Business leaders discuss possibility of expanding Medicaid through private insurance

By Molly Burchett
Kentucky Health News

Some Kentucky business leaders are discussing a possible endorsement of expanding Medicaid through private insurance, in a plan similar to one the federal government approved for Arkansas.

The Health Policy Council of the Kentucky Chamber of Commerce discussed the idea last Friday. A talking paper for the meeting highlighted presumed benefits of the approach, in which people newly eligible for Medicaid could use federal funds to buy private insurance through the insurance exchange that the state is constructing.

The health council has yet to decide the chamber's position on Medicaid expansion, but the council's talking paper said expanding Medicaid privately might be a better option than expansion of traditional Medicaid, considering the state's tight budget and already problematic managed care system.

The paper says a private plan would be beneficial to Kentucky because it would allow market forces to control costs and ultimately result in better health care. Private expansion would also prevent a flood of newly eligible people from entering the managed care system. "If Kentucky accepts the traditional Medicaid expansion, everyone that qualifies would be put into the already struggling managed care system, which until changes are made, cannot support the influx," the paper asserted.

The Obama administration has encouraged states to consider the Arkansas approach, the paper says.  To do so, states need to apply for a waiver, and the administration has provided information on how a state would apply. "Florida, Ohio, Louisiana, Maine and Pennsylvania are all looking into this option," the paper said.

An estimated 181,000 uninsured adults would become eligible for Medicaid in 2014, if Kentucky decides to accept the funds offered by the health law to provide coverage to those earning up to 138 percent of the federal poverty level.

Gov. Steve Beshear has said he will make his decision about Medicaid expansion no later than July 1. His office has declined to say whether the privatized option is under consideration, saying, "The governor is considering multiple issues as he determines whether Kentucky will expand Medicaid eligibility.  Along with affordability for the state, he is also looking at potential economic impact through jobs and investment created by possible expansion, as well anticipated changes in health outcomes for newly-eligible Kentuckians."

Poll shows health care costs are a burden for many Kentuckians

A recent statewide survey shows health-care costs are a burden for many Kentuckians, especially for those who are poor and don't have insurance and put off getting care they need because they can't afford it.

More than 60 percent of Kentucky adults in the poll said high costs forced them or a family member living in their home to delay getting care in the past year. Not surprisingly, almost 90 percent of uninsured respondents reported going completely without care in the past year.

The Kentucky Health Issues Poll also showed that 48 percent have relied on home remedies when they are sick instead of going to a doctor, 43 percent have postponed care they needed, 37 percent have not filled a prescription or skipped a dental visit or checkup, 36 percent skipped a recommended medical test or treatment, and 16 percent have cut pills in half or skipped doses of medicine for financial reasons. Overall, 64 percent answered "yes" to at least one of those questions.

“Although our economy is improving, many Kentucky families are still struggling financially. Our research shows healthcare costs have a significant impact on Kentuckians’ actions,” said Dr. Susan Zepeda, president and CEO of the Foundation for a Healthy Kentucky, which co-sponsored the poll. “Timely access to quality, affordable healthcare is important to restore and maintain Kentuckians’ health and productivity. When we delay or go without care, illness severity and costs can escalate. Based on the KHIP results, many Kentuckians are taking risks with their overall health because of the expense.”

Rising costs of health care do not affect all Kentuckians in the same way; almost 40 percent of Kentucky adults reported that paying for health care and health insurance is not a financial burden. Those who did say costs were a burden said they were burdened equally by the costs of doctor visits, prescription drugs and insurance premiums or deductibles.

The poll was funded by the foundation and the Health Foundation of Greater Cincinnati. The poll was conducted Sept. 20 and Oct. 14 of last year by the Institute for Policy Research at the University of Cincinnati. A random sample of 1,680 adults from throughout Kentucky was interviewed by telephone, including landlines and cell phones, and the poll has a margin of error of plus or 2.5 points.

Beshear vetoes prompt-pay bill but takes several steps to address problems in Medicaid; he and Haynes say it's working

Gov. Steve Beshear has vetoed the bill designed to make Medicaid managed-care firms pay health-care providers more quickly, but is taking administrative steps to address the issue.

Beshear said he agreed with the intent of House Bill 5 but it might have interfered with the contractual relationship between the state and the four managed-care companies. The bill would have subjected that relationship to the state Department of Insurance's review and investigation process for private-insurance payment complaints. 

"That language would have resulted in excessive costs for state government and taxpayers due to the expansion of the review process beyond the current parameters used for private insurance," Beshear's office said in a press release.

Instead, Beshear ordered the department to take over responsibility for review of prompt-payment complaints from the Department for Medicaid Services. "If improper payment practices are discovered, DOI can impose sanctions," the release said. He also ordered the department to audit each of the managed-care firms operating statewide – Wellcare, Coventry Cares, and Kentucky Spirit – at their cost.

Meanwhile, the firms have agreed to meet with every hospital they have under contract to reconcile outstanding accounts.  "This effort will begin immediately and continue until every hospital’s accounts receivable has been reconciled," the release said.  "The results will . . . be made public, in order to provide transparency and accountability." The firms have  agreed to meet with any other provider who wants a meeting.

Also, the Cabinet for Health and Family Services will hold eight regional forums for providers, managed-care firms, and Insurance Department representatives to discuss concerns and how to improve the system. Part of this effort will focus on "emergency room management that meets community needs without an ER operating as a de facto primary-care office," the release said. "A key component of controlling costs and improving health in a healthcare system is to provide the right treatment in the most cost-effective setting."

CHFS Secretary Audrey Tayse Haynes said the switch to managed care, made in November 2011, is working. “We are already seeing a tremendous increase in the use of preventive services, which improve health-care outcomes, while also reducing the enormous costs for treating chronic health conditions” such as diabetes-related amputations, she said.

Beshear said his plan would solve "lingering implementation problems" with managed care "while preserving the significant improvements in patient care and health care cost savings."

"Getting our people healthy and keeping them that way is not just good health policy, it’s good economics," Beshear said. "That’s why we will never return to the old fee-for-service system.  This is a significant cultural shift in medical care that has already happened across the country in both the private insurance market and in the Medicaid system."

Confused or concerned about the impact of health reform on Kentucky businesses? There's a seminar for that.

To address possible confusion or concern of business people and the public about the Patient Protection and Affordable Care Act, or "Obamacare," health-care reform experts will address its impact on small and large companies across Kentucky at half-day seminars in Lexington and Louisville on May 8 and 9.

The Kentucky Health Care Reform Seminar will include specific discussions about expected cost increases and tax implications for businesses once reform is implemented, including the role of the health insurance exchange and the changing ways that coverage premiums will be determined. The seminar will be presented by The Iasis Group Inc., The Lane Report and the Kentucky Chamber of Commerce, says a chamber release.  

Guidance to employers will be provided on complying with the new rules surrounding insurance reforms and insight to whether Kentucky companies can truly afford it. The seminar is part of a statewide partnership that includes Commerce Lexington, Greater Louisville Inc., the Kentucky Society for Human Resource Management and the Northern Kentucky Chamber of Commerce (Click here for more details or to advance register)

Feds letting Arkansas privatize Medicaid expansion; idea could spread like wildfire, as in Florida, but cost questions remain

Arkansas has turned heads nationally with its preliminary plan to expand Medicaid using the private insurance market, showing that the Obama administration is willing to give states more flexibility than expected in expanding the program.

Health and Human Services Secretary Kathleen Sebelius has agreed to a proposal by Arkansas Gov. Mike Beebe to reject the Medicaid expansion but use federal money to buy private health insurance for the 200,000 people who would have been covered under ordinary expansion, reports Sandhya Somashekhar of The Washington Post.

States that have come down on either sides of the Medicaid-expansion issue may reconsider their decision in light of the Arkansas proposal, said Sara Rosenbaum, a health law professor at George Washington University. "If Arkansas is allowed to do this, I expect it to spread like wildfire," Rosenbaum told the Post.

The first place could be Florida, where a state Senate committee rejected Republican Gov. Rick Scott's expansion plan and proposed a privatization plan like that in Arkansas. Last week, a House committee voted to reject any expansion of the program. Scott "made it clear he was not going to lobby the Legislature on Medicaid," preferring to emphasize other issues, The New York Times' Lizette Alvarez reports. For coverage from the Tampa Bay Times and The Miami Herald, click here.

Could the wildfire spread all the way up to Kentucky?

Gov. Steve Beshear has said he wants to expand Medicaid in Kentucky if the state can afford it, but many Republican lawmakers oppose the idea, saying it would not be fiscally responsible. On the national level, 26 states and the District of Columbia have expressed a desire to expand Medicaid, 17 have said they reject it and seven are undecided, according to the nonpartisan Kaiser Family Foundation.

A more flexibile arrangement could be a game changer because it makes expansion more appealing, especially for states where expanding Medicaid has been politically unpopular and polarizing. in Arkansas, which has a Democratic governor and a Republicna legislature, officials say that from an ideological standpoint, using private insurance appeals to lawmakers from both parties, reports Somashekhar. She reports that even Democratic-led states might prefer this arrangement because it gets rid of some bureaucratic hurdles.

However, there are questions about cost. The Congressional Budget Office estimates that private insurance plans cost $3,000 more per person than Medicaid, reports Somashekhar. On the other hand, Arkansas officials say the move could ultimately save money in administrative charges along with other cost-control measures.

Although the Arkansas proposal is not concrete, it provides proof that the Department for Health and Human Services encourages innovative, state-based approaches to promote expansion. Many states may develop a new route best suited to their specific needs, without having to leave federal money on the table. (Read more)

Survey finds employees pay greater share of health costs, and most large employers penalize them for using tobacco

As large employers respond to changes influenced by health care reform and rising costs of care, employees are paying a greater portion of their health-care costs. That trend that is likely to continue over the next few years, says a new report on employer-based health plans.

Although employers cover most costs of work-based plans, employees contribute 42 percent more for health coverage than they did five years ago, while employers paid 32 percent more, according to the study from the benefits consultant Towers Watson and the National Business Group on Health. Overall, costs went up 34.4 percent.

When employers were asked if they thought health plans would change by 2018, which is the year the excise tax on high-cost plans takes effect, 92 percent said plans would be different, and nearly half said they expect a significant or transformative change. Such change will increase both accountability and engagement for employees.

% of large employers saying they were "very confident" they would offer health benefits in 2022

Nearly two-thirds of employers surveyed offer employees financial rewards to encourage participation in health programs, according to the report, which said tying employee contributions to successful completion of specific tasks, such as health assessments and screenings, remains the most popular contribution strategy. Growth in the use of penalties to engage employees in health-program participation has slowed over the last two years, but the use of surcharges for tobacco use continues to grow. By 2014, 62 percent of surveyed companies are expected to apply tobacco-use surcharges.

"While U.S. employers remain committed to health care benefits for active employees over the next five years," the report says, "they are redifining their financial commitment in the short run and are more reluctant to commit to coverage for employees over a longer period."

The 18th annual Towers Watson/National Business Group on Health Employer Survey on Purchasing Value in Health Care tracks employers' strategies and practices. It was completed by 583 employers,between November 2012 and January 2013. The report says it identifies the actions of the best performing companies as well as current trends in health-care benefit programs of U.S. employers with at least 1,000 employees. Survey respondents collectively employ 11.3 million full-time employees and have 8.5 million employees enrolled in their health care programs. Download a report PDF by clicking here.

Commission says drastic changes to doctor pay and cuts to wasteful services can fix Medicare problem without tax hikes

A national advisory panel says “drastic changes” in how Medicare reimburses doctors and other providers are needed to shore up Medicare's finances, improve patient outcomes and rein in health care costs, and there is no need to seek more taxpayer money.

Medicare needs $138 billion over the next decade to avoid steep cuts in physician pay, and avoiding those cuts has become an annual scramble in Congress known as "the doc fix."  A panel dominated by internal-medicine specialists, The National Commission on Physician Payment Reform, has concluded that reduction of wasteful medical services can help solve the problem and "our nation cannot control runaway medical spending without fundamentally changing how physicians are paid," it says in its report.

Source: Henry J. Kaiser Family Foundation and Congressional
Budget Office, Budget and Economic Outlook, January 2011

The U.S. spends nearly $3 trillion a year on health care, and that level of spending is unsustainable. The report says that as a proportion of the federal budget, the cost of Medicare has risen from 3.5 percent in 1975 to 15.1 percent in 2010 in 2010). In 2020, it is projected to consume 17 percent, or 4 percent of the U.S. gross domestic product.

Recognizing the way that physicians are paid contributes substantially to the high cost of health care, The Society of General Internal Medicine convened the commission in March 2012 to make recommendations for payment reform. According to the report, some of the factors that drive up health care expenditures are:

• Fee-for-service reimbursement
• Consolidation in the health-care industry
• Reliance on technology and expensive care
• Reliance on a high proportion of specialists
• Paying more for the same service or procedure when done in a hospital setting as opposed to an outpatient setting
• A disproportionate percentage of health care spending directed to a small number of people who are very sick and costly to treat
• High administrative costs
• Fear of malpractice lawsuits
• Fraud and abuse

The commission says increased taxes are not needed to fix the Medicare problem, and the Medicaid shortfall could be entirely found by reducing overuse of services within Medicare. See the chart to the right for a breakdown of those excess medical costs.

The commission developed 12 recommendations to reduce health costs, calling for drastic changes to the current fee-for-service payment system and a five-year transition to a physician payment system that rewards quality and value-based care and not the volume of care.

The 12 recommendations were based on the principles that payment reform should improve care quality and efficiency, encourage care for the medically disadvantaged, reduce marginal and ineffective services, increase transparency to the public and should reward patient-centered comprehensive care. (Click here to see those recommendations)

Herald-Leader says state running out of time to fix Medicaid managed care, with decision on expansion looming

A recent editorial in the Lexington Herald-Leader called for swift legislative action to fix the problems of Medicaid managed care. Timely action is even more necessary since the state is considering expanding the program, some critics have said.

Fifteen months ago the administration of Gov. Steve Beshear made a quick transition to managed care that privatized Medicaid for 550,000 poor, elderly and disabled people and was projected to save Kentucky $375 million in three years.  If the state expands Medicaid, that number of covered individuals could grow to more than 1 million — or roughly a quarter of all Kentuckians.

Although Medicaid is encouraging preventive care, such as more well-child visits and diabetes testing, providers haven't been paid for some of their services. The state recently granted the managed care companies a seven percent rate increase, and the companies have said they're losing money here and one is pulling out in July. But at the end of the first eight months of managed care Medicaid, the state had paid $500 million more to the companies than the companies had paid to providers.

"The delay and denial of payments are creating financial crises for providers and pharmacies and forcing small hospitals to lay off employees, deplete reserves and default on bonds," the editorial said. "This is creating a massive transfer of wealth from Kentucky medical practices and hospitals to for-profit companies based in other states. . . . For patients, the companies are putting up barriers to care that would be illegal in the private sector. The new burdens that have been placed on vulnerable Kentuckians and their medical providers threaten to unravel not just the safety net but, in some places, the whole health care system."

The editorial called on the General Assembly to pass legislation to curb abuses such as "the stiffing of hospitals that provide emergency care as required by federal law. . . . House Bill 299 and Senate Bill 178 would also curb the false economy of severely limiting in-patient mental-health care for children while referring them to nonexistent out-patient care."

The legislation would also require Medicaid managed care companies to:

• Meet the same provider network standards, including distance to hospitals and obstetrical care, as other insurers operating under Kentucky law.
• Decide claims based on nationally recognized clinical standards and provide specific reasons for denials so providers would know what's allowable.
• Participate in an appeals process for denied claims.

Appalachian Regional Healthcare wants to sue the U.S. Department of Health and Human Services and others, alleging that the new system is out of compliance with federal law.

"The feds shouldn't have to be dragged in," the editorial says. "The federal government covers roughly 70 percent of Kentucky’s $6 billion Medicaid program. Expanding Medicaid to include more low-income people is a linchpin of federal health care reform," and Beshear has said that he wants to expand Medicaid if the state can afford it. "Kentucky can't wait much longer to get Medicaid right." (Read more)

Kasich of Ohio is fifth Republican governor to accept Medicaid expansion; he and others cite need to protect rural hospitals, poor

Several Republican governors have decided to expand Medicaid under federal health-care reform, saying their conservative principles were outweighed by a need to protect their state's rural hospitals and low-income people. Yesterday, the governor of one of the biggest states got on the bandwagon.

John Kasich of Ohio joined Jan Brewer of Arizona, Brian Sandoval of Nevada, Susana Martinez of New Mexico and Jack Dalrymple of North Dakota in saying they will take heavy federal subsidies to expand the program to households with incomes up to 138 percent of the federal poverty threshold.

Democratic Gov. Steve Beshear of Kentucky has said he wants to expand Medicaid if Kentucky can afford it, and he expects to get cost estimates around the end of March.

While Kasich is not an "Obamacare" supporter, he said expanding Medicaid “makes great sense for Ohio” because it would save $235 million over the next two years and free about $100 million in local funds for mental-health and addiction services, reports The Columbus Dispatch.

Kasich said the decision could extend health coverage to as many as 578,000 uninsured Ohio residents, and could keep everyone else’s health insurance premiums down because there won’t be so many uninsured people going to emergency rooms for their medical care, reports David Nather of Politico.

Kasich emphasized that he would like to see the 2010 law repealed, but the federal money it would pump into the state — about $13 billion over the next seven years — was too much to pass up, reports Stateline. The federal government will pay the full cost of expansion through 2016; then  states will have to pitch in, rising to a limit of 10 percent by 2020.

Brewer likewise said it doesn't make sense for Arizona to pass up federal dollars, reports Howard Fischer of the Arizona Daily Sun. "We will protect rural and safety-net hospitals from being pushed to the brink by growing their cost in caring for the uninsured," Brewer said. She also said the expansion will create enormous economic benefit, inject $2 billion into the Arizona economy, save and create thousands of jobs and provide health care to hundreds of thousands of low-income individuals, reports Fischer.

Brewer said going along with expansion will save Arizona money because the costs of providing care to the uninsured are not simply absorbed by hospitals but passed along through increased insurance premiums. Supporters of the expansion hope the five Republicans' decisions will prompt more GOP governors to follow suit. Twenty governors from both political parties are still undecided. (Read more)

Feds plan to let states impose co-payments on Medicaid patients above poverty level to encourage them to expand the program

By Molly Burchett and Al Cross
Kentucky Health News

If Kentucky expands its Medicaid program, it will probably be able to reduce the cost by requiring patients whose incomes are above the federal poverty level to help pay for their care. That could make it more feasible for the state to expand the program to people with incomes up to 138 percent of the poverty line.

A proposed federal policy will let states charge co-payments and increased premiums for doctor visits and some prescription drugs and hospital care. Robert Pear of The New York Times reports that the policy is designed to encourage states to expand Medicaid under the federal health-care reform law, with generous federal help. By shifting costs to patients, the state and federal governments would pay less.

That adds a new perspective to the cost consideration in Kentucky's debate over expansion of Medicaid. It could influence the state's decision, Republican state Sen. Julie Denton of Louisville said Friday during a legislative panel at the Kentucky Press Association convention.

Denton cautioned that the state needs to fix its problems with Medicaid managed care before it expands the program. Democratic Gov. Steve Beshear has said he wants to expand Medicaid if the state can afford it, and since there is no deadline for deciding whether to participate in the expansion, the debate may carry over into 2014.

Some Republicans have said Kentucky can't afford the expansion. If the state expands Medicaid eligibility to 138 percent of poverty from its current threshold of 70 percent, the federal government would pay all the cost of the expansion until 2017, when the state would begin helping out, with its share reaching 10 percent in 2020. The federal share of the state's current program is 72 percent.

This proposed rule could have important implications not just for state finances, but for Medicaid patients. It means that a family of three with an annual income of $30,000 could be required to pay $1,500 in premiums and co-payments, Pear reports in the Times.

As published in the Federal Register last week, the rule proposes to "update and simplify Medicaid premium and cost sharing requirements, to promote the most effective use of services and to assist states in identifying cost-sharing flexibilities." It proposes "new options for states to establish higher cost sharing for nonpreferred drugs and to propose higher cost sharing for non-emergency use" of emergency rooms.

Barbara K. Tomar, director of federal affairs at the American College of Emergency Physicians, told Pear that the administration had not adequately defined the “nonemergency services” for which the poor might have to pay. "In many cases, she said, patients legitimately believe they need emergency care, but the final diagnosis does not bear that out," Pear writes.

The proposed rule has no limit on emergency department charges for "non-emergency use." It says the hospital will have responsibility to assess the individual clinically and ensure access to other sources of care before requiring payment, which could pose problems for hospitals.

The public has until Feb. 13 to comment on the proposed rule, which can be submitted at www.regulations.gov.

Report: Electronic health records haven't cut health costs

The conversion to electronic health records isn't producing savings in health-care costs predicted by a 2005 report, and it's had mixed results in improving efficiency and patient care, according to a RAND Corporation report. The company's 2005 predictions helped drive growth in the EHR industry and encourage billions of dollars in subsidies from the federal government to hospitals and doctors to implement such systems, Reed Abelson and Julie Creswell of The New York Times report.

The 2005 report predicted that widespread use of EHRs could save the U.S. health care system at least $81 billion a year. "But evidence of significant savings is scant, and there is increasing concern that electronic records have actually added to costs by making it easier to bill more for some services," Abelson and Creswell write. Health care costs have risen $800 billion since the 2005 report, according to federal data.

Authors of the new report, published in this month's issue of Health Affairs, said they didn't attach dollar amounts to how much electronic record keeping has helped or hurt efforts to reduce costs. "But the firm's acknowledgement that its earlier analysis was overly optimistic adds to a chorus of concern about the cost of the new systems and the haste with which they have been adopted," Abelson and Creswell report.

There are several factors why the switch has not created significant savings, report authors said. Those factors include use of commercial record systems, slow rates of system adoption, and the fact that electronic records "do not address the fact that doctors and hospitals reap the benefits of high volumes of care," Abelson and Creswell report. (Read more)

Danville newspaper examines problems hospitals and doctors have with state's managed-care Medicaid program

All the talk about "Obamacare" may have obscured Kentucky's biggest health-care story, Kendra Peek of The Advocate-Messenger in Danville suggests, in a look at Kentucky's troublesome shift to managed-care Medicaid. "It's the biggest story in the state that's not being told," said Vicki Darnell, president and CEO of Ephraim McDowell Regional Medical Center in Danville, told Peek. Her story is an example of how a smaller newspaper can show the impact of a statwwide policy. (A-M photo)

On Nov. 1, 2011, Medicaid in Kentucky switched to a managed care program, which essentially means management of Medicaid was outsourced to private insurance companies Peek reports. There are three managed care organizations (MCOs) statewide: Coventry Cares of Kentucky, Kentucky Spirit and WellCare of Kentucky.

The time for payments to doctors and hospitals has doubled since MCOs were implemented, McDowell Chief Financial Officer Bill Snapp told Peek. Before, they were getting paid for Medicaid patients' care within 17 to 20 days. Immediately after the switch, he said, it took as long as 70 days. Some private physicians have been forced to make hard financial decisions because of delays, and because MCOs reimburse doctors at "significantly lower rates than private insurers," Peek reports. Some hospitals, physicians and health departments have had to lay off employees, and some doctors are refusing to see Medicaid patients because they can't afford to.

In some cases, patients have had to find doctors or hospitals where the MCO they selected would be accepted, Peek reports. Hospitals cannot legally deny treatment to anyone based on insurance, but having to find hospitals or physicians that accept particular MCOs can become expensive out-of-pocket for patients. Some primary physicians may not be allowed to work at certain facilities, requiring their patients to be shifted to another doctor.

MCOs have been in the news for these issues. Coventry Cares canceled contracts with Appalachian Regional Healthcare, a network of hospitals in Eastern Kentucky, in a move that drew significant backlash. Kentucky Spirit has announced it would end its managed-care contract in July, saying it has concerns about the sustainability of the plan. (Read more)

Poll: A quarter of Cincinnati and Northern Kentucky residents skip doctor visits and are behind on their medical bills

Nearly one-quarter of adults throughout Greater Cincinnati and Northern Kentucky did not always go to the doctor when they needed to during the past year, according to a Cincinnati Enquirer poll. And of those that did seek medical attention last year, a little more than one-quarter (27.5 percent) said they were not able to pay all of their medical bills. The results may not be all that surprising but do highlight health care costs’ impact on the average American. “It’s very common to see people making decisions between food and medicine,” said Kate Keller, senior program officer at the local policy group the Health Foundation of Greater Cincinnati.

Local doctors say they’re seeing all sorts of ruses from patients to try to avoid even a $25 co-pay. Rob Tracy, a family doctor at St. Elizabeth Physicians in Cold Spring (left, with patient Kathy Schneider), said some patients call and ask him to call in a prescription to the pharmacy without a visit. That allows them to avoid a co-pay on the office visit. He said delaying such visits only deepens the impact of chronic conditions and ups the costs when those patients are forced to local emergency rooms when their symptoms fail to improve. (Enquirer photo by Carrier Cochran)

Peale notes that these issues are intrinsically involved with the Patient Protection and Affordable Care Act, which was cemented by President Barack Obama's victory Tuesday. It is set to go into full effect in 2014. "The law will help insure as many as 30 million more people by requiring every American to buy insurance or pay a penalty, requiring employers to offer benefits or pay a penalty, and requiring insurers to accept anyone who applies," Peale writes. With the new law in place, the average person will likely be paying $4,775 out of pocket, including premiums and co-pays. (Read more)

Here are the seven factors driving health care cost increases

Escalating health care costs are everybody's problem and no one entity's fault. Julie Appleby at Kaiser Health News reports that the United States spends about18 percent of its gross domestic product -- or about $2.6 trillion a year -- on health care costs. So what's making that figure rise? A Bipartisan Policy Center study took on the task of finding out and came up with it believes are seven major factors:

1. Paying our doctors, hospitals and other medical providers in ways that reward doing more, rather than being efficient. Even insurers like Medicare pay on a fee-for-service system. New efforts in the federal health law look to change that.
2. Growing older, sicker and fatter as a nation.Medicare is set to grow by an average of 1.6 million people annually. With two-thirds of adults are either overweight or obese, lots of additional medical spending looms.
3. Wanting the latest drugs, technologies, services and procedures. Prices for newer treatments are often higher than for the products they replace.
4. Employers and employees get tax breaks on health insurance, and it costs employees little to seek care. Appleby writes, "The majority of people with insurance get it through their jobs. The amount employers pay toward coverage is tax deductible for the firm and tax exempt to the worker, thus encouraging more expensive health plans with richer benefits, the report says. How that coverage is designed also plays a role: Low deductibles or small office co-payments can encourage overuse of care, the report says. Increasingly, however, employers are moving toward high-deductible coverage as a way to slow premium growth and require workers to pay more toward the cost of care."
5. Not having enough information to make decisions on which medical care is best for us.
6. Hospitals increasingly gain market share through consolidation and demand higher prices.
7. Legal issues complicate efforts to slow spending. Doctors sometimes prescribe tests or treatment out of fear of facing a lawsuit, the report says. Fraudulent billing is another concern. The report notes that laws sometimes limit the ability of medical professionals to do work for which they are trained but that more highly paid doctors must do. (Read more)

To read the entire Bipartisan Policy Center report here.

Annual report for Cincinnati-Northern Kentucky region shows employee health care costs there will go up about $400 next year

In an continuing effort to move health costs off the shoulders of employers and onto employees, workers in Greater Cincinnati and Northern Kentucky will likely pay an average $4,775 out of their own pockets for health care in 2013 -- about $400 more than this year. That's nearly $2,000 more than they paid in 2007. The payments include premiums through their employer, as well as office co-pays and deductibles, said Aon Hewitt, the consultant that produced its annual cost report. These payments are slightly less than the national average of $4,814.

The trend toward "more employee accountability" means that nearly all companies are adjusting the designs of their employee plans, adding wellness programs and moving more employees to high-deductible plans with health savings accounts, reports Cliff Peale of the Cincinnati Enquirer. Penalties are now common for workers who smoke or who don’t take required health screenings.

The report notes that companies continue to bear most of the cost of their employees’ health insurance. It also predicts that, counting the portion paid by both companies and workers, the cost of a health care policy will increase 6.4 percent next year to $11,566. That should return the region to numbers more aligned with the national average. About half of all Americans still get benefits through their employers, and there are nearly 50 million without health insurance at all. (Read more)

Tenn. study suggests rural residents have as much access to care as anyone, if they're insured and don't mind the drive

A health-care study in Tennessee, which started with the premise that people in rural areas have less access to care than urban dwellers, ended with a rather surprising conclusion: They don't. Not if they have health insurance. "When it comes to commercially insured patients, there’s little disparity in access to health care between residents of rural communities and urban areas in Tennessee," said Dr. Steven L. Counter, president of the BlueCross BlueShield of Tennessee Health Institute.

How can this be? The study found that almost half of rural residents pass up the hospitals closest to their homes to go to larger urban hospitals, even if the same services are available locally, writes Getahn Ward of The Tenneseean. "The conclusion we came to is that we’re living in a very mobile society, and the distance is not necessarily a determinant factor in whether people get care or not," said Coulter.

Because the survey did not include consumers, it's only a guess about why they chose to take the time and trouble to go to the big town, but experts says it's a combination of services not being available or a perception that they aren't, even if they are. This raises, again, age-old questions about the viability of rural hospitals, some of which often don’t have the money for capital-intensive technology and services. However, Coulter told the Tennessean that "a recent increase in alliances between rural hospitals and larger hospitals and urban health systems raises hopes that non-urban hospitals may be able to expand their menus of services."

Such partnerships between non-profits and for-profit chains are becoming more common, reports Ward, and some say those efforts will change the perception of those in far-flung regions that great medicine is being practiced close-by. This could be especially important, said Wes Littrell, chief strategy officer and president of Nashville-based Saint Thomas Health, in the new world of health reform. “We expect that when you get more into population management that you need to take care of the patient closer to home in the lower-cost setting,” he said. (Read more)

Report: Two-thirds of Kentuckians obese by 2030 if trends continue; cost to nation's future unquestionably high

Nearly two-thirds of adults in Kentucky will be obese by 2030 if rates continue to climb as they are now, an analysis reported Tuesday. The level of obesity, defined as being roughly 30 or more pounds overweight, is projected to reach 60.1 percent in Kentucky in 2030, up from 30.4 percent in 2011, according to an analysis commissioned by the nonprofit Trust for America’s Health and the Robert Wood Johnson Foundation. Nancy Hellmich and Laura Ungar of The Courier-Journal in Louisville report that if states’ obesity rates continue on their current trajectories, the number of new cases of type 2 diabetes, coronary heart disease and stroke, hypertension, and arthritis could increase 10 times between 2010 and 2020, and double again by 2030. Medical costs associated with treating preventable obesity-related diseases could increase by up to $66 billion per year by 2030, and the loss in economic productivity could be as high as $580 billion annually. (Read more)

The joint report also shows that states could prevent obesity-related diseases and dramatically reduce health care costs if they reduced the average body mass index (BMI) of their residents by just 5 percent by 2030. Doing so would spare millions of Americans serious health problems, and the country could save billions of dollars in health spending. See the interactive map showing how much improvement could be made if that small change were made here.

The report also features a series of joint policy recommendations from TFAH and RWJF, including full implementation of the Healthy, Hunger-Free Kids Act, protection of the federal health reform law's Prevention and Public Health Fund, and inclusion of additional physical education and activity components in the Elementary and Secondary Education Act. To download the full report, go here. 

Health-care costs are a serious problem, nine of 10 adults say

Nearly nine of 10 American adults say the cost of health care is a serious problem (chart) and about two-thirds of the general public believe that cost has gone up in the last five years.

These are the results of a poll released by the Robert Wood Johnson Foundation, the Harvard School of Public Health and National Public Radio.

The poll asked additional questions of Americans who said they have had a serious illness, medical condition, injury or disability in the past year. More than 40 percent said the cost of their medical care caused a "very serious" (20 percent) or "somewhat serious" (23 percent) problem for their or their family's finances.

"The rising cost of medical care affects everyone, but people who have been unwell know firsthand that an illness or injury can mean financial hardship or ruin," said Risa Lavizzo-Mourey, president and CEO of the RWJF. "These findings confirm how thinly individuals and families have been stretched. Having access to high-quality, affordable, comprehensive health coverage is crucial, but we know that even with insurance, rising health care costs leave many Americans with the burden of higher out-of-pocket spending." (Read more)

For first time, annual health costs for families exceed $20,000

For the first time, the average annual costs of workplace-provided health insurance and other costs for a family of four has exceeded $20,000, a new study has found. Costs are $20,728 this year, an increase of $1,335 over 2011.

An average family will pay $5,114 in premiums for a preferred provider organization plan, plus $3,470 in out-of-pocket costs like co-pays and prescriptions,  Jeffrey Young reports on The Huffington Post. The rest of the costs are paid by employers, according to the report released by Milliman, a firm that consults with companies on employee benefits.

"The rate of increase is not as high as in the past but total dollar increase was still a record," the report states. "The dollar amount of the increase overshadows any relief consumers might derive from the slowing percentage increase."

The report also found health-care costs vary among 14 metropolitan areas Milliman analyzed. Miami and New York City are most expensive where costs are 20 percent higher than the national average. Louisville and Lexington were not among the areas studied. (Read more)

Doctor groups say to do 45 common tests, procedures less often

Doctors should perform 45 common tests and procedures less often, a group of nine medical specialty boards recommended today. The move will "likely alter treatment standards in hospitals and doctors' offices nationwide," reports Roni Caryn Rabin for The New York Times.

"Overuse is one of the most serious crises in American medicine," said Dr. Lawrence Smith, physician-in-chief at North Shore-LIJ Health System and dean of the Hofstra North Shore-LIJ School of Medicine, who was not involved in the effort. "Many people have thought that the organizations most resistant to this idea would be the specialty organizations, so this is a very powerful message."

Some estimates show unnecessary treatment accounts for one-third of medical spending in the United States.

The American Board of Internal Medicine Foundation is advising against physicians testing with EKGs during a physical when there is no sign of heart trouble; MRIs ordered whenever a patient has back pain; and antibiotics for mild sinusitis. "The American College of Cardiology is urging heart specialists not to perform routine stress cardiac imaging in asymptomatic patients, and the American College of Radiology is telling radiologists not to run imaging scans on patients suffering from simple headaches. The American Gastroenterological Association is urging its physicians to prescribe the lowest doses of medication needed to control acid reflux disease," Rabin reports.

Oncologists will also be urged to reduce the number of scans for patients with early stage breast cancer and prostate cancers that aren't likely to spread.

Some specialists are cautious, however. "These all sound reasonable, but don't forget that every person you're looking after is unique," said Dr. Eric Topol, chief academic officer of Scripps Health. "This kind of one-size-fits-all approach can be a real detriment to good care."

Others applauded the effort. "It's courageous that these societies are stepping up," said Dr. John Santa, director of the health ratings center of Consumer Reports. "I am a primary care internist myself, and I'm anticipating running into some of my colleagues who will say, 'Y'know, John, we all know we've done EKGs that weren't necessary and bone density tests that weren't necessary, but, you know, that was a little bit of extra money for us.'" (Read more)