The Demographics of Illness and Cost: or, An Old Story About Chronic Conditions

We’ve reported on the distribution of health care costs among populations on numerous occasions here at Health Reform Watch. Over the last decades, our own Professor John V. Jacobi has been espousing reform, at times as almost a voice in the wilderness, as a matter of dealing in caring and cost conscious ways with chronic conditions.

In January of 2009 I noted, quoting HHS reports:

Twenty-five percent of the U.S. community population were reported to have one or more of five major chronic conditions:

• Mood disorders
• Diabetes
• Heart disease
• Asthma
• Hypertension

Spending to treat these five conditions alone amounted to $62.3 billion in 1996. Moreover, people with chronic conditions tend to have other conditions and illnesses. , according to 1996 MEPS data. On an individual level, treatment for the average patient with asthma was $663 per year in 1996, but when the full cost of care for asthma and other coexistent illnesses is taken into account, the average cost was $2,779.

When the other illnesses are added in, total expenses for people with these five major chronic conditions rise to $270 billion, or 49 percent of total health care costs.

Expenses for people with one chronic condition were twice as great as for those without any chronic conditions. Spending for those with five or more chronic conditions was about 14 times greater than spending for those without any chronic conditions. Persons with five or more conditions also have high hospital expenditures. In New York State during 2002, of the 1.3 million different persons admitted to the hospital, the 27 percent with five or more chronic conditions accounted for 47 percent of all inpatient costs.

I have also noted in July of 2009 that

…32% of Medicare costs are attributable to diabetes. It is no stretch to say that if we have a Medicare cost problem in this country (we do), what we really have is a diabetes problem (and, considering Halvorsen’s “we only get it right 8% of the time” figure, a diabetes treatment problem as well).

But first things first. 32% is a mere scooch (yes, that’s the technical term) away from ONE THIRD. That’s an enormous number. If one were to relate this portion of Medicare expense to houesehold expenditures, it occupies a place similar to a mortgage– but an expensive mortgage in a house that no one wants to live in.

And now a further health cost demographic from NPR’s Marketplace in conjunction with WHYY’s Health Desk, Gregory Warner. And yes, it’s about chronic conditions:

Tess Vigeland: Take everything this country spends on health care — the government, employers, patients — and it rounds out to a little over $8,000 per person on average.

But averages don’t really tell the whole story. A study by the National Institute for Healthcare Management found that in 2009, 15 percent of us had no health care costs at all. While at the other end, 5 percent accounted for almost half of all health care costs: $1.2 trillion.

….

Gregory Warner: Maybe you picture this high-cost patient as someone at the end of life, confined to a hospital bed and hooked up to expensive medical devices. But more likely, you’ll find this person at home or in a nursing home, living with five or more chronic conditions.

Medicaid Incentives for Healthy Behavior: Turning That Cigarette Back Into Cold Hard Cash

The Centers for Medicare and Medicaid Services (CMS) recently announced a $100 million program through which states can reward Medicaid enrollees who adopt healthy behaviors. The grant program is part of the Patient Protection and Affordable Care Act and allows states to offer incentives for tobacco cessation, controlling or reducing weight, lowering cholesterol or blood pressure, and avoiding the onset of diabetes or improving management of the condition. The goal of the program is prevention, as spending on chronic conditions is said to account for more than 75 percent of annual healthcare expenditures in the U.S.

According to CMS Administrator Dr. Donald Berwick,

With the right incentives, we believe that people can change their behaviors and stop smoking or lose weight. Not only can preventive programs help to improve individuals’ health, by keeping people healthy we can also lower the nation’s overall health care costs.

States are not limited to direct cash incentives– proposed plans could include waiving premiums, deductibles and coinsurance payments, or offering coupons or gift certificates for weight management classes or tobacco cessation counseling.

CMS has based the program on data suggesting a short-term change in behavior when people are offered monetary incentives. Current research shows that while people may be internally motivated to make healthier decisions because of future consequences, they don’t often weigh those delayed outcomes with the immediate reward of engaging in the behavior. For example, knowing that smoking increases lung cancer risk 20 years from now isn’t always going to stop someone from smoking a cigarette. The benefit of monetary incentives is therefore their immediacy– they replace one unhealthy reward with another less harmful one. In short, CMS is betting that someone would put down that cigarette right now if you just paid them to.

But the experience of making healthy decisions seems to align more with what Mark Twain opined in Following the Equator,

He had had much experience of physicians, and said “the only way to keep your health is to eat what you don’t want, drink what you don’t like, and do what you’d druther not.

Though an individual may make a healthy choice now because they would prefer a cash incentive, that doesn’t automatically change their instinctual behavior. Someone could theoretically be convinced to take a grocery store gift card instead of buying a fast food dinner, but that does not change how much they enjoy the taste of a cheeseburger. In many circumstances, people engage in certain behaviors simply because they like to. For this very reason, critics are quick to point out that monetary incentives are unlikely to spur long-term changes in unhealthy habits. Critics also note that there is little research on whether these incentives will be successful in the Medicaid beneficiary population.

What may redeem the initiative from these criticisms is that CMS is candidly calling it a  ”demonstration program,” designed to figure out which strategies produce long-term behavioral changes. By allowing states to develop their own programs and keep data on the experience, CMS seems to be hedging its bets, wagering that at least one program will provide a successful model. Further, CMS can use the data to evaluate other factors such as the administrative costs incurred by states in rendering the programs.

Could $100 million federal grant dollars be used to support preventative health in a different way? Of course. But as long as this money is being set aside to incentivize healthy behavior, we may get an answer to whether external motivators spur long term behavior change. I, for one, would love to know just how much money it costs to convince someone to stop smoking, or to consistently trade in that Big Mac for some broccoli. It almost has to be cheaper than what we’re doing right now.

Childhood Obesity: A Problem Worth Solving

[Ed note: We are pleased to welcome Regina Ram to Health Reform Watch. Regina is finishing her first year as a law student at Seton Hall. She graduated from Drexel University with a B.S. in Biological Sciences and minors in Psychology and Anthropology. She completed a Masters in Public Health from Boston University in 2010 with a focus on Health Law, Bioethics and Human Rights. As a graduate student, Regina worked as a legislative advocate for Dana-Farber Cancer Institute and also supported a SAMHSA funded research program to integrate substance abuse treatment into primary care settings. As an undergraduate, she worked as a healthcare writer and authored emerging technology evidence reports on health devices and procedures.]

Just recently, the New York Times published an article describing the attempt of parents in Philadelphia to change the poor eating habits of the city’s children. A concerned group of parents in a North Philadelphia neighborhood takes turns standing outside of corner stores near a K-8 school in the mornings. They don safety vests and walkie-talkies, and their goal is to discourage kids from stopping at corner stores to buy snacks like soda and candy before school. The article likens the parents to foot soldiers fighting in a national battle over the diets of children.

As dramatic as that may sound, statistics from the Centers for Disease Control and Prevention (CDC) support the metaphor. Nationwide, obesity rates have more than tripled over the past 30 years in both children and adolescents. Long-term consequences include higher risk for heart disease, type 2 diabetes, stroke, several types of cancer, and osteoarthritis in adulthood. More immediate effects include social and psychological problems like stigmatization and poor self-esteem. Further, caring for these health conditions has significant economic effects on the U.S. health care system. All of these statistics portray a battle well worth waging.

But is a group of parents patrolling a convenience store at 8:00 A.M. going to stop childhood obesity? Probably not. Even if the program dissuades kids from buying morning snacks, that behavior is unlikely to continue once parents are gone. Is it a step in the right direction? Certainly. The Surgeon General’s report on overweight and obesity notes that “families and communities lie at the foundation of the solution to the problem.”

However, any successful solution to decrease childhood obesity rates has to involve parents and communities as components of more comprehensive interventions. The causes of obesity in children are multi-factorial, ranging from diet and exercise to genetic and social factors including socioeconomic status and the built environment. The wide array of contributing factors points to the need for an interplay between public and private action to address childhood obesity.

Outside of the home, schools are a key setting for public health efforts to reduce childhood obesity rates. In particular, the National School Lunch Program can be an effective tool in improving the diets of school-age children. Just this year, the U.S. Department of Agriculture announced recommendations to overhaul the nutrition criteria of food programs for the first time in 15 years. The recommendations include limiting salt intake and the use of starchy vegetables, offering only reduced fat milk and using whole grains. Introducing children to healthier foods can help them understand what to eat and why, and that goes much further towards changing future patterns of behavior.

External factors like marketing and advertising also weigh on children’s decisions to eat certain foods. Recent litigation cases (one noted by Jennifer Jascoll here on the HRW website) have focused on the effectiveness of this advertising on children, as well as the disproportionate impact of such advertising on children of lower socioeconomic status. A New York City Councilman recently proposed a bill to ban fast food toys for meals over 500 calories. Children are generally more vulnerable to social messages, and restricting marketing is a case where benefits clearly outweigh the costs.

While involved parents and communities like the one in Philadelphia are undoubtedly an asset, it is going to take a more orchestrated effort to decrease rates of childhood obesity. Parents need to be empowered to make healthy choices and encourage healthier lifestyles for their children. At the same time, schools need to be working hand in hand with the community to ensure that the messages given at school correspond with the messages children hear outside. However unwieldy the issue seems, any action is to be applauded as preferable to no action at all.

(Note: for a more in-depth discussion of the economic consequences of obesity, see Michael Ricciardelli’s article here on HRW)

Time To Tighten That Belt….

Keep an eye out for the April edition of the American Journal of Medicine.  In it, the Los Angeles Times and U.S. News Health Blog report that you will find a new study from the Centers for Disease Control and Prevention (CDC) which identifies the “diabetes belt.”  Almost 26 million Americans – that’s 8% of the population – have type-2 diabetes, the most common form of diabetes (as opposed to type-1) often connected with weight and physical activity.  In a county-by-county census, the CDC  identifies 644 counties in 15 states where the type-2 diabetes rates are higher (11%) than the national average (8.5%).  Ethnicity, age, weight, and a sedentary lifestyle were found to be key factors.

The Los Angeles Times describes the “belt” as stretching “down the southeastern seaboard, ’round the silty Mississippi Delta and following the Appalachian Mountains north across Tennessee, Kentucky and West Virginia” and including parts of Pennsylvania (but stopping short of New Jersey).  Dr. Lawrence Phillips, who studies diabetes at Emory University, told Reuters that

[s]ince diabetes is one of what we call the silent killer diseases … it’s important for the public to be aware that this is a problem….  What this does is to give health care providers ammunition. A provider can say, ‘We’re in the diabetes belt. All of these things are increased in part because of the way we live, and all of these things can be improved to a certain extent. Our risks can be decreased … by eating healthier and to the extent that we can, being less sedentary.’”

The “diabetes belt” appears to overlap with the decades-old “stroke belt” and the recently identified “heart failure belt.” Be sure to check out whether your home state falls within one of these belts.  And then remember to tighten yours.

A Trip to the Cardiologist, A Lipitor Future, and “Why Doesn’t My Health Insurer Want Me to Know if I’m Likely To Have a Heart Attack?”

I visited with a cardiologist last week. My inadvertent but no less harmful dalliance with two different kinds of drain cleaner having set off an entire chain of long past due check-ups. A little more than two years shy of fifty, I listened intently as I was told that although I had had a good run, a diet composed of grease, chocolate, quick carbs, coffee and unfiltereds was simply not going to cut it as I ventured into the last half of life (last third is more likely, but also more painful to consider– and I suppose for the doctor, harder to say).

I now look forward to a battery of tests. The first, done today, is designed to detect artery calcification: “Coronary calcium is specific for atherosclerotic plaque and can be detected with high sensitivity and accurately quantified by computed tomography (CT) to help predict future cardiac events related to coronary artery disease.” I had to pay for the test out of pocket as it seems my insurance company deems such screening unworthy of coverage– despite the tests highly vaunted predictive power. Quite a few people in this country die each year from heart disease–hard to understand how it wouldn’t be worth the $318 to know who was vulnerable–and if unchecked, destined for the very expensive Intensive Care Unit.

Tomorrow brings an echocardiogram and my first ever stress test. I readily assented to the tests as it is good, I suppose, to know where one stands. But in addition to testing and making dietary changes, the doctor also wants me to start taking Lipitor. A statin prescribed to lower cholesterol. I did not react well.  The prescription it seems is, in more than one sense, a life sentence.

And I am generally suspicious of the pharma zeitgeist. And terribly so as it concerns myself.

The prescription is not, in this instance, a treatment for an acute condition, it treats the endemic. If one has risk factors, it is prophylactic and is prescribed to reduce the risk of heart attack, stroke and other heart diseases. It is doubtful whether once I start taking this drug I will ever stop. There is no foreseeable time (while alive) that I will wish to stop reducing the risk of heart attack or stroke. And that I suppose is the essence of the onset of age– piling up prescriptions. A daily regimen that will follow one to the grave–only the dosages or the brand names changing as each day welcomes a regimen of pills. In short, this prescription feels like the onset of dependence. The forward guard, if you will. A harbinger of a pharmaceutical future.

Seeing my, shall we say, chagrin, the cardiologist told me that, like over 50% of the cardiologists he knows, he takes a statin. “We’ve seen the data.” Another recently told me  “Yeah, I take it. They should put it in the water.”

And so I will take this drug. But I am not happy. I am loath to think of myself in these terms. Only 12 or so years ago I played starting defensive tackle on a semi-pro football team. Soon I will be discussing my cholesterol numbers and God only knows what other numerical health indicators at cocktail parties.

The essence of good health is simply not having to think about it. It is not an issue. I have to think about it now. And I have a sneaking suspicion, that like when I first became a parent, the terms of my existence have just changed.

UPDATE

Photo credit to incurable_hippie.

Mental Health Parity and Health Reform

The Interim Final Rules on mental health parity were issued last Friday by the various agencies responsible for the administration of the  Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 (MHPAEA).  The rules provide interim permanent answers to some of the interpretive questions raised by the MHPAEA.  I’ll provide a couple of early reactions to the rules, and briefly describe why the parity rules in no way lessen the need for broader reform for the benefit of people with serious mental illness.

MHPAEA, effective for large (over 50) public and private health coverage for plan years beginning after October 3, 2009, adds substantial protections for mental health and substance abuse (MH/SA) coverage.  For example, it:

• Prohibits covered plans from imposing deductibles, copayments, and out-of-pocket limits on MH/SA coverage higher than those imposed for medical/surgical coverage;
• Prohibits restrictions on days of hospital coverage and duration/scope of MH/SA treatment beyond limits imposed for medical/surgical coverage; and
• Prohibits exclusion of out-of-network coverage for MH/SA treatment if such exclusions do not apply to medical/surgical coverage.

Advocates have been looking to the rules for clarification of a number of ambiguities in MPAEA.  Two clarifications in the published rules are encouraging.

• Should insurers be permitted to set deductible amounts separately for MH/SA? Some insurers require their members to meet two different deductibles — one for MH/SA, and one for other treatments. The effect is to permit members without behavioral health needs to experience, say, a $500 deductible, while people with behavioral and other health needs experience two such deductibles, for a total of $1,000. These rules forbid this double hit. The agencies acknowledged the lack of guidance in MHPAEA on this question, and the power of arguments on both sides, but explain their determination to enforce a unitary deductible:

Given that the statutory language does not preclude either interpretation, the Departments’ view is that prohibiting separately accumulating financial restrictions and quantitative treatment limitations is more consistent with the policy goals that led to the enactment of MHPAEA.

Translation: the act did not dictate a result, but unitary deductibles advance parity, and dual deductibles continue inequitable treatment.

• How will plans be prevented from continuing disparate treatment through less obvious means such as medical management decisions? Advocates have long been concerned that coverage inequities between behavioral and other health care could persist if aggressively restrictive utilization review systematically restricted MH/SA services under the guise of “medical necessity” or “medical management.” It is relatively easy to prohibit differential copayments and deductibles. It is harder — and more controversial — to attempt to monitor the relative equity of medical management techniques. The agencies have spoken pretty clearly on this issue in requiring equitable use of “nonquantitative” management strategies:

Any processes, strategies, evidentiary standards, or other factors used in applying the nonquantitative treatment limitation to mental health or substance use disorder benefits in a classification must be comparable to, and applied no more stringently than [those] used . . . with respect to medical/surgical benefits in the classification.

The tools must be comparable both facially and in application:

Thus, for example, assume a claims administrator has discretion to approve benefits for treatment based on medical necessity.  If that discretion is routinely used to approve medical/surgical benefits while denying mental health or substance use disorder benefits and recognized clinically appropriate standards of care do not permit such a difference, the processes used in applying the medical necessity standard are considered to be applied more stringently. . ..  The use of discretion in this manner violates the parity requirements for nonquantitative limitations.

Translation: the parity requirement for medical management is not one merely of form, but also of substance.  While the enforcement of this substantive even-handedness may be messy, it furthers the principle of parity in a powerful way.

The parity rule, then, takes some strides toward the enforcement of true parity in health insurance for people with behavioral health needs.   But people with such needs are desperately in need of further health reform for many reasons, a few of which are outlined below:

• Most obviously, people with serious mental illness are often unemployed or underemployed, and therefore are less likely to have employment-based health coverage. If they do not qualify for Medicaid or Medicare, they are often uninsured. Health reform extending coverage to the uninsured is therefore a pressing need for people with MH/SA needs.
• People with severe mental illness also suffer disproportionately from the effects of physical illness. As I’ve previously described, a 2006 National Association of State Mental Health Program Directors report titled Morbidity and Mortality in People with Serious Mental Illness revealed that people with serious mental illness die 25 years earlier than peers without mental illness, and suffer from a great deal of excess illness while alive. Most of the excess mortality and morbidity is due to preventable physical illness, and their poor medical condition is often traceable to poor coordination of their mental and physical care. The care coordination provisions in pending reform bills would go some distance in addressing these coordination and coverage concerns.
• The reform bills, in addition to mandating and facilitating the expansion of insurance, would channel at least much of the expansion through insurance exchanges. Although the proposals vary, exchanges could, as Tim Jost has described be a force for regularizing health plan design, and for promoting transparency in plan offerings for the benefit of all consumers, including those with MH/SA needs.

Our current health insurance system serves people with behavioral health needs rather poorly.  The MHPAEA took beneficial steps for insured people with MH/SA needs, and the interim rules in at least some sections interpret the act rather robustly.  This good news should not blind us to the fact that more comprehensive health reform is absolutely necessary to provide for the broad range of health needs of people with mental illness or substance use disorders.

Medical Marijuana Act Signed Into Law: Some Chronically Ill New Jerseyans Rejoice While Others Continue to Wait

As expected, on January 18, 2010, Governor Jon Corzine signed the New Jersey Compassionate Use Medical Marijuana Act into law, making New Jersey the 14^th state to legalize marijuana for medical use.  Seton Hall Law’s Center for Health & Pharmaceutical Law & Policy endorsed the Act in a position paper distributed to key lawmakers in June 2009.

The Act’s backers celebrated its passage with “hugs and tears,” while its opponents expressed continued concerns, including that the for-profit “alternative treatment centers” that the Act will allow to grow and distribute marijuana will have negative effects on the neighborhoods where they are established.  An interesting abcnews.com article by Susan Donaldson James highlights a third constituency: New Jerseyans with chronic illnesses that are responsive to treatment with marijuana but who are not considered to have debilitating medical conditions under the Act.

The article profiles Jack O’Brien of Laurel Lake, New Jersey who was born without fingers and toes and suffers from “crushing neuropathic pain.”  He wakes up to shooting pain in his arms and legs and can only walk short distances on his deformed feet.  According to O’Brien, smoking marijuana is “like having a valve on the forearm, turning it and having the coolness of relief through my extremities. … I try to walk on these feet and I can go four or five blocks, with my wife. With marijuana, I can go forever.”  State Assemblyman Reed Gusciora, who was a prime sponsor of the Act, explained that while he had empathy for O’Brien and others in his position, the legislature “had to do a measured approach,” citing fears that New Jersey could become another California, where medical marijuana “seemed to be spiraling out of control.”   Assemblyman Gusciora promised that in two years the legislature would “revisit the issue and add ailments.”

Addendum:

While Jack O’Brien’s case provides only anecdotal evidence of marijuana’s efficacy against neuropathic pain, as the Center noted in its position paper, “in the past two years, three placebo-controlled, randomized, double-blind clinical trials published in the medical literature have demonstrated that smoked marijuana is effective against neuropathic pain, including for patients who have tried the available conventional treatments and are still in pain.”   The existence of this evidence is remarkable because, as recent articles in the New York Times and Wall Street Journal explain, researchers must surmount formidable hurdles to study marijuana’s potential medical uses.

For those who are curious, under the compromise version of the Act which was signed into law January 18^th, “debilitating medical condition” is defined to include the following:

• Seizure disorder, including epilepsy, if resistant to conventional medical therapy;
• Intractable skeletal muscular spasticity, if resistant to conventional medical therapy;
• Glaucoma, if resistant to conventional medical therapy;
• HIV or the treatment of HIV, if it causes severe or chronic pain, severe nausea or vomiting, cachexia, or wasting syndrome;
• AIDS or the treatment of AIDS, if it causes severe or chronic pain, severe nausea or vomiting, cachexia, or wasting syndrome;
• Cancer or the treatment of cancer, if it causes severe or chronic pain, severe nausea or vomiting, cachexia, or wasting syndrome;
• Amyotrophic lateral sclerosis;
• Multiple sclerosis;
• Terminal cancer;
• Muscular dystrophy;
• Inflammatory bowel disease, including Crohn’s disease; and
• Terminal illness, if the physician has determined a prognosis of less than 12 months of life.

Rebalancing Long-Term Care

Will efforts to modernize home health programs survive insurance reform’s end game?  Providing insurance coverage to as many low-income uninsureds as possible has been an organizing principle in 2009′s health reform discussions, and reconciliation of the House and Senate versions will require satisfying some members that sufficient subsidies will be available to permit the promise of extended coverage to reach the neediest.  The ripple effects of those discussions may reach other reform issues, as leadership attempts to meet budgetary targets.  It would be a shame if this process led to a retreat from the current bills’ innovative long-term care provisions.

As I’ve described previously, the reform effort has contemplated an interesting mix of Medicare and Medicaid improvements to expand access to community based care for people with disabilities and chronic illness.  And the CLASS Act’s inclusion in the mix gives some hope  to those with needs for assistance with Activities of Daily Living (ADLs), as well as their family caregivers.  Those involved in caregiving for a chronically ill family member can testify that they’re not looking to dodge responsibility; to the contrary, they’re hoping to gain assistance to continue providing assistance in the community, to avoid the need for isolating and expensive institutional care for their loved ones.

Health Affairs’ January 2010, Volume 29, Number 1 — “Advancing Long-Term Services & Supports” – (subscription required for some content) is a welcome source of information and analysis in this area.   H. Stephen Kaye and coauthors provide timely data filling out our understanding of who is served, and where.  It is clear that people in need of nursing and personal care assistance prefer to live at home rather than in a nursing home.  About 8.4 million people of all ages with ADL difficulties receive services in their communities, while about 1.6 million receive services in nursing homes.  The median monthly cost in the home care setting, in 2009 dollars, is $928, compared to $5,243 in nursing homes.  About 75% of those in the community live with relatives.  90% have mobility impairments, 55% have cognitive impairments, and 31% have sensory impairments.  Other articles shed some light on programmatic and financial barriers to improving access to home services.

• Terrence Ng and coauthors describe the gaps, overlaps, and regional variation in long term care coverage provided by Medicaid and Medicare. In particular, they report wide variation in states’ adoption of Medicaid waivers and other mechanisms for extending community-based home care. For example, Iowa’s participation rate in Medicaid home and community-based care is 16.8 per 1,000, while Virginia’s rate is only 3.21 per 1,000. The authors also highlight the effects of the failure to coordinate Medicare and Medicaid for long-term care, and the cost-increasing effect of hospital readmissions, traceable in part to Medicare’s poor coverage of long-term care. The current Senate bill, at Sections 2401- 2406, would encourage expansion of Medicaid rebalancing efforts.
• The Public Policy Institute’s Susan Reinhardt discusses programs supporting the community preference of people with nursing and home care needs. She describes diversion and transition programs. Transition (“downstream”) programs are dedicated to moving to appropriate community settings those who would like to leave nursing homes. Diversion (“downstream”) programs fund home and community based services, to forestall or prevent institutionalization in the first place. She points to the reform bills’ support for the Community Living and Money Follows the Person Demonstrations.
• Two pieces do an excellent job of introducing us to those who provide home care. Carol Levine and others describe the plight of family caregivers, traditionally thought of as “informal” caregivers, but clearly the foundation of home health care.  Howard Gleckman provides case studies of non-family member home care workers, highlighting the physical and financial difficulties under which they labor. As needs for chronic care in general and home care in particular increase in coming years, the long-neglected needs of these family and non-family caregivers will have to be addressed. Congress is famously solicitous of the financial concerns of physicians, our most highly compensated caregivers. It is time to focus on the needs of those millions of direct caregivers who every day provide compassionate personal services to our most vulnerable friends and family members.

The January issue of Health Affairs helps to highlight the growing importance of the financing of long-term care.  As we age, and as our needs shift from acute to chronic care, we must wean ourselves from a financing perspective that emphasizes dazzling high-tech interventions and instead embrace the human-scale care offered by home health aides, visiting nurses, and physical therapists.  The pending bills don’t make this shift, but they nudge the battleship a bit.  They leave long-term care financing fragmented among various public and private programs, but they do support some promising programs.

The CLASS Act (Senate bill Section 8002) is a voluntary, opt out social insurance program that would provide some support for home care services.  For the reasons described last year by Howard Gleckman, the CLASS Act is incomplete; among other things, its voluntary nature could create selection problems.  It is a start, however, and would put a useful if imperfect patch on a torn system.  I’ll cite to one final article from the Health Affairs issue to point to a better way.  John Creighton Campbell and coauthors‘ discussion of public long-term care insurance in Germany and Japan contains the germ of a solution to the woes our system suffers.  Both the German and Japanese systems have universal coverage, support family caregivers, and accord beneficiaries a large degree of control over services received.  And they do so at a cost roughly comparable to that experienced by American public payers (Germany a bit less, Japan a bit more).  Organizing long-term care financing through one social insurance program yields efficiency dividends, eliminates stigma concerns, and encourages care at the level and location preferred by recipients.  Maybe it’s too early to be pushing for the next step in long-term care reform, but why can’t we do what the Germans and Japanese have done?  At the very least, let’s not cut back on the progress made in the current bills as we strain for the finish line.

John V. Jacobi on Health Reform & Care for the Chronically Ill

In case you missed it: Health Reform Watch regular, Professor John V. Jacobi, interviewed by Lester Feder for Legal Issues in Health Reform, a publication of The O’Neill Institute for National and Global Health Law at Georgetown University. In part:

Covering the Chronically Ill: An Interview with John V. Jacobi

John V. Jacobi is Dorothea Dix Professor of Health Law and Policy at the Seton Hall University School of Law. The O’Neill Institute’s Lester Feder spoke with him about health reform and covering those with chronic illness.

Lester Feder: Generally speaking, what do you think of what it is looking like we’re going to get out of Congress?

John V. Jacobi: I think that there are two big clusters of issues: one is covering the uninsured, which has gotten most of the attention, for good reason. The other issues, which I’ve been most concerned about is access for the most vulnerable: people with chronic illness and disabilities. On the first part it’s anybody’s guess on how well we’re going to do at covering the uninsured. On the second part, there are lots of interesting structural pieces in the bills that will help people with chronic illness, but I think that the overall structure of the reform may end up undercutting that quite a bit.

The pieces in the bills that are helpful are the ones that create medical homes, or chronic care management, or assure coordination of care for people with chronic illness. It is the sort of change that our delivery system and our finance system really need to be looking at. The problem with getting those innovations to actually work is that much of the coverage under the plans for the chronically ill will be provided through the private marketplace.

And here’s the problem with that: Private insurance companies are more or less profitable  depending on the risks that they accept. They are much more likely to be profitable if they are good at risk selection than if they are efficient and provide good service in other ways. There is such a dramatic concentration of cost in any actuarial pool that if an insurance company can avoid the 10 percent of the sickest people it is going to be doing quite well, whether it’s good or bad at delivering its services. And the ones that attract those 10 percent of the sickest are going to be in trouble unless there’s quite a good risk-adjustment program for premiums, which doesn’t seem to be available yet.

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Supporting Family Caregivers

Many of our hardest-working caregivers are not professionals, but parents, spouses, and children of people with serious chronic conditions, limited in their ability to engage in activities of daily living (ADLs) or instrumental activities of daily living (IADLs).  A new report from the National Alliance for Caregiving and the AARP opens up this informal, but absolutely essential, world of unpaid caregiving (h/t: Howard Gleckman ).

Some basic facts on the caregivers:

• They’re usually (66%) women;
• On average, they provide over 20 hours of care each week;
• They’re of all income levels, with an average income of about $60,000
• About one-third care for more than one person.

Some basic facts about those receiving the care:

• They’re mostly over 50 years of age, and 44% are over the age of 75;
• Most (51%) live in their own homes;
• Most (69%) require care due to long-term physical condition;
• 34% receive informal caregiving for 5 years or more.

In many cases, informal caregivers enable people with significant care needs to avoid nursing home or other institutional care.  Patients are better off, and so is the health budget: the avoided costs of expensive hospitalizations and nursing home care are enormous.   I have previously described the reform bills’ provisions that would support in-place care for people with chronic illness and disabilities.  Medicaid amendments would expand home care services, including such Cash & Counseling programs that give consumers substantial control over the mix of home services, and permit support for kinship caregiving.  And the Senate bill incorporates the Community Living Assistance Services and Supports Act (the “CLASS Act”), which provides for a new source of funding for personal assistance services for those not Medicaid-eligible.  A move supported by the insurance industry to strip it from the reform bill was narrowly defeated on December 4^th.

The insurance industry, of course, is vigorously trying to protect its own nascent long term care insurance business.  The long term care insurance industry has faced its share of horror stories about bureaucratic double-talk, denied claims, high prices, and limited benefits. The CLASS Act would provide an optional source of coverage, creating a voluntary program of member-supported public insurance for home care costs.  Like Medicaid’s Cash & Counseling system, it provides consumers with flexibility to choose the mix of supportive care when his or her health status triggers eligibility for coverage.

Why do we need such a program?  After all, there are many willing attorneys ready to help people spend down their assets — achieving “Medicaid impoverishment” — in order to qualify for Medicaid’s richer coverage.  Georgetown scholar Judy Feder was asked just that question for a recent Time Magazine article on the CLASS Act.  Her response was dead-on:

“Medicaid is invaluable,” says Judy Feder, a health policy expert at Georgetown University and a senior fellow at the Center for American Progress. “But it’s not insurance. It doesn’t protect you from catastrophe. It takes care of you after catastrophe.”

The long-term care financing mix in the Senate bill is far from perfect.  As a panel of experts surveyed by the Commonwealth Fund overwhelmingly agreed last year, the best solution would be to add a premium-financed long-term care component to Medicare, allowing the cost to be shared by government and consumers, without the trouble or expense of creating a new programmatic structure.  In the alternative, Congress could cobble together a better integrated “system” of long term/home care financing.  Such a system could virtually integrate a long-term care financing continuum, including Medicaid, Medicare, and voluntary insurance (such as that created by the CLASS Act) that could support consumers with chronic illness in the most appropriate setting for supportive care, reducing the discontinuities in coverage, perverse incentives for institutionalization, and counterproductive limits on services.  Either actual integration of all long term care services in Medicare, or the virtual integration (through smooth eligibility and service interfaces) in Medicare, Medicaid, and CLASS Act coverage could improve care and reduce costs.  But that won’t happen this year.

Instead, the best hope for expansion of access to personal assistance services will be the strengthening of Medicaid’s home care provisions and the creation of the CLASS Act program.  The overwhelming reform focus has been on very traditional “medical” insurance run through private, risk bearing insurance companies.  Only at the margins will the reform address the growing need for financing  appropriate health care for chronic illness.  Keeping the CLASS Act is a small step, but it at least acknowledges the obligation to support the personal assistance needs of those with serious chronic illnesses or disabilities, who are not (yet) impoverished, and who prefer to remain in their communities.  The CLASS Act will provide a new funding source for patient-directed personal assistance services.   Family caregivers will continue to devote themselves to their loved ones, but they need help.

Consumer Protection Under the Health Reform “Deal”

News of the Senate “deal” on the public option is trickling out.  It appears to comprise a swap, in which the public option will be dropped in favor of the creation of a nationwide program mimicking the Federal Employees Health Benefits Plan (FEHBP) (along with a Medicare buy-in for people 55 years of age or older).  Will the FEHBP model (for those under 55) accomplish what the public option would have done?  Tim Greaney’s post here yesterday raises well-founded concerns that it will be less likely to increase competition in concentrated markets.   But we had additional hopes for the public option.  I’ve previously argued that the public option could help assure adequate coverage of people with chronic conditions.  They’re the most vulnerable and increasingly the most costly; sound coordination of their care is necessary to serve their complex needs and to contain costs.   Whether this nascent deal will do that work depends on how the FEHBP model translates to an open exchange model, and in particular on benefits design and process rights components.  The new enrollees are likely to be more vulnerable than the FEHBP’s membership, and sound consumer protections are necessary to assure that their needs are met.  Two components of the program will be critical here: benefits design and process rights.

The FEHBP is mostly a mechanism for contracting with and managing private health insurers.  This deal would, therefore, likely create a form of private health insurance exchange, piggy-backing on private plans’ benefits design.  Congress should be aware of private insurers’ history with coverage of chronic care services.  It is widely documented, for example, that children with special health care needs have more sharply restricted access to necessary therapies through private than public coverage.  Ruth Benedict, of the University of Wisconsin, described access problems for children with functional limitations in 2006:

Public health insurance predicted greater use of supportive services and therapeutic services outside the school setting, a finding that may be attributable to the commitment of public programs to serve vulnerable populations such as children with special needs.  * * *   In contrast to public insurance, private insurance provided children no advantage in accessing therapeutic and supportive services relative to their uninsured counterparts.

The Office of Personnel Management (OPM) has historically addressed benefits design with a broad brush, negotiating and contracting directly with insurers, and balancing premium level against benefits richness.  Unless the bill directs OPM to incorporate the needs of people with chronic illness — physical and speech therapy, home care services, and case management, for example — the sickest of the newly covered will find only coverage that poorly matches their needs.  And state law that would otherwise benefit the private insurers’ benefits design is specifically preempted in the FEHBP statute:

The terms of any contract under this chapter which relate to the nature, provision, or extent of coverage or benefits (including payments with respect to benefits) shall supersede and preempt any State or local law, or any regulation issued thereunder, which relates to health insurance or plans.

Unless the bill mandates that the OPM protect vulnerable populations in its benefits design contracting, people with chronic illness will likely be left without coverage for vital services that they might have obtained through a public option.

What of process rights under the FEHBP?  Suppose a plan participating in the new national exchange were to deny coverage for a service with the benefits design on, say, medical necessity grounds.   As Nan Hunter described in her 2006 article, Managed Process, Due Care: Structures of Accountability in Health Care, the process by which covered persons may vindicate their rights of access to covered health care is fractured and often frustrating to participants.  Two features of the FEHBP bear note in this regard.  First, it allows participants “an independent system of external review,” which Nan Hunter argues can assist individuals and society by improving plans’ accountability and enhancing the deliberative process by which coverage decisions are made.  She also identifies, however, the pervasive lack of effective member notice of review options.  Second, judicial appeal from the administrative and independent review process is quite limited.  It is available only after exhaustion of internal plan review, external review independent review, and OPM review, and the scope of the judicial review itself is quite limited:

A covered individual may seek judicial review of OPM’s final action on the denial of a health benefits claim. A legal action to review final action by OPM involving such denial of health benefits must be brought against OPM and not against the Carrier or the Carrier’s subcontractors. The recovery in such a suit shall be limited to a court order directing OPM to require the Carrier to pay the amount of benefits in dispute.

The adequacy and accuracy of the administrative process, then, must be protected by thoughtful and specific statutory and regulatory language.

Insurance coverage does not equate to access to care.  Necessary benefits must be contractually covered, and the insurer must follow through where required.  The benefits design and due process provisions in the FEHBP in many ways mirror those of large, self-funded employers.   The population newly covered by this bill will, however, not be employees of large firms and federal agencies, and instead will be a more economically and medically marginal population with a higher percentage of people with disabilities and chronic illness.  The bill should, then, anticipate the issue directing OPM to set benefits design and review standards serving all, including those with chronic conditions.   If Congress hopes to contract out the responsibility of serving a vulnerable population, it needs to ensure that its contracting partners are charged clearly on the nature of their responsibilities.

Reforming Medical Treatment for People with Serious Mental Illness

What group could health reform help most?  The obvious choice (maybe the right one) would be people with no insurance, or lousy insurance.  It is clear that un- or underinsurance is bad for your physical and fiscal health.  How about people in need of skilled nursing care and assistance with activities of daily living?  Some provisions of pending bills would allow these folks to avoid the Hobson’s choice of institutional care or too little care.  But the cohort that might stand to gain the most from reform is the population of people with serious mental illness.

People with serious mental illness have long been known to have excess morbidity and mortality as compared to people without serious mental illness.  Although much of this excess is attributable to “unnatural causes” – e.g., suicide – studies have identified in this population substantially elevated natural causes of illness and early death from conditions such as cardiovascular and respiratory disease.    Some of these conditions are caused or exacerbated by side effects of newer atypical antipsychotics.    Much of this excess morbidity and mortality is preventable, and some causes (e.g., poorly controlled diabetes) could be addressed through sound chronic care management techniques I’ve described in an earlier post.    Inadequate attention to the management of the medical concerns of people with severe mental illness could be a particularly attractive goal of health delivery reform.

The National Association of State Mental Health Program Directors issued a Technical Report last year on this issue.  Its literature review rendered the following judgment:

Recent data indicates that, on average, persons with serious mental illness die 25 years earlier than the general population.  Eighty-seven percent of years of life lost to premature death are due to chronic disease, especially infectious, pulmonary, and cardiovascular diseases, and diabetes.  Cardiac events alone account for more deaths than suicide.

The data are emerging; more work needs to be done to evaluate comprehensively the connection between incidence of severe mental illness and lack of appropriate, coordinated medical care.  Whatever exact relationship is revealed, the situation is clearly dire: the fragmentation of our health care system causes particularly severe problems for people with serious mental illness.  The Association noted that emerging chronic care management techniques offer a way out of this unconscionable mess.  It advocates the adoption and application of patient-centered medical home programs that bring together primary care, mental health care, and care for chronic medical conditions in a patient- and community-centered environment.

The current bills offer some funding for such measures, at least as pilots.  The House bill, for example, contains language supporting Medicaid medical home demonstrations with initial funding tilted to the federal, in order to encourage states to try these programs out.  Let’s hope these and similar measures, which offer hope for the correction of terrible health disparities in a cost effective manner, survive the production of final legislation.

The Cost of (Not) Implementing Chronic Care Management

Health reform’s primary beneficiaries will be the uninsured, but it should also benefit those with “good” insurance.  We all know horror stories of well-insured relatives and friends driven from pillar to post in attempts to get good treatment for serious chronic conditions.  It too often seems that no one is in control: doctors aren’t paid to talk to patients, but rather to do things to them, and the roles of other professionals (e.g., advanced practice nurses) are sometimes minimized.  As I’ve described earlier, there is some good news regarding medical practice reform in the bills, particularly for people with Medicare or Medicaid.

How do we get people into medical settings where their chronic conditions can be well-managed?  Interesting work is being done in many quarters on this issue.  In a recent Health Affairs paper, Steven D. Pizer and coauthors reported that people with chronic conditions in regions of the country with thin Medicaid programs are likely to be uninsured, notwithstanding Medicaid’s strong orientation toward disability and chronic care.  In a companion article,   Andrew P. Wilper and coauthors reported on high levels of uncontrolled — often undiagnosed — chronic conditions (hypertension, diabetes, and elevated cholesterol) among  people without insurance.  Public insurance expansions in pending reform bills would assist these low-income people with chronic illness get coverage, and the chronic care provisions have the capacity to provide appropriate medical management of their most pressing conditions.

Structure is emerging on best practices for the delivery of sound coordinated care.  The NCQA has worked with physician groups to create tools to evaluate practice settings according to their ability to serve as therapeutic homes for all, but in particular for those with chronic conditions.  The Physician Practice Connections – Patient-Centered Medical Home program provides tools for public and private payers to evaluate a physician practice before designating it a “medical home” – and compensating it accordingly.  The tools evaluate prospective medical homes on factors such as their active support of patient self-management; use of non-physician staff for patient management; employment of procedures to maintain high levels of patient communication; and adoption and use of evidence-based care management protocols for chronic illness.

So how much does it cost to do this right?   A recent study from Commonwealth Fund sheds some light on this complex issue.  In the study, Stephen Zuckerman and coauthors take on the difficult task of examining the marginal cost of converting a 20^th Century practice to a 21^st Century medical home.  It makes interesting reading, and tentatively suggests that the cost could be modest.  Zuckerman et al. are attempting to compute cost. They recognize that cost is only a component in a more important calculation: what is the value of creating medical homes?  They cite to a 2008 Deloitte report that gathers research tending to show that the cost is probably worth it, even in purely economic terms.  That is, it appears that the savings achieved in avoided hospitalizations and other expensive interventions is significant, washing out the cost of supporting sound chronic care management.  It is not, of course, only about efficiency; ending the chronic care horror stories is the true goal.

Expanding insurance is only the first step in delivering the care people need.  For people with chronic illness, the finance and delivery system needs to work with the whole person, family, and community, and not slice the patient into 8 minute blocks and procedure codes.  A consensus statement of the American Academy of Family Physicians, the American Academy of Pediatrics, the American College of Physicians, and the American Osteopathic Association describes a commendable principle of care coordination that has particular application for people with disabilities and chronic illness:

Care is coordinated and/or integrated across all elements of the complex health care system (e.g., subspecialty care, hospitals, home health agencies, nursing homes) and the patient’s community (e.g., family, public and private community-based services).  Care is facilitated by registries, information technology, health information exchange and other means to assure that patients get the indicated care when and where they need and want it in a culturally and linguistically appropriate manner.

Practice follows payment.  Payment reform must facilitate the adoption of practices that serves chronic needs.

Preexisting Conditions & Wellness Incentives: A Horse of a Different Color?

The Washington Post has an interesting article which covers an aspect of pending health reform legislation that hasn’t received much attention as of late: wellness incentives tied to premium rates. As I have noted on this blog before, Senators Harkin and Baucus were both as of late said to have been considering legislative provisions which would enable employers to both reward and punish employees who fail to meet certain health goals. In pending legislation (and its practical application) it would seem the line between reward and punish has begun to blur.

The WaPo article relates how provisions passed by the Senate finance and health committees could more than double the allowable insurance premium increases tied to various conditions–or more precisely, to employee medical evaluations which fail to meet proscribed guidelines regarding weight, glucose and cholesterol levels, and other biometrics in addition to smoking cessation. Read more

Implementing Reform: Children with Special Health Care Needs

The public option took a hit on Tuesday, as the Senate Finance Committee rejected amendments adding it to the Chairman’s Mark of the Baucus bill. As I have written previously, a public plan could improve care for the most vulnerable, including those with chronic illness, who tend to struggle for appropriate care under commercial plans. If the public option is dropped, the implementation of the resulting private plan-based system, including enforcement and regulatory design at the federal and state levels, becomes that much more critical to the task of assuring access to appropriate care.

The bills build on the benefits design of the private insurance market, as did Medicare and SCHIP before them. Those programs adopted familiar, private-sector benefits design and payment methods for political and pragmatic reasons: powerful stake-holders were comforted, and implementation was simplified. The bills build on this lineage. The Baucus bill, for example, requires all plans offered by the insurance exchanges to provide:

preventive and primary care, emergency services, hospitalization, physician services, outpatient services, day surgery and related anesthesia, diagnostic imaging and screenings (including x-rays), maternity and newborn care, pediatric services (including dental and vision), medical/surgical care, prescription drugs, radiation and chemotherapy, and mental health and substance abuse services that at least meet minimum standards set by Federal and state laws.

Pretty standard stuff. But describing a slate of covered benefits, and ensuring that that care is properly delivered by private, mostly for-profit firms, are different things entirely.

Take the example of children with special health care needs (“CSHCN”). The Maternal and Child Health Bureau of DHSS defines CSHCN as “…those who have or are at increased risk for a chronic physical, developmental, behavioral, or emotional condition and who also require health and related services of a type or amount beyond that required by children generally.” The Catalyst Center at Boston University identifies these children’s health conditions as including:

chronic illnesses such as diabetes, sickle cell anemia, cystic fibrosis, and heart disease; developmental disabilities such as mental retardation, sensory impairments, and autism spectrum disorders; emotional or behavioral health needs including ADHD and mental health conditions; and physical disabilities such as cerebral palsy, spina bifida, or muscular dystrophy.

Simply providing “health insurance” to children with these conditions is no guarantee that they’ll receive appropriate services. A 2002 study by Harriette Fox and others for HRSA reported that insurers have interpreted contract terms to exclude categorically some conditions such as mental retardation or “inorganic disorders.” Others have limited medically necessary services such as speech therapy or habilitation therapy because they are not curative or restorative, but merely needed to maximize a child’s ability to function.

These contract terms and their interpretations have not often been challenged by state departments of insurance, because those terms and interpretations have the power of custom and industry practice behind them. These customs and practices, however, can deny care that children desperately need to live socially integrated and healthy lives. Amy Davidoff and coauthors in 2004 examined the difference in children’s coverage experiences when covered by Medicaid on one hand, or by private plan-mimicking SCHIP on the other, with respect to denial of access to needed services, including medically necessary ancillary services. They reported that,

Medicaid-eligible children tend not to face these concerns, in part because Medicaid explicitly covers medically necessary services not covered by private insurers. To the extent states pattern their SCHIP programs on private insurance and not Medicaid, the children lose that benefit.

The Baucus bill adds to Medicaid’s strength in this regard. At Title II, Subtitle B of the Chairman’s Mark (after the acceptance of an amendment from Senator Debbie Stabenow), a new Medicaid state plan option will permit states to offer, for children with at least two chronic conditions or one serious and persistent mental health condition,

Comprehensive care management; care coordination and health promotion; comprehensive transitional care, including appropriate follow-up, from inpatient to other settings; patient and family support; and referral to community and social support services, if relevant…

What of families covered by the private competitive marketplace of health insurance or SCHIP? The bills speak in general terms of the power of federal and state regulators to ensure adequate and appropriate coverage. This enforcement power should be used to ensure that coverage applies to chronic and disabling conditions as it does to run-of-the-mill medical/surgical cases. Future posts will examine some of the specific enforcement language, which will be key to the realization of the promise of reform to CSHCNs and others with chronic and disabling conditions.