Reporter uncovers $86 million from insurers to fight reform
Filed under: Health care reform, Health journalism
The flow of money into politics in general, and health reform in particular, has been thoroughly opaque this election season, yet Bloomberg’s Drew Armstrong has still managed to pull back the curtain and figure out that insurers gave $86 million to the U.S. Chamber of Commerce, which then lobbied heavily to either hamstring reform or to reshape it in the insurers’ favor. Armstrong traced the money to America’s Health Insurance Plans through classic reporting tools: public records and well-placed sources.
Tax forms require organizations to list only the amounts granted or received from other groups, not the organizations’ identities. Health insurers expressed opposition to parts of the health-care legislation while they conferred with congressional Democrats writing the bill and the White House. At the same time, the Chamber of Commerce was advertising its opposition.
The Chamber spent $45.5 million on a campaign against the bill in 2009, according to TNS Media Intelligence/Campaign Media Analysis Group, an Arlington, Virginia-based company that tracks political advertising.
The Chamber began in March 2010, weeks before the bill became law, another $10 million effort focused on pressuring lawmakers to vote against the bill. Blair Latoff, a spokeswoman for the Chamber, wouldn’t say how much of the money was spent in 2009 and how much, if any, was used in 2010.
Understanding the administrative side of implementation
Coverage of health care reform implementation has generally focused on the issues and effects of the roll-out, rather than the arcane governmental mechanisms involved. It makes sense, of course, as “here’s how you can now get coverage despite your pre-existing condition” is significantly more relevant to most readers than “23 states miss federal 90-day deadline for creation of high-risk pools, partly because already established pools don’t always conform to reform requirements, and partly because it’s too much hassle and they’d rather let the feds do it for them.”
Service-oriented as it may be, this focus has led to a few gaps in my understanding of the administrative moving parts involved in implementation. Which is why the Robert Wood Johnson Foundation’s guide to state and federal roles in the implementation of health care reform is such a handy document. It’s worth a quick scan, if only to give all those implementation stories a little context. It’s got everything from “how informal rulemaking becomes law” (hint: it involves both “notice” and “comment”), to the aforementioned business about why some states ceded control of their high-risk pools to the federal government. And it’s only four pages long.
A new wave of hospital consolidation looms
Nationally, the hospital consolidation craze has leveled off since its 2006 peak, but Kaiser Health News senior correspondent Julie Appleby, an AHCJ board member, reports that acquisitions are on the march again, especially in the mid-Atlantic region. Appleby found that this rising wave is due, in part at least, to health care reform and its emphasis on integrated care and Accountable Care Organizations.
Hospital leaders from Baltimore to Seattle say the health law approved by Congress in March gives them even more reason to merge with or buy rivals because of its emphasis on integrated systems where hospitals and doctors better coordinate care.
Also fueling the trend: More doctors want to be employed directly by hospitals, allowing them more job security without the hassles of running a business. But hiring groups of doctors can be an “expensive and daunting proposition” for a stand-alone facility, says Steven Thompson, senior vice president for Johns Hopkins Medicine.
Nationally and locally, he says, “it’s fair to say that (independent) hospitals are talking with everyone, feeling that they don’t want to be the last one standing.”
Other causes include increasingly contentious negotiations with insurers, more direct employment of doctors and access to the capital needed to adopt things like electronic medical records.
We were pointed to the KHN story by AHCJ Immediate Past President Trudy Lieberman’s cjr.org column, in which she compares hospital consolidation to HMOs and insurance consolidation.
It was good to see Appleby’s story, because the media pretty much gave hospitals a bye during the reform debate, instead making insurance companies the saga’s primary villains. Quietly, though, it seems the hospitals were up to the same thing as the insurers—organizing themselves into larger and larger groups with tons of market power to keep insurance premiums in the stratosphere.
Get up to speed on Sept. 23 insurance changes
Start with this primer from the AP’s Carla K. Johnson, an AHCJ board member. The big lesson is that you’ll see some changes, but only if your insurer has changed your plan significantly since the reform law went into effect on March 23, 2010. And, as we’ve established, insurers are very cognizant of these dates and are managing plans accordingly.
Johnson’s article (and others like it) emphasize the big-picture, top-level implementation issues, but things start getting more interesting when the rubber hits the road and each state sets up a slightly different system. For more on how each state is a unique reform lab, see Lynn Blewett and Sharon Long’s piece in the Health Affairs Blog.
From there, the gaps are filled by a slew of specialized articles detailing how reform will impact different sectors of the population. Some issues to look for:
A number of major insurers appear to be playing a high-stakes game of chicken with regulators over children’s health coverage. As N.C. Aizenman reports in The Washington Post, insurers like Anthem, Humana, WellPoint, Cigna and Aetna have decided to “stop offering new child-only plans, rather than comply with rules in the new health-care law that will require such plans to start accepting children with preexisting medical conditions after Sept. 23.”
The insurers cite “uncertainty” in the market, a concept which Julie Rovner ably explains in the NPR health blog. The issue, industry representatives say, is that the law would effectively allow children to sign up for insurance after they get sick, which may not be conducive to a sustainable business model for the companies. It is, after all, the very dilemma that led to the universal mandate vs. no denial for pre-existing conditions tradeoff which forms a key pillar of health care reform legislation.
More about children’s coverage
Q&A: Extending children’s health coverage, Chicago Tribune
Health reform: Will your kids be covered? Reuters Finance
New Health Law’s Protections For Adult Children Start Tomorrow, Kaiser Health News & USA Today
College kids
5 Ways Health Reform Affects College Students, U.S. News & World Report
Small businesses
Lightening the Health Care Load for Small Businesses, The New York Times
The long-term ill
Insurance Companies To Remove Benefit Caps, WBUR
The overweight and others in need of preventive care
Few Insurers Provide Coverage For Weight Loss Treatment, Kaiser Health News
And, of course, politicians
A Tale of Two Campaigns: Repeal vs. Reinforce, California HealthLine
Tool for tracking implementation
The Kaiser Family Foundation has added “Health Reform Source” to its stable. The site is dedicated to helping readers understand laws and regulations behind health reform, and to tracking their implementation, both locally and nationally. The site’s heavy on graphics, video and nifty interactive bits.
For those just looking for a feed full of reform implementation news to add to their Google Reader, I recommend The Scan (RSS) which, though Kaiser heavy, includes reports from all over.
In addition to lives, checklists save money
Filed under: Health data, Health policy, Hot Health Headline, Studies
Last year, Atul Gawande and company made a splash by showing what a profound clinical impact checklists made on patient outcomes. Now they’re back, but this time the checklist evangelists are aiming for the pocket book. In the latest Health Affairs, Gawande and seven others contributed a paper with the descriptive title “Adopting A Surgical Safety Checklist Could Save Money And Improve The Quality Of Care In U.S. Hospitals.”
Photo by cybrjoe via FlickrHere’s their arithmetic, courtesy of The Boston Globe’s Elizabeth Cooney
Time was the biggest cost in setting up the checklist, Gawande and his co-authors write in the journal Health Affairs. They estimated that a hospital with at least a 3 percent rate of complications per year would begin to see savings after five major complications were prevented. That means a hospital where 4,000 noncardiac operations were done each year could save about $25 on each procedure, or about $100,000 annually, they concluded.
As always, free access to Health Affairs studies is one of many perks enjoyed by AHCJ members.
Report examines health reform implementation
Filed under: Health care reform, Health policy, Hot Health Headline
A special report just released by The American Prospect looks at the implementation of health care reform. For the wide-angle view, read Paul Starr’s road map of where the battle lines will be drawn in the implementation effort.
AHCJ members Joanne Kenen, Jonathan Cohn and Rebecca Ruiz contributed to the 12-part report. Cohn discussed the construction and implementation of insurance rules, Kenen looked at Connecticut’s push for a local public option and piecemeal reform implementation in individual states.
Other elements include:
- Keith Wailoo’s evaluation of the pain management reform components of the bill, which amount to the promise that “we’ll look into it and maybe throw a little grant money in that direction.”
- Maria Abascal examines how reform will impact immigrants, legal and illegal alike. Legal immigrants, which make up a substantial portion of the nation’s uninsured, stand to benefit — as long as they can prove citizenship. Illegal immigrants don’t.
- Harold Pollack looks at health reform’s massive blind spot, the period between now and January 2014. Stopgap measures won’t be adequate for the majority of the uninsured, and Pollack pushes for an accelerated timetable.
Related
A briefing from the Alliance for Health Reform, cosponsored by the Robert Wood Johnson Foundation, looks at “50 Ways to Implement Health Reform: State Challenges and Federal Assistance.”
Reform may worsen ER crowding
Filed under: Health care reform, Health data, Health journalism, Health policy, Hospitals, Hot Health Headline, Member news, Studies
Associated Press medical reporter Carla K. Johnson has found that, contrary to common assumptions, emergency rooms could become even more crowded with the passage and implementation of health care reform. Popular wisdom has it that, with more access to insurance thus to primary care, folks will be less likely to go to the emergency room for minor complaints or to allow illness to progress to the point where an emergency visit is necessary. Johnson, an AHCJ board member, gives three big reasons why it’s not that simple:
- There are not (will not) be enough primary care physicians in America to deliver that preventative care.
- At present, the uninsured are no more likely to use the ER than patients with insurance coverage.
- “The biggest users of emergency rooms by far are Medicaid recipients,” Johnson writes. “And the new health insurance law will increase their ranks by about 16 million.”
ERs are crowded, Johnson writes, not only because of a lack of insurance but also because of obstacles inherent in their structure and mission, such as an aging population, more people with chronic illnesses, the closures of many ERs in the 1990s and the demand for beds for both emergency patients and patients scheduled for elective surgeries that bring more money.
AHCJ Immediate Past President Trudy Lieberman praised Johnson’s story and linked it to reporting by The Boston Globe on the impact of that state’s reform law upon emergency room use. So far, events in Massachusetts reinforce Johnson’s predictions.
The Boston Globe revisited Massachusetts’s ER conundrum last week, and reported pretty much what it did last year—that despite the state’s reform law, which mandated everyone have coverage beginning in July 2007, emergency room use is rising. Last year, the state’s Division of Health Care Finance and Policy cautioned that it was too early to draw any conclusions from the seven percent rise in ER visits between 2005 and 2007. Now the agency is saying that expanded coverage may be one reason for the 9 percent rise from 2004 to 2008. According to commissioner David Morales, many studies have shown that expanding coverage does not reduce emergency room visits. That’s because the uninsured “are not really responsible for significant ER use,” he told the Globe.
Why insurers care about the medical-loss ratio
The Wall Street Journal’s Avery Johnson explains the significance of the “medical-loss ratio,” a single metric within the reform bill that holds great significance for the insurance industry.
The ratio, known to wonks as the MLR, signifies the percentage of premiums insurers use for medical costs versus the amount that goes to paying administrative overhead. For individual and small-business plans, it’s set at 85 percent medical to 15 percent administrative. For larger businesses, the magic medical number is 80. Those who don’t meet the threshold would be forced to pay rebates to customers.
At present, the key issue seems to be subsidiaries. Major insurers have hundreds of them each, and while the insurer could meet the requirements if all subsidiaries were averaged together, they won’t be able to hit the numbers at every single subsidiary. Current draft documents, Johnson reports, seem to imply that each subsidiary would be judged separately, a practice which insurers say might force them to stop providing insurance in certain high-risk areas.
Applying uniform numbers to the segmented, fragmented insurance industry could prove tricky. Johnson looked at the numbers.
UnitedHealth, for instance, has about 392 subsidiaries, according to Goldman Sachs health-care analyst Matthew Borsch. Its average MLR for individual policies is 69%, dragged down by a 63% ratio at its dominant Golden Rule subsidiary, according to a report by Goldman Sachs that examined state insurance filings. The Minnetonka, Minn., insurer could owe about $280 million in rebates in 2012, Mr. Borsch estimates, based on his reading of the methodology in the health care law.
The rules will be set by the National Association of Insurance Commissioners, a coalition of state insurance regulators. They’re hoping to have recommendations ready for HHS by the end of this month.
Healthcare.gov coming July 1
Filed under: Government, Health care reform, Health journalism
KHN’s Phil Galewitz previews the July 1 launch of a federal website he says “will give consumers a list of all private and government health care plans for individuals and small businesses in their areas,” a service required by the reform bill, and one that has never before been part of the modern system.
The initial site will just provide basic information on each plan, but a planned October upgrade will include what Galewitz called “detailed cost and benefits information,” the precise nature of which is still being negotiated. Insurance groups, predictably, say that sharing all the information HHS plans to provide will just lead to confusion and higher costs. Consumer groups disagree.
Insurers including UnitedHealthcare and Aetna say HHS is going too far in planning to list certain data, such as the percent of claims that health plans deny, the rate at which they cancel policies after customers get sick and the number of times patients appeal coverage decisions. They say the data would mislead potential customers.
…
The site can “be the great equalizer so consumers can have equal access to information and be on the same playing field as insurance companies,” says Elisabeth Benjamin, co-founder of Health Care for All New York, a consumer health care coalition. “The government needs to make the information as open as possible.”
Until 2014, when stricter provisions of the reform bill go into effect and such practices are no longer permitted, the site will list only the “sticker prices” of the plans, and insurers will still be allowed to charge sicker patients more.
What we’re reading: OSHA, reform and a new site
Filed under: Government, Health care reform, Health journalism, Member news, Nursing
These are busy times for AHCJ (getting ready for Health Journalism 2010!) but we want to take a moment to share some of what we’re reading:
OMBWatch: OSHA Proposal Cuts Workers’ Right to Know about Chemical Risks
PLoS ONE: The Unbearable Lightness of Health Science Reporting: A Week Examining Italian Print Media
FairWarning.org launches: New site to investigate health, safety and corporate conduct issues was founded by former Los Angeles Times reporters.
Poynter’s Al Tompkins has an interview with ProPublica’s Charles Ornstein (also president of AHCJ’s board of directors) about investigating nurses and regulatory boards.
Health care reform: What’s next? Reporters Jim Landers, Washington correspondent for The Dallas Morning News, and Noam Levey, health policy reporter for the Los Angeles Times/Tribune Washington Bureau, have advice on how to cover the local angles of health reform. Suggestions from other reporters will be added soon.
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Join us in Omaha to find untold rural health stories
New at HealthJournalism.org
- AHCJ offers financial data about nonprofit hospitals
- Diversity in aging: Putting gray in the rainbow
- Southeast journalists eligible for regional fellowship program
- AHCJ-NLM Health Journalism Fellowship offers hands-on medical research training
- AHCJ announces 2011 winners of top health journalism awards
