Recently in Health reform Category

In an important speech for those interested in the future of the CLASS Act, federal Department of Health and Human Services Secretary Kathleen Sebelius said today that the program must be self-supporting but conceded that, as designed, it may not meet that goal. 

"The program must be able to pay for benefits over the long-term with the premiums it takes in,' she told the Kaiser Family Foundation. "No taxpayer dollars will be used to pay for CLASS benefits.This is non-negotiable."

At the same time, however, Sebelius said she was open to major changes to the program and acknowledged that the national, voluntary long-term care insurance system that was included in the 2010 health reform law "is not perfect." And, in an apparent nod to critics, said "it would be irresponsible to ignore the concerns about the CLASS program's long-term sustainability in its current form."

To respond to those fears, she suggested that HHS has broad authority to restructure key provisions of the law. Sebelius said that, besides sustainability, CLASS contains only two other "key principles." The first is that consumers must have the ability to direct their own services--a reference to CLASS' cash benefit. The other is that there should be no traditional underwriting for health status such as is included in private long-term care policies.

However, she explicitly opened the door to other highly controversial changes to the law. These include tightening its "at work" requirement, changing its premium structure, and assisting employers who offer CLASS benefits to their workers. 

The biggest change would make it tougher for some people with disabilities to enroll in the program. The law allows anyone 18 and older to sign up for CLASS as long as they earn just $1,100 a year, which makes it possible for many working people with disabilities to buy coverage. This is an extremely important change for them, but such a flexible standard has been sharply criticized by industry actuaries.

The problem is that this design may mean that those buying CLASS insurance will be more likely than average to claim benefits under the program. If that happens, the government will have to increase premiums to pay those claims which in turn will discourage healthy consumers from buying coverage. This will eventually lead to a "death spiral" that will destroy the program.

Sebelius said her office is reviewing that at-work requirement, although it is unclear how much flexibility she has to change it without an amendment to the law.

Other changes she is considering include:

Replacing a flat premium with one that increases annually with inflation. This postive change would allow for relatively low initial premiums, especially for young buyers.

Imposing anti-gaming rules. These would prevent consumers from going in-and-out of coverage during their lives without paying penalties.

Easing the burden on employers that offer CLASS insurance. This could be another key change. The law automatically enrolls workers in CLASS, but only if they get coverage through their job. Currently, however, the law includes no incentives for employers to participate.

Creating an aggressive marketing campaign for long-term care insurance. This change could attract broad insurance industry support. But coming up with the funding will be a huge challenge, especially given severe budget pressures and the strong opposition to CLASS from congressional Republicans.

Tailoring benefits to individual needs. The law appears to require Sebelius to approve only a single policy. But today she suggsted she might have the flexibility to approve multiple coverage options. This could be another key change.

Sebelius' speech today was a major acknowledgement that CLASS as currently designed is in deep trouble--both politically and as an insurance program. By recognizing the flaws that some of us have been noting for more than a year, she has taken the first steps towards making CLASS successful. The question now is whether it is not too late given the broad opposition to the program that has been building for months on Capitol Hill. 

There is lots of quiet speculation in Washington about the fate of the CLASS Act in the wake of the huge Republican 2010 election day victory. Will CLASS be repealed? Will it be changed in any major way?

My best guess is that CLASS--the national voluntary long-term care insurance program passed as part of the 2010 health reform law--will neither be repealed nor fundamentally changed, despite the GOP threat to roll back the entire health law. 

That is not to say conservatives won't try. Activists at the Heritage Foundation and elsewhere have called for repeal of CLASS, which they fear will turn into a new unfunded entitlement program. Sen. Lindsey Graham (R-S.C.) has already introduced a bill to repeal the law.

Worse for CLASS backers, the law has no real advocate in Congress. No Democrat has stepped up to take ownership of the idea since its primary sponsor, the late Sen. Edward Kennedy, died last year. Indeed, about a half-dozen Democratic senators opposed the provision when it was added to the health law.

There is a good chance the soon-to-be GOP-controled House will pass a repeal bill early next year. It would fit with the Republican vow to wipe out the entire health law and their special dislike of federal long-term care insurance. But even with strengthened GOP ranks in the Senate and the support of those Democrats, CLASS opponents remain far short of the 60 votes they'd need to repeal the law. And they''d need even more-- 67 votes-- to override a veto by President Obama. As one insurance lobbyist told me today, "CLASS isn't going to disappear."

Similarly, there is little chance Congress will gut the bill. Unfortunately, the new political environment also makes it extremely unlikely that Congress will improve those elements of CLASS that need to be fixed. As I have written before, there is a real question about how many people will buy CLASS policies, which are likely to cost an average of $100 or more per month.

Some changes in premium design and eligibility could help bring those premiums down. But given the hostility to the law on Capitol Hill, there is no chance the White House will ask Congress to make repairs. Those backers of CLASS who pushed to pass the law, flaws and all, in the expectation that they could fix it down the road are now stuck with the measure, flaws and all.       

Kudos to President Obama for making a "recess appointment" of Don Berwick to run the Centers for Medicare and Medicaid Services (CMS).

Berwick may be the ideal choice for the job. He is the right candidate at exactly the right time. The new health law makes possible broad reforms in the way we deliver health and long-term care. But it by no means guarantees these changes will be implemented. It will take a tough, commited head of CMS to break through the politics, inertia, and special interests to make the possible real.

As head of the private Insitute for Health Care Improvement (IHI), Berwick was a tireless advocate for high quality, cost-effective medical care. Under his leadership, IHI pressed hospitals to improve routine procedures aimed at saving lives. These included tasks such as routine handwashing and monitoring of mediciations as patients transfer from one care setting to another. Easy to support these ideas, but Berwick was convincing hospitals to actually implement them.  

Berwick has been an outspoken critic of our fragmented health system for years, pushing instead for more coordinated care. He has argued that as much as half of all health spending is wasted.  

At a time when politicians decry the high cost of health care but are afraid to make the decisions to manage these expenses, Berwick will be in a position to do something about them. As the biggest payers of health care, Medicaid and, especially, Medicare will be well-positioned to drive needed reforms.

Despite his credentials, and even though CMS has been without a permanent head for four years, Berwick's nomination was being blocked by Senate Republicans. In an effort to turn his choice into yet another partisan battle over health reform, they blasted Berwick as "Dr. Death" who would end care for elderly patients.

To listen to the GOP, Berwick would implement the fantastical death panels that health reform critics invented last summer. Their claim is absurd and irresponsible, to say nothing of offensive.  

Berwick will shake things up. He will surely struggle to manage the massive CMS bureaucracy where Medicare and Medicaid officials rarely even talk to one another. And his recess apointment will last only until the end of 2011. But if anyone can begin the process of making today's medicine more cost-effective while improving patient care, it is Berwick.   

Those of us who are caring for our parents or other loved ones know how tough it is. The emotional, physical, and financial burdens are sometimes overwhelming. Bathing your father or changing his adult diaper puts both of you in a new, uncomfortable, and difficult world.

But at a Syracuse University long-term care conference I attended last Thursday and Friday, Carol Levine reminded me about the medical expertise caregivers need these days. With patients being discharged quicker than ever to their homes from the hospital or from nursing facilities, adult children and spouses increasingly are being asked to do the work that was once left to highly trained nurses. 

Carol, a former family caregiver herself and director of the Families and Health Care Project at the United Hospital Fund in New York, has a long list of these tasks, for which few caregivers are ever prepared. Among them:

Medication management: It is common these days for a senior with many chronic diseases to be taking a dozen different medications. If you've been a caregiver, you know the drill--the green pill three times a day, the blue pill twice a day with meals, the other blue pill twice a week....Worse are the sometimes deadly interactions among these drugs. With few doctors keeping track of all these meds, preventing medication disaster is up to family caregivers.

Operating medical equipment: This is work that you'd need a license to do if you were not a family member. Is the oxygen tank full, are drugs flowing freely through IV tubes, are wounds being kept clean and appropriately bandaged, are you giving injections properly? And this is the easy stuff. Some family members must do even more complicated work, such as managing complex ventilator care.

Coordinated care: This may be the toughest task of all.Somebody must make sure that all the doctors and other health professionals are on the same page. With a few exceptions (such as hospice), docs and nurses won't do it. So it is up to family members who must learn medical jargon and become disease epxerts in their own right. And keep in mind, as hard as it is for adult children to provide this complex medical care, it can be far more challenging for spouses, who may face their own physical and cognitive struggles.     

There is almost nowhere for family members to go to get this training. I have found only a handful of such programs around the country. The Schmieding Center in northwest Arkansas is a great model. But they are few and far between. 

And even if this training were available, who has time to take classes when they in the midst of a caregiving crisis? 

We all want to be cared for at home, but to make it work, family members will need the training to perform increasingly sophisticated medical tasks. And right now, there are far too few people thinking about where their education is going to come from.   

In the new health bill, Medicare is planning to pay family practice doctors extra money to organize complicated care for the chronically ill--a role known as a medical home. But as family caregivers know all too well, they are the real medical homes--and probably will be for the forseeable future.     

Nice to see President Obama and Health and Human Services Secretary Kathleen Sebelius beginning to talk about the CLASS Act--the voluntary national long-term care insurance program that is included in the new health law. But unfortunately, even at a town hall yesterday at a senior center, CLASS was little more than an afterthought for the Administration.

Sebelius discussed the new program only in response to a question. Obama was focused on other benefits, such as shrinking the donut hole for the Medicare Part D drug benefit and new preventive care under Medicare. Of course, these are important. And because people must still be working to enroll in CLASS, many seniors who attended the event will not be eligible for the program. Still, the Administration will need to talk far more aggressively about CLASS if the program is to succeed.

As private insurers will tell you, selling long-term care coverage is very hard. Consumers don't want to think about disability and they are reluctant to pay premiums today--which will reduce their current disposable income-- to insure against the possibility of needing personal care in 30 or 40 years.

That's a big reason why only about 7 million people have private long-term care insurance and why so few policies are being sold these days. Like private insurance, CLASS will be be nothing more than a niche product without an aggressive marketing campaign. And unless millions of people buy, CLASS will fail.

A lack of funding to promote CLASS is a major flaw of the new law. It allows the government to spend only 3 percent of premiums on all administrative costs, including marketing. This is far too little. But it actually overstates the available resources. The key period for promoting any new product is just before it goes on sale. And since no-one will have yet purchased, the government will have no premium income and thus no funding for advertising. 

A handful of private foundations and some advocacy groups are quietly discussing ways they can help market CLASS coverage. But the White House has tbe biggest megaphone of all and, I hope the President will use it to encourage people to prepare for their long-term care needs. If not, the government will learn what private insurers already know--only a few people will buy long-term care insurance, no matter how important many of us think it is.       

For the first time since President Bush's ill-fated effort to privatize Social Security five years ago, the future of the nation's flagship retirement program is back on the policy agenda. For example, Social Security will almost certainly be an issue for President Obama's deficit reduction commission. 

Unfortunately, we may be headed for the same non-productive shouting match we had over the Bush plan in 2005. Critics of the current system tell us Social Secrity is "broke" and faces trillions of dollars in unfunded liabilities. Supporters argue the program is untouchable.

I'd like to make the case for a middle-ground. Largely as result of profound demographic changes (we are living longer and having fewer children), the Social Security system needs to be reformed. It does not need to be blown up. But it does need to be updated.  

Social Security is in no way broke. But over the long-run it will be paying more in benefits than it collects in taxes. The result is, without changes in the system, government will be able to pay only about three-quarters of promised benefits to future retirees. 

This is an unhealthy situation and, on top of much greater financial stresses of both Medicare and Medicaid (which pays the largest share of long-term care costs in the U.S.), it jeopardizes the secure retirement of future generations.

It is important to keep in mind that the debate over Social Security is about benefits for future retirees, not current seniors. There is no chance that reforms will reduce promised Social Security benefits for those already retired or, indeed, even for those 55 or older. Whatever changes we make will be phased in slowly over many years. 

So what to do? My choice is a mix of modest Social Security payroll tax increases and benefit changes. I'd raise the cap on wages subject to the tax. I would gradually increase the early retirement age of 62. After all,as the nature of work changes and we remain healthy well into our 60s, many of us can and should work longer. I'd also adjust the inflation index to which benefits are tied.

I'd also consider other changes in the design of the program, perhaps even reducing benefits somewhat for younger retirees (especially those over a certain income) while raising them for those over 80 or 85 and for low-income workers and widows.

Finally, government needs to encourage younger generations to save more for their own old age. This means boosting participation in retirement plans. The CLASS Act, a new national voluntary long-term care insurance program included in the health reform law, will also help people prepare for the risk of needing personal assistance in old age.

There are many ways to address these issues, but the goal should be clear: At a time of budget contraints, Social Security benefits should be targeted to those who need them the most, even as we all do more to prepare ourselves for what we all hope will be a long old age. 

The Senate Finance Committee has begun an investigation into four big home-health agencies that, it alleges, artificially inceased their home therapy visits to take advantage of higher Medicare billing rates. A May 12 letter from committee chairman Max Baucus (D-MT) and senior Republican Charles Grassley (R-IA) asked the four for-profit agencies--Amedisys, Almost Family Inc. Gentiva Health Services, and LHC Group-- for records and internal documents relating to these visits from 2006-2009. The firms all either deny the allegations or say they will cooperate fully with the investigation.

It will be interesting to learn whether this is a scam or not, but the probe misses the point: The Medicare payment system encourages this sort of thing all the time.   

The controversy, first reported in The Wall Street Journal,  involves changes Medicare made to its reimbursement rules for home therapy. In essence, The Journal alleged that when Medicare paid a $2,200 bonus to agencies that provided 10 visits, the firms boosted their number of visits to 10 so they could claim the bonus. When Medicare changed the payment triggers in 2008, the firms once again adjusted their visits to maximize their payments. 

I don't know if the firms (and the physicians who ordered the therapies) were manipulating these visits to squeeze the most revenue out of the Medicare reimbursement system. And I don't know if these practices are more widespread than just these four firms.

But if the allegations are true, my question for the lawmakers is: What did you expect? As we heard throughout the health debate, Medicare reimbursement is based on piecework. Most health providers get money for each separate visit, test, and procedure they do. We pay them like they are auto mechanics when we should be paying them a single rate to do what is necessary to fully treat an illness or injury in the most effective way possible.  

Today, docs are paid for each test they order. So, it should be no surprise that they order lots of tests. Some doctors will ask a Medicare patient to come to their office to learn the results of, say, a routine blood test. They could deliver the news by phone but don't. Why? Because they get paid for the office visit but not for the phone call.

Health providers are like the rest of us: They will maximize their profits within the bounds of business ethics. If Congress doesn't want home health agencies to add visits to earn a bonus, it should change the Medicare payment system to stop rewarding the firms for that extra visit. If it wants doctors to communicate with patients by phone or email it should change Medicare payments to encourage those practices.

The new health law includes some small steps in this direction. But this is about much more than home therapy visits. If The Journal's allegations are correct, they are just more evidence of how badly the entire payment system is broken.           

I           

President Obama has signed health reform, including the CLASS Act, into law. Now, his administration needs to turn a law into an insurance product people will buy.

It won't be easy. No other country has tried to create a voluntary public long-term care insurance program, which is what CLASS is. The challenge will be to design a policy that provides a respectable benefit at an affordable premium. The fear is that only those who need the coverage will buy, driving up premium prices and driving out young and healthy buyers.

CLASS supporters had hoped to make some changes in the law Obama signed this week through the so-called "fixes" bill now being considered by the Senate. But in the end, they chose not to. Instead, the Department of Health and Human Services will try to make some adjustments through regulation and backers are likely to try to quietly slip in some legislative changes in a few months.

Here are some of the key issues administration officials would like to address:

The work requirement: The law makes insurance available to part-time workers. Actuaries fear this would allow many already-disabled people to enroll in CLASS, driving up premiums. As a result, this work standard may be toughened up.

Gaming: Analysts fear some people will game the system by dropping in and out of the program. To prevent this, the administration may limit people's ability to enroll, drop coverage, and re-enroll. 

Marketing: Administration officials believe CLASS will require a major marketing campaign to succeed. They are looking for the money to do this.

Premiums: The new law sets a fixed premium based on your age at enrollment, and that premium generally doesn't increase. But in an effort to encourage more young people to enroll, some suggest setting a very low initial premium that would rise slowly each year.

One senior HHS official says that, for now, four elements of CLASS seem etched in stone. On one hand, policies must provide cash benefits and coverage must be guaranteed to the broadest possible population. On the other, political realities demand the program be voluntary and based on a system of premium support, rather than mandatory and funded by taxes. Within those constraints, the administration will be challenged to build a functioning insurance program.            

The health reform bill passed by Congress last night includes big changes in the way we pay for long-term care, both at home and in nursing facilities. The reforms will give the elderly and disabled far more flexibility in the way they get care and, at the same time, begin turning long-term care from largely a welfare program to an insurance system.

The biggest change is the Community Living Assistance Services and Supports (CLASS) Act. It would, for the first time, make voluntary long-term care insurance available to all Americans, give those unable to care for themselves a lifetime cash benefit they could use to help make their lives--and the lives of their caregivers--a bit easier.

But CLASS is not the only major change. The new law will also make it easier for the poor to receive home care benefits under Medicaid. It would ease paperwork requirements for states that want to offer such assistance and provide more federal money to help pay for Medicaid home and community care.

The bill also takes modest steps aimed at coordinating care for those very poor and frail who are eligible for both Medicare and Medicaid--a population that often faces multiple, and complicated, chronic diseases. Finally, the new law will provide additional federal money to train health professionals and health aides in geriatric care.

It remains to be seen how all of this will work. There are major questions about the CLASS Act: What kind of  benefit package can it offer for a premium price consumers will be willing to pay? Will young and healthy people enroll in the voluntary program, or will the insurance end up covering only those with the greatest need--a recipe for unsustainably high premiums? How will private insurance respond? Will carriers create policies to wrap around government insurance, much like Medicare Supplement (Medigap) works today? Or will they try to cherry pick the least risky customers, leaving the government with the tab for the costliest buyers?

Similarly, the Medicaid home care reforms fall far short of the ideal. Medicaid would still only be required to provide nursing home care. Home care would remain optional for the states. And the House "fixes" bill would delay additional federal funding for these benefits from next fall until October, 2011. This could be critical since many states are currently slashing their home care benefits in the face of severe budget pressures.     

The new law takes only modest steps and is flawed in some important ways. But it is making the biggest changes in long-term care since the creation of Medicaid more than a half century ago. And for those of us caring for our parents, most are long overdue.         

Mike Vitez at the Philadelphia Inquirer has done a great story on palliative care at a community hospital. Mike weaves the deeply touching story of Mary Tole, a 74-year-old woman who spent two months in the suburban Philadelphia hospital with an undiagnosed illness. She spent much of that time in an intensive care bed in a coma. 

Mike describes how the hospital's palliative care team and Mary's family struggled with how much treatment she should get, or whether she should be allowed to die as comfortably as possible. He also talks about the cost of her care--$775,000--Medicare's role, and Mary's out-of-pocket expense: $900.

This piece is an excellent antidote to all the foolishness and misinformation in the debate over "death panels" last summer. There is no more difficult or complex subject than end-of-life care. And Mary and her family still struggle to confront what happened to her, and what they will do when she again faces such a medical crisis.

As individuals, as family caregivers, and as a society, we need to address this issue head-on, and recognize there are no simple answers. Mike's story helps us do that. 

Congress made a horrible mistake when it allowed itself to be bludgeoned into dropping a provision of health reform that would have allowed Medicare to pay doctors to discuss end-of-life issues with patients.Mary's story is an example of the price we all pay for not having that conversation.