Super Bowl XXXI Special Edition - January 26th, 1997 - Vol.4., No.2
- How About Those Conventional Wisdoms?
- A perfect description of rural health would be that it "embodies tradition, communal loyalty, volunteerism and decentralized management." But these words were used by columnist Paul Gigot to describe America's only community owned football team. ("America's Real Team Forget the Cowboys. The Pack is back, not only on the hunt for the super bowl but also in our hearts," Time Magazine, 1/13/97.) The next time you hear community based organizations can't compete; a four word rebuttal should do nicely:
Wisconsin's Green Bay Packers
- Medicare "Freeze" Hits Fat & Lean
- The Prospective Payment Assessment Commission has recommended a zero percent Medicare "update" for hospitals. (I don't want to resurrect last year's dysfunctional and deliberately obfuscating partisan argument on whether this is a cut or decrease in rate of increase.) As Medicare spending is considered, it is critical to understand how significantly disadvantaged rural hospitals already are by the current system. To the point, across the board cuts from both the fat and the lean are destructive of rural health and the maintenance of local access to appropriate care.
- In the first year following the implementation of Medicare's Prospective Payment System (PPS), urban hospitals enjoyed an average operating margin due to Medicare inpatients of fourteen percent, rural seven--a spread of six percent. Over the following years Medicare margins fell and the difference between urban and rural hospitals substantially narrowed. In 1990 through 1992, both groups averaged negative operating margins (Medicare revenues less than costs).
- Since 1992, the margin for both urban and rural hospitals has improved, but urban hospital margins much more so--preliminary figures for 1995 show urban hospitals again six percent higher than the average for rural hospitals. Some are quick to say that these numbers reflect superior management; however when you look at total margins that include inpatient Medicare and all other activities, rural hospitals are actually doing better than urban hospitals--most would say a sign of pretty good management.
- As previously noted in this newsletter, "It seems fair to say that reasonable people would conclude that the growing Medicare differential has more to do with urban political power in lobbying and gaming favorable Medicare reimbursement policies than it relates to any one's managerial competencies." Time for Congress to develop a more even handed approach.
- WI Insurance Commissioner In National Post
- Jo Musser, Wisconsin Commissioner of Insurance, has begun her term as President of the National Association of Insurance Commissioners (NAIC) having served as Vice President in 1996. She will be speak on "Rural Health and Medicare Reform" at the National Rural Health Association's annual Policy Institute in Washington on February 10th. From a NAIC Press Release:
- " 'For 125 years, state insurance regulation has protected consumers. It has endured because it is close to the people it serves. It has prospered because it works,' commented Musser. 'The NAIC plays a pivotal role in assisting the states, and I am committed to enhancing the system of state based insurance regulation.' "
- "Musser was appointed Wisconsin Commissioner of Insurance in 1993 by Gov. Tommy G. Thompson. Previously, she served as chief executive officer of a health care alliance cooperative in Madison."
- Congressional Medicare Scuffle 1997-1
- From "Medicare Accounting Dispute Could Threaten Early Budget Accord" by Clay Chandler in The Washington Post, 1/10/97:
- "A controversial provision in the budget plan President Clinton intends to submit to Congress early next month would shift much of what the government spends to provide home health care to the elderly from one Medicare account to another. That may seem like a simple bookkeeping change, but in the politically charged battle over how to maintain the solvency of the Medicare program, it makes a world of difference."
- "Republicans say they object to the proposed home health care transfer because it would remove an estimated $55 billion in spending over the next five years from the Hospital Insurance Trust Fund -- the account that has become the focal point of arguments about the fiscal health of Medicare -- without imposing any real curbs on Medicare spending."
- "Clinton's plan to shift part of the cost of home health care to another account would appear to extend the solvency of the hospital fund by several years. What galls Republicans most is that Clinton would move home health costs to another Medicare fund -- known in health policy argot as Medicare Part B -- that has unlimited access to general revenue."
- "To the dismay of Republicans--and many budget analysts--the Clinton budget reportedly will reject any increase in Medicare premiums, although the added cost for home health visits is sure to send costs soaring."
- " 'This is a rather transparent effort' to extend the life of the hospital fund 'without taking steps to reduce spending or increase the revenue that flows to it,' said former Congressional Budget Office director Robert D. Reischauer. 'Clinton made a commitment to preserve the solvency of the hospital fund, but he's been unwilling to do the heavy lifting necessary to realize it.' "
- "Clinton aides insist that Republican criticisms are misguided. The rationale for paying home health costs out of the hospital fund rather than the fund for doctor bills has become increasingly arbitrary, and the president's plan would simply revert to the accounting system in place before 1980, the aides contend. Regardless of which Medicare account covers home health expenditures, they say, Clinton's budget would yield roughly $100 billion in Medicare savings over the next five years and be part of a budget plan that brings the deficit to zero by 2002."
- "Some health policy experts, however, said neither side had put forth proposals to deal seriously with the home health care problem. 'I don't see what good comes from all the name-calling on this,' said economist Henry Aaron, a fellow at Stanford University. Medicare 'is a tremendous drain on the general budget, and needs to be reformed. This administration has advanced a proposal that doesn't advance that cause, and it's quite reasonable to criticize them for temporizing. But the republic will not fall as a result of it.' "
- A Failure Of Leadership--Partisan Strife
- From "The Cultivation of Conflict" by Robert J. Samuelson in The Washington Post, 1/1/97
- "The most affecting and instructive political event of 1996 for me was a funeral I did not attend. I read about it later, and it said something important about how our political system has changed for the worse. It has lost much of its power to conciliate. Instead, it often inflames conflicts that, though real, ought to be manageable. What crystallized the change for me was the funeral of David Ifshin, a lawyer who had served as counsel to President Clinton's 1992 campaign. One of the men who eulogized Ifshin was Republican Sen. John McCain of Arizona."
- "What made this moving was not the difference of political parties. It was history. In 1970, Ifshin -- then in his twenties -- had visited Hanoi as an anti-war protester, while McCain -- a downed Navy pilot -- was being held and tortured in a Vietnamese prison. That these two men had reconciled and developed respect and friendship seemed completely at odds with today's hateful political climate. It is a climate in which people increasingly view their opponents as their enemies."
- "Whatever the causes, the phenomenon stretches across the political spectrum and poses clear dangers. It has already increased Americans' normal distaste for politics. Character assassination often substitutes for measured debate; that doesn't inspire respect. And the exaggerated differences among political elites -- politicians, pundits, advocates -- may amplify actual differences among ordinary people. In general, Americans are less splintered than they're portrayed. But we routinely witness harsh disagreements among "opinion leaders"; and we're constantly told how divided and different we are. Sooner or later, we may come to think and act that way. We may forget common values."
- "Politics is inevitably about disagreements, and many of these matter deeply. But beyond the conflicts lie larger areas of agreement that define us as a nation and people. Among these are a tolerance of our differences. As it happens, I met both Ifshin and McCain on separate occasions, each for about 15 seconds. I cannot claim to understand precisely what motivated their reconciliation. But I suspect it was a common decency and an instinctive recognition of the importance of these larger areas of agreement. If so, their message is worth pondering for 1997."
- Medicare Wage Inequity Continues
- Many of us have been focusing on the need to equalize Medicare HMO payments between and within states in order to prepare for a widely anticipated shift of beneficiaries into that type of insurance. However, it is a mistake to assume that the traditional system is going away; in "mature markets," HMOs only expect that 30% of Medicare beneficiaries will choose an HMO option--70% will stay with the traditional plan.
- While these numbers may shift around if new alternatives like Medical Savings Accounts become available, it is a clarion call for all of us to continue to work on the inequities of the current system which will remain a major payment source. The current system persists in under-estimating Medicare wage rates in rural markets and over-estimating Medicare wage rates in urban markets. The time for an equitable calculation of rural wage rates is long over due; the Administration's own National Advisory Committee on Rural Health has proposed a remedy, as recently as 1994. From the "Recommendations to the Secretary of Health and Human Services," 12/94:
- "The Committee recommends that the Secretary base the wage index, which is used to calculate Medicare hospital payments, on relative labor cost adjusted to a standard occupational mix. To accomplish this, the Secretary should establish a data base for making a labor market specific occupational mix adjustment."
- "Under the prospective payment system (PPS), hospitals are paid a standardized amount that is adjusted for the diagnosis of the patient and the labor costs of the labor market area in which the hospital is located. Hospitals receive higher payments for treating patients with more severe disease. These higher payments are supposed to compensate a hospital for the more costly staffing mix that is required to treat these patients. The labor adjustment is supposed to account for differences in labor prices among labor market areas. However, as currently calculated, the wage index provides a second, duplicate source of compensation for hiring a more costly staff mix."
- "To better understand the issue of occupational mix, consider a hypothetical State with two labor market areas: 1) an urban area with three tertiary care hospitals and 2) a rural area with ten small rural hospitals. The urban tertiary care hospitals all treat patients with very severe and complex diseases. They are staffed with a high percentage of registered nurses (RNs) relative to the number of licensed practical nurses (LPNs) and nursing assistants (NAs). The rural hospitals treat fairly simple illnesses and use a high proportion of LPNs and NAs compared to the number of RNs. All hospitals throughout the state pay the same pay the same prices for RNs, LPNs and NAs. Under the current system, as discussed below, the rural hospitals will be disadvantaged even though their wage rates are the same as the urban hospitals."
- "The wage index for a labor market is calculated from the average labor costs of all employees working in each hospital in the area. No adjustment is made for occupational mix. The tertiary care hospital of our example has higher average costs because it used more RNs on its nursing staff. The small rural hospital has lower average costs because its nursing staff has more LPNs and NAs than RNs. Even though they pay the same wage rates, the wage index for the tertiary care hospital is higher than the wage index for the small rural hospital. Consequently, the small rural hospital receives a lower payment than the tertiary care hospital for treating a patient with the same diagnosis."
- Through A Looking Glass--After Regulation
- From Reuters News Service, 12/27/96:
- "Hospitals in New York state are fighting insurance companies' planned rate cuts as hospital price controls are lifted effective January 1 in the state."
- "For the past thirty years, insurance companies in New York haven't been allowed to negotiate discounts with hospitals, and hospitals responded by keeping their prices high, according to Thursday's edition of The Wall Street Journal. Because 40% of the hospital beds in New York state are vacant, insurance companies are expected to negotiate for discounts of approximately 30-40%, and some are setting discounts of up to 70%."
- "Kenneth Raske, head of the Greater New York Hospital Association, said that some insurers, "...are being very threatening, trying to extract discounts that are beyond what is called for." In an attempt to fight the cuts in rates, hospitals are refusing to sign new contracts with insurers and HMOs and are refusing to cut rates."
- Examining Conventional Wisdom, Part II
- From "Is Health Care System Strategic Thinking At A Crossroads," by Daniel K. Zismer, Ph.D. in Partner' Integration Advisor, December, 1996. (612-591-1414):
- "A number of health provider systems have set a strategic course that places them in the business of, at best, owning their own health plan or, at least, accepting full financial risk for a large population. Their strategy is clear: we want to get as close to the premium dollar as possible to retain as much independence as possible. Likewise, "we" want to access the profits earned by the insurers. The market-mantra goes something like this: we must own the premium dollar."
- Those who pursue this strategy are, perhaps, failing to grasp certain market realities. The first is more general: the world economy is principally composed of vendors, and as long as they provide a high quality, desirable product at a fair price, they stay profitable and in business. The second is specific: providers (health systems) presume that high profits are available and sustainable to health insurers in consolidating markets. Most haven't lived through highly competitive cycles where market share points are shifted from one plan to another through premium wars that eventually lower the water table on premiums for all payers. As consolidating health markets mature, the insurance business becomes a relatively low margin business that requires substantial enrollments to survive."
- "If providers should stay in the business they know versus pursuing one that is unfamiliar, how is a strategy based on fundamentals built? The fundamentals are dictated by the purchasers' needs, in this case the managed care plans. The strategic question is, how may providers efficiently and affordably satisfy those needs within an acceptable framework of economic exchange?"
- "Providers can generally pursue two strategic development axis--horizontal and vertical. The horizontal axis generally pertains to size and geographic placement. The vertical axis pertains to service line diversification or in the case of physicians, specialty diversification. The strategic question is "broader, deeper, or both?"
- "So, how do these strategies meet buyers' need, and what are common critical success factors within each? In each instance the principle objectives are:"
- 1. "To present a substantial allied network with broad geographic coverage and ready access to specific services and programs."
- 2. "To be recognized as the preeminent provider of quality clinical services."
- 3. "To create sufficient internal leverage to positively affect the cost structure."
- 4. To create a recognizable brand name that is associated with quality and patient/user confidence."
- 5. To ensure superior financial performance to allow for reinvestment in the system and strategy."
- "The clear message here is that a predominant and preeminent provider (or provider system) can't be ignored under any market circumstances. The principle strategic goal should be sustainable access to sufficient market under reasonable exchange conditions (i.e. price paid for value received). A focus founded on success within an unfamiliar business or on expectations for radically altered payment methods presents the highest risk."
- Caring For The Uninsured--Realistic Reforms
- From "Health Care Reform Stages a Comeback in Massachusetts" by John E. McDonough, Christie L. Hager, Brian Rosman, New England Journal of Medicine, 1/9/97:
- "Since the demise of efforts to reform the national health care system in the fall of 1994, there have been few new initiatives to address the problems faced by the more than 40 million Americans who lack health insurance. Even state governments that were at the forefront of efforts to deal with this problem in the early 1990s saw their initiatives stalled, scaled back, or repealed. As the focus of debates on health policy shifted to issues such as controlling Medicare and Medicaid costs and protecting the rights of already insured consumers enrolled in managed-care plans, the public turned its attention away from the needs of those without any insurance coverage at all. Recent developments on both the federal and state levels, however, suggest that a new and more realistic round of reform is beginning."
- "The federal Kennedy-Kassebaum legislation, the Health Insurance Portability and Accountability Act of 1996, is intended to enable currently insured consumers to retain employer-sponsored coverage if they leave their jobs -- thus, it is hoped, slowing the increase in the number of uninsured citizens. This bipartisan victory demonstrates that gridlock over health care policy is not inevitable, even at the federal level. Although this legislation does not address the problem of the already uninsured, some state governments are once again seeking ways to extend coverage to their uninsured populations."
- "Legislation recently approved in New York will increase the number of children covered by the state's Child Health Insurance Program from 104,000 to 251,000 by 1999; the program provides coverage for primary and preventive care as well as for short-term hospitalization. In November, voters in Oregon passed an initiative proposed by Governor John Kitzhaber to increase the cigarette tax by 30 cents per pack to fund the expansion of the Oregon Health Plan to cover an additional 130,000 uninsured citizens. Arizona's Proposition 203, also passed in November, will redirect revenues from a 1994 increase in the cigarette tax to expand Medicaid eligibility to cover an additional 180,000 people there."
- "A new Massachusetts statute, approved in July, represents an ambitious plan to expand access to health care services for children and to restructure Medicaid. Elements of that initiative could be used as a model for other states and for the federal government in charting the next stage in the process of improving access to health care."
- "A new round in the struggle for health care reform will begin when policy makers, key constituency groups, and the public articulate a demand and fashion a program and strategy to meet it. In the hope that the Kennedy-Kassebaum act and the initiatives in New York, Oregon, Arizona, and Massachusetts are only the first of many such efforts, we offer the following lessons from the success of the Massachusetts campaign."
- "First, gridlock over health care reform is not inevitable."
- "Second, major reform efforts require coalitions that isolate and minimize potential opposition."
- "Third, the idea of meeting children's health care needs through taxes on tobacco can generate substantial public support and overcome legislative turmoil."
- "Fourth, employer mandates to provide health insurance are even less viable now than several years ago."
- "This final point suggests that we are still far from finding a broad-based solution to the problems of the working uninsured. As we continue to experiment and grapple with possible solutions, we should work to achieve the reforms that are attainable and can be implemented now."
- The Non-Profit Conversion Debate Continues
- In the November 1st Eye On Health article, "New Take Over TargetCharitable Assets" you were introduced to Linda Miller of the Volunteer Trustees of Not-For-Profit Hospitals. Since then, she has agreed to be part of a debate on this issue at the National Rural Health Association's annual conference in Seattle this May. The following is taken from "Not-For-Profits Have Say--Advocate Miller a step ahead in conversion debate" by Lisa Scott, Modern Healthcare, 1/13/97:
- "For-profit healthcare leaders were beaten to the punch in the debate over not-for-profit hospital conversions by the industry's devoted gadfly, Linda Miller. She already had printed a 42-page booklet warning communities to watch out for their interests when not-for-profit hospitals go for-profit. As of last week, she had distributed 8,000 copies to interested parties, including all state attorneys general."
- "That's when for-profit sector leader Thomas Scully, president of the Federation of American Health Systems, confirmed that he plans to discuss his views on 'reasonable oversight' of such deals with a number of attorney generals in key states. The federation believes regulations governing the transfer of not-for-profit hospitals assets should be applied evenly to both for-profit and not-for-profit buyers."
- "Miller accused the federation of attempting to obscure the debate. 'Our issue is what happens to those charitable dollars in conversions,' Miller said. 'Is there full and fair compensation to the community? There are certainly very important issues that come up in the transfer of one not-for-profit to another, but they are different issues.' "
- Contrary Provider Views On Assisted Suicide
- From "Before the Court, the Sanctity of Life and of Death," The New York Times, 1/5/97:
- "In agreeing three months ago to rule on the constitutionality of two states' prohibitions against physician-assisted suicide for the terminally ill, the Supreme Court put itself at the center of a profound national debate."
- "Each side has its doctors, its bioethicists, its religious viewpoints, its supporters from among people with disabilities and from those who have come face to face with the questions the court will address this week."
- "The power to assist in intentionally taking the life of a patient is antithetical to the central mission of healing that guides both medicine and nursing. It is a power that most health care professionals do not want and could not control. Once established, the right to physician-assisted suicide would create profound danger for many ill persons with undiagnosed depression and inadequately treated pain, for whom physician-assisted suicide rather than good palliative care could become the norm."-- The American Medical Association and 45 other medical societies
- "Petitioners argue that the principle that doctors should not intentionally harm their patients trumps all the other ethical considerations that support physician-assisted suicide. This takes an unreasonably narrow view of what may constitute harm for a patient suffering irremediable and severe pain and confronting an imminent and unavoidable death. For such a patient, death may constitute not harm but the only available relief; the true harm may lie in being compelled either to continue unnecessary suffering or to end one's life in a lonely and violent manner."-- The American Medical Student Association and a coalition of medical professionals
- "Even hospice professionals -- advocates for the dying who see their dilemma in the most immediate ways -- cannot agree."
- "The medical profession and policy-makers should enhance the availability of comfort care and establish it as the standard of care for dying patients. However, hospice and palliative care does not always relieve suffering. For some patients, the pain can be so overwhelming that they cannot focus on anything beyond their unremitting suffering, and "life" becomes nothing more than their pain. Other patients appear to attain relief only with sedation so heavy that they cannot function, cannot interact with anyone, and "life" consists merely of lying inert, which some patients reject as intolerable. The coalition's members have treated patients whose distressing physical symptoms were too severe to be managed and have observed such patients wishing to hasten death. The coalition believes that those desires can be fully competent and rational choices." -- The Coalition of Hospice Professionals
- "What the courts below failed to recognize is that the final stage of life may be a time of profound opportunity for terminally ill individuals and their families. The hospice experience has taught that life is not "all but ended" simply because a person suffers from a terminal illness. By treating the end of life as meaningless, the courts below adopted an unnecessarily static view that is unable to accommodate the changing nature of life and of the self. Had these courts acknowledged that dying is a part of the normal process of living and at all of life's stages it presents substantial opportunities for personal growth and development, they would have recognized that the state has an interest in preserving life even in the face of terminal illness. Instead, the courts below adopted a view of dying which admitted only two possibilities: unrelieved misery or assisted suicide."-- National Hospice Organization
- Social Security Debate According To AARP
- Besides assorted scandals and Medicare, the other major issue being predicted to occupy much of the next Congress is Medicare's sister, Social Security. The following summary of the three major alternative approaches is taken from "Can We Save Social Security?", Modern Maturity, January-February 1997 (spousal member):
- "Legislators who used to be afraid to touch Social Security for fear of political death now believe they can build their own constituencies from voters who are worried about its future. Says Sylvester Schieber, vice president of the benefits consultant company, Watson Wyatt Worldwide, 'You can't escape the demographics."
- Status Quo Plan--Maintenance of Benefits:
- "Basically it leaves the current benefit structure fundamentally untouched but diversifies the trust fund so that by 2014 up to 40 percent of the money would be invested in stocks."
- Among other changes: "Tax Social Security benefits like contributory pensions--once you get back your contributions, you pay taxes on the remainder; gradually shift the Medicare portion of the tax on Social Security to the Social Security Trust fund; raise pay roll tax by .8 percentage points starting in 2045; compute benefits using a 38-year work history instead of the current 35 years."
- Winners: "Single-earner couples of all income levels; low and average income Boomers."
- Losers: "High-income singles; high-income dual earner Boomers."
- Middle-of-the-Road Plan--Individual Accounts:
- "This plan essentially retains the current benefit structure with a little tweaking. Workers will pay another 1.6 percent of their taxable income into a mandatory government sponsored retirement plan, similar to a 401(k) plan, that should offer some choices about where their money was invested. At retirement age, funds from the account would be annuitized to be paid out over their life expectancy."
- Among other changes, "this plan would also cut future benefits by 16 percent by 2030; raise the normal retirement age to 67 by 2011, then index to life expectancy, and cut spousal benefits from 50 percent to 33 percent."
- "Winners--Older: Older folks do better because the cuts phase in over time."
- "Losers--Married couples with one earner lose with the cut in spousal benefits. Baby Boomers--who might get squeezed between the reduced benefits and the small amounts allowed in individual accounts--could lose the most."
- Radical Restructure--Personal Security Accounts:
- "This plan changes everything, but not for a while. It shifts Social Security into a two tiered program. The first tier offers a maximum monthly benefit of $410 (in today's dollars) for workers with 35 years of work experience. The second tier returns 5 percent of each worker's FICA tax to invest tax free for retirement.
- Among other changes, "Raise the normal retirement age to 67 by 2011, then index to life expectancy; cut spousal benefits from 50 percent to 33 percent and tax some benefits."
- "Winners: Young, savvy high-earners with the time to build their Personal Security Accounts."
- "Losers: Married couples with one earner would lose with cut in spousal benefits. Low earners could suffer if they don't have enough cash to build significant savings. Unsophisticated or unlucky investors would have to fend for themselves."
- Sean's Exploding Oat Bran Muffins
- Preparations for a backpacking trek this June in Alaska include becoming less attractive as bear bait. To that end one of my sons is keeping me supplied with oat bran muffins--the closest thing I've found to a miracle food.
Two of these for breakfast and one before dinner will keep you feeling full even when you are cutting back on fats, cholesterol and other evils. Something to due with the fact that oat bran in your system swells up considerably, absorbing anything within a five feet radius. Anyhow, Sean's uses a modification of the recipe on the back of the Quaker® Oat Bran Hot Cereal box and one from Robert Kowalski's The 8-Week Cholesterol Cure:
- 2 cups oat bran
- 1/4 cup brown sugar
- 2 teaspoons baking powder
- 1/2 teaspoon salt
- 1/2 cup apple or other fruit
- 1/4 cup raisins
- { or replace apple and raisins
- with a ripe medium banana
- and 1/4 cup nuts.}
- 1 cup skim milk
- 1/4 cup honey
- 2 tablespoons olive oil
- 2 egg whites, slightly beaten
Heat oven to 425°F. Line 12 medium muffin tin cups with paper baking cups. Combine dry ingredients, mix well. Add combined milk, honey and oil; mix just until dry ingredients are moistened. Add fruit and raisins. Fold in egg whites. Fill prepared cups 3/4 full. Bake 15 to 17 minutes or until golden brown. Each about 150-calories, 5 grams fat and 0 mg cholesterol.