Health Freedom Watch
"The way we finance Medicare now is equivalent to taking out a credit card for our grandchildren and slapping our own medical bills on it."
Medicare Funding Warning Triggered; Legislation Proposed
On February 15 Health and Human Services Secretary Michael Leavitt sent a Medicare-funding warning to Congress. The warning, required by the Medicare Prescription Drug, Improvement, and Modernization Act, is triggered whenever the Medicare Trustees determine for two successive years that more than 45 percent of Medicare funding will be derived from general revenues during the next seven years.
In response, President Bush has proposed legislation that would, among other things:
- Make interoperable electronic health records “available” for Medicare beneficiaries.
- Assure a transition into the Medicare program for those individuals who own Health Savings Accounts (HSAs).
- Clarify that Medicare beneficiaries’ electronic health records will be covered under the HIPAA rule (which authorizes access to patients’ records without their consent).
- Shield health-care providers from liability when prescribing or dispensing prescriptions and medical products approved, licensed, or cleared by the FDA.
- Reduce the federal subsidy and increase premiums for prescription-drug coverage for single beneficiaries with incomes greater than $82,000.
Some think the warning trigger is unnecessary and should be eliminated. However, Nada Eissa, associate professor of public policy and economics at Georgetown University, says that would be a big mistake. “The way we finance Medicare now is equivalent to taking out a credit card for our grandchildren and slapping our own medical bills on it,” Eissa told PBS’s “Nightly Business Report.”
Retired Couple Needs $225K Savings for Noncovered Health-Care Expenses
BusinessWeek reports that a U.S. couple retiring at age 65 this year will need a savings nest of $225,000 to cover health-related costs for the remainder of their lives. The figure was determined by Boston-based Fidelity Investments; it includes Medicare premiums, copayments and deductibles, and out-of-pocket expenses for prescription drugs. BusinessWeek notes that the Center for Retirement Research at Boston College released a study estimating that a couple retiring this year would need approximately $206,000 for health expenses.
Baby Boomers Uninformed about Medicare, National Association of Insurance Commissioners Survey Finds
As the first wave of baby boomers turns 62 this year and begins claiming Social Security benefits, many are uninformed about their Medicare eligibility, according to the National Association of Insurance Commissioners (NAIC). The NAIC survey of 377 baby boomers (born between 1946 and 1964) found only 36 percent know that Medicare eligibility begins at age 65; 21 percent said 62; 9 percent said 67; 6 percent said 59½; and 28 percent weren’t sure. “Baby boomers need to get smart about their health insurance needs when planning for retirement,” stressed NAIC Executive Vice President and CEO Catherine J. Weatherford.
- Letter from Michael O. Leavitt, HHS Secretary to Nancy Pelosi, Speaker of the House, February 18, 2008.
- “Lawmakers in House, Senate Introduce Bush Administration’s Medicare ‘Trigger’ Bill,” Kaiser Daily Health Policy Report, February 26, 2008.
- “Medicare Funding Warning Response Act of 2008,” S. 2662, introduced in the Senate February 25, 2008.
- "Commentary: Curing Medicare,” by Nada Eissa, PBS Nightly Business Report, February 25, 2008.
- “Health Highlights,” BusinessWeek, March 5, 2008.
- “Baby Boomers Confused About Medicare, According to Recent NAIC Survey,” PR Newswire press release, February 26, 2008.
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Many Americans Want Major Changes in Health Care, Deloitte Survey Finds
Americans want better service, personalization, value, and increased access to holistic and alternative therapies; many want to customize their insurance with unique coverage and pricing features.
American consumers want more from their health care system than they’re currently getting—greater online connection to health care providers and medical records, customized insurance coverage and wider access to emerging innovations such as retail clinics, a new survey from Deloitte reveals.
At the same time, they express anxiety about future health care costs—only 7 percent say they’re adequately prepared financially—and increasingly search for alternative medicines and services that can save them money and offer convenience. But many also say they are willing to pay extra for wellness programs, and to support or consider tax increases to cover the uninsured.
The “2008 Survey of Health Care Consumers,” a representative poll of more than 3,000 Americans between the ages of 18 and 75, was conducted by the Deloitte Center for Health Solutions (http://www.deloitte.com/us/healthcareconsumersurvey). It was directed by Paul Keckley, executive director of the Deloitte Center for Health Solutions, and William Copeland, Jr., national managing director of the Life Sciences and Health Care practice of Deloitte Consulting LLP.
“More than anything, the findings convince us that Americans no longer see themselves only as patients, but as consumers who want to take greater control of their health care,” Keckley said. “Consumers will redefine our health care market, but how they do it is the most important strategic question the health care industry must answer.”
Copeland said the survey’s scope makes it one of the most thorough and comprehensive efforts to date to measure consumer attitudes, behaviors and unmet needs. “We believe these attitudes and consumer demands could have a transformative impact on the way health care services and products are developed,” he said.
Among the survey’s key findings:
- 93 percent say they are not well prepared for future health care costs
- 79 percent of consumers believe health care will be an important issue in the 2008 election; 46 percent described it as one of the top three issues affecting their vote
- 34 percent say they would use a retail clinic; 16 percent already have
- 60 percent want physicians to provide online access to medical records and test results, and online appointment scheduling; one in four say they would pay more for the service
- 1 in 3 consumers say they want more holistic/alternative therapies in their treatment program
- 3 of 4 consumers want expanded use of in-home monitoring devices, and online tools that would reduce need for visits and allow individuals to be more active in their care
- 84 percent prefer generic drugs to name brands
- 29 percent support a tax increase to help cover the uninsured; another 34 percent say they would consider a tax hike
- 52 percent of consumers say they understand their insurance coverage; only 8 percent understand their policies completely
For additional findings, visit http://www.deloitte.com/us/consumerism/library.
The way Americans think and behave in buying, managing and using their health care varies widely by gender, age group and cultural background, according to the survey. Women and men, for instance, have very different approaches to how they select and pay for their health care.
The Deloitte survey, however, found that consumer needs overall are basic—better service, personalization, value—and that they want specific tools to customize the health services and insurance programs they use. Consumers are embracing innovation. Respondents said they wanted health plans to provide help with clinical decisions, not simply administrative services, and many want to customize their insurance with unique coverage and pricing features.
In addition, the survey revealed the consumer health care market is not homogenous; key distinctions exist within different groups. An analysis of the data found that the more than 3,000 respondents fell into six discrete segments, ranging from “content and compliant” consumers more accepting of the status quo to “out and about” health care shoppers who tend to be more independent and willing to try unconventional treatments.
Those factors taken together carry with them the potential for dramatic near-term change in the way U.S. doctors, hospitals, health plan administrators, drug makers and biotech companies operate, Keckley noted.
- Press release reprint, “Groundbreaking Deloitte Survey Reveals Many U.S. Consumers Want Major Changes in Health Care Design, Delivery,” February 20, 2008.
- “2008 Survey of Health Care Consumers”: (http://www.deloitte.com/us/healthcareconsumersurvey).
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More than 1 out of 10 Consumers Report Having a Health Spending Account
Eleven percent of consumers report having a health savings account (HSA), health care reimbursement account (HRA), or flexible spending account (FSA), according to the Deloitte “2008 Survey of Health Care Consumers.” The survey of more than 3,000 Americans age 18 and older found the following regarding health spending accounts (excerpted):
- Sick & Savvy consumers are most likely (13%) to report having one of these types of accounts
- Casual & Cautious consumers are least likely (8%)
- Boomers (16%) and Gen X consumers (12%) are more likely to have a health-related account than Gen Y consumers (8%) and seniors (4%)
What’s more, 88 percent of consumers reported having some type of health insurance (including coverage through Medicare and Medicaid). But the type of insurance varies:
- 3% are enrolled in a high-deductible or consumer-directed plan
- 4% are enrolled in a point-of-service plan
- 6% are enrolled in a traditional indemnity or fee-for-service plan
- 29% are enrolled in a health maintenance organization (HMO)
- 47% are enrolled in a preferred provider organization (PPO)
Source: “2008 Survey of Health Care Consumers”: (www.deloitte.com/us/healthcareconsumersurvey).
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Who Will Be the Gatekeeper of Personal Health Information?
By Sue Blevins
Who should own and control personal health information that is stored electronically? That’s going to be an important issue in the coming years, especially as companies like Google and Microsoft offer individuals the ability to maintain that information online.
While providing information is essential when seeking services, one shouldn’t be forced to give up privacy and the freedom to withhold consent. In fact, as the nation moves toward interoperable electronic medical records, it’s important for citizens to gain greater privacy and control over their health information. The U.S. Department of Health and Human Services has noted:
“The electronic information revolution is transforming the recording of health information so that the disclosure of information may require only a push of a button. In a matter of seconds, a person’s most profoundly private information can be shared with hundreds, thousands, even millions of individuals and organizations at a time.”
Thus as health information technology advances, three ethical principles should be upheld with any new policy or law: consent, contract, and confidentiality.
Consent is the precious ethic whereby individuals exercise self-determination. Contract assures that people are associating on mutually satisfactory terms. And confidentiality is simply the ability to keep matters private. The American Medical Association defines a breach of confidentiality as “a disclosure to a third party, without patient consent or court order, of private information that the physician has learned within the patient-physician relationship.”
The best way to maintain the rights to consent, contract, and confidentiality is to make sure individuals own their health data.
Sonia Arrison of TechNewsWorld.com writes, “To create a better system where consumers are truly in control and can access their data anytime they want, a market-based system like Google’s personal health records or Microsoft’s HealthVault is the way to go.” She goes on to say, “For those who worry that the companies would then claim that all information on their servers is theirs, perhaps a law clearly making all health data the property of the consumer would be in order” (emphasis added).
I couldn’t agree more!
Sue Blevins is founder and president of the Institute for Health Freedom in Washington, DC
- U.S. Department of Health and Human Services, “45 CFR Parts 160 and 164: Standards for Privacy of Individually Identifiable Health Information; Final Rule,” Federal Register, Vol. 65, No. 250, Dec. 28, 2000, page 82465.
- “Health 2.0: A Promising Prescription” by Sonia Arrison, TechNewsWorld, March 7, 2008.
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Health Freedom Watch is published by the Insitute for Health Freedom. Editor: Sue Blevins; Assistant Editor: Deborah Grady. Copyright 2008 Institute for Health Freedom.