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A brief from the Department of Health Policy at George Washington University posits that the proposed limitation on coverage of medically indicated abortions within health care reform legislation will have industry-wide effects.
Current federal law prohibits any use of federal funds for abortion, with the exception of the case where a pregnancy is a result of an act of rape or incest, or where “a woman suffers from a physical disorder, physical injury or physical illness, including a life-endangering physical condition caused by or arising from the pregnancy itself that would place the woman in danger of death unless an abortion is performed.” Similar to Medicaid restrictions, federal employees also are subjected to limitations of coverage, unless ”the life of the mother would be endangered if the fetus were carried to term, or the pregnancy is the result of an act of rape or incest.” Within Medicaid, states are preserved the right to fund additional abortion services using only state and local monies, with 23 states currently paying for some abortion services beyond that permitted under the federal law. Private employers also have no mandatory exclusion of payment for certain types of medically appropriate abortions. In fact, 87 percent of employer-based insurance plans cover medically indicated abortions and 46 percent of workers have coverage that includes some level of abortion services.
The Stupak-Pitts Amendment seeks to continue the prohibition of federal funding for abortion in Medicaid and the proposed national health insurance exchange. The Amendment would:
- prohibit the use of funds either to directly pay for abortion or to buy an exchange product that coverages abortions other than a narrow range of services (i.e., a case of life-endangering physical condition)
- prohibit companies from offering supplemental coverage or plans that cover abortions unless they also offer an exchange plan that is identical in every respect except that no prohibited abortion coverage is provided.
- prohibit use of federal funds for that supplemental coverage, with administrative costs and all services offered through such supplemental coverage or plan to be funded only by premiums collected for such coverage.
The authors make the point that the health benefit services industry depends on standardization and norms, with a preference for products that can be offered in all markets. The new large market as created through a health exchange program is expected to include 30 million people within the first six years of implementation, taking into account that small employers are expected to migrate into the exchange system. As in other industries, with the exclusion of certain types of products from large markets, the market itself will shift over time as the insurers accommodate their products through redesign.
Under this Stupak-Pitts Amendment, the default coverage will become a product that excludes all but a limited number of abortion procedures, as the industry will seek to meet the lowest common denominator. In addition, the development of supplemental plans that cover abortion services will be limited due to the extensive difficulty of plan administration. Costs of supplemental coverage will be high as the supplemental premiums must alone cover all administration and the risk of cost for certain abortions that are connected with serious health conditions cannot be shared in the larger risk pool. Individual coverage determinations will differ for women based on their procedures, severity of health conditions and medical evidence in the case.
Complex decisions will be difficult as the abortion might not always be the immediate subject of the claim, i.e. part of a broader treatment for a serious health condition. Coverage determinations and grievance and appeals procedures will have to be separately administered to respond to different coverage rules. The legal risks involved will also be high as the commingling of plan administration duties between the prohibited and non-prohibited plans is difficult to avoid. Indeed this reasoning accounts for the lack of availability of such supplemental products currently in states that enforce the same sort of limitations on abortion coverage.
The authors also describe a potential for spillover effects from the administration of an exclusion that imposes a life-threatening coverage standard that will eventually consume the entire industry. Plan administrators will have difficulties with the complex decisions about whether a certain condition is life-threatening. They will be more likely to deny treatment altogether, rather than face the prospect of legal violation for paying for excluded abortions.
Commentary
Indeed, there will be significant standardization of insurance products as the health insurance exchange will include a large portion of our citizenry. As insurance companies join the exchange, incentives must be created to maintain their competitive nature through differing services. At the same time, the conversation must also turn towards the regulation of all insurance companies and their ability to apply unfettered subjectivity within their claims approval process. There are currently no sanctions for improper claims denials – the consumer has no recourse or apology after a long appeals process and the insurer has no incentive to prevent such action in the future. There must be a forum within the determination process that will force insurers to be subjected to a level of standardization that is appropriately reactive to medical evidence and that applies priority to fairness as opposed to the insurer’s profit margin. Among other results, such a forum might mitigate the spillover effects of excluded treatments in order to allow for the intent of the proposed Amendment to be realized.
by Kameron L. Matthews, MD, Esq.
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As the healthcare debate appears to have stalled in Congress, perhaps we should take note that health care is a limited resource. How to best divide this resource, in terms of how to define what is covered and what is not, has yet to be adequately debated.
A clever Perspective in the New England Journal of Medicine last month verbalized one of the most neglected issues in our current health care debate. How can America reconcile the conflict between covering more people versus covering more health services given a fixed amount of resources devoted to the health sector? The authors provide a simple comparison of the costs of insuring more Americans based on the cost of health insurance premiums. They looked at the cost of premiums ranging from 10th percentile ($2,800)), median ($4,200), and 90th percentile ($6,000) and calculated that to insure an additional 50 million Americans the nation would need to spend an additional $140, $210, or $300 billion annually, respectively.
Looking at the problem from another angle, the authors provide estimates on the average number of quality-adjusted life-years (QALYs) gained from certain medical interventions. Given the same fixed budget of $180 billion, the United States could provide left-ventricular assist devices for heart failure patients and thereby gain fewer than 360,000 QALYs. Alternatively, the nation could provide HIV medications and receive over 1.8 million QALYs. Currently, our society chooses among these choices based on financial factors. If you can afford it, you can purchase whatever health care technology will pay for. If you can’t, even inexpensive technology is out of a patient’s reach.
The authors go on to remind us of the Oregon Health Plan, where a commission of patients and doctors sought precisely to determine the relative value of various health care interventions. The goal was to change the implicit rationing our current health care system provides via the patient’s financial situation with that of explicit rationing via cost effectiveness and participatory democracy. However, the Oregon Health Plan has not been very successful at rationing care or saving costs. This is largely a factor of politicians being unwilling to implement deep cuts in services to their constituents.
Commentary
Our current health care debate has focused on expanding coverage to the uninsured, providing subsidies to help the uninsured purchase insurance, and fixing business practices which allow health insurers to avoid risky patients and abandon sick ones. What the health reform debate has missed has been a genuine discussion about the scope of health insurance, that is, what services should and should not be covered. Other than abortion services, which are only mentioned because of the ideological fervor separating the political parties over that issue, and mammography, which only became an issue when the USPSTF altered their recommendations, minimal energy has been devoted to determining which health care services our society values over others.
This article reminds us that the most difficult decision is adjudicating the battle for health care resources between the uninsured and the overinsured. Our political process makes it possible for specific interest groups to politically guarantee access to certain treatments or therapies. By requiring certain benefits be covered, the cost of insurance for everyone goes up. The more services required, the costlier it becomes.
The health reform bills under debate defer the definition of “minimal credible coverage” to administrators within the Department of Health and Human Services. First, our society must come to grips with the inevitable truth that health care is a limited resource and decisions must be made regarding how much, to whom, and by what means to distribute this resource. We cannot realistically cover all things for all people. We should not cover all things for some people. The first priority of our healthcare system is universality. With that as a goal, difficult decisions about where to draw the line on benefits coverage must be made in such a meaningful way that funds allocated for health can cover some things for all people.
NEJM. 2010. 362; 2: 95-97.
by
Cedric K. Dark, MD, MPH
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The Japanese tout one of the world’s best multipayer, universal health care systems in terms of long life expectancy, copious technology, and low cost. Still, areas for improvement persist and lessons for the US abound.
Of the myriad healthcare systems in the world, the Japanese system resembles one towards which the American system was metamorphosing. That was, until last week’s events threatened to stall or kill the movement for health reform in the United States. Regardless, in our zeal to promote a universal healthcare system structured around multiple payers, we find it instructive to examine international systems resembling that ideal. This post represents the first in a series of comparative national and international health systems.
The Japanese have guaranteed health insurance coverage to its citizens since 1958. Presently the life expectancy in Japan is the longest in the world, the infant mortality is among the lowest, and the per capita number of physicians, MRIs, and CT scanners is among the highest around the globe. Health costs in Japan amount to approximately 8 percent of GDP. Although this figure is growing, it remains far less than the 16 percent of GDP the United States spends on health care.
The Japanese system divides patients into one of the three segments – (1) employer based insurance, (2) the elderly (Roken), and (3) everyone else (Kokohu). Further fragmenting the employer-based health insurance system, Japan’s government manages insurance for small and mid-sized companies (Seikan) as well as government employees and teachers (Kyosai). Larger private firms are serviced by over a thousand separate private insurance (Kenpo) plans. Cross subsidization is paramount in the Japanese system and is vastly more explicit than in the American system.
When examined from this perspective, the Japanese system appears quite similar to the American one, except that the Kokohu plans which includes the self-employed and retired, also provider coverage for individuals without another qualified insurance plan. In this sense, the Kokohu could appear similar to a large national insurance exchange open to America’s currently uninsured.
Despite the positive aspects of the Japanese systems, scholars have identified several areas for reform:
(1) over prescription by physicians – doctors earn income by writing prescriptions and therefore it is no surprise that Japanese doctors write more prescriptions than are likely necessary. Drug costs amount to nearly one-quarter of total health costs in Japan (compared to only 10 percent in the US).
(2) resistance to cross-subsidization – large employer-sponsored plans cross-subsidize smaller plans within the employer based system as well as the elderly. As financial pressures worsen for Kenpo plans, many are losing the social solidarity supportive of cross-subsidization schemes.
(3) mixed private and insurance payments are prohibited – resistance to allowing a two-tiered system is strong among Japanese physicians. However, because of the comprehensiveness of benefits, there is little incentive to minimize marginally effective health care services on the part of patients.
(4) fee-for-service – the Japanese equivalent of American DRG system for hospitalizations was implemented in 2003. No value based systems yet exist.
(5) evidence-based medicine – over the past decade, the Japanese government has met resistance from the medical community over protocolized EBM as a threat to professional autonomy.
Commentary
To each nation, a uniquely tailored health system. As the United States continues to move towards universal health care, comparisons to other multipayer, universal systems are instructive. Many of the problems we face are still present in Japan. How the Japanese work to resolve the issues surrounding cross-subsidization of health care and the resistance to evidence-based medicine will help inform US lawmakers about how to tackle two critical issues: (1) explicit cross-subsidization in order to cover the uninsured and (2) the adoption of comparative effectiveness research as the next leap forward in evidence-based medicine.
A key point from Japan, however, is that there has been a commitment on the part of the people to provide care to all Japanese, not just those of financial means.
“International Health Systems Primer” by the American Medical Student Association.
“Sick Around the World” A PBS special on health systems around the globe.
BMJ. 2005; 331: 648-9.
by
Cedric K. Dark
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