ICYMI: AHIP Letter to HHS Secretary Sebelius
Posted by The Campaign on March 16, 2010 at 11:31 AM
AHIP sent a letter to HHS Secretary Sebelius yesterday to respond to her request for specific cost savings recommendations that could be included in the current legislation. Below are a few highlights from the letter:
Increased Transparency
To address your request for greater transparency, we immediately began working with the National Association of Insurance Commissioners (NAIC) to develop a template our members can use across the country to provide information on the factors that are driving premium increases.
As you request transparency from our members, we urge you also to consider pursuing transparency for hospitals, physicians, pharmaceutical and device companies, and other suppliers.
First Do No Harm
We are particularly concerned that there are inadequate incentives in the legislation to bring everyone into the system, that new age-rating requirements would drive up costs for younger families, and that the proposed premium tax on health insurers would further drive up costs for consumers in the individual and small group markets.
Limiting the amount by which premiums can vary by age can have particularly significant effects for young adults, as moving from a 5:1 to 3:1 rating band...raises rates for adults under age 30 by approximately another 30 to 50 percent beyond that projected for the population as a whole.
Enacting insurance reforms and coverage expansions without meaningful cost control will bring more people into an unsustainable, unaffordable system.
The Senate legislation would establish a new commission to review Medicare and private sector health care spending. That is a start, but it will not provide the comprehensive oversight needed because it would exempt Medicare payments for hospitals, physicians, and other key services from review during the first five years.
Payment Reform
Within a comprehensive framework for cost containment, we recommend broadening and expediting certain provisions of the Senate bill that focus on realigning incentives and promoting innovation. The following are several specific examples:
- To reduce preventable hospital readmissions, we recommend strengthening the Senate bill's proposal to require modest Medicare payment reductions for hospitals with unnecessary risk-adjusted readmissions for three conditions. Increasing the amount of the payment reduction and applying it to a broader range of conditions will create stronger financial incentives for improvements in patient care, thereby reducing unnecessary admissions that are contributing to higher costs while also improving patient safety and quality.
- To reduce hospital-acquired infections, we recommend building upon the Senate's proposal to reduce Medicare payments by one percent for the worst performing hospitals on medical conditions identified by the Secretary. The Senate proposal would be more effective if it established a stronger financial incentive and applied to all "never events" identified by the National Quality Forum.
- To accelerate the adoption of payment reform and quality improvement, incentives under the Value-Based Purchasing program should be accelerated forward to begin in 2011 with final recommendations by 2015. By building on existing collaborations to tie hospital performance on quality measures to common high-cost conditions (AMI, Heart Failure, Pneumonia, etc.), we can more rapidly move away from traditional fee-for-service structures.
- To advance new payment reform models on a system-wide basis, we recommend that the Senate proposal for a CMS Innovation Center be expanded beyond Medicare and Medicaid. Focusing solely on public programs will not improve the overall health care system.
- To improve the value of comparative effectiveness research and the proposed Patient Centered Outcomes Research Institute, we recommend that such research focus on both the clinical and cost effectiveness of treatments.
Provide Malpractice Protections for Doctors
To reduce the burden of defensive medicine, a fresh approach to medical liability reform should be adopted that combines a safe harbor for following evidence-based medicine and a system to ensure that harmed individuals are compensated adequately. As an alternative to the existing litigation system, we recommend an approach that offers protections for providers who follow established best practices and implement safe, accountable care models based on the latest scientific evidence.
ICYMI: AHIP's New Ad on Costs
Posted by The Campaign on March 16, 2010 at 6:05 AM
Building on AHIP's national television advertising campaign on health care costs, the below open letter to the American people has begun running in national newspapers. For a printable version of the letter, click here.
MUST SEE TV: AHIP's Karen Ignagni on CBS' Face the Nation
Posted by The Campaign on March 15, 2010 at 11:21 AM
AHIP's Karen Ignagni appeared on CBS' Face the Nation this weekend. Karen set the record straight on what is driving premiums higher (underlying costs), health plan profits (other industries profit margins are much higher), and the need for the current legislation to do more to control costs (can't pay for $1 trillion legislation by only focusing on 4% of all health care spending.)
MUST SEE TV: AHIP's Karen Ignagni on Fox Business News Discussing Rising Health Care Costs
Posted by The Campaign on March 11, 2010 at 7:08 AM
AHIP's Karen Ignagni was on Fox Business News last night discussing rising health care costs and AHIP's new ad campaign on health care costs.
Watch the full video below:
MUST SEE TV: AHIP's Mike Tuffin on PBS' Newshour
Posted by The Campaign on March 11, 2010 at 6:18 AM
FACT CHECK: Health Plan Competition and Provider Consolidation
Posted by The Campaign on March 10, 2010 at 7:44 AM
Health insurance plans operate in highly competitive markets across the country and consumers have numerous choices in the types of plans and in insurers. To the extent that research has raised the question of competition as a factor in rising health care costs, it has pointed to consolidation among providers, not health plans.
Key facts about health plan competition:
· There are eight or more health insurers in each of the top 40 metropolitan statistical areas (MSAs) in the nation.
· Physicians contract, on average, with about a dozen health plans. Only about half of their practice revenues come from health plan contracts while the rest comes from the federal government through Medicare and Medicaid.
· Aggressive competition among health insurance companies has also increased the number of product options available to both consumers and their employers. New types of products—like consumer-directed health plans, or HSAs—afford more choices, in addition to the many and varied PPO, HMO, POS, and indemnity options, both fully insured and self-funded.
· The states which are allegedly the most concentrated actually have some of the lowest health care costs in the nation.
· The list of participating insurance plans that are available through every state insurance department show that there are a variety of choices for consumers.
Additional information on provider consolidation:
· Massachusetts Attorney General Martha Coakley recently issued a report on hospital consolidation in the state. According to a recent Boston Globe story, the report “points to the market clout of the best-paid providers as a main driver of the state’s spiraling health care costs” and “found no evidence that the higher pay was a reward for better quality work or for treating sicker patients”.
· A report from the Robert Wood Johnson Foundation found that hospital consolidation has contributed to rising health care costs. The report stated: “Research suggests that hospital consolidation in the 1990s raised inpatient prices by at least five percent and likely significantly more. Prices increase 40 percent or more when merging hospitals are closely located.” The report also found that higher hospital prices do not translate to higher quality of care: “[A] narrow balance of the evidence and the evidence from the best studies indicates that hospital consolidation more likely decreases quality than increases it.”
· According to a brief from the National Institute for Health Care Management: “With only a few exceptions, results consistently demonstrate that hospital consolidations result in higher prices for hospital services. The magnitude of price increase varies by methodology and by the characteristics of the markets under study, ranging from low-end estimates of 5 percent price hikes to increases of more than 50 percent.”
· The Federal Trade Commission and the Department of Justice held extensive health care hearings in 2002 and 2003, and in their subsequent report noted the correlation between hospital concentration and high hospital prices: “Most studies of the relationship between competition and hospital prices have found that high hospital concentration is associated with increased prices, regardless of whether the hospitals are for-profit or nonprofit.”
· Recent reports show how much hospital consolidation has increased in recent years, indicating that:
o The vast majority (88 percent) of U.S. Metropolitan Areas have highly concentrated hospital markets.
o Hospitals markets have increased their concentration by 47 percent over 13 years.
MUST SEE TV: AHIP Hits the Nightly News To Discuss Costs and Set the Record Straight on Health Plan Profits
Posted by The Campaign on March 09, 2010 at 4:57 PM
CBS and ABC both reported on today's developments in the health care reform debate. Watch the full clips below which include important setting the record straight segments on health plan profits as well as good discussion on what is driving premium increases.
AHIP's Karen Ignagni on CBS Evening News:
AHIP's Robert Zirkelbach on ABC Evening News:
POLL VAULT: Latest Gallup Poll Shows Americans Most Concerned About Costs
Posted by The Campaign on March 09, 2010 at 2:46 PM
Gallup released its latest poll, and it shows among people who oppose the current reform legislation the biggest reason for opposition is the impact the legislation will have on costs.
Key findings:
There has been greater change in opponents' stated reasons for wanting to defeat the president's proposed healthcare legislation. Now, 20% of opponents say it will raise insurance costs, up from 9% in September. Nineteen percent currently believe the legislation will not address the real problems in the system, up from 10% in September.
Over time, healthcare reform opponents have increasingly come to doubt whether the legislation Congress is considering will control costs and really fix the problems that plague the healthcare system. Supporters are more hopeful that it will make insurance more affordable, but much of their support rides on their belief that all Americans should have insurance.
Full results, click here.
ICYMI: AHIP's New Ad - Pie
Posted by The Campaign on March 09, 2010 at 2:06 PM
AHIP today launched a new national television ad campaign that puts into perspective health insurance companies' contribution to rising national health care spending and urges Washington to focus on the true drivers of rising health care costs.
ICYMI: Slate's Tim Noah on Health Care Costs and Health Plan Profits
Posted by The Campaign on March 08, 2010 at 2:52 PM
While in general Tim Noah's recent article on Slate.com is off in many ways, he does have two very good points on health care costs and health plan profits.
Here they are:
On Health Care Costs: "Health insurers and other complain that the health reform bill does little to control doctor and hospital bills, especially in the private sector. That's true."
On Health Plan Profits: "Profit margins in the health insurance business aren't especially great. On Fortune magazine's list of the 53 most profitable industry sectors, health insurance ranks 35th."
