Viewing entries tagged with 'ICYMI'
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 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:
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."
ICYMI: AHIP's Letter to Secretary Sebelius
Posted by The Campaign on March 04, 2010 at 10:25 AM
Yesterday, AHIP's President and CEO Karen Ignagni sent a letter to HHS Secretary Kathleen Sebelius outlining concerns about rising medical costs, the impact this has on premiums and things that can be done to slow the growth rate.
Here are some key excerpts from the letter:
"But for months health plans have been raising concerns about far more needing to be done in health care reform legislation to bring costs under control, because we were seeing disturbing increases in unit costs in the marketplace. We also have raised strong concerns about what happens when costs increase and younger and healthier people leave the pool. These concerns no longer are conjectural; they are being borne out in the data."
"With respect to why premiums are increasing, we believe the data clearly show that premiums are increasing primarily because of soaring medical costs and a slowdown in the economy."
"...the Department’s recently released analysis of 2009 health expenditures found that rising costs for hospitals, physicians and prescription drugs have led to the largest growth in health care spending as a share of GDP since the government started keeping track of these data 50 years ago. [1] Just last week Health Affairs[2] published an analysis that showed that hospitals and physicians have enhanced their significant bargaining clout in a way that works against consumers."
"The data also put in perspective health plans’ profits and administrative costs. Indeed, the Department’s analysis showed that in 2009 the portion of premiums that went toward health plans’ administrative costs and profits declined for a second year in a row. [1] Fortune Magazine’s 2009 analysis of industry profits showed that health plans’ profit margin was 2.2 percent, ranking it far below other health care industries.[2] Yahoo! Finance’s latest analysis of quarterly financial data shows the average profit margin in the health insurance industry is 3.4 percent, compared to 11 percent for the entire health care sector.[3] "
"We have long advocated that a public-private process be established to develop a road map to take 1.5 percentage points off the future rate of growth in total health care costs.... Such an effort would help reduce the deficit, improve the stability of Medicare, and control the future cost of coverage for those under age 65, including small businesses and individuals."
"Recognizing the important dual responsibility of state insurance commissioners in protecting consumers and ensuring the financial stability of insurers in the marketplace, we are also committed to working with the National Association of Insurance Commissioners (NAIC) to help develop a uniformity of process and more transparency for consumer."
Click here for the full letter.
[1] Christopher J. Truffer, Sean Keehan, Sheila Smith, Jonathan Cylus, Andrea Sisko, John A. Poisal, Joseph Lizonitz, and M. Kent Clemens, Health Spending Projections Through 2019: The Recession’s Impact Continues, Health Affairs Web Exclusive, February 4, 2010.
[2] Berenson, R., Ginsburg, P., and Kemper, N., “Unchecked Provider Clout In California Foreshadows Challenges To Health Reform”, Health Affairs 29 (April 2010): 1-7.
[1] Truffer, February 4, 2010.
[2] Fortune 500, “Top Industries: Most profitable”, Fortune, May 4, 2009.
[3] Yahoo!Finance, Yahoo.com, http://biz.yahoo.com/p/5qpmd.html
ICYMI: Seattle Weekly -- Washington State Offers Dismal Lesson for Federal Regulation of Premiums
Posted by The Campaign on February 23, 2010 at 10:21 AM
The health care reform debate has been focused recently on why premiums are increasing. What the data shows is that premiums track closely with underlying medical costs -- in fact the Department of Health and Human Services National Health Expenditure Accounts data shows this exactly.
Despite this data showing that underlying medical costs are driving premiums and health care spending ever higher, there continue to be arguments made that the federal government should play a larger role in regulating premiums.
However, the below two resources point out the exact problems with regulating (or dictating) premiums.
The news site Seattle Weekly points out "Practically, however, a rate board is unlikely to do much, judging by Washington state's experience with similar regulation...Stephanie Marquis, a spokesperson for Insurance Commissioner Mike Kreidler, says her boss's hands were tied. He has to go along with rate increases if insurance companies show that they are paying out more money than they are taking in. And the reality is, Marquis says, that insurance companies lose money in the individual market, which holds just a sliver of the total population, and one that tends to need a lot of expensive care." For more click here.
Several years ago, the California Healthcare Foundation and RAND performed an analysis on legislation in the California State Senate that would have regulated premiums. The study found "if health care costs continue to rise while premiums are frozen, stringent rate regulation could lead to undesired consequences." Click here for the full study.
ICYMI: AHIP Statement on Premium Increases
Posted by Campaign on February 18, 2010 at 8:08 AM
AHIP Statement on Premium Increases
Ignagni: “It’s time to stop the politics of vilification.”
Washington, D.C. – America’s Health Insurance Plans (AHIP) President and CEO Karen Ignagni today released the following statement regarding premium increases:
“It’s time to stop the politics of vilification and focus on what Americans need most: real health care reform that addresses the serious and urgent problems facing our nation.
“Increases in the cost of coverage in the individual market shine a spotlight on the urgent need to reduce the growth of underlying medical costs and to bring everyone into the system. If reform doesn’t address these pieces, it will not solve the serious problems that individuals, families, and employers face. That is why health plans have proposed fundamental reform of health insurance markets and a long-term strategy to reduce rising health care costs.
“Health insurance premiums are increasing in the individual market because of soaring medical costs and because younger and healthier people are dropping their coverage due to the economy. In 2009, according to a report from the Department of Health and Human Services’ Centers for Medicare and Medicaid Services released on January 5th, rising costs for hospitals, physicians, and prescription drugs led to the largest growth in health care spending as a share of GDP since the government started keeping track 50 years ago. At the same time, the portion of premiums that went towards health plans’ administrative costs and profits declined for the second year in a row.”
Facts about rising health insurance premiums
- In every state, health plans have to provide actuarial justification for any premium increases.
- Federal government data confirms that rising health care costs are driven by increased spending on hospital care, physician services, and prescription drugs.
- AHIP recently sent a letter to Capitol Hill to highlight the key factors contributing to increases in health insurance premiums. These factors include:
o sharp increases in provider rates;
o increased cost-shifting as providers seek to offset the costs of treating more Medicaid patients;
o an increase in uncompensated care costs;
o consolidation among hospitals and other health care providers;
o a wide range of new state laws, including benefit mandates, regulations, and premium taxes; and
o economic factors that have caused some people to drop coverage resulting in a risk pool that is more heavily weighted with older, less healthy persons.
- According to National Health Expenditure Accounts, health plan administrative costs have fallen over the past two years from 12.8% in 2006 to 12.5% in 2007 to 11.7% in 2008. (See Table 12)
Facts about health plan profits
- Fortune 500 puts the health plan industry profits at 2.2%, 35th on its list of profits by industry sector. This is below other sectors of the health care industry.
- According to Yahoo! Finance’s latest analysis of quarterly financial data, the net profit margin for the entire health care sector is 11%. Using the same index, health plans have a 3.4% net profit margin.
ICYMI: Fortune Magazine discusses the importance of structuring reform properly
Posted by The Campaign on February 03, 2010 at 9:41 AM
Fortune Magazine’s editor-at-large, Shawn Tully, takes a look at several of the health care reform provisions with broad support and how they need to be structured in order to work well.
A few excerpts:
In the battle over health care reform, two ideas seems to bridge the divide between Democrats and Republicans: Private insurers should be required to cover Americans with pre-existing conditions and be banned from charging older, sicker people much more. But where the two camps jibe could also cause the most damage to health care.
The two ideas: Guaranteed Issue and Community Rating.
Guaranteed Issue forces private insurers to accept any and all applicants, regardless of their medical condition. Community Rating bans carriers from charging a different rate, say, for someone with diabetes than a buff tri-athlete. It also imposes tight bands on premiums for customers of different ages, even though older patients cost far more to insure than younger ones.
The pool dries up: So what is the problem with obliging insurers to accept everyone and try to keep pricing uniform? First, the young and healthy -- the group whose premiums carriers count on to make insurance work -- will be less likely to buy in. Community Rating forces them to pay far more than their anticipated medical expenses. Shunning insurance actually makes sense: They can wait to sign up if they get diabetes, cancer or another chronic condition. Remember, under Guaranteed Issue, insurers can't turn them down.
Boosting penalties: A system mandating that insurers take all comers at close to the same premium can work -- but only if it also imposes a powerful "individual mandate" requiring that everyone buy insurance.
To read the full article, click here.
ICYMI: The market clout of Massachusetts providers is a “main driver of the state’s spiraling health care costs”, investigation finds
Posted by The Campaign on January 29, 2010 at 4:30 PM
A year-long investigation into the rising costs of health care in Massachusetts, which are growing by 7.5 percent each year, found that hospitals and physicians are leveraging their market power and driving up health care costs in the state. The Boston Globe reports on the investigation by the state attorney general’s office. Here are some key findings:
- “Massachusetts insurance companies pay some hospitals and doctors twice as much money as others for essentially the same patient care, according to a preliminary report by Attorney General Martha Coakley. It points to the market clout of the best-paid providers as a main driver of the state’s spiraling health care costs.”
- “Coakley’s staff found that payments were most closely tied to market leverage, with the largest hospitals and physician groups, those with brand-name recognition, and those that are geographically isolated able to demand the most money.”
- “’These rising costs are unsustainable. If we don’t do something about it, the only thing we’ll be able to afford is health care. No one will have money for food or housing,’[said Coakley].’’
- “The report shows that a small group of about 10 hospitals statewide command significantly higher payments than the other 55, ranging from 10 to 100 percent more than their competitors for similar work.”
- “Investigators found that Massachusetts health care costs, which are growing by 7.5 percent annually, are mostly the result of rising prices, not patients getting more imaging tests, surgery, and other procedures.”
For the full article, click here.
To read the preliminary report, click here.
