IN THIS ISSUE:
? Families USA – 75 Million Uninsured in Two Year Period
? Single-Payer – Same Old Song
? CD Plan Cost and Utilization Experience Described
? Survey – 71% of New York Employers Would Offer CD Plans
? Survey – 53% See Immediate Cost Savings With CD Plans
FAMILIES USA – 75 MILLION UNINSURED IN TWO YEAR PERIOD
A new statistic has entered the lexicon of insurance reform – 74.7 million. If you have been paying attention at all, you already know what “74.7 million” describes. It took less than a month for the number to penetrate the mass media, be cited on talk shows, parroted by advocates, quoted in research reports, mentioned in editorials. It has the kind of pseudo-precision the media loves, and provides partisans with a new bludgeon to move their agenda. Yet I would wager not one in a hundred of the people spouting “74.7 million” have read the report or wondered about its veracity. It is enough to be able to say, “Okay, maybe you don’t care about 41 million, but surely you MUST care about 74.7 million.” Others might try a different spin – “We used to think the problem was 41 million, but now we see it is getting much worse. It is 74.7 million!!!!!!!!!”
You’ll notice I haven’t yet mentioned what 74.7 million is referring to. We could have a quiz. Anyone who knows the answer gets a free T-shirt, and anyone who knows where it came from gets a coffee mug as well. But such an offer would bankrupt the Galen Institute. We would be sending out millions of T-shirts and mugs. That is the power of a well-primed and uncritical media. Give ’em a number and show up in every newspaper in the country.
That is why they like surveys so much, too. If you want to get a lot of press, sponsor a survey. It doesn’t matter how many people you poll, or whether you twist your questions to get the answers you are hoping for. The important thing is the number – 68% of Americans support X, while only 22% oppose it. Okay, we can turn that into a graphic that will look great on TV.
Oh. For those of you who have been out of reach of the media, like maybe on a Special Ops mission in Kurdistan, 74.7 million is the estimated number of people who have been without insurance coverage at some time in the past two years. It was released by the highly partisan Families USA during “Cover the Uninsured Week.” Here are some things to think about with this number:
? It is at best a guesstimate. It is a projection by the Lewin Group, based on two Census Bureau reports – the 1996 Survey of Income and Program Participation (SIPP), and the March, 2002 Current Population Survey (CPS) of the uninsured in 2001. Both measures are controversial, though most researchers accept them because there isn’t anything better available. CPS relies on self-reporting of past events. SIPP is more reliable, but its data set ends in 1999. Lewin projected these numbers to the period of 2001-2002 by adjusting for state-specific changes in employment and Medicaid enrollment. It is a reasonable methodology, but fraught with potential distortions if the assumptions used are off the mark. Lewin concedes as much, noting there were “relatively large standards of error” in some of the more important variables, and that “researchers have differing opinions” on the reliability of some of the underlying data.
? Families USA, of course, isn’t in the business of issuing caveats that would detract from the propaganda value of the report. In a press release, executive director Ron Pollack states flatly, “Now that almost one out of three non-elderly Americans experienced significant periods without health insurance, the uninsured problem is no longer simply an issue of altruism about other people, but it is also one of self-interest for us all.” He goes on to frame it as, “The 75 million who were uninsured over the past two years?.” The leap from a hesitant projection by a research firm to hard, incontrovertible fact by an advocacy organization is typical of how policy is made in Washington.
? The rest of the report is unsurprising. The demographic breakdown, variation between states, and work status of the uninsured are all well known from earlier reports. The uninsured are young, Hispanic, and low-income. Many are already eligible for existing programs or employer-sponsored coverage. A significant number are well-off (16.5% above 400 percent of poverty according to these numbers). Many are short-term, probably between jobs (35% for less than 6 months, 67% for a year or less, according to this report).
? It should also be noted that merely having “coverage” doesn’t guarantee access to care. As everyone knows, Medicare doesn’t cover a host of important services, like prescription drugs and preventive services, so people have to buy additional coverage to fill in the gaps left by the program. People on Medicaid are covered for just about everything imaginable, but very often they can’t find a doctor who will see them for the paltry payments Medicaid provides. The important issue isn’t whether or not someone is “insured,” but whether or not they can get the health care they need.
? The solutions are already known – tax credits to help the low-income, MSAs and other cash accounts to provide a source of funds when between jobs, privatizing Medicaid to reduce stigma, Association Health Plans to encourage more small employers to offer coverage, tort reform to reduce costs, and so on. Whether we start with a base of 41 million in one year, or 75 million over two years, doesn’t change the policy prescriptions.
If anything, the report emphasizes the trouble with relying on employer-sponsorship in a mobile economy. People will indeed lose their coverage when they change jobs – it is guaranteed. The answer is to allow them to “own their own” coverage that can go with them regardless of who their employer might be. Employers should be allowed to contribute to the costs of this coverage without penalty.
SINGLE-PAYER – SAME OLD SONG
Writing in “AMNews,” Joel Finkelstein provides an overview of the continuing push for Single Payer health care. He quotes a bevy of advocates, including Jay Glasser of the American Public Health Association, Marcia Angell of Harvard Medical School, Minesh Shah of the American Medical Student Association, Kenneth Frisof of the Universal Health Care Action Network, David Himmelstein of Physicians for a National Health Program, and Rep. Jim McDermott (D-WA). The opponents of the idea seem pretty lonesome in comparison, including only Stuart Butler of Heritage and Alain Enthoven of Stanford. The arguments are all routine – the same things have been said for 60 years or more, and the politics don’t seem to have evolved much, either. The article notes activity at the state level, but forgets to mention that Oregon’s voters defeated a proposal by a four to one margin a mere 6 months ago. At least Families USA isn’t boring.
CD PLAN COST AND UTILIZATION EXPERIENCE DESCRIBED
Results from the field on consumer-driven health (CDH) plans are starting to come in. An article in “Employee Benefit News” reports on the experience of one Fortune 500 company that used a total replacement for a group of 1,500 employees beginning in January, 2002. The study by Michael Taggart and Howard Tarre, both of Synhrgy Healthcare Solutions, finds that:
? “Overall utilization was significantly reduced,” except for preventive services, which stayed about the same. Older enrollees had a greater drop (17%) than younger enrollees (9%), “but this is not surprising since the absolute level of utilization is higher for older groups.”
? “There was no cost shifting between older and younger workers.” The article says that while it is true that healthier employees are better off under the CDH, the “healthy” crowd is not the same group of people from year to year. “Only 57% of the employees who had less than $1,000 in expenses in 2001 (also) had less than $1,000 in 2002.”
? “Prescription drug use changed in positive ways.” The firm switched from a triple-tier copayment system with mandatory generic substitution and mail order supplies. The CDH resulted in a decrease of 6% in “days of therapy supplied.” “High utilizers maintained their prior level of critical medications,” but there was a significant decrease in the use of pain medications. Diabetics reduced their “oversupply” of medications from 40% to 24%.
? Chronic patients “continued to obtain routine and preventive care services, even as overall utilization fell.” Notable was hypertensives who increased their use of preventive services, while lowering the rate of hospital outpatient encounters and office visits, and reducing drug utilization.
The article concludes that, “For a typical employee group, the likely result of a well-designed CDH strategy will be a significant drop in the utilization of discretionary health care services, lowering the overall cost of medical plans, without negatively impacting participants’ health.”
SOURCE: The article may be found at http://www.benefitnews.com/pfv.cfm?id=4232
Or got to http://www.synhrgy.com for the complete study.
SURVEY – 71% OF NEW YORK EMPLOYERS WOULD OFFER CD PLANS
“Crain’s New York Business” reports that consumer-driven plans have been slow to take hold in the city, but that may be changing as companies continue to experience double-digit inflation. One pioneer is executive placement firm Redwood Partners, which has just installed an HRA. Managing partner Todd Zangrillo says, “People need to focus more on their own health care costs; it shouldn’t be just the company’s decision.” The firm signed up for a Definity premium-based product. The article reports Definity as saying “In 2002, its clients’ health insurance costs dropped by half a percent, compared with an average increase of 14.5% for non-HRA plans.” The article also cites a Hewitt survey that found “71% of New York metro area employers would be interested in offering an HRA if it decreased overall annual costs by 10%.” But a principal at Buck Consultants, Richard Stover, “warns that consumer-driven plans don’t usually affect how the minority of employees who face large, catastrophic medical conditions spend their health care dollars.”
SOURCE: http://www.crainsny.com. The article ran on March 24 by Samantha Marshall. There is a fee for accessing it – sorry.
SURVEY – 53% SEE IMMEDIATE COST SAVINGS WITH CD PLANS
Deloitte & Touche has also conducted a survey finding a great deal of interest in consumer-driven plans and satisfaction among those employers that have already installed them. The number of employers offering them has doubled in one year from 11 percent to over 20 percent, with another 8 percent saying they will definitely offer one in the next two years, and 35 percent reviewing them for possible adoption. Forty-five percent say consumer-driven plans will be a part of most employer plans by 2005. The article says, “More than half (52 percent) of the companies surveyed agreed that consumer-driven health care plans will result in immediate employer cost savings, while slightly more than one-third (36 percent) believe these new plans will reduce the long-term health care cost trend.”
SOURCE: contact Lauren Mistretta at 312-946-2659 or email@example.com