Quality, not quantity; Frugal health care in America.(Private firms take baby steps to curb American health-care costs)(Geisinger Health Systems, Intermountain Healthcare, Blue Cross Blue Shield) - The Economist (US)

Relax, your grandchildren will pay

Private firms are taking baby steps to curb soaring health costs

ABOVE a valley in Pennsylvania sits an old hospital that gives an optimistic hint about the future of American health care. Geisinger Health Systems was founded in 1915 but is as adaptable and creative as a start-up. It has invented new ways to offer services: it provides heart surgery, for example, at a fixed price and with a warranty. (If there are complications within 90 days, you pay nothing to fix them.)

Geisinger is changing the way it delivers primary care, co-ordinating teams of doctors and nurses to keep more people healthy for less money. Barack Obama sometimes praises the organisation in speeches. His health reform includes a programme to promote a model much like it. Alas, Geisinger's chief executive, Glenn Steele, is one of many hospital bosses who think the new programme will not work.

America spends far more on health care than other countries, such as Britain (see page

). The waste is staggering (see chart). The main problem is loopy incentives. Under 'fee-for-service' arrangements, the more tests, scans and pokes with gloved hands a hospital or clinic provides, the more it is paid. Mr Obama's health reform included only a few small nudges to change this.

Topmost among them is a plan for Medicare to reward 'accountable care organisations' (ACOs) for keeping people healthy, rather than lavishing treatment on them. The plan seems sensible enough. But it has provoked uproar in every corner of the health industry. This month the Centres for Medicare and Medicaid Services (CMS), the body that oversees government health schemes for the old and the poor, was barraged with irate letters about it.

An entrenched system is hard to change. Hospitals currently have little incentive to keep patients healthy. On the contrary, fitter patients would mean lower volumes and smaller margins, says Michael Nugent of Navigant Consulting, an expert on ACOs. Nevertheless, the current system is clearly unsustainable.

Wonks have buzzed about ACOs for years. In 2005 CMS began a pilot with ten health systems, including Geisinger, to reward them for improving the quality of care while lowering costs. America is dotted with examples of reform. Utah's Intermountain Healthcare is a hospital system with its own health plan. Clever use of data has helped to streamline care: a new protocol for delivering babies has reduced the number of unplanned caesarean sections and saved about $50m a year.

Insurers are experimenting with reform as well. Aetna, Humana and Wellpoint are testing new payment models. In Massachusetts, Blue Cross Blue Shield has created an 'alternative quality contract' that gives hospitals a fixed budget for a patient, with additional rewards for improving the quality of care. In the programme's first year hospitals cut the number of unnecessary emergency-room visits by 22%.

'The train is moving in the right direction,' says Mark McClellan, a former head of CMS who has championed ACOs. Real progress, however, requires change in the public sector. Medicare, the public health programme for the old, provides a whopping 35% of American hospitals' revenue.

CMS's proposed rule for ACOs would allow doctors, hospitals and other health providers to form networks to co-ordinate Medicare patients' care. CMS would reward ACOs that save money, relative to a predetermined benchmark, while meeting certain standards of quality.

Alas, the regulations are a mess. 'The ACO policy is an example of why the government is not always a great change agent,' sighs Chip Kahn, president of the Federation of American Hospitals. The insurance lobby frets that the rules will prompt hospitals to merge, reducing competition and driving up prices. The American Hospital Association says that the rewards for saving money are too low and the risks too high. The rules include 65 quality measures, more than twice the number in CMS's earlier, smaller pilot. 'I was very disappointed with their over-specificity,' says Geisinger's Dr Steele. Advocates for ACOs, such as Dr McClellan, hope that the final rules will be different.

CMS is likely to make at least some changes to the programme. 'I'm delighted to have the feedback,' says Donald Berwick, CMS's boss. Last month Dr Berwick unveiled a few new enticements for ACOs, such as more flexible rules for experienced hospitals such as Intermountain. But it is unlikely that the ACO programme will be in place by January, as originally planned.

SIRES' STATEMENT ON AFFORDABLE HEALTH CARE FOR AMERICA ACT. - States News Service

WASHINGTON -- The following information was released by the office of New Jersey Rep. Albio Sires:

After thoughtful consideration of H.R. 3962, the Affordable Health Care for America Act, I stand here today in strong support of this legislation. Beyond the expansion of coverage that this bill will bring to 115,000 of my constituents, it will reduce health care spending and our national deficit over time, as well as create new job opportunities within the health care sector.

First, the bill is estimated to provide affordable health coverage to 96 percent of all Americans. For people that like their current plans, they will be able to keep it, but for those individuals who are not currently covered by their employers and for those small businesses who can not currently afford health care coverage for their employees, a new Health Insurance Exchange will be created. Here consumers will be able to comparison shop from a menu of affordable, quality health care options, including private plans, health co-ops, and a new public health insurance option. Financed by its own premiums, the public option will operate on a level playing field with private insurers to spur additional competition. The Exchange will lead to improved coverage and care by creating competition based on better quality and prices.

Additionally, to ensure coverage is affordable for all Americans, affordability credits would be provided to qualified individuals in the Exchange; tax credits for up to 50 percent would be available for certain small businesses who acquire insurance; and Medicaid would be expanded to cover individuals with incomes up to 150 percent to the federal poverty level.

Second, this legislation will be entirely paid for, while not adding a dime to the deficit, rather reducing the deficit over the next two decades. It will also put Medicare and Medicaid on the path to a more fiscally sound future, so seniors and low-income Americans can continue to receive quality health care benefits for years to come.

Third, this bill makes tremendous investments in our nation's health workforce, especially in the field of primary care. Under this legislation, existing scholarship, loan repayment, and training grant programs are strengthened to address the need for primary care, nursing, and public health professionals. The primary care workforce is also enhanced by expanding the National Health Service Corps and creating a new primary care loan program. Additionally, a new generation of public health workers will be trained through a new loan repayment and scholarship program modeled on the National Health Service Corp. These investments will come at a critical time as there will be an increased need for primary care professionals due to the influx of new patients caused by increasing access to coverage and care.

Finally, this bill will create high quality research opportunities and jobs. By including the framework for allowing biosimilar competition created by the Energy and Commerce Committee, a new class of medicines will flourish to help lower costs and bring competition in prescription drugs. As this provision requires much research and testing to ensure patient safety, more high paying, highly skilled jobs will increase in New Jersey as the biosimilar industry grows. It is imperative that we keep this research and these jobs in this country. We cannot allow these research opportunities to leave this country, and I intend to work with the Secretary of HHS and the Commissioner of the FDA to ensure they stay in the United States.

AHIP STATEMENT ON AFFORDABLE HEALTH CARE FOR AMERICA ACT. - States News Service

WASHINGTON -- The following information was released by America's Health Insurance Plans:

Karen Ignagni, President and CEO of America's Health Insurance Plans (AHIP), released the following statement today in response to the Affordable Health Care for America Act:

'The promise of health care reform has been that if you like your current coverage, you can keep it. We are concerned that this proposal will break this promise by increasing health care costs for families and employers across the country and significantly disrupting the quality coverage on which millions of Americans rely today.

'The lack of system-wide cost containment is a missed opportunity. Without a greater focus on health care costs, families and employers will not be able to afford coverage and health care costs will rise at a rate much faster than the overall economy is able to sustain.

'We share the concerns that doctors, hospitals, employers, and patients have all raised about the significant disruption a new government-run plan would have on the current health care system. A new government-run plan would bankrupt hospitals, dismantle employer coverage, exacerbate cost-shifting from Medicare and Medicaid, and ultimately increase the federal deficit.

'Estimates show that a government-run plan would cause millions of people to lose their current coverage. Moreover, massive Medicare Advantage cuts would cause millions of seniors to lose their Medicare Advantage coverage altogether, while millions more would face benefit cuts and higher out-of-pocket costs.

'Health plans strongly support comprehensive, bipartisan health care reform and have proposed sweeping insurance market reforms and new consumer protections to ensure that every American has guaranteed access to affordable health care coverage. Experience in the states has shown that insurance market reforms must be paired with an effective personal coverage requirement for these reforms to work. While this legislation recognizes the key linkage of market reforms and a personal coverage requirement, more needs to be done to ensure coverage is affordable and our health care system is sustainable.

REP. CHU'S STATEMENT ON PASSAGE OF H.R. 3962, AFFORDABLE HEALTH CARE FOR AMERICA ACT. - States News Service

WASHINGTON, DC -- The following information was released by the office of California Rep. Judy Chu:

Rep. Judy Chu, D-CA32, issued the following statement today on the passage of the House version of the health care reform bill, H.R. 3962, the Affordable Health Care for America Act of 2009:

'With today's passage of H.R. 3962, America has never been closer to truly reforming our broken health care system,' said Rep. Chu. 'The magnitude of this accomplishment cannot be overstated: for six decades, Congress and a number of presidential administrations have tried - and failed - in this monumental task. So President Obama and our Leaders in Congress deserve great credit for bringing us this far, and I am honored and humbled to have been a part of the debate over what I truly consider to be the most important piece of legislation of this century.

'I believe the ultimate goal of health care reform is to provide stable and affordable health care for every American while preserving what works in today's system, expanding choice, and containing costs. The Affordable Health Care for America Act accomplishes those goals by creating a public health insurance option that would compete on a level playing field with private insurers within the Health Insurance Exchange. It protects Americans from being discriminated against by insurance companies due to gender or pre-existing conditions. And it opens up the health insurance system to tens of millions of individuals who currently cannot afford it, which is particularly important in areas of our country such as my own District, where fully one-third of residents are uninsured.

'A bill of this size and complexity can never be perfect, As a long-time supporter of a robust public option, I would have preferred a stronger government plan with the power to better negotiate rates and help keep overall premiums down. I am also disappointed that under H.R. 3962, legal immigrants will still have to wait five years before being able to access Medicaid or Medicare benefits. But faced with the choice of reform or continuing the status quo, I felt that I had to support reform, and this bill goes a long way toward reforming our system for the better.

'We now await news from the Senate as it moves forward with its own version of the health care reform bill. I will work hard to encourage our colleagues in the other chamber to preserve the most important components included in the House bill, particularly the public option. I also urge our Senators to incorporate that aspect of the House bill that ensured that our states are provided with adequate federal funding to cover the expansion of Medicaid to individuals and families to 150 percent of the poverty level,

REP. REYES ISSUES STATEMENT ON HOUSE PASSAGE OF AFFORDABLE HEALTH CARE FOR AMERICA ACT - US Fed News Service, Including US State News

WASHINGTON, Nov. 7 -- Rep. Silvestre Reyes, D-Texas (16th CD), issued the following news release:

Congressman Silvestre Reyes today released the statement below following the passage of H.R. 3962, the Affordable Health Care for America Act:

'This is a momentous occasion for the American people, particularly for the hundreds of thousands of El Pasoans who have unjustly struggled without health insurance in the world's wealthiest nation. The Affordable Health Care for America Act, as passed by the House, will dramatically improve the quality of life for so many families in our community, who will finally have access to quality affordable health coverage.

'I am particularly pleased this legislation incorporates a provision that I, along with Majority Leader Steny Hoyer, and others worked to include that will support the development of our medical school. The measure will allocate $100 million each year through fiscal year 2015 to the Department of Health and Human Services to help develop medical schools in federally-designated health professional shortage areas for construction, equipment, curriculum and faculty development. This is an exciting opportunity for our community.

'The House passage of the Affordable Health Care for America Act is one of the most significant legislative victories for the people of El Paso. Our community has one of the highest concentrations of America's uninsured population, with over 230,000 residents without health coverage, one in three people. Texas has the highest rate of children and adults without health insurance in the entire nation. The status quo is unacceptable, and we can no longer afford to pass this growing problem to future generations.

'While our community is spending a greater share of property taxes to pay for individuals without health coverage, insurance companies have continued to engage in practices that protect their bottom lines. For too long, insurers have been the gatekeepers to our health care system, with the power to dictate who receives health coverage and who does not. Americans with pre-existing conditions and serious illnesses are too often denied coverage or are dropped from their existing insurance plans for developing a serious illness or reaching their cap on coverage, and are denied access to the medical care they need.

'When people lack access to quality affordable preventative care, they end up in our emergency rooms for ailments that could have been treated by a family doctor or seek treatment for conditions that should have been diagnosed earlier. When these patients fail to pay their medical bills from publically-financed hospitals such as University Medical Center, local property taxes are used to cover these expenses. Since 1998, El Paso property tax payers have spent over $400 million to pay for treatment and services for those patients who could not afford to pay their medical bills.

'The Affordable Health Care for America Act will dramatically reduce the number of people without insurance in El Paso. First, it prohibits insurance companies from denying coverage due to 'pre-existing conditions.' It requires that every American obtain health coverage, and provides 'affordability credits' to individuals and families with incomes up to 400 percent of the federal poverty level (currently $43,430 for individuals and $88,200 for a family of four).

'The legislation also requires that most employers provide coverage. It includes exemptions for small businesses with payrolls of less than $500,000 and offers generous tax credits for those small businesses that elect to provide coverage for their employees. The bill creates an 'insurance exchange,' that will offer affordable health insurance plans for individuals without employer-provided or government-provided insurance (such as Medicaid and Medicare). This exchange will include a public option to encourage competition with private insurers to keep prices low for consumers.

'This bill also brings much needed relief and peace of mind for those who do have insurance coverage, as all Americans will no longer have to worry about the possibility of financial ruin due to a serious illness. It caps annual out-of-pocket expenses at $10,000 for families and $5,000 for individuals, and prohibits insurance companies from imposing lifetime limits on an individual's coverage.

'Our local community leaders have expressed their support for health insurance reform, and both the City and the County have passed unanimous resolutions in support of reform. The Affordable Health Care for America Act is endorsed by over 300 national organizations and associations, including the AARP, the American Medical Association, the American Cancer Society, the American Heart Association, the Consumers Union, the Catholic Health Association, and many other medical professional organizations.

'The passage of this landmark legislation by the House of Representatives is an historic achievement and reflects the commitment and determined leadership of President Obama and the Democratic Congress to follow through on a key promise to help middle class families, who have endured years of rising medical costs. I commend my colleagues for their determination to pass this truly historic legislation that will lower health care costs for all Americans, and strengthen our country's financial future.'For more information please contact: Sarabjit Jagirdar, Email:- htsyndication@hindustantimes.com.

REYES STATEMENT ON HOUSE PASSAGE OF AFFORDABLE HEALTH CARE FOR AMERICA ACT. - States News Service

WASHINGTON -- The following information was released by the office of Texas Rep. Silvestre Reyes:

Congressman Silvestre Reyes today released the statement below following the passage of H.R. 3962, the Affordable Health Care for America Act:

'This is a momentous occasion for the American people, particularly for the hundreds of thousands of El Pasoans who have unjustly struggled without health insurance in the world's wealthiest nation. The Affordable Health Care for America Act, as passed by the House, will dramatically improve the quality of life for so many families in our community, who will finally have access to quality affordable health coverage.

'I am particularly pleased this legislation incorporates a provision that I, along with Majority Leader Steny Hoyer, and others worked to include that will support the development of our medical school. The measure will allocate $100 million each year through fiscal year 2015 to the Department of Health and Human Services to help develop medical schools in federally-designated health professional shortage areas for construction, equipment, curriculum and faculty development. This is an exciting opportunity for our community.

'The House passage of the Affordable Health Care for America Act is one of the most significant legislative victories for the people of El Paso. Our community has one of the highest concentrations of America's uninsured population, with over 230,000 residents without health coverage, one in three people. Texas has the highest rate of children and adults without health insurance in the entire nation. The status quo is unacceptable, and we can no longer afford to pass this growing problem to future generations.

'While our community is spending a greater share of property taxes to pay for individuals without health coverage, insurance companies have continued to engage in practices that protect their bottom lines. For too long, insurers have been the gatekeepers to our health care system, with the power to dictate who receives health coverage and who does not. Americans with pre-existing conditions and serious illnesses are too often denied coverage or are dropped from their existing insurance plans for developing a serious illness or reaching their cap on coverage, and are denied access to the medical care they need.

'When people lack access to quality affordable preventative care, they end up in our emergency rooms for ailments that could have been treated by a family doctor or seek treatment for conditions that should have been diagnosed earlier. When these patients fail to pay their medical bills from publically-financed hospitals such as University Medical Center, local property taxes are used to cover these expenses. Since 1998, El Paso property tax payers have spent over $400 million to pay for treatment and services for those patients who could not afford to pay their medical bills.

'The Affordable Health Care for America Act will dramatically reduce the number of people without insurance in El Paso. First, it prohibits insurance companies from denying coverage due to 'pre-existing conditions.' It requires that every American obtain health coverage, and provides 'affordability credits' to individuals and families with incomes up to 400 percent of the federal poverty level (currently $43,430 for individuals and $88,200 for a family of four).

'The legislation also requires that most employers provide coverage. It includes exemptions for small businesses with payrolls of less than $500,000 and offers generous tax credits for those small businesses that elect to provide coverage for their employees. The bill creates an 'insurance exchange,' that will offer affordable health insurance plans for individuals without employer-provided or government-provided insurance (such as Medicaid and Medicare). This exchange will include a public option to encourage competition with private insurers to keep prices low for consumers.

'This bill also brings much needed relief and peace of mind for those who do have insurance coverage, as all Americans will no longer have to worry about the possibility of financial ruin due to a serious illness. It caps annual out-of-pocket expenses at $10,000 for families and $5,000 for individuals, and prohibits insurance companies from imposing lifetime limits on an individual's coverage.

'Our local community leaders have expressed their support for health insurance reform, and both the City and the County have passed unanimous resolutions in support of reform. The Affordable Health Care for America Act is endorsed by over 300 national organizations and associations, including the AARP, the American Medical Association, the American Cancer Society, the American Heart Association, the Consumers Union, the Catholic Health Association, and many other medical professional organizations.

REP. DORIS MATSUI ON AFFORDABLE HEALTH CARE FOR AMERICA ACT. - States News Service

WASHINGTON -- The following information was released by the office of California Rep. Doris Matsui:

Today, Congresswoman Doris O. Matsui (CA-05) joined with her colleagues in the House of Representatives to announce historic legislation: the Affordable Health Care for America Act. This landmark reform package will reform our nation's health insurance system, make health coverage more affordable and accessible, and increase the quality of care for all Americans.

Today's announcement comes after several months of discussions between Rep. Matsui and her constituents about ways to improve our current system, feedback which she has used to work with her colleagues to strengthen earlier versions of health insurance legislation debated in Congress. Congresswoman Matsui issued the following statement today at the launch of the Affordable Health Care for America Act:

'The Affordable Health Care for America Act represents the views of the majority of my constituents in terms of making health insurance work for all consumers at a price they can afford. This is truly a consensus piece of legislation that will hold insurance companies accountable, empower patients and their doctors, and make quality insurance accessible for America's seniors and families. It is a stronger and more comprehensive bill because of the feedback and input that I have received from Sacramentans over the past year. Thanks to these conversations, the bill now includes important investments in Medicare, an expansion and strengthening of Medicaid, and a policy allowing young Americans to stay on their parents' health insurance plans while they transition into financial independence.

'The legislation blends the bills passed out of each of the three House committees with jurisdiction over health policy, including the Energy and Commerce Committee upon which I sit. It builds upon the strong foundations put forth in earlier drafts, and includes a number of policies and amendments I championed to invest in wellness and prevention, strengthen the public health system, provide more community-based resources for people with mental illness, and give seniors choice about where to receive health services. The Affordable Health Care for America Act also includes sweeping new regulations of the insurance industry, such as prohibiting companies from denying coverage to those with pre-existing conditions and making it illegal for insurance companies to rescind people's coverage. Finally, the package includes creation of a public health insurance option that will inject competition into the health insurance marketplace and guarantee that all Sacramentans has access to a comprehensive suite of health insurance benefits.

'We cannot afford not to enact the important protections for Sacramento's families that are included in this legislation. The cost of inaction is too great: the high cost of our current health insurance system is suffocating many of our local families and businesses. The Affordable Health Care for America Act makes important investments in the health and well-being of the American people, our seniors, our economy, and our future. I strongly support it and I look forward to its passage by the House of Representatives in coming days.'

The key components of the Affordable Health Care for America Act include:

INCREASING CHOICE AND COMPETITION: The bill will protect and improve consumers' choices.

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If people like their current plans, they will be able to keep them.

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For individuals who aren't currently covered by their employer, and some small businesses, the proposal will establish a new Health Insurance Exchange where consumers can comparison shop from a menu of affordable, quality health care options that will include private plans, health co-ops, and a new public health insurance option. The public health insurance option will play on a level playing field with private insurers, spurring additional competition.

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This Exchange will create competition based on quality and price that leads to better coverage and care. Patients and doctors will have control over decisions about their health care, instead of insurance companies.

GIVING AMERICANS PEACE OF MIND: The legislation will ensure that Americans have portable, secure health care coverage - so that they won't lose care if their employer drops their plan or they lose their job.

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Every American who receives coverage through the Exchange will have a plan that includes standardized, comprehensive and quality health care benefits.

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It will end increases in premiums or denials of care based on pre-existing conditions, race, or gender, and strictly limit age rating.

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The proposal will also eliminate co-pays for preventive care, and cap out-of-pocket expenses to protect every American from bankruptcy.

IMPROVING QUALITY OF CARE FOR EVERY AMERICAN: The legislation will ensure that Americans of all ages, from young children to retirees have access to greater quality of care by focusing on prevention, wellness, and strengthening programs that work.

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Guarantees that every child in America will have health care coverage that includes dental, hearing and vision benefits.

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Provides better preventive and wellness care. Every health care plan offered through the exchange and by employers after a grace period will cover preventive care at no cost to the patient.

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Increases the health care workforce to ensure that more doctors and nurses are available to provide quality care as more Americans get coverage.

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Strengthens Medicare and Medicaid and closes the Medicare Part D 'donut hole' so that seniors and low-income Americans receive better quality of care and see lower prescription drug costs and out-of-pocket expenses.

ENSURING SHARED RESPONSIBILITY: The bill will ensure that individuals, employers, and the federal government share responsibility for a quality and affordable health care system.

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Employers can continue offering coverage to workers, and those who choose not offer coverage contribute a fee of eight percent of payroll.

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All individuals will generally be required to get coverage, either through their employer or the exchange, or pay a penalty of 2.5 percent of income, subject to a hardship exemption.

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The federal government will provide affordability credits, available on a sliding scale for low- and middle-income individuals and families to make premiums affordable and reduce cost-sharing.

PROTECTING CONSUMERS AND REDUCING WASTE, FRAUD, AND ABUSE: The legislation will put the interests of consumers first, protect them from problems in getting and keeping health care coverage, and reduce waste, fraud, and abuse.

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Provides transparency in plans in the Health Exchange so that consumers have the clear, complete information, in plain English, needed to select the plan that best meets their needs.

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Establishes consumer advocacy offices as part of the Exchange in order to protect consumers, answer questions, and assist with any problems related to their plans.

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Simplifies paperwork and other administrative burdens. Patients, doctors, nurses, insurance companies, providers, and employers will all encounter a streamlined, less confusing, more consumer friendly system.

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Increases funding of efforts to reduce waste, fraud and abuse; creates enhanced oversight of Medicare and Medicaid programs.

REDUCING THE DEFICIT AND ENSURING THE SOLVENCY OF MEDICARE AND MEDICAID. The legislation will be entirely paid for - it will not add a dime to the deficit. It will also put Medicare and Medicaid on the path to a more fiscally sound future, so seniors and low-income Americans can continue to receive the quality health care benefits for years to come.

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Pays for the entire cost of the legislation though a combination of savings achieved by making Medicare and Medicaid more efficient - without cutting seniors' benefits in any way - and revenue generated from placing a surcharge the top 0.3 percent of all households in the U.S.(married couples with adjusted gross income of over $1,000,000) and other tax measures.

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The Congressional Budget Office estimates the bill will reduce the deficit by at least $100 billion over ten years.

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