Trying to make sense of the plans for US health care reform is a bit like, as one observer told Croakey, “snorkelling through mud”.
Below are some links to articles that fill in some of the details, as well as a report from Croakey correspondent Jon Wardle, who says the reform package contains far-reaching proposals whose impact may not yet have been fully appreciated – and that may offer some lessons for Australian reform efforts.
This report in the New England Journal of Medicine notes that more than half of the $940 billion price tag for health care reform would be covered by reductions in the growth of payments to health care providers (except physicians) and new fees on insurers, pharmaceutical manufacturers, and medical suppliers. Medical groups were split over the reform, with the American Medical Association (AMA) and the American College of Physicians in support, whereas a coalition of some state medical societies and specialty organizations was opposed.
The editorial in the BMJ gave the reforms a mostly glowing review (only the abstract is freely available) but notes two “particularly troubling” shortcomings, including that at least 5.6 million undocumented immigrants will be left uninsured, “which is an affront to the notion of health care as a fundamental human right”. Secondly, women on low incomes who receive federal subsidies to buy insurance on the exchanges are barred from using them to pay for an abortion, which arguably curtails poor women’s reproductive rights.
Ray Moynihan also reports in the BMJ (abstract only freely available) that the reform package would require all manufacturers of drugs, devices, and biologicals to provide details to the government of all payments they make to doctors and teaching hospitals, which will then be made publicly available on a searchable website. Companies will have to disclose consulting fees, honorariums, gifts, entertainment, food, travel, education, research, speaking fees, and grants. But the requirements are weaker than a previous version of the Sunshine Act, which would have forced the industry to disclose payments to a much wider group of recipients, including pharmacists, patient advocacy groups, medical schools, and providers of sponsored medical education. The language in the final bill means that only payments to doctors and teaching hospitals will have to be disclosed.
Meanwhile, Jon Wardle has filed this report from the US:
“Those observing the recent passage of the US health reform legislation from the Australian sidelines may have been left wondering just why Joe Biden was so damned excited about a health bill that seemingly failed to live up to everyone’s expectations
After all – where’s the public option? I mean it’s not really universal health care after all.
Notwithstanding the fact that expanding insurance coverage from 83% to 95% of the US population is a pretty good achievement in its own right, while we’ve all had our ‘insurance goggles’ on, most people have ignored the fact that in the health reform bill there is actually a substantial amount of, well, real reform.
Even the insurance ‘reforms’ aren’t that bad. Children are now listed as dependents on their parents policies until the age of 26 – closing that ‘getting on your own two feet gap’ during the stage of life when getting insurance is not usually one of your priorities. Health insurers are also now required to treat children with pre-existing conditions.
Tax credits and rebates make the imposition of mandatory insurance coverage a little easier for businesses and individuals (even for those earning up to 400% of the federal poverty level) to meet these requirements.
A number of consumer protection mechanisms, regulations, obligations and caps have been put in place – not as many as initially hoped admittedly, but quite a few nonetheless – to make sure that insurance companies don’t abuse their new compulsory role.
It may from the outset seem absurd to penalise those without insurance – though in reality the penalties are broadly similar in both size and structure to the Australian Medicare levy. Think of it as public funding by stealth – the best you can hope for in a society founded on the cult of the individual.
Even more stealthily, The CO-OP program will encourage the creation of new member-run non-profit insurance providers in all states and territories. Exchanges will also be set up to allow purchasers to identify best deal insurance, in addition to a government run website comparing plans.
And whilst there is some opposition, it is worth noting that similar hostility was experienced by Whitlam in Australia when he introduced health reform. Eventually healthcare became so electorally popular that even John Howard changed tune from openly discussing the dismantling of Medicare at the start of his tenure to becoming its most public advocate at the end (though it may be argued that he continued to attempt dismantling it by stealth).
Though the front page of the Seattle newspaper I read this morning was filled with stories of health insurers choosing not immediately accepting their obligations to treat children with pre-existing conditions or 14 state attorney-generals are mounting legal challenges, it is widely acknowledged that these challenges amount to posturing before an election, and even the insurance companies have admitted they can only get away with ignoring obligations until the full law begins in 2014. However, the Republicans do talk of ‘reforming the reform’ when they eventually get back in office.
But on top of shaking up insurance, the US seems intent on actually changing the way it does health business. Whilst insurance mandates do form a large part of the bill, there are deeper substantive reforms making health wonks turgid with excitement across the US.
Hidden in the legislation are enormous changes to the way healthcare is paid for. Some pundits, perhaps somewhat optimistically, are suggesting that fee-for-service procedural medicine model will be gone in ten years. One of the introduced measures is bundled payment for episodes of care, shared between providers and following the patient, not the procedure.
In fact, a federal research centre will be established specifically to research, design, evaluate and implement different payment structures to reduce overall costs and improve efficiency. This will be complemented by another research centre focusing on comparative effectiveness research utilising patient-centred outcomes.
Primary care and prevention becomes the focus of the plan. Medicare and Medicaid services, currently funded jointly between state and federal governments, will be 100% funded by the federal government for primary care and preventive health services. This will revert to joint funding, but to a minimum of 90% federal funding in 2020 onwards. This offers a clear incentive for state governments, who run the services, to redirect them to a primary care and preventive health focus.
To ensure that practitioners are also encouraged. Services by a primary care provider will attract a significant increase and a 10% premium over normal rates. And the federal government will pick up the tab on these premiums – with an assumption that such an investment now will result in substantial savings later.
In addition primary care providers will be boosted, not just through extension of loan forgiveness programs and training places, but also through advanced primary care training for non-physician workforce, including nurse practitioners, physician assistants and dentists (remember them).
Hospitals are in fact probably the biggest losers in the bill, with their monopolistic hold on the US health system reduced considerably at the expense of community-based delivery and primary care.
To assist in training primary care providers for the challenges of the new health care environment hospitals will lose their monopoly on residency training. Moreover the hoarding of lucrative training slots will be discouraged by allowing any unused slots to be put up for tender to primary care organizations.
To stem the flow of America’s best and brightest becoming merchant bankers and other equally unproductive members of society instead of doctors, the ‘work-them-into-the-ground’ mentality towards young doctors will cease. Part-time work will count towards training hours and fulfill service obligations in federally funded training programs. This provision is also aimed at attracting those who may want a medical career, but not at the expense of having a family or pursuing a research or academic career.
Not content with just moving out of hospitals workplace will also become a major tool for health – with grants for smaller businesses to establish wellness programs. Larger companies may offer incentives up to 30% of coverage value (50% in some cases) to employees to participate in preventive health and wellness programs, ultimately reducing insurance costs for those employers.
Of course, with over 2000 pages of legislation the full tenet of changes cannot be fairly described in one small article. And while there is certainly a long way to go to fix the US system, at the very least substantive measures are being taken to fix it.
When comparing both systems as they stand Australia’s system is undeniably the preferred model. However, Australia’s system was designed to cope well with the health challenges of a time past, and both the US and Australian systems are equally unprepared to face future health challenges.
It’s not that the US system is now better than Australia’s system, it’s just that the trajectory of positive change is far, far steeper.
However, while the US seems keen to actually reform and thrust its health system kicking and screaming into the 21st century, Australia’s solutions offer more of the same – that is to say the same 20th century failing system, but just more of it.”
• Jon Wardle is Trans-Pacific Fellow at the School of Medicine at University of Washington, and NHMRC Research Scholar, School of Population Health, University of Queensland
