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Health Care Reform Memo:
August 19, 2013

Deloitte Center for Health Solutions publication


The health care reform memos are issued on a weekly basis, highlighting news from the previous week's activities in the administration and implications for the C-suite and various stakeholder groups.

My take: health system transformation is a long journey 

From Paul Keckley, Executive Director, Deloitte Center for Health Solutions

In the past week, many Egyptians have died in the conflict over the country’s governance between the Muslim Brotherhood and the military government that came to power July 3 with the downfall of the Morsi regime.

Leaders in Iran, Afghanistan, India and China announced changes in their governments’ policies intended to protect their national interests and control their markets more autonomously.

Conflicts in at least 30 of the globe’s 192 countries continued—in some cases, civil unrest that’s seemingly decades old.

And at home, with Congress home for its August recess, coverage focused on mixed signals about the U.S. economic recovery and of late, the pending opening of health insurance exchanges (HIX) for individuals and small businesses October 1.

I am a health care industry guy. My natural appetite is for reading health care journals and trade publications about how this industry representing 17.9 percent of our gross domestic product (GDP) is performing, who its winners and losers will be and how innovation is changing the operating models and capital flows into and out of each sector. I easily gravitate to stoic assessments of its fundamental challenges—labor intensity, capital intensity, regulatory complexity, structural fragmentation and costs—because those are my comfort zones. And I perk up when news reporters cover the industry often taking issue with overly simplistic or inaccurate coverage.

Global conflicts, poverty that’s standard fare for one-third of the globe’s population, undeveloped systems of care and any number of other important topics don’t naturally get my attention. And studying a piece of legislation, like the Affordable Care Act (ACA), or any other, is not my idea of fun reading.

The U.S. health care system is in the cross hairs of changes that aren’t comfortable for many. Each sector is circling its wagons to protect its self-interests and defend its conventional role. Some efforts require awkward alliances outside the sector: insurers and hospitals, primary care and specialty medicine, biotech and pharma and so on.

Here’s what I am learning as I age…

The health system is not the centerpiece of everything that matters in the U.S. It’s an important part of our complicated society that also requires investments in defense, agriculture, education, infrastructure and others, while balancing the needs of those who have and have not. But events on the world stage and dizzying news cycles mean our industry must increasingly see itself in the broader context of the global human drama and its economy.

Understanding the health care system takes effort. Time is precious. Most in the health care industry are busy, so we default to time-savers—PowerPoint presentations with speaker notes prepared by others, talking points that make good sound bites, trade associations’ legislative summaries and so on. Though helpful, they sometimes mask lack of personal knowledge about this full scope of this industry—the issues, challenges, innovations and constraints facing sectors other than our own. It takes ongoing, persistent personal study, nothing less. And it requires study outside health care—to world affairs, to other industries, to the lessons of history—to understand health care in its proper context.

We are prone to live in our comfort zones. Walter Lippman, famed journalist and author, wrote “When all think alike, no one thinks very much”. That’s a timely message in our industry. Leaders surrounded by “yes men” enjoy less friction in their role but jeopardize the long-term viability of their organizations. Listening to the opinions of those with whom we differ and engaging with those for whom “health care” is seen through a different lens is necessary to competent leadership. And as accessible, affordable health care is juxtaposed against other societal challenges such as hunger, literacy and poverty, our solutions should be sensitive to the dynamics of our increasingly pluralistic society at home and complex markets abroad.

There’s a natural tendency for those of us in health care to default to views that support our strongly held predispositions, especially when under attack. And it’s understandable that with looming deadlines for compliance with new rules and regulations and ever-present demand for transparency and cost cutting, we’re always in a rush to hit short-term milestones. The underlying premise of health reform is that our system is not performing as it should. That lends itself to defensiveness and short-term strategy for survival or competitive advantage.

Health system transformation is a long journey. As a system, our changes span decades: we celebrated Medicare’s 48th birthday July 30—one of many trans-generational examples. The implementation of the ACA, imperfect as it is, spans 2010-2018—yet another.

Health system transformation will come as we think and engage outside our personal and professional comfort zones. The world is small. Conflicts in Egypt and elsewhere, economic challenges in China, Japan and India, populist movements in emerging markets are as relevant to the future of our industry as are our efforts in basic science toward person-centered medicines and in integrating the financing and delivery of care more seamlessly.

Our industry’s future is bright, but it is not without challenges that are likely to take us beyond our traditional comfort zones.

Paul Keckely

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Implementation update 

$67 million awarded to HIX navigators 

Last Thursday, U.S. Health and Human Services (HHS) awarded grants totaling $67 million to “navigators” (i.e., community organizations, providers and businesses) tasked with educating consumers about how to enroll in health insurance via the health insurance exchanges (HIX). The grants go to 105 organizations in the 34 states that defaulted to federally-facilitated exchanges. The $13 million added to the effort came from ACA’s Prevention and Public Health Fund.

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Study: average federal tax credit to purchase individual coverage through exchanges $2,672 

According to a Kaiser Family Foundation study, the average subsidy will be $2,672 for an individual purchasing the lowest-cost silver plan, which would lower average individual premium costs on the HIXs 32 percent. The average subsidy for a family purchasing the lowest-cost silver plan would be $5,548, reducing premium costs by 66 percent. The analysis was based on the 2008 Survey of Income and Program Participation (SIPP), Wave 6 (interview period April to July 2010) data.

Background: eligible individuals earning between 100 percent and 400 percent of the federal poverty level (FPL) can apply for federal tax credits to assist in the purchasing of health insurance on HIXs. The tax credits are calculated based on the cost of the second least expensive silver plan in a person’s living area and family income. For example, a single 27-year-old non-smoker who makes $28,000 per year (244 percent of FPL) that has an annual health insurance premium of $3,163 would qualify for a federal tax credit of $971, which is 31 percent of the total premium cost.

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Oklahoma challenge to ACA proceeds in court 

Last Monday, U.S. District Court Judge Ronald A. White granted Oklahoma permission to proceed with a lawsuit filed in 2011 against HHS’s interpretation of the ACA. The issue: does the ACA authorize tax credits to be awarded to individuals buying insurance on state-run exchanges and federally-facilitated exchanges? The state’s suit contends eligibility is limited to state-based exchanges. Note: Oklahoma plans to have the federal government operate its exchange.

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HIX eligibility update: HHS initiates data sharing with VA, IRS 

Last week, the Centers for Medicare & Medicaid Services (CMS) issued two notices announcing the establishment of a computer matching program (CMP) to connect CMS with the Veterans Health Administration and the Department of Treasury to determine eligibility for the advance premium tax credit and cost sharing reductions under the ACA. Interested stakeholders have 30-days to submit comments.

Related: Friday, CMS announced data sharing with the Department of Homeland Security and U.S. Citizenship and Immigrations Services to allow for the verification of immigrant, nonimmigrant and naturalized or derived citizen status to assist HIXs in making premium tax credit and subsidy eligibility determinations for individuals applying for health insurance coverage and exemptions. Interested stakeholders have 30-days to submit comments.

Note: “lawfully present immigrants” are eligible for subsidies and tax credits on the HIXs.

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Legislative update 

Meaningful use workgroup releases stage 3 recommendations for comment 

Last week, the Meaningful Use Workgroup that advises the Office of the National Coordinator for Health IT (ONCHIT) issued draft recommendations for meaningful use stage 3 goals and criteria. Scheduled for 2016 to 2017, these draft recommendations focus on using technology implemented in stages 1 and 2 to improve patient outcomes. Highlights:

Stage 3 objectives should be (with the caveat that some might be delayed until after 2016-2017):

  • Tracking more than 50 percent of medication orders electronically
  • Providing the ability to electronically submit patient-generated data
  • Tracking medical devices on 80 percent of implant patients
  • Ensuring electronic health records (EHRs) can assist with follow-up orders and identify potentially appropriate clinical trials
  • Sending electronic notifications to a patient's primary care provider or other member of the care team following a significant health care event (such as emergency department admission)

(Source: “ONC Workgroup Releases Meaningful Use Stage 3 Recommendations” by Helen Gregg, Becker’s Hospital Review, August 15, 2013)

Implementation and oversight should focus on gaps in EHR functionality, simplify meaningful use reporting requirements so that higher level objective compliance assumes subsumed process compliance and promotes greater patient engagement.

Related: most physicians believe that EHR systems can improve patient outcomes but half say the cost of EHRs outweigh the financial benefit, according to athenahealth's Physician Sentiment Index based on 1,200 physician EHR users polled in March. Highlights:

  • 69 percent have favorable view of their EHRs opinion vs. 18 percent unfavorable
  • 55 percent said patient care benefits of EHRs outweigh the costs
  • 51 percent said the financial benefits of EHRs do not outweigh the costs

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AHRQ report: health IT alone won't improve quality in primary care settings 

The Agency for Healthcare Research and Quality (AHRQ) report based on its analysis of 24 primary care health information technology (HIT) projects funded between 2007-2012 found the use of HIT correlated to increased adherence by providers to processes related to evidence-based care recommendations, improvements in patients' health status and improved clinical outcomes for patients with chronic diseases if coupled with other workflow changes.

Source: “Findings and Lessons from the Improving Quality Through Clinician Use of Health IT Grant Initiative” based on 24 projects funded between 2007-2012: 21 in primary-care settings and 3 in mental health and dental offices. (

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OIG report: majority of critical-access hospitals do not qualify for cost-plus Medicare reimbursement 

The HHS Office of the Inspector General (OIG) released a report last Thursday that concluded that two-thirds of the over 1,300 U.S. critical-access hospitals (CAHs) (rural/remote hospitals with 25 or fewer beds) that are paid 101 percent of costs should not receive cost-plus funding since they are not remote: 846 of the CAHs were less than 35 miles from another hospital and 71 were less than ten miles from the nearest hospital.

Background: Since 1997, CAHs have been paid 101 percent of their costs to provide services to residents of remote areas vs. traditional Medicare hospitals that receive payments based on uniform fees and covering about 93 percent of costs of Medicare patients.

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CMS miscalculated inpatient rehab compliance, House committee looking at reduction in post-acute costs 

This summer, CMS incorrectly calculated that ten inpatient rehabilitation hospitals (IRFs) were not complying with the 60 percent rule (60 percent of the facility’s patients must have one or more of a set of medical conditions), causing many IRFs to undergo unnecessary medical reviews. CMS is in the process of rethinking how it calculates compliance with the current threshold but recently delayed those changes for a year.

The U.S. House Ways & Means Committee is looking to reduce Medicare post-acute spending in four post-acute sectors, including a 75 percent rule proposal applied to IRFs. IRFs that fall below the threshold get paid at lower, acute care hospital rates.

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State update 

HIX update 

Seventeen states have released health insurance premium rate information for plans to be sold on the HIXs beginning October 1. To see the number of carriers operating in each state, see Deloitte Center for Health Solutions HIX map, click here.

Sixteen states—12 led by Democratic governors, three led by Republicans, one Independent—and the Democratic mayor of D.C. have announced plans to operate state-based exchanges. Seven states—five led by Democratic governors and two led by Republicans—will participate in state-partnership exchanges. The remaining 27 states will default to a federally-facilitated exchange.*

State-based exchange State- partnership exchange Federally- facilitated exchange
CA, CO, CT, DC, HI, ID**, KY, MA, MD, MN, NM**, NV, NY, OR, RI, VT, WA AR, DE, IA, IL, NH, MI, WV AK, AL, AZ, FL, GA, IN, LA, KS, ME, MO, MS, MT, NC, ND, NE, NJ, OH, OK, PA, SC, SD, TN, TX, UT*, VA, WI, WY

Democratic Governor Republican Governor Independent Governor

*UT: individual market will be a federally-facilitated exchange; small business health options program (SHOP) will be state-based.

**NM & ID: federal government will help run the individual market. States will continue to maintain plan management and consumer assistance functions; HHS will operate the IT system. SHOP will be state-based.

(Source: HHS, KFF and National Association of State Health Policy)

  • Last Friday, Massachusetts insurance department announced insurance rates were projected to increase 2 percent in 2014.
  • Oregon announced that its state-based exchange, Cover Oregon, will not be ready for consumers to sign up for coverage on their own by the October 1 open enrollment deadline. Individuals will need to sign up for coverage via an insurance broker or state aide. According to state officials, Cover Oregon will need several weeks to sort out technological issues, customer support and internal processes. The U.S. Government Accountability Office (GAO) and the HHS OIG have acknowledged that all 50 states may not be prepared for a full insurance marketplace launch by October 1, 2013.
  • Mississippi Insurance Commissioner Mike Chaney is requesting to run the Small Business Health Options Program (SHOP) for small employers on the federally-facilitated exchange. The federal government would continue to run the state’s HIX individual market. If HHS approves Chaney’s proposal for the SHOP, the state-run SHOP would be fully operational by June 2014. Currently, Utah is the only other state that will split individual and SHOP exchange responsibilities with the feds.
  • Minnesota has applied for a $55 million federal grant to help fund the operation of its state-based exchange (MNsure) next year. The grant would cover salaries for about 166 full time employees and cover spending on technology, marketing, customer service, administration and other items. MNsure is expecting the award on October 1, 2013.
  • Last Tuesday, D.C. officials awarded $6.4 million in funds to community organizations to hire over 150 specialists to educate the uninsured and hard to reach populations on how to enroll in the state-based exchange. Approximately 42,000 people, or 7 percent of the District’s population is uninsured—a majority of which are under 35 years old.

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Medicaid expansion update 

To date, 23 states and DC have announced they will or are likely to expand their Medicaid programs; 24 states have indicated they will not expand their programs in 2014. Currently, 36 states are out of session, six are in session, eight are in session year-round and two are in special session:

Expected to expand Medicaid Will not expand Maybe

Democratic Governor Republican Governor Independent Governor

(Sources: NASHP and Kaiser Family Foundation. Updated as of July 1, 2013)

  • A New Hampshire commission tasked with studying Medicaid expansion is scheduled to make a recommendation on whether the state should expand in early September.
  • State Medicaid spending in Ohio is projected to reach $43.4 billion by 2025 with a growth rate of 7.2 percent per year. With Medicaid expansion, the growth rate could be maintained at 3.5 percent per year, resulting in projected Medicaid costs of $37.2 billion by 2025 per an analysis from the Health Policy Institute of Ohio and Ohio State University John Glenn School of Public Affairs. Ohio policymakers are still debating expansion, which would add 366,000 Ohio residents to the program.

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State round-up 

  • Last week, a California Senate bill (No. 491) proposing to expand nurse practitioners’ scope of practice was approved by the state Assembly committee. The legislation is expected to be heard before the Assembly Appropriations Committee this week.

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Industry update 

Hospital consolidation gets attention 

The New York Times front page story August 13 by Julie Creswell and Reed Abelson, “New Laws and Rising Costs Create a Surge of Supersizing Hospitals” put a spotlight on increased consolidation among acute care hospitals. America’s Health Insurance Plans’ Chief Executive Karen Ignagni challenged the reason for the increase in hospital consolidation activity: “The rhetoric is all about efficiency. The reality is all about higher prices.”

Related: Last week, Representative Jim McDermott (D-WA) sent a letter to the U.S. GAO requesting the Agency conduct a study about merger and acquisition (M&A) activity among providers and its impact on Medicare program costs and quality. The report would include an analysis on hospital-hospital and hospital-physician M&A trends and Medicare service utilization and spending associated with consolidation.

For background, download Deloitte Center for Health Solutions’ Hospital Consolidation: Analysis of Acute Sector M&A Activity (

My take: The posturing of hospitals vs. health insurance plans is not a new skirmish. Since the prospective payment system was implemented 30 years ago, each party has sought to gain leverage at the expense of the other: it’s not a new story, just the latest chapter. And as budgets for health care face intensified pressures from employers and policymakers, the tension between the two is likely to intensify. At issue: the role each plays in coordinating care for patient populations and the financial incentives supporting those roles. Plans contend their core competence in care management and historic focus on cost containment is needed as the hub of local health systems. Hospitals contend their core competence is the domain of caring for patient populations across the continuum—ambulatory, acute and post-acute— given aging of the population and clinical innovation that’s constantly changing. Trust between the two is guarded and negotiations increasingly testy. Examples: see the next two items in this section…

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Hospitals at odds with Medicare Advantage plans about 2 percent sequestration cuts 

Last Tuesday, the American Hospital Association (AHA) and 17 state hospital associations asked CMS to clarify a payment dispute with Medicare Advantage (MA) plans that 2 percent sequestration cuts cannot be passed through as in their contracts with hospitals. AHA says MA organizations have passed along a reduction based on a misinterpretation that Medicare rates, rather than payments, have been reduced by budget sequestration. The state groups say that CMS instructed MA plans to review contracts individually to determine whether and how sequestration might affect an MA plan’s payment to its contracted providers, inferring that plans could not automatically pass the reduction of premium payments to MA plans on to providers. They also say it was implicit that plans should not pass along the sequestration reduction to hospitals where payments to providers use Medicare fee-for-service rates purely as a reference point as CMS had not changed the published rates for payments.

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Hospitals ask CMS to require exchange plans to pay claims during ACA grace period 

Thursday, hospital trade groups asked CMS to reverse its policy on the ACA's mandatory grace period when subsidized consumers do not pay premiums. The current policy states that qualified health plans (QHPs) must pay claims for the first 30 days of the grace period but gives issuers the option of holding claims for the final 60 days. Hospitals believe the services provided in the grace period might be unpaid services resulting in providers exiting the program. Under the CMS policy, insurers may retroactively deny all pending claims for services rendered during those 60 days if the enrollee ultimately fails to pay premiums.

The American Hospital Association, Federation of American Hospitals and Association of American Medical Colleges asked CMS to require that QHPs pay for all services rendered during the three-month grace period. The hospitals say CMS's policy subjects enrollees to significant liability for services received during the second two months of the grace period and the approach also unfairly burdens providers because they will not get paid by the health plans and will have to wait to try to get paid directly by the patient.

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Health insurers advertising for expanded coverage in 2014 

Health insurance companies will invest up to $1 billion for advertising encouraging consumers to purchase coverage through HIXs over the next two years, with the majority going to local TV networks. In 2014, this new category is expected to be among the top revenue generators for TV stations, along with automobiles, political ads, fast food and medications.

(Wall Street Journal, “Health ads stream in”, August 15, 2013)

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Technology price index: average price paid for PET/CT systems dropped 21 percent in last year 

The average price paid for PET/CT systems dropped 27 percent from May to June and 21 percent in the last year as hospitals purchased lower cost models according to the most recent Modern Healthcare/ECRI Institute Technology Price Index.

The Technology Price Index uses monthly and annual price data for about 30 supply and capital items purchased by hospitals and other healthcare providers, based on three-month rolling averages. The costs of PET/CT systems used for determining the stages of cancer and monitoring cancer treatment range from $1 million (64 slice systems) to $2.7 million (128 slice systems).

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Pioneer ACO results update 

Of 32 Pioneer ACOs:

  • 18 generated savings (13 of these shared $76.1 million cost saving pool) vs. 14 generated losses for Medicare (2 of these owe Medicare $4.5 million)
  • 32 reported on all quality measures
  • 25 had lower risk-adjusted hospital admissions
  • Nine are transitioning out of the Pioneer program: seven will transition to the Medicare Shared Savings Program (Section 3022 ACA) and two will drop out altogether

Source: CMS July, 2013

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American Medical News to shut down 

Last week, the American Medical Association (AMA) announced it was shutting down American Medical News and its companion site AmedNews due to growing operating losses. The publication has a print circulation of about 230,000.

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CMS physician fee schedule proposal criticized by AMA 

The AMA issued strong criticism of CMS’s proposed 2014 Medicare physician fee schedule, calling it “an arbitrary new policy” that would lower payment for more than 200 services that Medicare pays more for when the service is provided in a doctor's office and less when it's performed in a hospital outpatient department or ambulatory surgery center. The AMA credited “the ongoing efforts” of the Specialty Society Relative Value Scale Update Committee, commonly known as the RUC and the AMA Current Procedural Terminology (CPT) Editorial Panel, for convincing CMS that current evaluation and management codes “do not adequately capture the costs of providing care to all Medicare patients”. It goes on to say that the CPT panel and the RUC will work with CMS to “discourage overly burdensome requirements and to ensure that all the necessary resources are captured in the payment”.

Responding to criticism of the RUC, the AMA summary noted that, using “objective screening criteria”, the panel has reviewed about 1,300 “misvalued service” codes and prompted CMS to redistribute $2.5 billion within the fee schedule between 2009 and 2013.

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Study: behavior changes prompted by lab results problematic for older adults 

A working paper for the National Bureau of Economic Research found poor results from blood sugar and blood pressure tests did not prompt healthy changes to diet and exercise among older adults.

The research analyzed results from the 2006, 2008 and 2010 National Institute on Aging's Health and Retirement using biomarkers such as blood pressure and blood sugar levels from randomly selected respondents, who are ages 50 and older. Those with high laboratory results were notified and instructed to see a physician.

The study found behavior changes among 0.7 percent of the 2006 survey respondents with lab results and those with a prior diagnosis of high blood pressure reported less smoking and less intense drinking, but less light exercise.

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Research snapshots 

New industry and peer-reviewed studies of note to health system transformers…

Studies conclude that limiting residents' work hours does not hurt patient safety, but results in less time with patients 

Background: The Accreditation Council for Graduate Medical Education set an 80-hour weekly work limit (averaged over four weeks) in 2003 based on concerns that patient safety might be compromised by longer hours. Further limits, including restricting first-year residents to 16-hour shifts went into effect in 2011. Two studies in the Journal of Internal Medicine focus on results.

University of Pennsylvania researchers studied mortality rates within 30 days of admission for 13.7 million Medicare patients admitted for heart attack; gastrointestinal bleeding; congestive heart failure; and general, orthopedic, or vascular surgery between July 2000 and June 2008. Heart attack patients had a 16.7 percent mortality rate during the 2000-01 academic year, but only a 13.9 percent rate in 2007-08. Mortality rates for congestive heart failure patients fell from 10 percent to 9.3 percent; and mortality rates fell from 12.3 percent to 10.9 percent for vascular surgery patients.

Findings: mortality rates at teaching hospitals stayed relatively the same in the first three years after work-hour limits were set and improved in the fourth and fifth years. “These concurrent changes make it impossible to determine the incremental impact of any single intervention, but we can clearly say that mortality did not worsen following implementation of the 2003 duty hour rules.”

A Johns Hopkins University and University of Maryland research team observed 29 first-year internal medicine residents at two “large academic medical centers in Baltimore” for a total of 873 hours in January 2012 and recorded how they spent their time. The first-year residents, also known as interns, were observed spending 12 percent of their time in direct patient care, 64 percent in indirect patient care, 15 percent in education activities and 9 percent in miscellaneous activities such as walking (which accounted for 5.9 percent of their total time), eating, socializing and sleeping. In all, computer use accounted for 40 percent of their time. The researchers cited 1989 and 1993 studies that found interns spent 18 percent to 22 percent of their time in direct patient care, 42 percent to 45 percent doing documentation and up to 40 percent on miscellaneous activities including eating and sleeping.

Findings: time spent on patient care didn't differ significantly between the two institutions, day and night shifts, or male and female interns.

Citations: “In the Wake of the 2003 and 2011 Duty Hours Regulations, How Do Internal Medicine Interns Spend Their Time?” Lauren Block, Robert Habicht, Albert W. Wu, Sanjay V. Desai, Kevin Wang, Kathryn Novello Silva, Timothy Niessen, Nora Oliver, Leonard Feldman J Gen Intern Med. 2013 August; 28(8): 1042–1047.

“Teaching Hospital Five-Year Mortality Trends in the Wake of Duty Hour Reforms” Kevin G. Volpp, Dylan S. Small, Patrick S. Romano, Kamal M. F. Itani, Amy K. Rosen, Orit Even-Shoshan, Yanli Wang, Lisa Bellini, Michael J. Halenar, Sophia Korovaichuk, Jingsan Zhu, Jeffrey H. Silber J Gen Intern Med. 2013 August; 28(8): 1048–1055.

My take: The August 2013 issue of the Journal of General Internal Medicine offers a wide ranging collection of articles about aspects of medical education including the two above. The future of medical education in the U.S. is uncertain. Curricular changes that equip students to embrace technologies that support clinical decision-making, team-based care coordination and engagement with consumers are underway, but changes in medical education face enormous resistance. And innovations that disrupt the status quo face huge hurdles, many considered threatening to incumbents. Medical education is much more than “teaching doctors”. It is sharing information about the appropriate ways to diagnose and treat medical problems deploying the full range of professional skills and competencies of the health care workforce and engaging individuals actively in the process.

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Re: whether the ACA will require more changes: “I have to believe that’s going to be the case. Anytime you implement something like this, it’s new and there’s no doubt that it’s complicated, there will be changes along—there should be changes along the way.”

—former White House adviser David Axelrod on Morning Joe, MSNBC Friday, August 16, 2013

“We’re not going to let this dangerous and ludicrous proposal be touted without a response — we’re going to every state they are [going to] and our presence will be felt,” We’ll hold our own events in some cases with dozens of concerned citizens, elected officials, doctors, nurses, students, seniors and people from across the spectrum who are or will benefit from the law.”

—Americans United for Change and Protect Your Care announcement last Friday about its tour to counteract Heritage Foundation’s August tour of nine cities encouraging defunding of the ACA

“As lower wage occupations have proliferated in the past several years, Americans are increasingly unable to make a living at their jobs. They work harder and are paid less than workers in other advanced countries. Ad their wages have stagnated even as executive pay has soared.”

—“Fast Food Fight”, New York Times lead editorial, August 8, 2013

“Accountable care organizations (ACOs) are among the most widely discussed models for encouraging movement away from fee-for-service payment arrangements. Although ACOs have the potential to slow health spending growth and improve quality of care, regulating them poses special challenges. Regulations, particularly those that affect both ACOs and Medicare Advantage plans, could inadvertently favor or disfavor certain kinds of providers or payers. Such favoritism could drive efficient organizations from the market and thus increase costs or reduce quality of and access to care. To avoid this type of outcome, we propose a general principle: Regulation of ACOs should strive to preserve a level playing field among different kinds of organizations seeking the same cost, quality and access objectives. This is known as regulatory neutrality. We describe the implications of regulatory neutrality in four key areas: antitrust, financial solvency regulation, Medicare governance requirements and Medicare payment models.”

—Bacher et al, “Regulatory Neutrality Is Essential To Establishing A Level Playing Field For Accountable Care Organizations”, Health Affairs August 2013

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Fact file 

  • Health spending as share of economy: “health care prices increased 1.1 percent in July 2013 relative to July 2012, only a tenth above the May rate. The 12-month moving average, at 1.6 percent, represents a new low for the data. National health expenditures grew 4.3 percent in June and spending growth is averaging 4.1 percent for the first half of 2013, barely above the record low levels seen annually since 2009.” (Source: Altarum Institute, “Health share of economy drops due to data revisions: Health price, spending and jobs growth contained,” August 16, 2013)
  • Medicare vs. private insurance: Medicare enrollees more satisfied than those with commercial coverage: 8 percent rate Medicare unfavorably vs. 20 percent who rate their commercial coverage negatively; access problems are lower for Medicare enrollees vs. commercial (23 percent vs. 39 percent) and overhead costs for Medicare are lower (1.4 percent vs. 12-25 percent). (Source: The Commonwealth Fund, “Medicare beneficiaries less likely to experience cost-and-access related problems than adults with private coverage,” July 2012)
  • Obesity rates in 2012: “at least 30 percent of adults were obese in 13 states: Alabama, Arkansas, Indiana, Iowa, Kentucky, Louisiana, Michigan, Mississippi, Ohio, Oklahoma, South Carolina, Tennessee and West Virginia. In 2011, a dozen states reached that threshold. Louisiana and Mississippi led the list. In both, nearly 35 percent of adults were obese. Colorado was lowest, with less than 21 percent obese.” (Source: CDC telephone survey referenced in Modern Healthcare, “Adult obesity very high in 13 states; many in the South,” August 16, 2013)
  • Related: obesity accounts for 18 percent of deaths among African American and white Americans between the ages of 40 and 85. (Source: American Journal of Public Health August 15, 2013)
  • 2012 health costs: hospital readmission rates for Medicare patients dropped to 17.9 percent from 19 percent; health insurance premiums increased 3 percent. (Source: USA Today, “White House touts slow increase in health care costs,” July 29, 2013)
  • 340B participation: 14,076 participants in 2009 vs. 16,572 in 2011. (Source: Health Resources and Services Administration data referenced in Modern Healthcare, “Who benefits from drug discounts?” July 13, 2013)
  • U.S. fertility rate: increased from 1.89 per female in 2012 (25 year low) vs. 1.90 in 2013. (Source: CDC)
  • Stress: in 2012, 67 percent of U.S. adults regularly experienced physical symptoms due to stress. (Source: American Psychological Association)
  • Retail market for stress reduction: $521 million spent for relaxation drinks in 2011; massage chairs $250 million; therapeutic massage is $13 billion industry. (Source: Nielsen data referenced in USA Today, “All stressed out? Businesses will sell you some peace,” August 5, 2013)
  • Initial public offerings: up 35 percent in 2013 year to date, with 116 deals vs. 128 for 2012, 125 in 2011, 154 in 2010, 63 in 2009 and 31 in 2008. (Source: Renaissance Capital referenced in USA Today, “IPOs returning to Wall Street after deep freeze,” August 4, 2013)
  • Insurance awareness: 14 percent of adults understand basic insurance. (Source: Carnegie Mellon Survey, July 2013)
  • Avoidable readmission penalties on hospitals: $227 million in fines against 225 hospitals in FY2013 vs. 214 hospitals fined $280 million in FY2012. (Source: CMS)

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