wasting time and money on treatment that brings only risk for a specific individual patient.  This is a huge advancement.

Now, insurers, in order to save money, are asking my colleagues to participate in nothing short of blackmail.  An oncologist may get paid a bonus to ONLY use the protocol management rather than individual treatment strategies when treating patients with cancer.  No one anticipated things would disintegrate so far so fast after the passage of “ObamaCare.”  Who could dream up such a nightmare?

No, there are no death panels.  And, technically, the government has not mandated that patients not see “their” doctor of choice.  Rather, they have subversively applied blackmail to the marketplace of life and death.

The difficulties that result from a patient/doctor relationship that is complicated with third-party payers are the root of many of the distortions that add cost and a “dys” use of our limited resources in the U.S. healthcare delivery system.  This subversive interference with complicated life and death decisions demonstrates the immediate need to repeal ObamaCare in order make the right reforms.

The first reforms need to be about solidifying what is best about the delivery of health care in any system and that is an uncompromising trust in our relationship with our patient.

Why So Sneaky?

By Greg Scandlen

Two recent articles, one in the Washington Post about the new high-risk pools, and the other in the New York Times about the new end-of-life counseling, give plenty of material for discussion. They are on very different topics, but they both reveal something that should disturb all Americans. That is how very sneaky our political leaders have become.

The Post article notes that enrollment in risk pools is well below what was projected by the Administration just a few months ago. It was predicted by HHS that 375,000 people would have enrolled by the end of this year, but in fact, only 8,000 had actually enrolled by early November. The reporter asked HHS for updated figures, but, “HHS officials declined to provide an update, although they collect such figures monthly, because they have decided to report them on a quarterly basis.”  So, HHS has the numbers but won’t release them because they are embarrassing.

The Times article is even worse. To refresh your memory, a new end-of-life counseling benefit in Medicare was considered and rejected by Congress because of concern about “death panels.” It would have paid for such a session with your doctor once every five years.

Now, it turns out that HHS has, by regulation, decided to include it as part of a beneficiary’s annual “wellness” exam. So, rather than every five years it will now be yearly. Actually, it is not these counseling sessions that raise the concern about death panels, but the combination of the new “comparative effectiveness” standards of physician practice along with “pay-for-performance” incentives.

But, leaving that aside, what is shocking about the Times article is the revelation that the Administration and senior members of Congress purposely tried to hide the new regulation from the public. Robert Pear writes:

After learning of the administration’s decision, Mr. Blumenauer’s (The Democratic Representative from Oregon who sponsored the original proposal last year) office celebrated “a quiet victory,” but urged supporters not to crow about it.

“While we are very happy with the result, we won’t be shouting it from the rooftops because we aren’t out of the woods yet,” Mr. Blumenauer’s office said in an e-mail in early November to people working with him on the issue. “This regulation could be modified or reversed, especially if Republican leaders try to use this small provision to perpetuate the ‘death panel’ myth.”

Moreover, the e-mail said: “We would ask that you not broadcast this accomplishment out to any of your lists, even if they are ‘supporters’ — e-mails can too easily be forwarded.”

The e-mail continued: “Thus far, it seems that no press or blogs have discovered it, but we will be keeping a close watch and may be calling on you if we need a rapid, targeted response. The longer this goes unnoticed, the better our chances of keeping it.”

So here is a new benefit for Medicare that the elected representatives of the people don’t want the press to “discover” for fear that the people may object to it.

On top of the secret recess appointment of Dr. Don Berwick to head CMS, this government is looking more like the Hugo Chavez regime every day.

Chronic Failure

By Greg Scandlen

Every federal initiative that I can think of in health care has been a failure. Maybe you can think of some that have worked as promised. I can’t.

This is not an ideological critique, but a practical one. Most Americans are practical people. We like to do what works and avoid repeating our mistakes. This country is famous for “second acts” and “second chances.” We don’t condemn people for making mistakes, but we expect them to learn from the error and do better the next time. But that assumes that the second act is not an exact repeat of the first one.

Unfortunately, today we are repeating all of the things that have been proven failures in the past. Managed Care was soundly rejected by most of the public, so now we are doing it all over again with a new name – “Accountable Care Organizations.” Much like today, we tried to lower health care costs by reducing the supply of health care services with the massive federal Health Planning Act in the 1970s. It had the exact opposite effect. Hospital rate setting was tried by 30 states in the 1980s and repealed in all but one (Maryland.) But today there is new talk of a new round of hospital rate setting. Community Rating and Guaranteed Issue have been tried with horrendous results, but today it is national policy with one small twist – everyone will be required to buy whether they want to or not.

Even the much-touted Medicare program is a failure by any standard. Yes, it is popular and defended by the elderly. Of course it is. The “beneficiaries” pay a mere fraction of what the program costs. Of course they like it. And there no longer exists any alternative in the market. Of course they defend it. That does not make it a success.

As John Goodman writes in Forbes, Medicare’s unfunded liabilities are $89 trillion on top of any expected premiums and dedicated taxes. Or, he adds, if we froze the program today and just looked at what is owed to today’s worker’s and retirees the unfunded amount would equal $33 trillion. That is – 33,000 billion dollars, or about $100,000 for every man, woman, and child alive in the United States today.

More recently, writing on the From Forum, Bruce Bartlett looked at an obscure federal report, “The Financial Report of the U.S. Government,” that takes an accrual approach to obligations, rather than the cash flow approach of the federal budget. Every private corporation in the United States is required to use accrual accounting in its financial statements, says Bartlett.  He reports that Medicare liabilities over the next 75 years were $38 trillion at the end of 2009, but were cut by $15 trillion in 2010 because of the health reform law. Of course, that $15 trillion “cut” was just being transferred from Medicare to the other programs within ObamaCare, so it isn’t really saving money at all.

So, the program is massively insolvent. But it is also a lousy insurance program. You would not be able to sell this program as a private benefit plan. It has a bewildering array of deductibles, coinsurance, and limits on covered benefits. In fact there is absolutely no limit on the out-of-pocket liability for beneficiaries, so that most people on the program also have to buy an expensive supplemental policy to cover all the coverage gaps.

The list of failures is so long it would take a book (which I am currently writing) to list them all. The SCHIP program was supposed to ensure that all low-income children would have insurance coverage. It didn’t. Hillary Clinton’s federal vaccine program was supposed to ensure that all kids could be vaccinated at low cost. The doses rotted in warehouses.

It is not the opponents of these programs that are ideological, but the supporters. In most cases the skeptics were willing to give the ideas a chance to succeed even while doubting that they would. But the supporters are unwilling to ever admit failure and keep pushing the same ideas in spite of all the empirical evidence.

9/11 Responders and Health Care

By Greg Scandlen

The old Congress has passed a $4.2 billion 9/11 Responders health care bill. It was passed by a unanimous voice vote in the Senate after the price tag was lowered from $6.2 billion.

All of the news articles I have seen mention it was mean old Tom Coburn who was trying to deprive our heroes of needed health care, and that Jon Stewart rode to the rescue by highlighting the plight of the victims. Not a single – not one – article I have seen had anything to say about exactly what this bill does or whom it would help.

The whole discussion seems to place 9/11 heroes at one end and a pile of money at the other end and anyone who gets in between as a villain.

But no one ever mentions how the money will be spent. Presumably these responders have pretty good health insurance. Is treatment denied them? Is this excluded from coverage because it was an act of war? I don’t know. Nobody ever says.

How many people will be helped? How much money will they each get? It’s not reported. Is there a death benefit involved? Who knows? Is there compensation to the families of victims? I can’t tell. It was $6.2 billion and now it is $4.2 billion – why? How did they calculate the number?

More importantly, what does this process say about the future of health care in America now that the federal government is in charge of all health care spending? Is every decision going to be based on a split-the-difference calculation between heart-hearted Republicans and generous Democrats? That certainly seems to be the case if you look at the sorry history of the SGR payments to physicians in Medicare. One month they are cut by 20%, the next month it is restored for a few months, then it gets cut by 25%, until it is restored once again.

Will your treatment depend on the political machinations of Congress? Will you, too, have to recruit Jon Stewart to plead your case? It’s beginning to look that way.

MLRs: The Seductive Myth of ObamaCare

By Ross Schriftman

Would you invest your money in a company whose managers spend most of their time focused on how to reduce 15% of their spending?  Wouldn’t you find it weird if they conducted lots of meetings about how to cut back on the number of desk staplers they purchased rather than figuring out how to keep their overall prices competitive and improving their customer service so they could sell more of their products or services?

Unfortunately the new health care “reform” law in Washington is forcing health insurance companies to do just that.  Within the massive act referred to as ObamaCare there is a whole section dealing with Medical Loss Ratios. (Also referred to as Minimum Loss Ratios).  Insurance companies are going to be required to spend no more than an arbitrary 15% of your premium dollars on “administrative” costs in the large group market and no more than 20% in the small group and individual markets.  If they do spend more they will be required to refund customers.

For years I have heard advocates supporting more government regulation of health insurance promote this concept.  They honestly believe that if the government could simply get insurance companies to spend less on running their companies the savings would pay for all kinds of new benefits and give everyone lower premiums.  This is a simplistic answer to a complex problem but the idea is very seductive. They really believe that the government can make a private industry more efficient by piling on even more regulations. In reality they will be lucky to reduce costs by more than one or two percent.  In reality this absurd provision will have many unintended consequences which will drive up dissatisfaction among the public for Obamacare.

By the way, last year most health insurance companies were already in the minimum loss range talked about.  The industry made a whopping $3 billion in profit last quarter which actually breaks down to less than 3% of premiums collected.  The drug companies enjoyed a 7% profit last year.
So where will they find the savings for our health insurance premium dollars?

What is included in the administrative side of the equation?  The new regulations list includes paying claims, collecting premiums, fraud management, some taxes and paying employees as administrative costs.  They also include paying out commissions to insurance agents including independent agents, who must pay all of their own expenses themselves.  It also includes compliance costs such as making sure every word in plan materials are in compliance and the printing and distribution of dozens of required documents to consumers.  Finally, the insurance companies are required to set up an administrative process to send out refunds if they spend too much on administration which this provision in itself adds to their costs.

With these added costs how will insurance companies comply?  Where do they have wiggle-room?  The answer is customer service.  Already health insurance companies are laying off employees leaving those who still have a job with even more work to do.  Call center wait times for customers will increase dramatically.  Insurance companies are now sending letters to the insurance agents they partner with telling them that their compensation for selling and servicing their health insurance will be cut by as much as 40%.  Many agents are considering selling other lines of insurance that will allow them to remain in business.  Many small businesses and individuals rely on their personal insurance agent to help them navigate all the new rules of ObamaCare.  Health insurance agents help keep insurance companies rates competitive by shopping coverage for their clients every year.  With fewer agents to help them many small business will now be forced to hire benefit managers at the very time when they are struggling to meet payroll and keep their own workers.  The “reform” law has forced these business owners to spend countless hours trying to figure out if they are in compliance with the new law.  Medical Loss Ratios will cut off many of them from the help they need by no longer having their own agent to help them.

The whole idea of medical loss ratios was to keep premiums down.  Instead, in order to comply some insurance companies are raising their premiums so that they can match their 15% or 20% share with the added reporting and other requirements demanded by our government officials.  In addition, health plans that do a poor job of wellness and end up with a sicker group of customers will be rewarded by not having to give refunds while those who help their customers stay healthy will be penalized with more administrative costs.

The Medical Loss Ratio provision is just another example of our government gone wild.  Rather than having this bizarre rule and requiring refunds the next Congress should throw out Obamacare and instead focus on wellness, health education and streamlining the regulations on the health insurance industry.  The elimination of medical loss ratios will actually lower administrative costs, improve innovation and may result in lower rate increases going forward.  I believe my clients would rather see better rates at renewal time than getting some kind of refund after it has gone through a nightmarish administrative process overseen by government bureaucrats that ends up costing them money.