The Commonwealth Fund has released a report titled International Profiles of Health Care Systems, which included comparisons of 13 nations. Here’s what it says about Germany and Switzerland, two systems often cited as potential models for the U.S.
Germany: Most German residents receive statutory coverage through one of 180 competing nongovernmental social insurers (or “sickness funds”). The statutory system is financed through employer and employee contributions, which, since 2009, are pooled into a central fund and redistributed among the sickness funds according to a sophisticated risk adjustment formula. Sickness funds offer a uniform benefit package covering most medical care, including physician and hospital services, prescription drugs, and dental care. The components of this benefit package are determined by the Federal Joint Committee along with representatives from payer and provider organizations. Self-employed, high income, and civil-service residents may opt for private insurance as an alternative to the statutory insurance system, and roughly 10 percent of the population does so. Complementary private insurance is also purchased to cover amenities and cost-sharing charges under the statutory system, particularly for dental care. Ambulatory doctors mostly operate in solo practices and are paid fee-for-service with varying degrees of bundling. Gatekeeping is optional but is incentivized through cost-sharing arrangements, and often by sickness funds. Roughly half of hospitals are publicly owned and half privately owned. Hospital doctors are generally salaried and are not allowed to treat outpatients except in certain circumstances. For several chronic conditions, a set of disease management programs guided by national evidence-based recommendations has been introduced; these are implemented by sickness funds through contracts with providers….
Switzerland: Switzerland operates a regulated private insurance market, with individuals mandated to purchase a minimum insurance package from among competing nonprofit insurers. Premiums are collected by insurers and then redistributed based upon a risk-adjustment formula. The basic benefit package includes hospital and physician care and prescription drugs. The 26 cantons (similar to U.S. states) have responsibility for planning the health services within their borders and subsidizing hospitals, nursing homes, and home care organizations. Residents generally have free choice of a GP and access without a referral to specialists (unless enrolled with a gatekeeping managed care plan). Some managed care plans operate capitation models, where physicians or physician groups are paid on a capitation basis; otherwise, ambulatory physicians are paid on a fee-for-service schedule negotiated between insurers and providers or their organizations at the canton level. Hospital-based physicians are paid a mix of salary (by mandatory insurance policies) and fee-for-service (by supplemental insurance policies). Hospitals are for the most part publicly owned or publicly subsidized. Recent reforms have established a single set of regulations for both public and private hospitals.
At least one new health care program’s likely to run out of money too soon. Subsidized high risk insurance pools for adults with preexisting conditions may run through the $5 billion of federal funds allocated for them long before 2014, when they’ll no longer be needed. That’s when a ban on insurers denying coverage to affected adults kicks in. Odds are the statewide pools will be popular, so Congress will have to deal with the dilemma of whether or not to fork over more taxpayer funds. States that are challenging the law won’t turn up their noses at the money. And if a state opts not to run the program itself, the feds will get a nonprofit to do it.
David Wyss, chief economist at Standard & Poor’s, comments on the likely impact of reform on the nation’s economy and finances. From the S&P offices in New York, March 26, 2010.
There was a funny moment during the floor speech of House Minority Leader John Boehner (R-OH) during the final healthcare reform debate on Sunday just prior to the vote. It was when he was eliciting responses from members of Congress (I’m guessing the responders were largely Republicans). Anyway, the funny moment starts at the 3:18 mark.
Boehner: Look at how this bill was written. Can you say it was done openly?
Audience: No!
Boehner: With transparency and accountability?
Audience: No!
Boehner: Without backroom deals, and struck behind closed doors, hidden from the people? Hell no you can’t! Have you read the bill?
Audience: Yes!
Boehner: Have you read the reconciliation bill?
Audience: Yes!
Boehner: Have you read the manager’s amendment?
Audience: Yes!
Boehner: Hell no, you haven’t!
I actually think he almost started laughing at this point.
Eli Lilly chairman and chief executive John Lechleiter speaking about healthcare reform and the need for innovation to improve quality and access while reducing costs:
Innovation is not a panacea for the challenges facing our health care systems, but it is hard to see any way out of the current crisis – and I don’t think that’s too strong a word – without innovation. Indeed innovation needs to be the purpose of health care reforms.
Not by much, but still a new Gallup/USA Today poll shows that 49% of Americans think passage of the healthcare reform bill was a “good thing,” 40% think it was a “bad thing,” and 11% had no opinion. The poll was based on telephone interviews with 1005 adults. Democrats overwhelmingly favored passage (79%), while Republicans were overwhelmingly opposed (76%).
Overall results are shown in the chart below from Gallup. The specific question was as follows:
As you may know, yesterday, the U.S. House of Representatives passed a bill that restructures the nation’s healthcare system. All in all, do think it is a good thing or a bad thing that Congress passed this bill?
Aetna chairman and CEO Ron Williams on healthcare reform:
Millions of Americans can look forward to gaining access to health insurance, a significant milestone for this country. The challenge unmet by this bill, however, is how to effectively deal with the critical issue of affordability, which has become a burden for so many people, particularly individuals and small business owners.
I’d say it a slightly different way. This legislation is mostly about expanding coverage, and that’s a necessary first step toward reforming the U.S. healthcare system. Now comes the far harder task of bending the cost curve. At best this legislation “nudges” (Jonathan Cohn’s word) us in the right direction. But we have a long way to go — and a lot of difficult choices to make.
Williams goes on to say:
Aetna plays a significant role in helping our members – both employers and individuals – meet the cost challenge. Our role won’t change with this legislation. But, as a nation, we need to come together to bring greater focus on addressing the many underlying factors that are driving soaring health care costs. When the nation inevitably turns to finding ways of reducing this alarming trend, we stand ready to help.
And that’s really the challenge for health plans in this brave new post-reform world. Can the industry deliver on the promise of truly managing care, i.e., improving quality while at the same time reducing costs. Now is the time for health plans to prove that spending 10% to 15% of premiums on administration isn’t a waste.
Former General Electric chairman and CEO Jack Welch on CNBC Squawk Box commenting on the outlook for Democrats in the November elections following the passage of healthcare reform:
I don’t think they’re going to get wiped out. I think the economy is picking up….and freebies are now coming my way. My kids are now covered….I’m not predicting what it’s going to be, but it’s not going to be the broad-brush sweep blow them out.
Here’s a fun chart (hat tip: Paul Krugman) showing the Intrade.com price on a bet that healthcare reform would pass; the time period shown spans Scott Brown’s election to the final yea vote.
As data from the Congressional Budget Office show, there’s very little difference in the number of uninsured under the Senate bill (31 million fewer uninsured) versus the Senate bill with fixes through reconciliation (32 million fewer uninsured).
Today’s vote will chart a new and better course for our nation’s health and health care. Bottom line: the health reform bill may not be perfect, but it expands coverage to 32 million people, enacts significant insurance market reforms and lays a solid foundation upon which we can continue to build.
By extending health coverage to tens of millions of uninsured, improving competition and choice in the insurance marketplace, promoting prevention and wellness, reducing administrative burdens, and promoting clinical comparative effectiveness research, this bill will help patients and the physicians who care for them. There are increased payments for primary care physicians caring for Medicaid patients and bonus payments for physicians in underserved areas.
Throughout this long process, we have been guided by a belief that all Americans should have access to high-quality, affordable health care coverage and services. This legislation, while not perfect, is a step in that direction. Even as we support health care reform legislation, we continue to have concerns about a number of issues including the overly broad powers of a non-elected Independent Payment Advisory Board (IPAB), which could enact sweeping Medicare changes without action by Congress and would not be subject to judicial or administrative review.
The access expansions are a significant step forward, but this legislation will exacerbate the health care costs crisis facing many working families and small businesses.
This $900 billion, 2800 page bill is not health care reform. It fails to fix what is broken and risks breaking what already works. It will drive up health care costs and make coverage less affordable for businesses and families. It marks a major step down the road to a government-run health care system. It will further expand entitlements and explode the deficit, and raises taxes by a half a trillion dollars at the worst possible time. American jobs and growth are at risk thanks to the decision by the House today.
(Note: Revised to include most recent AHIP comment on the legislation).
I’ll have a lot more to say about healthcare reform later today. Five quick points right now:
1. This is not only historic, it’s also a very good thing. For all the rhetoric about healthcare reform, the fact is that it will help a lot of people: 32 million to be exact. These are the people without health insurance who will now be able to get coverage because of this legislation. Others will have access to much better coverage than they have now. The sick won’t be denied coverage anymore. And people who already have coverage through their employer can rest assured they will still be able to afford coverage if they lose their job.
2. The health insurance industry — which played the role of villain in the reform debate — is going to see its profits suffer. The industry will take hits on its Medicare Advantage, individual and small group business lines. It will also experience some adverse selection because the legislation calls for guaranteed issue of health insurance without a strong coverage mandate. Other costly regulations and taxes will take a bite as well.
3. The managed care industry will survive. Yes, it will be less profitable (which suggests the need for additional consolidation), but the industry isn’t going away. The winners will be the companies that take the advice of Aetna chief executive Ron Williams and focus on four areas: products and services that improve quality and control costs; convenient tools and easy-to-understand information to help members make better-informed healthcare decisions; transparency; and new wellness and prevention programs.
4. You’ve got to hand it to President Obama. He’s made history — again.
5. I hate to say, “I told you so” (all right, actually I love to say, “I told you so”), but I predicted on that dark day following Scott Brown’s victory in Massachusetts that the House would pass the Senate bill. If you want to know what will happen next, be sure to pick up a copy of our annual report The Outlook for Managed Care 2010. Our forecasts were based on the assumption of last night’s yea vote.
UBS analyst Justin Lake says the odds are 60/40 in favor of the enactment of the Senate healthcare reform bill with certain changes made through a budget reconciliation process. Lake says that House Speaker Nancy Pelosi (D-CA) is building momentum to win the votes necessary to pass the Senate bill in the House. While she’s not there yet, Lake says, “The power of the Presidency; the power and respect that Pelosi commands with most of her Democrats; and the power of being the majority party and being able to manipulate the rules of the game — all argue that the Democrats will get it done.”
New Republic reporter Jonathan Cohn on health insurance industry profits:
The issue…isn’t the profits that insurers make. It’s the actions insurers take to maximize those profits….The quickest, surest way for insurers to boost profits is to avoid spending a lot of money on sick people. And, particularly in the individual insurance market, insurers can do that in any number of ways. They can charge sick people higher premiums, deny them coverage altogether, or — failing that — revoke their coverage after they start filing claims….They can make it difficult for the chronically ill to get the care they need, by manipulating benefits and provider networks or making it more difficult to obtain authorization for treatments. And they can always jack up rates on blocks of business that have high expenses.
All of which gets at something I’ve been trying to say for some time. Industry profit margins of 3% to 5% aren’t the problem. Administrative costs of 10% to 15% of premiums– i.e., expenditures aimed largely at maintaining the infrastructure needed to do all the things Cohn outlines to ensure profitability — is a big part of the problem. Cohn continues:
These practices help explain why people with serious medical problems so frequently find insurance inadequate or simply unavailable. But they don’t explain why health care generally is expensive for everybody, even the healthy–and why it’s getting expensive so much more quickly. Those problems are the result of the entire health care sector–doctors, hospitals, device makers, the drug industry–providing too much medical care or charging too high a price for it. The insurance industry likes to point this out and it is right to do so.
Said another way, I can understand when insurers raise premiums — even at double-digit rates — to offset rising costs (sorry Mr. President). But I can’t justify higher rates simply to support an administrative infrastructure aimed at denying coverage and care to the sick. Only a highly regulated public-private insurance market or a single-payer system gets at a solution.
House Leaders Looking At A Tried & True Parliamentary Procedure To Pass The Senate Bill. This is far from certain, as we are at least 9-14 days away from any potential votes, but the House Dem Leadership is looking at avoiding an up or down vote on the Senate passed bill from December 24, 2009 when the House debates the as-of-yet unformulated Budget Reconciliation/FixIt bill. The Leadership is looking to use a procedural maneuver that would be part of a self-executing Rule — a process that has been used from time to time in the House by both parties when they have been in the majority. It would work something like this:
*Before the House takes up the Budget Reconciliation/FixIt bill they would have to adopt a Rule governing the debate as is the normal procedure. The Rule would contain a self executing clause that would state that upon adoption of the Rule and then debate and adoption of the Budget Reconciliation bill that the Senate bill/December 24, 2009 would also be considered as adopted.
*The whole package would then go to the Senate for approval. In this manner, assuming Senate approval, the Senate bill/December 24, 2009 and the Budget Reconciliation/FixIt bill would all be sent along to President Obama at the same time. And nervous House Democrats would be assured that the Senate bill would not move to the President by itself without the Budget Reconciliation/FixIt bill alongside; since many House Dems do not trust the Senate to pass the Budget Reconciliation/FixIt bill once the House has already stuck out its political neck and taken the tough vote.
President Obama outlined both the far-left and far-right positions on healthcare reform in a speech yesterday:
On one end of the spectrum, there are some who’ve suggested scrapping our system of private insurance and replacing it with a government-run healthcare system. And though many other countries have such a system, in America it would be neither practical nor realistic.
On the other end of the spectrum, there are those, and this includes most Republicans in Congress, who believe the answer is to loosen regulations on the insurance industry — whether it’s state consumer protections or minimum standards for the kind of insurance they can sell. The argument is, is that that will somehow lower costs. I disagree with that approach.
Compromise — and I’m just guessing here — would be something in between.
Who knows, but maybe the President of the United States is actually smarter than I am.
The Administration successfully parlayed the WellPoint rate hikes in California — increases that in fairness were logical and justified at least to some extent — into a symbol of the need for reform by highlighting the financial burden on small businesses and families trying to afford healthcare coverage (and once again demonizing millionaire health plan executives).
Now the President has backed opponents of reform into a corner by agreeing to incorporate into his revised healthcare proposal four additional Republican ideas. These ideas, which Republicans stressed in last week’s bipartisan healthcare summit, include a greater emphasis on combating fraud and waste, alternatives for resolving medical malpractice disputes, increased Medicaid payments to doctors, and the inclusion of HSA plans in insurance exchanges.
The subtext is that the Administration has compromised (and compromised again), and now it’s the Republicans turn. Don’t hold your breath. Republicans have refused to compromise all along, and my guess is they will continue to refuse to compromise. Their strategy is obstruction.
Obama, meanwhile, has laid the groundwork for Democrats to push through reform — even if it requires the use of reconciliation — without appearing too bad in the eyes of the public. When faced with the inevitable conservative cries of outrage, the President can just say, “Hey, we tried to compromise and look what happened.”
All of which seems like pretty shrewd politics, especially considering that six in 10 Americans already blame Republicans for not compromising enough on healthcare reform. Of course, winning the U.S. Senate election in Massachusetts would have been a better strategy, but hey, any port in a storm.
We have officially jumped the shark on healthcare reform with this ABC News report depicting President Obama as Super Mario — complete with music, video game sound effects and animations of Obama, Speaker Pelosi and Blue Dog Democrats (literally portrayed as little blue dogs).
May Haitian individuals admitted on humanitarian parole qualify for Medicaid?
Yes. Individuals granted humanitarian parole are ordinarily non-qualified aliens ineligible for any benefits as non-qualified aliens. However, the Refugee Education and Assistance Act of 1980 permits Cubans and Haitians who have been granted humanitarian parole to be provided benefits as Cuban/Haitian Entrants. Therefore, Haitians granted humanitarian parole because of the earthquake are qualified aliens exempt from the 5-year waiting period, and if otherwise eligible, may receive all Medicaid services available under the State plan. The emergency services restriction affecting some non-citizens does not apply.
As I predicted in January in my most roundly vilified post to date (and as this Reuters report suggests), House Democrats are putting together the votes to push through healthcare reform. It’s not yet clear whether the House will pass the Senate bill (as I had predicted) or whether Democrats will use reconciliation to pass a slightly improved version (i.e., Obama’s compromise of the House and Senate bills). Either way, I’ll be anxious to count how many anti-reform protesters forego needed benefits proffered by the legislation as a matter of principle.
U.S. Sen. Tom Harkin (D-IA) during President Obama’s healthcare summit last week, in response to Republican calls for a step-by-step approach to healthcare reform rather than comprehensive legislation.
If we want insurance reforms, you can only do that if everybody’s in the pool. You can only get everybody in the pool if you make it affordable for middle class families and others. You can only make it affordable for middle class families and others if you have cost controls….That’s why you can’t do this incremental approach.
Posted by Carl Mercurio 
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