Yet, even with the savings, the Maryland Health Care Reform Coordinating Council is warning that the health care system in Maryland could falter because of increasing costs.

“Our health care system will soon be unsustainable, regardless of these savings, unless we succeed in improving quality while reining in the runaway growth in costs,” said the report from the council, co-chaired by Lt. Gov. Anthony G. Brown and Maryland Health Secretary John M. Colmers.

Maryland “must affirm and strengthen its commitment to immediately begin serious and sustained efforts to bend the cost curve and align incentives toward quality, safety and efficiency,” according to the council’s interim report.

The midpoint for health care reform savings in the state is $829 million, with the benefits to the state budget peaking in 2019, five years after the state health exchanges begin operating. The health exchanges, set to begin in 2014, will provide individuals and small groups with a one-stop location to compare rates and obtain health insurance.

In fiscal 2020, however, Maryland’s health reform savings lessen, as the state appears likely to spend about $46 million more on health reform measures than it would have without the passage of the Patient Protection and Affordable Care Act in March.

Except for fiscal 2013, when a $1 million loss is projected, the council suggests cumulative savings every year through 2019. Annual projected state savings in $15 million in fiscal 2011, $11 million in fiscal 2012, $132 million in fiscal 2014, $354 in fiscal 2015, $604 million in fiscal 2016, $749 million in fiscal 2017, $829 million in fiscal 2018, $875 million in fiscal 2019. The estimates are based on an analysis  conducted by the Hilltop Institute, a research center at the University of Maryland Baltimore County.

In fiscal 2020, the savings slide back to $829, a decrease from its peak the prior year, largely because costs associated with health reform begin shifting to states. Those costs measures include administrative and enrollment processes for the exchanges, as well as money to cover the expansion of Medicaid, according to the report.

The council estimates that “substantial savings and new revenues” will be generated from more federal assistance for the Children’s Health Insurance Program (CHIP) and premium assessments on insurance products.

The council also predicts that even with a mandate that every individual obtain health insurance or face a fine that 6.7% of the state’s population will not enroll in an insurance plan. The state has about 700,000, or 15%, of its non-elderly population without insurance now, slightly less than the national average of 17%.

Health reform should trim about 400,000 people from the state’s uninsured rolls, Brown said in a statement on the report.

If, presumably, those people who do not enroll are the healthy ones, who elect to forego coverage to save the money, then overall insurance costs will further increase, as the pool of people covered has fewer healthy people to spread costs among.

To rein in health care costs, the council suggests that the state “expand and leverage” initiatives such as increasing access to primary care through patient centered medical homes, building a health information technology infrastructure and reducing hospital-acquired infections.

“Everyone—consumers, employers, providers, insurers and taxpayers—has a stake in promoting quality and access while improving efficiencies and incentives to reduce costs,” the report said.

Even with reform’s savings, Md. health care system ‘unsustainable’ via IFAwebnews.

Joel Ario

Joel Ario, the state’s insurance commissioner, said he fears that if Highmark and IBC, who collectively claim 55% of the state’s health insurance market, incorporate health profiling in their rate setting, it could cause a big shift in the current small-group market in Pennsylvania.

“If [the insurers] decide to become more aggressive in using health profiling tools to determine premiums charged to small groups, there could be a significant shift in the current market creating more uncertainty to consumers and more pricing segmentation, both count to the federal health reform efforts,” Ario said.

“However, there is nothing in Pennsylvania’s statutes or regulations that would restrict them from using medical and prescription information to develop rates on small-group business,” he said.

Speaking before the Pennsylvania House Insurance Committee and the Democratic Policy Committee, Ario released the findings of a report on the ratings and underwriting practices of the state’s nine largest health insurers writing small-group business. Gov. Ed Rendell sought the report earlier this year.

Ario said the profiling tools used include health questionnaires and prescription drug profiling, usually conducted at the time of the application. The nine insurers included in the study accounted for 89% of all group accident and health direct-written premium in Pennsylvania in 2008.

Ario urged state lawmakers to pass a law prohibiting health profiling and limit increases in health insurance rates between now and the implementation of health exchanges, scheduled for 2014 as part of federal health reform.

The insurance commissioner asked the General Assembly to set rate limitations, including a 2:1 band on rates with restrictions on the use of rating factors other than age, caps on premium increases, initiation of wellness accounts, development of standard health benefit plans and rate reviews by the department.

Ario said the bill (HB 746) can cure the problem by triggering a limit on the use of health profiling tools if adjustments to base rates hit certain specified caps.

Ario asked legislators to grant the Pennsylvania Insurance Department additional authority to request and obtain documents and information when handling consumer complaints, industry studies and surveys, and investigations of licenses.

He wants more transparency in rate filings to ensure consumers and “knowledgeable about the factors that affect premiums,” and he wanted “clearer guidance” in the rate spread/ratio in the small-group market leading to “less price segmentation,” Ario testified.

Small-group market ‘shift’ feared if two Pa. insurers use profiling via IFAwebnews.

Harry Reid

“We’re going to have a public option,” Reid, a Democrat from Nevada, said at a gathering of liberal activists at Netroots, according to Reason Magazine. “It’s a question of when.”

A government-run health insurance option was key component in the debate over health care reform last year, until Democrats said they didn’t think they could win enough support to include it in the health reform bill passed in March.

The insurance industry fears that if a public option is created, insurance brokers will not be part of the process of selling policy, eliminating a huge portion of the market.

Last week, 128 Democrats in the U.S. House of Representatives introduced a bill that would add the public option to the features of the health care reform law, the Patient Protection and Affordable Care Act.

Senate majority leader says public option isn’t going away via IFAwebnews.

The AMA’s action was in response to new reports that patients are receiving inaccurate profiles of doctors from health insurance companies.

The letters were cosigned by 47 state medical societies and called on each health insurer to publicly document the accuracy of its physician cost profiles by submitting the programs for external review by unbiased, qualified experts.

“Patients should always be able to trust that insurers are providing accurate and reliable information on physicians,” said AMA President Cecil B. Wilson, a doctor, in a statement. “Studies show that economic evaluations of individual physicians are so unreliable that they are more often wrong than right.”

Wilson said a series of studies recently conducted by researchers at RAND Corp. confirm the AMA’s “longstanding contention that serious flaws exist” in health insurer programs that attempt to rate individual physicians based on economic criteria.

One RAND study shows that physician ratings conducted by health insurers can be wrong up to two-thirds of the time for some groups of physicians. Under the best circumstances, insurers misclassified one-fourth of all physicians.

The AMA said this study and others “call into question the use of cost-profiling tools to control health care spending and provide the public with information.”

“Transparent, accurate information is critical when selecting a physician,” Wilson said. “Patients deserve to know that insurers are offering physician ratings that have a high risk of error and should not be the sole basis for selecting a physician.”

Wilson said patients must have accurate information to choose the right doctor.

“Flawed physician profiling programs help no one and hurt many by causing confusion and apprehension among patients and eroding confidence and trust in caring physicians,” Wilson said. “Given the damage these error-filled reports can cause, insurers have an important public responsibility to reevaluate whether physician cost profiling is working as intended.”

By working cooperatively with each health insurer to reevaluate physician profiling programs, the AMA and supporting state medical societies hope to address the concerns raised by the RAND studies, the doctors’ group said.

AMA urges health insurers to heal ‘flawed’ physician ratings via IFAwebnews.

These insurers’ newly found appeal is a result of health care reform, passed by Congress and President Barack Obama in March, according to Bloomberg Business Week.

Carlyle Group and GTCR Golder Rauner LLC, two private-equity firms, appear to be looking for acquisition targets, with Carlyle seeing medical insurers as “an attractive investment opportunity,” Karen Bechtel, head of the firm’s health-care team, told Bloomberg.

Much of the appeal is in the growing market assured with health reform. An estimated 16 million people could join government-funded Medicaid programs by 2020, according to the report. Those plans usually are operated by private companies.

In this post-recession economy, few industries can foresee that level of growth in the next decade.

The private-equity firms’ efforts could eventually make it more costly for Coventry Health Care, a Bethesda, Md.-based health insurer that favors growth through acquisition, to buy additional plans, the report said. Coventry, with 4.84 million members in March, is acquiring MHP Inc., an 180,000-member Missouri health plan operated by the Sisters of Mercy Health System. Terms of that deal were not disclosed.

Small health insurers could become big acquisition targets via IFAwebnews.

David Paterson

Paterson said he and his wife, Michelle Paterson, read about the contract with Group Health Inc., to be directed by the New York State Insurance Department, in an article in the New York Post Monday, according to the newspaper.

The first lady is Emblem Health’s director of integrative wellness, earning $152,000 a year.

Group Health is a subsidiary of Emblem Health, chosen for the contract because it is a non-profit serving most of the state, an insurance department spokesman told the newspaper, The contract is for $297 million.

A governor’s press office statement, issued July 1, said state officials “requested that GHI serve as the designated nonprofit contractor” to oversee the federal contract, whose terms include up to $30 million in “administrative costs,” according to the newspaper. A spokesman for the governor, Morgan Hook, told the newspaper the press office sent out the statement, not the governor.

Under federal health reform, passed in March, states are creating programs to insure more people, ahead of planned state health insurance exchanges in 2014.

Paterson unaware insurance department contract went to wife’s firm via IFAwebnews.

Donald Berwick, a controversial health care expert who along with colleagues wrote in 2008 that “the simplest way to establish many of these environmental conditions is a single-payer system,” using “budgets to take care of the health needs of a defined population,” will be the next head of the Center for Medicare and Medicaid Services (CMS).  Berwick has said that he is against using medical technology to keep elderly and terminally ill citizens alive, even if they or their families wish to use extra means, in favor of shifting those resources to other, more-healthy individuals.

In other words, health care rationing.

But don’t take my word for it. Last year, for a newspaper article, he said: “The decision is not whether or not we will ration care,” adding, “The decision is whether we will ration with our eyes open.”

And what kind of model would he use for America’s single-payer, rationed health care system?

None other than the United Kingdom’s National Health Service (NHS), for which he served as a paid consultant.

Two years ago, Berwick sang the praises of Britain’s government-run health system, telling a gathering celebrating the anniversary of the program, ““I am romantic about the NHS; I love it. All I need to do to rediscover the romance is to look at health care in my own country.”

His romanticism with Britain’s socialized medicine displays his affection for a more socialized society in general. He said during his remarks that health care funding “must redistribute wealth.” He further explained that, “Excellent health care is by definition redistributional.”

Nice.

Recess appointments are not rare, and they have been used by nearly every president in recent history. But this case itself is a bit rare.

President Obama had already submitted Berwick’s nomination for the post, but when he discovered that Senate Republicans would fight the nomination he took the opportunity of using the very short Fourth of July recess to make the appointment. That, in spite of the fact that the Senate would take up the issue in a matter of days.

But his forceful use of the presidential appointment powers means that Obama can begin implementing his health care reform law more quickly, and, more importantly, the move will keep confirmation hidden from public scrutiny and will avoid publicity of the health care debate. Polls have shown consistently that Americans do not approve of the law passed by the Democrat-controlled Congress.

Some Republicans have voiced something more than displeasure of the move.

“This recess appointment is an insult to the American people,” Sen. John Barrasso, a Wyoming Republican, was quoted saying in the Boston Globe. “Dr. Berwick is a self-professed supporter of rationing health care, and he won’t even have to explain his views to the American people in a hearing.”

Senate Minority Leader Mitch McConnell (R-Ky.) wasn’t so genteel in his remarks. He accused the Obama administration of sneaking Berwick through, issuing a statement in which he called the president’s actions “truly outrageous.”

“As if shoving a trillion-dollar government takeover of healthcare down the throat of a disapproving American public wasn’t enough, apparently the Obama administration intends to arrogantly circumvent the American people yet again by recess-appointing one of the most prominent advocates of rationed health care to implement their national plan,” McConnell said in the statement.

Some would say the president is being disingenuous with his power, that he is trying to implement a form of socialism that Americans don’t want. But truth be told, he said over and over during his presidential campaign that he was in favor of dismantling our current system of health care — which is second to none in the world — and replacing it with a single-payer system where the government makes the decisions for individuals regarding their health care.

Americans voted him in. Americans are getting exactly what they bargained for.

Obama pulls another fast one on health reform with CMS appointment via IFAwebnews.

Bruce Caswell

MAXIMUS, a Reston, Va., health and human relations consulting company, said its exchange will help states assess, design, implement and operate a cost-effective and efficient exchange that meets all federal and state requirements, according to a statement.
“State leaders must make critical decisions regarding how they extend health insurance coverage through an Exchange,” said Bruce Caswell, president and general manager of MAXIMUS Health Services, in a statement. “Our exchange solutions utilize our extensive government health insurance program experience to apply best practices that address each state’s unique challenges of expanding coverage and meeting the federal requirements.”

MAXIMUS intends to leverage its experience with Medicaid, the Children’s Health Insurance Program and other state-designed insurance programs to help state leaders, the statement said.

Under the reform law passed in March, states must develop exchanges where individuals and small-business owners can obtain information and buy health insurance, starting in 2014. Additionally, states must meet a “readiness determination” deadline Jan. 1, 2013, at which time they must be deemed ready to offer the exchanges one year later.

The exhange solutions focus on three key areas: assessment solutions to help states analyze their current infrastructure, translate the federal requirements to meet their situations; operations support to provide the necessary technology and program management support to implement an effective exchange that addresses governance, eligibility determination, linkage to other major subsidized programs, customer support and educational outreach; and quality-related services to help states ensure that the technology and operational components of the exchange and supporting systems are developed and deployed in a manner protecting consumer rights and other compliance requirements.

Va. firm wants to help states develop their health insurance exchanges via IFAwebnews.

Virginia Solicitor General E. Duncan Getchell Jr. told U.S.. District Court Judge Henry E. Hudson that the government’s requirement that individuals buy private health insurance would be “unprecedented,” according to the Washington Post. Getchell also called the law “ahistorical” and “radical.”

The Obama Administration’s lawyers argued that the law is appropriate and legal, given the national health care crisis, the newspaper reported.

Hudson must now decide if the federal government’s request to dismiss the suit should be granted. He said he would decide if the case can move forward within 30 days.

The suit, filed by Virginia Attorney General Kenneth Cuccinelli is one of a handful arguing the law is unconstitutional. A second one, filed in Florida, pits attorneys general in 20 states against the government, arguing that states will lose their constitutional freedom if forced to expand Medicaid programs required under the law.

The hearing in Virginia came the same day a new law took effect in the state, prohibiting an individual insurance mandate. Cuccinelli said the Virginia law, one of 38 state attempts to avoid the mandate, required his legal action in federal court.

The health reform, approved by Congress and President Barack Obama in March, requires every American to buy health insurance in 2014 or pay a penalty of up to 2.5% of annual income.

Critics of the mandate argue that the federal government has never before told Americans to purchase any product or service, while proponents of the mandate argue that without it, some people might only enroll in health plans when they are sick. In Massachusetts, where health reform has been in place since 2006 and where no individual mandate is in place, state officials recently reported that the number of people enrolling in health insurance plans for six months or less quadrupled from 2006 to 2008.

Va. AG office argues health reform law is ‘unprecedented,’ ‘radical’ via IFAwebnews.

In April, the monthly survey showed that people were more optimistic, probably in the wake of passage of comprehensive federal health reform legislation, passed in late March by Congress and President Obama.

The monthly Consumer Healthcare Sentiment Index found that confidence decreased three points from 99 in April to 96 in May, a statistically significant drop, according to a statement from researchers, who base the data on the Thomson Reuters PULSE Healthcare Survey,

In May, respondents expressed across the board pessimism in their ability to access and pay for healthcare services in the next three months — resulting in the prospective consumer healthcare outlook dipping from 99 to 96. Retrospective consumer responses indicated significant increases in postponement or delay of care, delay in or failure to fill a prescription and difficulty paying for healthcare over the last three months.

“The month-to-month fluctuations we’ve seen in the Consumer Healthcare Sentiment Index are consistent with other economy-wide consumer confidence indexes – continued high levels of unemployment and uncertainty around the impacts of healthcare reform are likely driving this volatility,” said Gary Pickens, chief research officer at Thomson Reuters. “According to the Thomson Reuters PULSE Healthcare Survey, 50 percent of respondents expect healthcare reform to increase healthcare costs. That concern is showing up in our consumer sentiment data.”

Despite reform, Americans pessimistic on health care access, funding via IFAwebnews.