1.      April/May 2008 QHCR; under the caption “Consumer Driven Health Care Product”

2.       July 2006, QHCR; “The Impact of Consumer Driven Health Plans on Cost Trends”
  

We evaluated Obama’s, McCain’s and Clinton’s health care reform plans in detail in the January/February issue of the Quarterly Health Care Report.

We also discussed an “Innovative Approach to Health Care Reform” in the October/November 2007 issue of the Quarterly Health Care Report that merits rereading.  

In this issue of the Quarterly Health Care Report, we identified the drivers of health care costs and poor quality.  In evaluating both McCain’s and Obama’s health care reform plans (as well as others), one needs to determine how each of those plans address these major drivers.  Given the U.S. precarious economy, it is more critical than ever, that we focus on these drivers of high cost and poor quality.

The Obama and McCain Health Care Platforms: A Guide for Employers

In published statements and spoken comments, John McCain and Barack Obama have offered voters visions of health care reform. This InsightOut provides a broad overview of their platforms and focuses on three particular aspects that would have profound impact on employers: portability, mandates, and consumer-directed health.

Obama favors eliminating pre-existing conditions limitations and medical underwriting on individual insurance plans and establishing a new national health plan, which would compete head-to-head with privately insured products. Obama’s national plan has been described as similar to the Federal Employees Health Benefit Program (FEHBP), the program covering federal employees including members of Congress. The FEHBP offers a range of plan options from Consumer-Directed Health Plans (CDHPs) with HSAs through co-pay-based HMO plans.

He also proposes a National Health Insurance Exchange, a public agency that would create rules and standards for participating insurance companies. The Exchange would ensure that the coverage offered is at least as generous as the national health plan and those premiums are fair, stable, and not based on health status. The Obama camp claims that these initiatives would broaden the array of coverage choices for people not eligible for employment-based benefits and assist them in navigating the insurance markets.

McCain proposes a Guaranteed Access Plan (GAP), which would be available to anyone not eligible for coverage through traditional insurance markets. He envisions GAP coverage being provided by a non-profit corporation(s) that would contract with insurers to cover individuals who have been denied coverage.

One of the more controversial aspects of either candidate’s platform is McCain’s proposal to establish refundable tax credits ($2,500/individual; $5,000/family) to offset the cost of health insurance. These tax credits would be paid directly to the provider of coverage, whether it is a private insurer or an employer. McCain would revise tax law further, requiring that the cost of employer-sponsored coverage less the proposed tax credit and any employee contributions be imputed to employees as income and, possibly, for payroll tax purposes. Under current law, employees pay neither income nor payroll tax on the cost of employer-provided coverage.

Proponents of the McCain tax credit proposal argue that eliminating the favorable tax treatment for those covered by employer-sponsored health plans will level the economic playing field with individual policies, enabling employees to choose more freely between the two. Experts opposed to the McCain tax credit speculate that healthy employees will jump to the individual market and less healthy employees will remain in employer plans. This would drive up employers’ costs and could cause many to discontinue their plans.  The McCain camp counters this theory asserting that most employers will have to offer health coverage to emain competitive in the labor market.

 Questions underlying this aspect of the debate would include:

• Would employers prefer to be out of the health insurance delivery business or is providing coverage a tax-effective way to compensate employees and a practice most employers would like to continue?
  
• If employers are not the primary source for medical coverage, will they still be inclined to promote health and wellness in the workplace? If not, would the government fill the void?
  
• Would enhanced competition between employer plans and individual insurance, as McCain advocates, drive young,
  healthy employees into the individual markets, leaving the least healthy, most costly employees in employer plans?  Would that conceivably doom the employer-based system?
  
• Will McCain’s proposal eventually result in employers discontinuing coverage and potentially increase the uninsured population, or will it help to decrease the number of uninsured through a more robust individual market?

Mandates: Are They the Only Way?

Obama advocates an employer mandate and a partial individual mandate (young people to age 25 could remain covered under a parent’s plan). Under his “pay or play” proposal, employers would be required to meet minimum standards for health coverage or contribute a percentage of payroll toward a new national health plan. This money would be used to fund the proposed national plan, in which both ndividuals and employers could enroll.

The Obama proposed mandate would most significantly affect small employers not currently offering health coverage, employers with large uninsured segments of their workforces, particularly low-paid, uninsured workers, and those not meeting the yet-to-be-defined minimum coverage standards. It is not known at this time whether the mandate would apply to part-time workers, but industries, such as retail, could also be affected significantly.

McCain rejects employer and individual mandates. He focuses instead on improving access and affordability through tax incentives and free market initiatives. His platform advocates measures that would foster competition among individual insurance and employer-based coverage (as described in the previous section), insurance carriers operating across state lines, walk-in clinics and traditional physician offices, and domestic and international pharmacies.

Questions underlying this aspect of the debate would include:
 

• Is broadening access and affordability as McCain advocates enough to achieve coverage expansion goals or are mandates as Obama proposes necessary?
• Is a free market solution as advocated by McCain preferable, even if a large number of Americans remain uninsured or if coverage expansion goals take many years to achieve?
• Does an employer “pay or play” mandate as advocated by Obama make it more difficult for U.S. companies to compete globally?  Is coverage expansion through mandates worth the potential cost to the U.S. economy?

 Consumer-Directed Health Plans:  What Does the Future Hold?

Since CDHPs were unveiled in early 2000 and HSAs were legislated into existence in 2003, employers have gradually, but steadily, adopted CDHPs. According to the Kaiser/HRET Annual Employer Health Benefit Survey, 18 percent of organizations with 1,000 or more employees offered CDHPs in 2007, and 25 to 30 percent more say they are somewhat to very likely to do so in the future. The Kaiser survey reports that, as of spring 2007, roughly 7.9 million people or five percent of those enrolled in employer-sponsored health plans were covered by CDHP.

Questions abound with regard to CDHPs including:

• Are the plans suitable for low income workers?
• Do they effectively control medical trend?
• Can patients really manage their own health care and successfully negotiate price with providers?
• Do CDHPs discourage patients from receiving the necessary care?

McCain and Obama appear to be on entirely different pages with respect to CDHPs. McCain advocates solutions that put individuals more in control of health care spending and decision-making. He openly expresses support for HSAs. In his call for a refundable tax credit (described earlier) to offset the cost of health insurance, he proposes that the balance of the credit would be deposited into an HSA if innovative, less costly coverage were obtained.

By contrast, the Obama platform does not mention CDHPs. His call for a mandate speaks of employers making a “meaningful contribution to the cost of quality health coverage.” Whether a CDHP would qualify as “quality health coverage” would likely become part of the debate. It is perhaps noteworthy that Obama proposes a national health plan similar to the FEHBP. As mentioned earlier, the FEHBP offers a range of plan options, including a CDHP option, but the Obama platform does not specify whether, to qualify, a plan would be required to include all, some, or only the most generous FEHBP options.

In the Final Analysis …

The demise of the Clinton health reform plan in 1994 and employee reaction to changes in employer-sponsored plans occurring both before and since cast light on the biases and expectations of Americans with respect to health care. Despite the consequences, Americans seem to favor a system in which:
 

• Government plays a limited role,
• Patients have free choice of providers and care settings,
• Third parties stay out of health care decisions,
• Heroic life saving treatments are available to all,
• Patient out-of-pocket expenses are limited.

Most reformers and economists would agree that these values are substantially opposed to a sustainable health care system. Some might go further, arguing that so long as health care delivery remains in the hands of independent businesses driven by revenue growth and profit motive, any effort at reforming the existing public-private system is merely a band-aid.

It is probably a safe bet that neither John McCain nor Barack Obama will be promoting the idea of “nationalized health care” between now and Election Day. Although Obama’s platform leans more heavily on public sector initiatives, neither he nor McCain advocate the sweeping role of government envisaged by the Clinton plan or the rigid structure and tight controls it sought to impose.

Stay tuned for the election of 2016, however. If medical trends continue at historic levels, we may be paying twice as much for health insurance by then. That would put the average cost of family coverage around $25,000 per year!  Who knows what may be possible at that point. (“The Obama and McCain Health Care Platforms: A Guide for Employers,” By Anthony P. Riezi and Chantel Sheaks, Buck  consultants’ Insight, 2008)  

 Primary Care

Tom’s Comments:
Both Presidential candidates have identified some of the following objectives relating to their health care reform platforms:
 

• Providing a coverage “safety net” for the uninsurable
• Making coverage more affordable for low-income individuals
• Expansion of efforts to address chronic diseases
• Expansion of wellness initiatives
• Initiatives to address access to adequate health care services, etc.

All of these initiatives, plus many others need to be built upon the foundation of a primary care workforce.  As the authors state, “The success of any health reform effort will entail more than achieving universal coverage: it must include a robust and evenly distributed primary care workforce, along with adequate safety-net infrastructure and financing for those who are medically underserved.”  Primary care work force, for this discussion, is defined as primary care physicians, nurse practitioners, physician assistants, and certified nurse midwives.

Community Health Centers play a special role in meeting the needs of the uninsured.  Community Health Centers are a vehicle to provide basic cost-effective quality care to those in need of health care services.  Many of the Community Health Centers’ efficiencies are result of their team approach to providing health care services.

As the report discusses, there is a major shortage of primary care providers to adequately staff Community Health Centers in the U.S.  There is also a major shortage of primary care physicians, and this shortage is increasing.  I continue to work with the medical students at Ohio University College of Osteopathic Medicine.  Many of the students convey a passion for practicing in one of the primary care areas of medicine, but this passion is many times squelched by the reality of large medical school loans, relatively low pay vs. other physician specialties, and quality of life issues relating to primary care’s long hours.

The authors of this report did a good job in identifying a number of proactive strategies to address the shortage of primary care providers to staff Community Health Centers.  Over and above this shortage, more proactive incentives are needed to address the overall shortage of primary care physicians, which are the foundation for wellness, prevention, chronic disease management of our population.

In the last issue of the Quarterly Health Care Report, we discuss further the issue concerning the shortage of primary care physicians: May/June 2008; under the caption “Primary Care Reform”.

For additional information see The National Association of Community Health Centers Web site which can be found at: http://www.nachc.com/research-data.cfm

Building a Primary Care Workforce for the 21st Century

Pressure to reform the U.S. health care system is mounting in the face of growing numbers of uninsured individuals, widening health care disparities, and the rising cost of care – factors that fuel increasingly restricted access to needed health care for millions of people. Yet the success of any health reform effort will entail more than achieving universal insurance coverage; it must include a robust and evenly distributed primary care workforce, along with adequate safety net infrastructure and financing for those who are medically underserved.

The national trend so far indicates that we are not only falling short of that goal, but retreating from it. Indeed, what we face is a crisis of distribution in terms of the primary care workforce to meet local health needs. In short, there are not enough doctors, nurses, and other primary care professionals in the communities where they are most needed.

The current supply of primary care professionals is already being outpaced by rising demand, and our national health care system is notorious for providing America’s most vulnerable and chronically ill limited access to primary health care. In our previous report, Access Denied, we presented evidence that 56 million Americans lack adequate access to primary health care because of shortages of such physicians in their communities. These “medically disenfranchised” individuals represent one in five Americans, and still millions of others face additional barriers to primary care.

Evidence suggests that a further disappearance of primary care services will inevitably contribute to a worsening of health outcomes, a widening of health disparities, and a rising price tag on the cost of health care. Achieving access for the underserved therefore hinges on meaningful health policy advances that can tackle this worsening primary care workforce crisis. Building on the success of the federal Community Health Centers Program could anchor primary care practices in communities unable to attract or sustain sources of stable and high quality health care.

Moreover, as our Access Granted report revealed, health centers already save the health care system billions of dollars annually while pumping economic returns into the very communities that need them most. Recognizing that significant unmet health care needs persist for the millions of individuals without a regular source of care, and with an established and innovative model for primary care delivery, health centers are aiming to reach 30 million patients by the year 2015 under their ACCESS for All America plan. This requires producing the workforce needed to staff current and new delivery sites.

The plan envisions that health centers will eventually reach all 56 million medically disenfranchised individuals for a total of 69 million patients. Health centers have achieved record growth since 2000, thanks to a bipartisan initiative spearheaded by President Bush with Congressional support. Between 2000 and 2006, the number of primary care physicians at health centers grew 57%, while the combined number of nurse practitioners, physician assistants, and certified nurse midwives grew by 64%. At the same time, the number of nurses grew 38%.

Even so, health centers across the country are experiencing significant clinical vacancies and challenges in recruiting clinical staff. Consequently, the success of any effort to expand health centers in order to increase the availability of care for the medically disenfranchised and underserved will necessarily require more effective policies to address the production and placement of an adequate primary care workforce.

Given the current primary care workforce crisis, we determined the workforce required to achieve these ambitious goals. From our analyses, we project the following:

 • Health centers are increasingly challenged to meet their primary care workforce need. Health centers currently need 1,843 primary care providers, inclusive of physicians, nurse practitioners, physician assistants, and certified nurse midwives. On top of this need, they are 1,384 nurses short.

• To reach 30 million patients by 2015, health centers need at least an additional 15,585 primary care providers, just over one third of whom are non-physician primary health care providers. Health centers also will need another 11,553 to 14,397 nurses.

• To reach 69 million patients, health centers will need at least 51,299 more primary care providers over the current number, as well as an additional 37,981 to 44,522 nurses.

• Any workforce solution must specifically address the factors driving primary care imbalance in staffing patterns and need that exist across states. Robust staffing patterns allow for a comprehensive approach to meeting a community’s health care needs, including the full range of preventive and chronic care services and those services that facilitate access to care and address socio-economic conditions that lead to poor health.

 • Addressing these deficits will involve more than a continuation of current workforce policy. Policymakers must consider a series of targeted interventions that boost the overall U.S. primary care professional workforce, while also ensuring increased placement in medically underserved areas. A multi-faceted national and state course of action must strengthen the pipeline of would-be primary care professionals even before they begin formal medical education, expand training opportunities and placement incentives for locating in underserved areas, and ensure adequate reimbursement for primary care services. In particular, successful programs like the National Health Service Corps, which places primary care professionals in underserved areas, can and must be expanded, as should others that train nurse practitioners, physician assistants, certified nurse midwives, and physicians.

Primary care professionals are undeniably needed in underserved communities today. To meet this workforce need, policies must address the location and career choices among practicing and future professionals that cause an oversupply in some areas and an acute shortage in others. This report lays out the workforce needed to reach these goals, as well as a multi-faceted policy approach that will strengthen the nation’s primary care system and minimize health disparities, making it possible to ensure that every American can have access to vital primary health care. (“Building A Primary Care Workforce For The 21st Century,” National Association of Community Health Centers, Robert Graham Center, The George Washington University School of Public Health and Health Services,” August 2008)
http://www.nachc.com/client/documents/ACCESS%20Transformed%20full%20report.pdf

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