May 5, 2008

IN THIS ISSUE

Editor's Column: The Lesser Of Two Evils?
WCMSSM Wins Key Slots At MSMS HOD
WCMSSM Resolution Calling For GME Study Passes House
Pols Weigh In At HOD
Cost Control Key To Health Care Reform
The Uninsured Aren't Who You Think They Are
Young WSU Docs Reach Out To Detroit High Schoolers
HFHS Honored For Innovation

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Editor's Column: The Lesser Of Two Evils?

By JOSEPH WEISS, MD
The response to the April 14 New York Times article, Co-Payments Go Way Up For Drugs with Higher Costs, was extraordinary. The public awoke to the health insurance practice of charging patients a percentage – 20 percent to 40 percent – of expensive drugs such as Embrel, Remicade and Humira. These drugs run $1,300-$2,000 a month, meaning a cost to the patient of at least $3,000 per year.

The thrust of the e-mail criticisms was that: “Something must be done about this (terrible cost to the patient).” Unfortunately, there is nothing a patient advocate or physician can do. The marketplace is acting as it should: allocating resources by the mechanism of price. The marketplace rations health care by making it available to those who can pay for it.

Insurance companies must either raise premiums for everyone, or require patients using expensive drugs to bear much of the price burden. The health insurance companies decided raising premiums would lose them more market share than angering and losing the few people who would take on perceived extra cost.

If the public and the medial profession find the insurance companies’ action intolerable, the response is not to accuse the companies of greed, indifference to suffering, malice or ignorance. The response is to change from a marketplace environment in health care to another approach.

The alternative available now is a single-payer system, But if the public and the profession choose this alternative, remember that we will still have rationing. Under the best of circumstances, decisions on who will receive drugs such as Remicade and procedures such as implanted pacemaker-defibrillators will be made by experts in the field.

Then the newspapers will have the opportunity to expose men who play god and the tragedies that arise from placing faith in statistics that turned out to be incomplete or “doctored.” In short, no matter what the approach, we will have rationing of health care and decisions on allocating health that critics will call arbitrary and flawed.

However, until we try this alternative way, we will not know which approach, marketplace or single-payer, is the less arbitrary and least flawed.

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WCMSSM Wins Key Slots At MSMS HOD

WCMSSM Past-President Richard Smith, MD, was elected as President-Elect of MSMS for the term beginning in May 2009. WCMSSM member and longtime activist Michael Sandler, MD, was installed as president of the statewide organization for a one-year term that began Saturday. Current WCMSSM Acting President and President-Elect E. Chris Bush, MD, was elected Secretary of the MSMS Board of Directors.

Congratulations to all!

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WCMSSM Resolution Calling For GME Study Passes House

The following resolution key to the future supply of physicians was passed last weekend at the MSMS House of Delegates.

RESOLUTION 89-08A

Title: New Medical Schools in Michigan

Introduced by: Theodore B. Jones, MD, for the Wayne County Delegation Original Author: Wayne County Delegation Referred to: Reference Committee E House Action:

Whereas, national attention is being drawn to the shortage of physicians, and in particular, primary care physicians, and Whereas, in Michigan multiple institutions of higher learning and health systems have expressed interest in forming medical schools, and Whereas, there are finite human and financial resources available for new medical schools, and Whereas, as important as medical school expansions are, additional residency slots for completion of medical education and training are needed since there is currently a federal cap on the number of residency slots; therefore be it

RESOLVED: That before any medical schools are founded in Michigan, MSMS urge the state of Michigan to perform a thorough prospective study on their effect on existing medical schools; and be it further

RESOLVED: That MSMS urge state officials to conduct a study on the impact of current and new medical schools, existing residency training positions, and the effect on international medical graduates on the future supply of physicians in Michigan.

WAYS AND MEANS COMMITTEE FISCAL NOTE: NONE

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Pols Weigh In At HOD

By PAUL NATINSKY
Representatives from two of Michigan’s three branches of government delivered their message at the MSMS House of Delegates meeting at the Ritz-Carlton Hotel in Dearborn May 2.

Senate Health Policy Chairman Sen. Tom George, MD, cited individual behavior and responsibility as the key to improved health status and brought news of his committee’ passage of alternate bills on controversial individual health insurance market reform.

Michigan Supreme Court Chief Justice Clifford Taylor talked about his re-election campaign this year and the value of a conservative court that doesn’t try to make policy from the bench.

George applauded the House on its passage of anti-smoking legislation that would end tobacco use at restaurants and bars at the same time that he chided the larger chamber for rushing through individual health insurance market reform with little debate.

George cited studies that reveal 40 percent of health care utilization is driven by behaviors, like smoking. He said 30 percent are attributable to genetics, 15 percent to socio-economic factors, 10 percent are affected by the health care system and 5 percent by the environment.

He pointed to positive examples of policies that influence health behavior in other states, such as providing Target department store gift certificates to Medicaid mothers who make all of their prenatal visits and dental coverage as an incentive for the same behavior in another state.

“The problem is patients who are not compliant,” said George. “That is the frontier that we must face.”

George blasted the House for passing the individual market reform bills so quickly (14 days).

“I am ashamed of what the House passed,” said George, whose committee held nine hearings on the bills. He also criticized Blue Cross and Blue Shield of Michigan for “wanting it both ways,” meaning retaining their tax-exempt status while being permitted to set rates based on the risk they face from the health status of applicants and being permitted to invest in for-profit ventures in other states with their surplus income.

The Michigan Senate passed substitutes to the House-passed Blues bills that bear little resemblance to the originals.

George said the Senate-passed version, which bears his fingerprints, “does not allow a tax on premiums; does not lessen the power of the (Michigan) attorney general (in Blues matters); does not allow the Blues to siphon reserves to out-of-state, for-profit companies; but does allow the Blues to set rates based behavior (such as smoking).”

Chief Justice Taylor described his unflagging devotion to the principle of a conservative court, which is firmly connected to the upholding of medical liability reforms enacted 15 years ago and strongly supported by the Michigan State Medical Society. Taylor’s remarks were greeted with a hearty standing ovation from the assembled MSMS delegates.

Taylor stressed the apolitical nature of his position; the law is to be adjudicated without regard for parties coming before the court. He juxtaposed that with what he said is the stated position of presidential candidate Barack Obama, and, indeed, the majority of the legal community. Taylor said Obama’s position is that judges should put the “weak before the strong,” not adhere to the constitution, and do “what’s in your heart.” He described this position as “a prescription for a third-world judiciary,” such as might be found in Guatemala or sub-Saharan Africa.

He said one Southfield law firm of trial lawyers contributed more in an attempt to defeat him during his last campaign than MSMS and other health care organizations spent in support of him and the other justices that form a conservative majority on the court.

“I am the fourth vote and if I’m gone, the point of view that I represent will go away,” he said.

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Cost Control Key To Health Care Reform

By PAUL NATINSKY
Changes in health care coverage, financing and cost are necessary to reform the health care system and ameliorate the ongoing crisis in insurance coverage. This is not news, but, as is said, the devil is in the details.

As part of an annual week spent spotlighting the lack of health care coverage for, by latest estimates, 47 million Americans and 1 million Michiganders and 200,000 Detroiters, a panel of health care pundits gathered in Ann Arbor May 2 to share views and analyses that drilled deeply into commonly accepted suppositions and estimates.

Kevin Seitz, a vice president at Blue Cross and Blue Shield of Michigan, former head of the Blue Care Network HMO and erstwhile Michigan Medicaid director presented the trio of reform elements. In his analysis, the rising cost of health care services is the toughest nut to crack. In Seitz’ analysis, pharmaceutical companies drove huge increases in cost during the 1990s, with patents that were granted too easily and lasted too long. Further contributing to the problem, he said, is the fact that insurance companies compete on risk, specifically, trying to insure populations that present the least risk, and avoid those that rack up the highest costs.

“If we’re really honest, insurance is risk management – we try not to say that,” said Seitz. “I think insurance companies should be non-profit. I think insurance is a social good. I think it’s horrible that we compete on risk.”

It might be horrible, but is apparently necessary from the Blues’ perspective. A legislative package initiated by BCBSM and passed by the Michigan House last fall would allow the Blues, a tax-exempt company currently required to cover all who seek their products, to rate individuals seeking coverage and set rates based on the risks determined by the ratings. A vastly different version of these bills that does not contain this provision was passed by the Michigan Senate May 1 (see related story, this issue).

The way Seitz explains the individual market, which covers an estimated 300,000 to 400,000 people in Michigan, is in terms of “medical loss ratios,” which simply put, tell the percentage of premium dollars paid that actually go toward medical care. For example, an MLR of 80 percent means that 80 percent of money paid for premiums goes to medical care and 20 percent to administrative costs and profits for insurers.

Seitz says individuals seeking insurance are harder to reach than companies, requiring marketing to individuals through expensive means such as television and support of agents who sell the products to individuals. The result, he says, is that the MLR in the individual market has to be 80-85 percent for companies to break even, with 60-65 percent a desirable number for most insurance companies.

The Blues legislation calls for an MLR of 70 percent. The Michigan State Medical Society says this is not good enough and that Medicaid operates with an MLR of about 90 percent.

While cost is one leg of the stool, it has fueled crises throughout the system, particularly financing said Seitz. Seitz says Medicaid is 25 percent of Michigan’s general fund budget and the largest single program funded by the state.

“There is simply not enough capacity within state government to sustain Medicaid,” he said and added that, “virtually every governor is asking for (federal) relief from Medicaid.”

The crisis extends to the private sector and plays out this way, according to Seitz: “We’re seeing an exit of employers from the market.” Health care costs are increasing about 9 percent a year, while insurance premiums are climbing about 5 percent, leaving an additional 4 percent that is passed on to consumers in the form of copays on insurance premiums and general increases in out-of-pocket expenses.

Seitz said employers are also dropping their retiree health coverage, leaving those who retire before age 65 in the lurch and forcing them to buy their own Medigap policies to cover what Medicare doesn’t.

Seitz thinks the insurance system, public and private, needs to be remade and that the broad nature of the current crisis will spur this to happen after the upcoming presidential election – at least for the coverage and financing aspects.

He called for health care professionals to develop a more integrated system that focuses on providing for the health of a targeted population rather than simply providing services to individuals.

“We’ve got a system of individual entrepreneurs out there who might be linked by friendship or other ties, but are not integrated for purposes of delivering care.”

In near term, Seitz predicted that substantial changes will occur in the direction of universal coverage and financing reform, but measures to reduce escalating health care costs will be treated with ideology and rhetoric in place of action.

“I encourage you to take half a loaf, it’s an incremental system,” said Seitz. Let’s take universal coverage and finance reform and create a crisis for five years from now. We need cost control, (but must be willing to) trade it away in the end if we can make some progress.”

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The Uninsured Aren't Who You Think They Are

By PAUL NATINSKY
A vast majority of the uninsured, 83 percent, are members of working families, not the unemployed or very poor. The often-quoted figure of 47 million uninsured in the United States isn’t what it seems, either. Sixty-seven million people lacked health insurance coverage for a portion of the year last year, while 36 percent went the entire year without coverage.

Catherine McLaughlin, PhD, furnished these statistics and others, at a May 2 Cover The Uninsured Week event in Ann Arbor. The intent was to provide a more penetrating look at the uninsured crisis and to dispel some popular myths and misconceptions about the issue.

McLaughlin is a University of Michigan professor who is Director of the Economic Research Initiative on the Uninsured, a five-year Robert Wood Johnson Foundation initiative at the U-M.

She provided an alternate perspective on the nature of the uninsured problem, primarily by looking more closely at available statistics. For instance, the population of uninsured is often considered a monolith; either you have coverage or you don’t. In addition to the partial-year versus full-year lack of coverage mentioned above, McLaughlin said there is a disparity in the length of “workless periods.” “Some of the longest workless periods are experienced by men aged 45-55;” which is when many health problems, including heart problems and strokes, begin to become a factor for this population.

The problem is becoming a brushfire as numbers accumulated from 2001-2005 indicate. At the same time that 30,000 small businesses have stopped offering coverage, the average out-of-pocket cost for consumers has increased 30 percent while wages have increased 3 percent. For perspective, hourly workers earned an average of $35,800 per year and faced out-of-pocket health care expenses averaging $3,276.

What’s worse is that in Michigan, which has consistently been among the leaders in unemployment among states, faces this calculus: every 1 percent increase in unemployment results in 600,000 more children lacking coverage and 400,000 adults facing coverage loss.

There are also misconceptions that factor into the presidential candidates’ health plans regarding the cost of insurance.

McLaughlin said Sen. John McCain’s plan features a tax credit of $5,000 for a family to buy health insurance; the average cost is actually closer to $12,000.

Sens. Barack Obama and Hillary Clinton feature proposals that would provide coverage to all Americans equal to what members of Congress receive. The cost of such a plan is more than the $12,000 average for employer-based coverage.

Finally, there are misconceptions about why people remain uninsured. While it is true that a high number of young, healthy people voluntarily forgo the expense, mostly young men; broader numbers reveal that 7 percent say they don’t need health insurance, but 54 percent say they feel they need it but can’t afford it.

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Young WSU Docs Reach Out To Detroit High Schoolers

The guest speaker at the April 26 event was Galen Duncan, senior director of player development for the Detroit Lions. This year’s theme, “Dream, See, Do, Be,” focused on the importance of continuing education and career development and opportunities.

“We want to stress to the students that they can overcome challenges to be successful,” said first-year medical student Cecelia Calhoun, who, with first-year medical student Rebecca Lynch, serves as co-chairwoman of Young Doctors of Detroit. Ms. Calhoun is from Detroit, while Ms. Lynch hails from Terra Haute, Ind.

Eric Ayers, MD, assistant professor of internal medicine/pediatrics and associate program director of internal medicine/pediatrics; and Silas Norman, M.D., assistant dean of Admissions, also spoke to the high school students.

“They are very engaging speakers,” said Ms. Lynch. “We wanted them to speak on the importance of education and advancement. It’s important to provide role models.”

The 75 students also had the opportunity to break into smaller groups with volunteer professionals in a variety of careers to hear about what it takes to excel in those fields. The professionals spoke about the challenges they met while working toward their chosen careers.

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HFHS Honored For Innovation

Henry Ford Health System was honored by the National Kidney Foundation of Michigan with its Innovations in Health Care Award.

Henry Ford‘s Institute on Multicultural Health received the award, presented at the foundation’s 10th Annual Lansing Champion of Hope Tribute Dinner, for its African American Initiative for Male Health (AIMHI).

AIMHI strives to improve the health of African Americans through community-based prevention and early detection by providing health screening and health education targeting Type 2 diabetes, high blood pressure, stroke risk, and high cholesterol.

The AIMHI program helps to increase the number of African Americans who receive blood glucose screenings, reduce barriers to follow-up care and provide education through diabetes support groups. Mobile AIMHI screening clinics are conducted at various locations throughout the Detroit area.

AIMHI was among 12 applicants who presented their projects at the Champion of Hope Tribute Dinner and one of three who received the Innovations in Health Care, which acknowledges programs that improve the lives of Michigan residents with diabetes, kidney or cardiovascular disease.

The Institute on Multicultural Health, directed by Denise White Perkins, MD, PhD, is led by Kimberlydawn Wisdom, MD, System vice president, Community Health, Education, and Wellness.

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