Baucus sees a health-reform 'train wreck,' fearing insurance exchanges won't be ready

Max Baucus (J. Scott Applewhite, AP)

Senator Max Baucus, who as Senate Finance Committee chair helped write the health-care reform law, has become the highest-ranking Democrat to publicly voice concerns about its implementation, saying he thinks it’s headed for a collision with itself.

“I just see a huge train wreck coming down,” the Montanan told Health and Human Services Secretary Kathleen Sebelius during a budget hearing.

Matt Gouras of The Associated Press notes that polls show that Americans are confused by the complex law, which is designed to cover about 30 million uninsured people through a mix of government programs and tax credits. Baucus told Sibelius he’s “very concerned” that new health insurance exchanges will not open on time in every state and residents will not have enough information to make choices even if they do open on time, as Kentucky's seems likely to do.

"The administration’s public-information campaign on the benefits of the Affordable Care Act deserves a failing grade,” Baucus lectured. “You need to fix this.” Baucus’ office later told Gouras that the senator still thinks the Affordable Care Act is a good law, but questions its roll-out.

Sebelius said that the administration is on track to fully implement exchanges in January, and to be open for open enrollment on Oct. 1, 2013, reports Gouras. Kentucky is among the states that have chosen to build a fully state-based exchange. Others have chosen a state-federal partnership exchange, or defaulted into a federally facilitated exchange. The map below shows the lay of the land about that decision. Yellow states have defaulted to a federal exchange, light blue states are planning for a partnership and blue states have chosen a state-based exchange.

Map provided by the Kaiser Family Foundation

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)

Beshear will expand Medicaid, Democrat and Republican say; D says governor believes the state can opt out if it's not affordable

State legislators in both parties say they expect Gov. Steve Beshear to expand Medicaid to cover several hundred thousand more Kentuckians who earn up to 138 percent of the federal poverty rate.

Rep. Tom Burch, chairman of the House Health and Welfare Committee, told Ryan Alessi of cn|2’s "Pure Politics" that the governor told him exactly that last week. And Sen. Tom Buford, R-Nicholasville, told Kentucky Health News that he expects Beshear to do the deed.

Burch told Alessi that Beshear has decided to move forward with the expansion because he believes the state would be able to opt out if state officials discover that Kentucky can’t afford it after 2017.

Beshear didn’t mention expansion in his State of the Commonwealth Address last week, and the governor’s office said the official decision hadn’t been made yet but didn’t dispute Burch’s statement, Alessi reports. Here is the salient part of his interview with Burch:



Buford said Beshear will be under much political pressure to expand Medicaid because it is President Obama's signature program and expansion will create jobs. However, Republican legislators generally  have opposed the expansion of Medicaid because the state can’t afford it. The federal government will cover the cost of covering the extra people from 2014 through 2016. Kentucky would have to kick in 5 percent of the costs starting in 2017 and 10 percent by 2020.  

The federal government covers roughly 70 percent of Kentucky’s $6 billion Medicaid program. It covers more than 800,000 Kentuckians and with the expansion, that number could grow to more than 1 million — or roughly a quarter of all Kentuckians, reports Alessi.

“I think it’s critical that we take a look at those to see how we achieve that. I’m not sure that this would be the way that would be best-suited to Kentucky and be fiscally responsible for the state of Kentucky,” Sen. Julie Denton, R-Louisville and chairman of the Senate Health and Welfare Committee, told Alessi in December (at 4:10 of the interview below). “Frankly, I don’t think we can afford to do it,” she said.

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)

Health reform will let insurers charge smokers up to 50 percent higher premiums, which is likely to have a big impact in Kentucky

"Millions of smokers could be priced out of health insurance" because the health-care reform law will let health-insurance companies charge smokers as much as 50 percent more starting next year on individual policies, according to experts who are just now teasing out the potential impact of a little-noted provision in the massive legislation," The Associated Press reports.

The provision is likely to have a major impact in Kentucky, where 29 percent of adults are smokers, a figure exceeded by no other state, and where 25 to 30 percent of people under 65 are estimated to have no health insurance.

"For a 55-year-old smoker, the penalty could reach nearly $4,250 a year" AP reports. "A 60-year-old could wind up paying nearly $5,100 on top of premiums. Younger smokers could be charged lower penalties under rules proposed last fall by the Obama administration."

A state health insurance exchange, now being created under the law, will be a place to buy insurance with tax credits depending on income. Gov. Steve Beshear has said he wants to expand the state Medicaid program to cover people in households with incomes up to 138 percent of the federal poverty level, but many Republicans in the legislature are opposed to that because the state would ultimately have to pay 10 percent of the expansion's cost.

The provisions to discourage smoking would allow employees covered by employer plans to avoid penalties by joining smoking-cessation programs,"but experts say that option is not guaranteed to smokers trying to purchase coverage individually," AP reports.

There is concern about the provision's effect on older smokers who "could face a heavy hit on their household budgets at a time in life when smoking-related illnesses tend to emerge. . . . Several provisions in the federal health care law work together to leave older smokers with a bleak set of financial options," AP reports, citing Karen Pollitz, a health-insurance expert with the Kaiser Family Foundation and former deputy director of the Office of Consumer Support in the U.S. Department of Health and Human Services.

Pollitz notes that the reform law lets insurers charge older customers up to three times as much as their youngest customers; charge the full 50 percent penalty on older smokers while charging less to younger ones; and does not allow smokers to use tax credits to offset the cost of the penalty.

And there's a good argument to charge the full penalty, insurance consultant Robert Laszewski told AP: "If you don’t charge the 50 percent, your competitor is going to do it, and you are going to get a disproportionate share of the less-healthy older smokers,” said Laszewski. “They are going to have to play defense." (Read more)

Health departments prepare for challenges posed by health-care reform law

No one really has a clue what changes from the health-care reform law will mean to Kentuckians and public health departments are preparing for the uncertainty, reports Kristy Cox of Business Lexington.

"The Affordable Care Act will have an impact on health departments.  It is going to put a whole lot more people out there on the street on health insurance" of one kind or another, Dr. Rice Leach, head of the Lexington-Fayette County Health Department, told Cox.

"I think how health departments are impacted is going to look a little different depending on what part of the state they're in," Rice said. "The United States has passed a law that creates an entitlement for 30 or 40 million people, and here in Lexington, for 10,000 or 20,000 more people to have health insurance. Now, who is going to take care of them?"

If the private sector can't handle the increased patient load, Leach said, the stress goes onto the health departments, meaning they may be expected to provide a broad "continuum" of care for acute medical needs, including doctors and laboratory services. Leach said he hopes other systems will step up to provide care so health departments can continue to focus on preventative services.

Many factors determine what health departments can and can't do as well as their ability to generate dollars. Leach called  the services mandates by state and federal governments as "mission critical activities," which include preventive health, communicable disease control, public health education, emergency response, sanitary code and restaurant inspection and public health policy, writes Cox. 

Despite the challenging economic environment created by budget cuts and managed-care non-payment issues, Kentucky health departments are trying to stay focused on their big-picture mission.  Some departments are writing grants and others, like the Lincoln Trail District Health Department, has sent nurses into school systems in attempt to increase revenue through expanded clinical services, Cox reports.

Poll shows registered voters in Ky. favor expanding Medicaid

By Molly Burchett and Al Cross
Kentucky Health News

A statewide poll last month found that most registered voters in Kentucky, when presented with specific facts and options, generally favored expansion of Medicaid under federal health-care reform. Similar results were found in six other states surveyed by a bipartisan pair of pollsters working for the American Cancer Society Cancer Action Network.

"Respondents in the seven states polled were informed that federal funds are available to pay 100 percent of the costs to cover more uninsured people through Medicaid beginning in 2014, with the federal share gradually decreasing to 90 percent," the network said in a news release. "Respondents in each state were two to three times more likely to support accepting federal dollars to cover more people than they were to prefer turning down federal funds and leaving vulnerable populations uninsured." The poll asked:

Next I’d like to ask you about an issue being talked about by the governor and the state legislature. Under the new federal health care law, [number of] people in [state] who are uninsured right now could get health care coverage through Medicaid starting in 2014. The governor and state elected officials can choose to accept federal dollars that have been allocated to cover these people in [state], or to turn the money down and not cover these people. The federal dollars cover 100% of the costs in the first few years, and 90% of the costs after that.

The release said the result in Kentucky was 63 percent for expansion and 23 percent opposed. The results were not quite as strong, 60-30, when voters were presented with arguments from both sides of the debate:

Side A says we can cover more people in [state] and save taxpayer dollars that are currently spent on treating uninsured people in emergency rooms. Covering more people gives hard-working families the security of knowing they can get preventive care and see a doctor when they need to. The alternative is people showing up in the emergency room when they are sicker. By accepting the money, we could cover more people and save taxpayer dollars.

Side B says Kentucky will eventually have to pay 10% of the costs of covering these people, and even more if the federal government fails to follow through on its promises. We cannot afford to spend even more on health care coverage, which is already a big part of the state budget. We have too many other priorities in the state that need attention, like education and roads. By turning down the money, we could avoid future increases in state health care spending.

Which side do you agree with more?

The results in other states were Florida, 62-28; Iowa, 55-34; Michigan, 62-29; New Jersey, 65-29; New Mexico, 61-29; and Texas, 55-35. The Kentucky poll found that 49 percent of registered voters in Kentucky have close friends or family members who are uninsured, and 43 percent of voters who are not currently receiving coverage through Medicaid say they or someone close to them has been covered by it.

The poll did not mention the key standard for expansion, that a state must cover people in households with incomes up to 138 percent of the federal poverty threshold. Kentucky now covers people with incomes below approximately 70 percent of poverty, and the federal government pays a little more than 70 percent of the cost. It would pay all the cost of expansion in 2014-16, then the state would have to start paying an increasing share, reaching 10 percent by 2020. Democratic Gov. Steve Beshear has said he wants to expand Medicaid if the state can afford it.

The telephone poll surveyed 812 registered voters, giving it an error margin of plus or minus 3.44 percentage points. It was conducted by Lake Research Partners, a Democratic firm, and GS Strategy Group, a Republican firm, between Dec. 13 and 22. For more details, click here.

Lexington lawyer writes booklet helping Kentucky businesses to break down health-care reform law

Margaret Levi, a lawyer with the Lexington firm of Wyatt, Tarrant & Combs, has authored a new publication, The Impact of Health Care Reform on Kentucky Employers. The 68-page booklet, published by the Kentucky Chamber of Commerce, is a readable summary of The Patient Protection and Affordable Care Act, writes Greg Kocher of the Lexington Herald-Leader.

The law that started taking effect in March 2010 has had more more interpretations and critics than it has pages -- that's 2,555, if you don't count the legal citation references that require reading included within it. "There's a lot of criticism of it from people who haven't read it, and I think you have to know it before you can criticize it," said Levi, a Danville native and resident, said of the law. "I'm not taking a political position one way or another. I am neutral and I tried very hard to remain neutral."

The most common misconception about the law "is that all health care is going to be free and people can get all the care they want," Levi told Kocher. 'So there are some unrealistic expectations on behalf of consumers."

Levi also noted some confusion about how different-sized businesses qualify for different exemptions under different provisions of the law.  She said that some employers are weighing the "pay or play" mandate that takes effect in 2014. Under that provision, writes Kocher, "employers with 50 or more employees must provide 'minimum essential' health plan coverage to their eligible employees or pay a penalty if an eligible employee obtains coverage through a state-sponsored health insurance exchange and qualifies for benefits subsidized by the government. An employer who offers no health coverage will be subject to a penalty equal to $2,000 a year per employee after the first 30 employees. "I think some employers are doing the math as to whether they pay the penalty or provide insurance for their employees," Levis said. "I saw a report that said 88 percent of employers are still going to provide the coverage."

Jim Ford, vice president of business education for the Kentucky Chamber, told Kocher that the booklet "basically says here are the rules, here's what it means, here's what implementation means. We're leaving politics at the door. Here's what you need to know." (Read more) For information on buying the booklet, go here.

Expert: Health care landscape already changed, despite what Supreme Court decision is this week

Whether or not the federal health-care reform law is upheld by the U.S. Supreme Court tomorrow, initiatives are already in place that will change the way health care is delivered, an expert said at a Lexington conference Tuesday. Gregg Nunziata, senior director at research and consulting firm The Advisory Board in Washington, D.C., "said the burgeoning number of baby boomers entering retirement, the ever-accelerating advances in technology and the increasing public health crisis that finds more and more Americans with chronic illness such as diabetes, are fundamentally changing how health care works in America," reports Mary Meehan for the Lexington Herald-Leader. As people age, they are "demanding a different kind of care, and they will be living long into their golden years," he said. When they become seniors, who already tend to cast their vote, they will become a powerful voting bloc.

Health officials are looking at ways to cut down on costs, which is necessary because "the government is the major funding source, and the major funding source is broke," Nunziata said. To cut costs, the government and insurers are looking at new ways to pay for health care. One example is the Centers for Medicaid and Medicare scoring hospitals based on their performance and paying them accordingly. "A low score could reduce payments by only 1 percent or 2 percent," Meehan reports, but that can translate to a multi-million dollar loss. "Every hospital is being judged and Washington is keeping score," he said.
Bundling payments is another method being tried, in which one flat fee covers all of the care that is provided in a procedure. "The idea would be to force more efficient and cost-effective care by encouraging cooperation," Meehan reports. (Read more)

A summary of what to expect when the Supreme Court hears arguments about the health-care reform law

How big a deal will it be when the U.S. Supreme Court hears arguments about the constitutionality of the new federal health-care reform law later this month? Big, concludes Stuart Taylor Jr. for Kaiser Health News.

"It's big enough for the justices to schedule six hours of arguments — more time than given to any case since 1966," he reports. "It's also big enough to attract more briefs than any other case in history ... and, finally, it's big enough to cause the justices to postpone until October half of the 12 cases that they were ordinarily going to hear in April in order to clear time to get started on the health care opinions."

The most pressing issues deal with the individual mandate of the law, which requires people without insurance to buy some or pay fines. The question is whether the mandate "represents an unconstitutional exercise on Congress' power to regulate commerce and to levy taxes," Taylor notes. There is also the question of state sovereignty, since the law requires states "to spend more of their own money or forfeit all of the federal Medicaid money they now receive," Taylor reports.

As for the outcome, that's the million-dollar question, Taylor writes. "It's clear that the court's four more liberal members, like almost all other liberal legal experts, will find the law constitutional in all respects. It's also clear that conservative Justice Clarence Thomas will vote to strike down much or all of the law. It's less clear what swing-voting Justice Anthony Kennedy and conservative Chief Justice John Roberts as well as Justices Antonin Scalia and Samuel Alito will do."

As for the major arguments regarding Medicaid and for and against the individual mandate, Taylor provides an excellent summary that is worth reading in its entirety. (Read more)

What health reform changes to expect in 2012 — assuming the Supreme Court doesn't strike down the entire law

The U.S. Supreme Court is set to hear arguments later this month about the federal health care-reform law, and is expected to decide the law's future this summer. While the court mulls the constitutionality of an individual mandate to buy health insurance, "implementation marches on, and a number of notable changes will take effect for consumers this year," writes Michelle Andrews for Kaiser Health News.

If the high court strikes down the Patient Protection and Affordable Care Act, "all bets are off," Andrews writes. Popular provisions, such as allowing children to stay on their parents' insurance until age 26 and the 50 percent discount on brand-name drugs for seniors under the prescription drug doughnut hole, could be eliminated — and provisions set to take effect this year could be cancelled. But, if the Supreme Court does not invalidate the entire law, here's a list of new provisions consumers can expect this year:

Free contraception coverage: "Women in a new health plan or in an existing one that has changed its benefits enough to not be considered grandfathered under the law will be able to receive contraceptives without an out-of-pocket charge," Andrews writes. Insurance plans will also have to provide basic health services for women, including screening for gestational diabetes; HPV testing; STD counseling; screening and testing for HIV; and screening and counseling for interpersonal and domestic violence. Religious employers such as churches are exempt from the new regulation, but colleges, hospitals and other employers that are religiously affiliated are not — though they do have a one-year grace period to implement it. Employees of those institutions will receive their free benefit from their employer's insurance.

Consumer rebates: Under the law, insurance companies have to spend at least 80 to 85 of their premium revenues on medical claims and quality improvement. If they don't, they have to pay the difference to policyholders, which, in most plans, means the employer. If the provision had been in place in 2010, an analysis by the National Association of Insurance Commissioners estimated that would have meant $2 billion going to consumers. In December, the Obama administration said that about 9 million Americans could receive rebates that added up to $1.4 billion.

Clearer descriptions: Starting in September, all health plans will have to give consumers benefits information that is easy to understand. "Every plan will be required to give people a short summary of coverage and a uniform glossary of terms," Andrews reports. "It will also have to provide examples of how much the plan would cover if someone had a baby or was managing Type 2 diabetes — two common situations that should make it easier for people to compare plans."

Smaller doughnut hole: "This is the break in Medicare prescription drug benefits that, in a standard plan, begins after total drug spending by the beneficiary and the health plan exceeds $2,930 and continues until the beneficiary has hit the $4,700 out-of-pocket limit," Andrews reports. Last year, people on Medicare with high drug costs got a 50 percent discount on brand-name drugs once they reached the doughnut hole. This year, they'll also get a 14 percent discount on generic drugs. (Read more)

Cost of an MRI in America? $1,080. France? $280. Why? providers 'largely charge what they can get away with'

Why does getting an MRI in the United States cost $1,080 when it only costs $280 in France? The answer comes down to how the prices are set, reports Ezra Klein for The Washington Post.

"That may sound obvious," he writes. "But it is, in fact, key to understanding one of the most pressing problems facing our economy. In 2009, Americans spent $7,960 per person on health care. Our neighbors in Canada spent $4,808. The Germans spent $4,218. The French, $3,978."

The difference in expenditures isn't linked to the idea that Americans just use more health-care services (the opposite is actually true) or that we are sicker. A 2003 study on international heath-care costs and a survey released Friday by the International Federal of Health Plans both concluded it comes down to pricing. The latest survey showed that in 22 of 23 medical services, whether that was a routine doctor visit or coronary bypass surgery, Americans paid more than other developed countries.

The difference is based on the way the pricing is set. "Other countries negotiate very aggressively with the providers and set rates that are much lower than we do," said Gerard Anderson, who was involved in the 2003 study. In Canada and Britain, prices are set by the government. In Germany and Japan, the prices are "set by providers and insurers sitting in a room and coming to an agreement, with the government stepping in to set prices if they fail," Klein reports.

Outside of Medicare and Medicaid, which are cheaper than the commercial average, "it's a free-for-all" in the U.S., Klein wriotes. "Providers largely charge what they can get away with, often offering different prices to different insurers, and an even higher price to the uninsured."

Because the customer often doesn't have choice in whether or not he or she will purchase health care — one could be unconscious or very ill — "sellers of health-care services in America have considerable power to set prices, and so they set them quite high," Klein reports.

Fixing the problem is fraught with complication, Klein writes, because "centralized bargaining cuts across the grain of America's skepticism of government solutions." The prices are also set by very powerful industries. The federal health care reform law is not expected to fix the issue, Klein writes, though might spread awareness since there are provisions to expand transparency; hospitals will have to publish their prices, for example. "But this is, for the most part, a fight the bill ducked, which is part of the reason that even its most committed defenders don't think we'll be paying anything like what they're paying in other countries anytime soon," Klein write. (Read more)

As with health care reform, dentistry should move from volume to value, report urges

Dentists should be paid according to the outcomes of their patients and should be monitored more closely given that there is great variability and expense when it comes to dental care, a new report argues.

"I think there is broad consensus that the current oral health system doesn't meet the needs of a significant portion of the population," said Paul Glassman, professor of dental practice at University of the Pacific Arthur A. Dugoni School of Dentistry and lead author of the report "Oral Health Quality Improvement in the Era of Accountability."

The report, funded by the W.K. Kellogg Foundation and the DentaQuest Institute, was released as the U.S. healthcare system is undergoing a transition from the "pay-for-performance" model to "value-based care." The paper argues oral health should likewise move in the same direction and make the transition from "volume to value."

The report found dentistry is the second-highest out-of-pocket health care cost after prescription medicines, and, like health care in general, its cost is increasing, reports Laird Harrison for Medscape News. Another issue is the government just pays for about 6 percent of dental care nationally, the report found, leaving people to pay for care themselves.

While expensive, the care dentists give can be inconsistent, the report found. Though Glassman said dentistry is not lacking in standards, there is limited evidence of the best practice for most dental procedures, the report found.

Another issue, the report contends, is dentists are paid according to what they produce, not by how successful they are in their outcomes. As such, dentists are resistant to change since there are few incentives to implement quality improvement programs. "If the question is 'what's the optimum system for providers,' then many feel the optimum system is what we have now," Glassman said. "If the question is 'what's the optimum system for the public,' then you will come to a different set of assumptions."

To help improve the system, the report recommends a number of proposals, including:

• The increased use of electronic health records

• Development and use of measures for oral health outcomes

• Tying incentives to the oral health of the population being served

• Relying more on allied dental professionals and non-dental professionals

It also suggests relying more heavily on telemedicine, with Glassman envisioning "hygienists and dental assistants going into schools, nursing homes, and other areas with underserved populations to deliver preventive care," Harrison reports. "Dentists, monitoring from afar with access to dental charts stored on the Internet, could gain more patients."

Steven Silverstein, director of the graduate program in dental public health at the University of California San Francisco, said the report was "outstanding" and agreed that the care dentists give can be inconsistent, saying, "If you ask 10 dentists to look at a patient you will get 10 different opinions." Part of the problem, he said, is 98 percent of dentists either practice alone or with one or two partners.

Silverstein did take issue with the fact that the report did not mention the high cost of dental education; didn't take cosmetic dentistry into account; and it did not explain how reform could lower the cost of dental care. (Read more)

Several pieces of federal health reform law taking effect in 2012

At the beginning of the new year, family doctors started facing a 1 percent cut in Medicare reimbursement if they hadn't nixed their paper-based prescription pads in favor of an electronic version. The change is part of another piece of the federal health-care reform law taking effect, USA Today reports.

"There will be a significant number of folks that will incur the penalty," said Robert Tennant, senior policy adviser with the Medical Group Management Association.

E-prescribing, which allows physicians to generate, transmit and file patient prescriptions, is part of the federal government's effort to get doctors to use electronic health records. Last year, doctors received bonuses from Medicare and Medicaid to set up EHRs, but this year they will start being penalized if they haven't already done so — 1 percent this year, 1.5 percent in 2013 and 2 percent in 2014.

Another piece of the federal health care reform law that will begin falling into place in 2012 involves Medicare's Shared Savings Program, "under which groups that qualify as accountable care organizations will be eligible for shared savings in 2013," USA Today reports. "Under the program, savings from participants in an ACO — including hospitals and doctors working together to improve patient care and reduce costs — would be shared between Medicare and the providers."

One study showed Kentucky already has three ACOs established, though several Kentucky experts have said no ACOs have been formed in the state yet.

Jan. 1 also marked the beginning of consumers being eligible for rebates if their insurer spent less than it should have on medical care. As per the new law, insurers have to spend 85 percent for large group plans and 80 percent for small groups and individuals on medical care as opposed to administrative and other costs. Kentuckians will not be privy to these rebates this year, however. Kentucky got a one-year break from the rule after applying for an exemption. (Read more)

Health insurance exchange benefits will be decided at the state level; Kentucky can now proceed to set up its exchange

For months, Kentucky officials have said the state cannot move forward with setting up a health-insurance exchange under the new federal health law because there weren't enough details about which benefits they had to offer. On Friday, the Obama administration answered that question when it "let states, rather than the federal government, define which medical benefits insurance companies will have to offer consumers starting in 2014," reports Noam L. Levey of the Los Angeles Times. "This is significantly more state-flexible and friendly than many would have expected," Alan Weil, head of the National Academy for State Health Policy, told Levey.

The law says that by 2014, each state must offer an insurance exchange, an online insurance marketplace in which people can choose from a variety of plans from companies like Anthem or Bluecross/Blueshield and then, for the most part, be given federal subsidies to help pay their premiums. About 30 million individuals and employees of small businesses are expected to use the exchanges. The plans in an exchange must cover a basic set of benefits, including hospitalizations, emergency care, newborn and maternity care and pediatric services, but until now the federal government could have decided how generous the benefits had to be.

"Under the guidance issued Friday, state leaders can define their own set of benefits by using an existing major health plan in their state as a benchmark," Levey reports. "That means that some states may require insurers to cover services such as chiropractic therapy and in vitro fertilization, while others may not."

It's this variability between states that worries some. "In passing a good deal of the decision-making to states, the administration has guaranteed that Americans will continue to face a patchwork of state regulations that make coverage uneven and inefficient," report Gardiner Harris, Reed Abelson and Robert Pear in a news analysis for The New York Times.

Some consumer advocates also worry the move will allow states to make benefits too meager. Timothy Jost, a law professor at Washington and Lee University, said the policies "could restrict, for example, the number of covered visits a pregnant woman could make to her obstetrician or which prescription drugs to pay for."

However, by passing the responsibility on to the states, "President Obama will most likely make his plan for health care reform more politically palatable," the Times reporters write. "States will be allowed to set benefits at levels similar to what they are now, making coverage not much more expensive than it is today."

While some Republican state officials were happy with the decision, saying it makes it easier for states to comply with the law, others opposed to the law were critical. "All they're trying to do is avoid making tough calls before the election," said Ed Haislmaier, a senior research fellow at the Heritage Foundation. (Read more)

The urge to merge hospitals is driven by health care reform

Mergers that are creating large hospital groups in Kentucky are part of a national trend being driven in part by last year's health-care reform law.

There are three key reasons for this, according to Barton Walker, a North Carolina attorney with McGuireWoods, who specializes in health care mergers. Reform is decreasing revenues, increasing costs, and rewarding integration among providers, Walker said during a webinar last fall. Because the federal government is rewarding hospitals that can demonstrate quality -- and measuring quality takes investment -- larger organizations are better poised to take advantage of the changes, he said. Fior more from Leigh Page of Becker's Hospital Review, click here.

On Tuesday, the University of Louisville's hospital and its James Graham Brown Cancer Center joined with Jewish Hospital and St. Mary's HealthCare in forming a system to be led by the parent of Lexington-based St. Joseph Health System. The partners announced that their boards had approved a merger that would combine the three health care groups. The merger plan was announced last November, about the same time that the University of Kentucky and Norton Healthcare announced a similar plan that was fleshed out last week.

The system including U of L will be the largest hospital group in Kentucky. It will be led by Denver-based Catholic Health Initiatives, which owns St. Joseph and is a partner in Jewish and St. Mary's. The group will hold 10 of the 18 seats on the new organization's board in return for an investment of $620 million in the new system.

The new group must be approved by regulators and Catholic Church officials, a process that could take up to a year. It brings together hospitals, clinics, specialty institutions, home health agencies and satellite primary care centers, where more than 3,000 academic and community physicians work. “We will be increasing access to basic and advanced health services,” said Bob Hewett, a long-time St. Joseph board member who will be the first chair of the system’s community board of trustees. "That will lead to improving the health not only of individual patients, but of entire communities.” For more from The Courier-Journal, click here.

Despite the glowing appraisals and the promises of improved health care from of the proposed merger, some fear that the merger may mean less health care access. According to a story in Monday's Courier-Journal, members of the Louisville Board of Health are worried that the merger may interfere University Hospital's mission to care for the poor. In addition, the members are worried that the new merger may reduce access to reproductive services, as some Catholic hospitals limit their reproductive services. Hospital officials responded that there was no need for such worries, and U of L President James Ramsey told cn|2 Politics that the reproductive servcie would be provided at outpatient facilities.

Rural hospitals in Kentucky say health reform will hurt them

Though the new national health-care law may increase the number of insured Americans by 32 million, rural hospitals in Kentucky aren't expecting a revenue windfall. That's because half of the people who will be newly covered will be Medicaid patients, "who have been big losers for hospitals in cash-strapped states where Medicaid payments do not cover costs," The New York Times' Milt Freudenheim reports.

"We should repeal it all and start over," said Milton Brooks, administrator of Pineville Community Hospital. "Most hospitals are barely breaking even. When you take a couple of million dollars out of our pocketbooks, we're gone." The Kentucky Hospital Association has said the law will cost its hospitals $1.28 billion over 10 years because of "reduced Medicaid payments for more Medicaid patients as well as lower federal payments to make up for losses," Freudenheim reports. The KHA is not calling for repeal, but is asking for some changes to the law.

Some major national players support the new health care law, including the American Hospital Association, the Catholic Health Association, the Federation of American Hospitals, the National Association of Children's Hospitals and the Association of American Medical Colleges. (Read more)

Electronic health records are the new frontier in health care

By Tara Kaprowy
Kentucky Health News

Just two years ago, the acronym EHR didn't mean much to many people. But since Congress passed the health-care reform law last year, physicians and hospitals have become intimately acquainted with it — and patients may follow suit.

EHRs are electronic health records. They are quickly being adopted by hospitals and physicians as the federal government begins to pay out $19 billion in incentives: extra Medicare and Medicaid payments. Kentucky health care facilities and providers have been especially eager to sign up, perhaps because so few of the state's doctors had adopted EHRs. Kentucky doctors' offices were the least digitized in the nation last year, according to a national survey.

An EHR is a digitized copy of a person's health record, essentially replacing the file folder that has typically held handwritten information about a patient. It generally contains information about a patient's laboratory and radiology results, diagnoses, prescriptions and other treatment.

EHRs' advantage is their easier accessiblity. Rather than being locked in a doctor's office, the information, in theory, can be accessed by other health-care providers, regardless of which one the patient is seeing. "It's about the information always moving with you," said Nancy Szemraj, spokeswoman for the Office of the National Coordinator for Health Information Technology.

"That's like the pot of gold," said Jeff Brady, executive director of the Governor's Office of Electronic Health Information. "If you've been to six different hospitals and three different doctor's offices, literally all of that data can be viewed."

EHRs are expected to reduce unnecessary tests and treatment because they will list tests that have been performed, and to reduce the potential for medical errors, because they containing such cautionary information as the patient's allergies.

Protecting your information

One risk of electronic health records is the potential for the information being leaked, lost, altered or merely read by an unauthorized person. Leaks can be purposeful or by accident. In January, the private information of thousands of people who visited the Green River District Health Department in Owensboro was found online, where it had been mistakenly available for several months.

Brady acknowledged the danger of unauthorized access, but said safeguards have been taken to avoid it. Participating providers in the Kentucky Health Information Exchange, the state clearinghouse for EHRs, have to sign several agreements in which they attest the information they obtain will be used responsibly.

"The golden rule is this data will only be viewed by a provider who is providing care to a patient," Brady said. To make sure that is happening, he said, the software has an audit function, in which administrators are able to see who looks at a patient's data, when they did, from what computer and what piece of data they examined.

The national network will not be a database, and thus not in danger of being hacked, said Szemraj, of the national office. "It's simply a means to securely push and pull information as needed," she said, citing an example of a person traveling around the country and falling ill in New York City. "At that time, they would be able to tap into your medical record in your home base and say, 'I want to pull your medical information.' It's not literally sitting out there in a repository where anybody could hack into it."

To set up EHR systems, hospitals and doctors choose from a list of federally approved software. The programs don't "necessarily have to communicate with each other," Brady said, "but they do have to conform to certain standards that would allow them to communicate with a health information exchange."

The state's exchange has been operating in the pilot stage since April 2010. It will act as a "middleman" between hospitals and health care providers, Brady said. "We will be the hub and all information will flow from a provider, to us, back to another provider."

Under ideal circumstances, Brady said he hopes to see half of the state's hospitals and doctors' offices connected to the exchange by the end of the year, with the other half signed on by the end of 2012. That may be ambitious, since a recent survey showed Kentucky had the lowest percentage of doctors' offices that have adopted EHRs, just 38 percent, compared to 51 percent nationwide.

While Kentucky builds its exchange, other states are doing the same. Eventually, the goal is to create a National Health Information Network that will allow information to flow from state to state. That will be especially beneficial to Kentucky, Brady said, "because we have so many hospitals and medical facilities on our border. We're talking to Tennessee and Ohio about exchanging data with them. There's going to be a lot of development in the next 12 months."

But when will the state information exchange or national network be useable? Brady said no date has been set for the state exchange, and Szemraj said of the national network, "We are truly just beginning."

Cost savings?

The Obama administration and other supporters of the health-reform law say EHRs will save money. A 2005 study by the RAND Corp. indicated that implementing EHRs and networks could eventually save more than $81 billion per year by improving health care efficiency and safety, but that study was theoretical in nature and assumed 100 percent compliance, Drs. Jerome Groopman and Pamela Hartzband wrote in an op-ed piece in The Wall Street Journal.

Some data show EHRs do not necessarily improve patient care, the doctors wrote, pointing to a study published in the journal Circulation that reviewed the influence of EHRs on the quality of care received by more than 15,000 patients with heart failure. It concluded that "Current use of electronic health records results in little improvement in the quality of heart-failure care compared with paper-based systems."

Another study looked at the Department of Veterans Affairs' health information technology investments and estimated a potential value of $3.1 billion "in cumulative benefits net of investment costs." But Brandon Glenn of Medcity pointed out "the study's lead researcher stressed the dollar amount reflects only what's possible — not actual savings."

The prevailing opinion in the industry is that EHRs will save money, but no one is really sure how much. On the expectation of savings, the health-reform law calls for extra Medicare and Medicaid payments to providers as incentives to adopt the technology. Providers have until 2014 to adopt EHRs. If they don't, Medicare will start penalizing them by paying them less in Medicare payments.

A rural equalizer?

Since the Centers for Medicare and Medicaid Services started distributing EHR incentive payments in January, Kentucky hospitals and other health-care providers have received more than $18 million of about $38 million handed out nationwide so far. University of Kentucky Healthcare and Central Baptist Hospital, which together received $4.1 million, were the first facilities in the nation to receive the extra payments. In the next four years, Kentucky hospitals are expected to receive more than $100 million in incentives.

For a spreadsheet of incentives paid to Kentucky providers through last week, click here.

To receive the incentives, which can mean up to more than $60,000 for eligible professionals and millions for hospitals, applicants must prove their EHR systems are being used in a meaningful way. To show "meaningful use" in the first of three stages — the only stage that, so far, has been officially defined — eligible professionals must show "continuous quality improvement and ease of information exchange," according to regulations in the Federal Register. Professionals must meet 25 measures, hospitals 24, to prove meaningful use. One measure, for example, is the ability to send electronic data to the state's immunization registry.

The list of incentives already paid shows providers in the most rural to the most urban areas areas of Kentucky are switching over at equally rapid rates. In fact, two of the few hospitals already linked up to the Kentucky Health Information Exchange are Pikeville Medical Center and Murray-Calloway County Hospital, both outside metropolitan areas.

Brady said the Office of the National Coordinator for Health Information Technology "is very interested in rural areas, the critical-access hospitals, the very small but important hospitals . . . that typically get left out on technology. This an effort to bring them along and be the equalizer."

Faith-based alliances may be exempt from health-insurance mandate; Kentucky court case part of national question

Though the health-refom law requires all Americans to be enrolled in a health-insurance plan by 2014, Christians can be exempt if they pool their risk. Such is the message being spread by Samaritan Ministries and Christian Care Ministry.

Melissa Maynard of Stateline, a nonpartisan news service of the Pew Center on the States, reports the new law "does in fact contain language exempting faith-based groups from the requirement." That's because these ministries fall under the umbrella of "health care sharing ministries," in which members pool their money and their risk to help each other cover their medical expenses.

Christian Care Ministry is hoping to target 11 million Americans "it estimates profess Christian faith and are not covered by an employer's insurance plan," Maynard reports. Currently, only 100,000 households nationwide are members of health care sharing ministries.

However, states have a major role to play in implementing the law, and last fall, the Kentucky Supreme Court ruled Christian Care Ministry should be considered a regulated insurance plan since its members pool their risk. The group says it believes an agreement can be reached with the state, Maynard reports.

The issue will be debated in Arizona, Georgia, Indiana, Maine, Montana, North Carolina and South Carolina this year, in part because conservative legislators are eager to sidestep implementation of the health reform law. (Read more)