Medicare at 48: Surviving And Still Innovating the Flagship Of American Economy And Jewel In The Crown Of The American Health System

by William Toby Jr., Health Care Consultant, William Toby Health Care Consulting Board Member, Adelphi University Center for Health Innovation Advisory Board

On July 30^th, surprisingly Medicare reached its 48^th birthday without any fanfare. Yet, it had much to celebrate. For it has transformed the dismal state of the elderly being   underinsured prior to 1965 and gave them health security and peace of mind. 

The world of 1965 was no bed of roses for the elderly. They were largely underinsured with an outrageously low coverage level of 53% and that coverage was limited to $10 a day. Thus, former President Lyndon Johnson enacted Medicare as an important addition to Social Security whose aim was to help prevent the elderly from becoming destitute after they could no longer work.

The inevitable medical expenses of old age were wiping out the life savings of those whose health insurance coverage ended with their retirement.  Together, Social Security and Medicare allowed those who worked all their lives and contributed to the country’s economy a more secure and dignified old age. In short, Medicare coverage transformed the lives of the elderly and is the main reason so many is in the middle class today.

Strikingly, of the 48 million Medicare beneficiaries, patient surveys show 83% of them are satisfied with their coverage and confident in their ability to get care, a figure private insurance cannot match.

It is little understood and appreciated that Medicare is the only stable payor in a fragile health care system dependent on third party payors. It pays every clean claim in 14-days versus 30-days for the private sector and it has the lowest administrative cost. In addition, per beneficiary spending has grown more slowly over time than private insurance premiums for comparable benefits.

Medicare’s impact on our economy is huge. Its annual expenditures of over $522 billion make it the flagship of the American economy representing 3.6 percent of our Gross Domestic Product and 16 percent of the Federal budget.

Many of the nation’s over 800,000 physicians depend on Medicare for their Part B income of over $21 billion. Our more than 5,000 hospitals receive over 28% of Medicare outlays and it finances more than one third of all hospital stays nationally.

The assurance of timely and adequate reimbursement for such a large proportion of their patients has allowed hospitals to borrow and invest in infrastructure, new technology and research and has helped enable important advances in medicine.

Our teaching hospitals depend on Medicare subsidies for graduate medical education and high technology services.  The subsidies alone for medical students have been estimated to exceed $70,000 per resident per year.

Looking back to 1965, much like the Affordable Care Act (ACA) today, Medicare at birth was met by dire predictions and given little chance of success by health planners, politicians, and the media. It was supposed to be a train wreck, given little chance of success. 

Medicare was opposed by the AMA, which called it socialized medicine. But President Johnson outsmarted opponents by adopting two guiding principles of government policy for Medicare implementation: (1) the public required more health services than the private market could provide; (2) the private sector was uniquely qualified to organize health services.

This compromise resulted in Medicare having to use the payment policies of the Aetna Insurance company’s Federal Plan and Blue Cross and Blue Shield based on “usual and customary” charges for non-institutional providers. Hospitals, Skilled Nursing facilities and Home Health Agencies were paid on the basis of reasonable cost.

Looking ahead, there are few challenges greater than improving Medicare for future generations.  Yet, it is important to meet those challenges in a way that do not sacrifice Medicare’s essential protections. Indeed, in this current polarized debate over the role of Medicare in deficit and debt reduction the crucial thing to remember is that Medicare  actually saves money compared to private insurance and that there are still policies Medicare can adopt that can save money in future years.

For example, a major goal of the new health care law (ACA) that receives too little notice in the media is “to sustain Medicare by reducing program expenditures.” Medicare now has the tools to link payments to the performance of health care providers and to test out new models for payment and service delivery.

Already, the cost controls in ACA are slowing expenditure growth and lowering health care costs. Since enactment the Affordable Care Act, health care spending has grown at the lowest rate in the 52 years since records have been kept. According to the Congressional Budget Office, spending on Medicare and Medicaid last year was five percent  lower than they predicted just two years before.

There’s a clear slowdown in health care spending. But we need to do more, and do it faster, to change the way Medicare pays for health care.  ACA reforms are a good start and should go forward since they represent new thinking on Medicare.

What I find worrisome about Medicare is that it is too oriented towards acute care when chronic illnesses represent 63 % of its spending. That figure is higher system-wide because we  are spending $2 trillion on health care and 75% of the costs and 7 out of 10 deaths are attributable to chronic diseases such asthma, diabetes, heart disease, and cancer.

The lack of care-coordination for chronic care sufferers results in high re-admission to hospitals. And they also end up in expensive hospital emergency rooms, which is the worst place for people with chronic conditions.

Yet, in Medicare today there is no system to manage chronic care cases, but health reform legislation like ACA and the Medicare Advantage program take Medicare in that direction.  Thus, for the near term, a focus on chronic conditions is the best policy approach for the future of the program.

From my point of view as a manager of Medicare for 31 years, Medicare at 48 is a great success because even in its present form it has delivered on its promise to provide health security for our elderly and disabled.

It is now up to us to make those policy decisions that will reform the program to protect it for future beneficiaries. 

Happy birthday, Medicare!

(William Toby Jr. is a former CMS Administrator who administered the Medicare and Medicaid programs.)

The School Snack Police Have Arrived, And Not A Moment Too Soon

by Diane Dembicki,
Ph.D., LMT, CYT, Clinical Associate Professor and Director of the M.S. in Nutrition Program, College of Nursing and Public Health

There was a story reported on NPR from the Washington Associated Press on June 27 that for the first time the Agriculture Department is telling schools what kinds of snacks they can sell. This Department sets nutritional standards for schools that receive federal funds for lunches, which is almost every public school and about half of private ones. These rules are based on a law passed by Congress in 2010 called the Healthy, Hunger-Free Kids Act which was put into place last year. The new federal snack rules go into effect next year. But it’s not without its critics, from Congress to the kids it affects.

I would like to address the criticism mentioned in the story. Some say the government should not be telling kids what to eat. They’re not really, because there is still a lot of choice. The “a la carte” lines and any vending machines now have to offer healthier foods. Students can still choose from those offerings or bring food from home, even birthday cupcakes (food allergies being more of a concern here). One high school student commented that they didn’t think anyone would eat the healthier food.  Well, there is a Nutrition scientist up in Cornell, Dr. Brian Wansink, who spends a lot of time studying eating behavior.  He is the past president of the Society for Nutrition Education and Behavior, and not only did I have the pleasure of meeting him at our annual conference, but I also agree with what he has to say. That we can try to educate people about healthy habits, and even though they probably know what they should do, the environment has a big influence on what they actually do. This was the very topic which was discussed in this week’s New York Times Sunday Review:  “Why Healthy Eaters Fall for Fries”(love that creative food photo). By the way, Dr. Wansink was the one that came up with the 100-calorie snack, manipulating the food environment.   I do believe if we offer only healthier snacks, it will be a part of the total picture that adds up to healthier kids.  

A couple of students who were interviewed said they didn’t like the new government ruling because they like the taste of sweet.  No problem there, they can still have sweet tasting fruit, 100% fruit juice, low-calorie sports drinks, and diet sodas.  A director of food services in a school district said the healthier foods are expensive. That may be something the government also needs to address. But I ask, how expensive is obesity? Never mind the comorbidities of cardiovascular disease and diabetes, once considered diseases of adults. The Healthy, Hunger-Free Kids Act is supposed to be part of the solution to the childhood obesity epidemic. Just last week, the AMA classified obesity as a disease. Obesity researcher Dr. James Hill at the University of Colorado welcomed the new classification. I worked with Dr. Hill when I was one of the clinical coordinators for the human clinical trials by the FDA on Procter and Gamble’s fake fat Olestra conducted at Colorado State University. People also like the taste of fat.

But tastes, such as liking sweet and liking fat, and the food environment, are just part of nutrition, the other part is physical activity. And that’s a whole other “Think About It “ blog. The federal snack rule can help, along with other things. As Mrs. Obama says, “Let’s Move!” Yes, let’s be active, and let’s also move on doing the things we need to do to have healthy kids.

Preparing for Hurricane Season

by Meghan McPherson

M.P.P., CEM, Coordinator, Center for Health Innovation,
Program Manager, Graduate Programs in Emergency Management

This week is National Hurricane Preparedness Week in preparation for hurricane season officially beginning June 1. The National Oceanic and Atmospheric Administration (NOAA) has predicted an above average Atlantic Hurricane season for 2013.  NOAA indicated in its recent hurricane forecast a “70 percent likelihood of 13 to 20 named storms (winds of 39 mph or higher), of which 7 to 11 could becomehurricanes (winds of 74 mph or higher), including 3 to 6 major hurricanes (Category 3, 4 or 5; winds of 111 mph or higher).  These ranges are well above the seasonal average of 12 named storms, 6 hurricanes and 3 major hurricanes.”  

The greater New York area is still in the beginning of what is an unprecedented and massive recovery from Superstorm Sandy.  Critical Infrastructure, home owners, hospitals, and community services are still struggling to come back.  That fact alone makes the area more vulnerable as hurricane season begins.  It is incredibly important to heed warnings when they are given by meteorologists and public officials to evacuate.  We have now learned a lesson all too familiar to people of the Gulf Coast. Watch the weather and when you are told to evacuate, do so.  By not evacuating, you put yourself, as well as first responders, in danger.

The federal government has an extremely user friendly site, ready.gov, that gives you tips for any type of hazard, how to secure your property, and how to make a plan for your family and loved ones.  While planning for an emergency, remember that medical preparedness is also key to successfully surviving a hurricane.  Make sure you know what medications you take and their dosages, you have the phone numbers for your doctors, and that you have done the same for elderly members of your family.

By taking simple precautionary steps to prepare your family for hurricanes, you can increase your resiliency in the face of disaster.

Adelphi Connection to the Granbury, TX Tornado

by Center for Health Innovation staff 

A series of tornadoes in Texas has initially reported at least six people dead, and 37 injured on Thursday, May 16, 2013. The city of Granbury, 35 miles southwest of Fort Worth, appears to have been struck the worst.

The tornado created a mass trauma event, unlike any other ever seen in the area. Dr. Kyle McCombs an emergency room physical and chief of staff at Lake Granbury Medical Center is reported in the The New York Times as saying,  “For a hospital of our size, we’ve never seen a mass trauma event like this… we had serious, major trauma, and a lot of it.”

Supporting the continuum of health care in emergency situations, like a tornado, was the focus of a recent Adelphi University symposium.  On the heels of Hurricane Sandy, the Adelphi Center for Health Innovation invited a panel of health care experts to share their expertise with attendees. The experts included featured speaker Dr. D. Sean Smith of Joplin, Missouri who like his Texas counter-part, Dr. McCombs, runs an emergency medical facility, Mercy Clinic, that was directly affected by a tornado.

At the Adelphi University program, Dr. Smith spoke of how on May 22, 2011, a tornado caused unprecedented destruction in Joplin, including this country’s first direct hit on an acute care hospital. Smith assisted with the initial Incident Command Functions for St. John’s Regional Medical Center.

In the fall 2012 semester, the Center for Health Innovation (CHI) had released a poll on emergency preparedness. The findings released showed that most Americans were not prepared for a catastrophic event. More than 1,000 adults over the age of 18 were surveyed in the university-sponsored poll with highlights that included: 44 percent don’t have first-aid kits; 48 percent lack emergency supplies; and 53 percent do not have a minimum three-day supply of nonperishable food and water at home. Ironically, soon after the poll was released, the region where CHI and Adelphi University is was critically affected by superstorm Sandy.

Another poll focused on mental health in times of disaster, asking whether professionals in that field were prepared to manage clients in such situations. The Mental Health and Disaster Preparedness Poll found that most mental health professionals felt their communities were only somewhat prepared for a disruptive event.

Adelphi University’s the Center for Health Innovation offers over 55 health-related academic programs across 7 schools and colleges. All contributing to an improved healthcare landscape. The university offers Emergency Management master’s degree and certificate programs online.

Thoughts from the CHI Symposium

by Dr. K.C. Rondello

The recent CHI Symposium served as reminder to all in government, medicine and the emergency services that continuity of care in a crisis can only be secured through collaboration of the participating agencies that cut across the spectrum of public health and medical services.  As anyone involved in emergency management will tell you, there is no straightforward disaster response — and as the three speakers appropriately explained, cross-discipline communication and cooperation are essential to meet the ever-changing demands of an evolving healthcare crisis.  

In times of non-disaster, the interconnectivity of the public, private and not-for-profit sectors is important – but in times of emergency, it is imperative.  In the past, medical disaster responders have too often viewed the continuum of care following emergencies through a single lens, most often through that of their own particular discipline.  The problem with such a perspective is that no health or medical concern is unifactorial.  In the increasingly complex U.S. healthcare system, patients must routinely rely on the interconnectivity of their healthcare providers.  In the same way, in order to optimally address our most vulnerable populations following a disaster, we must employ a more holistic model of disaster healthcare – one that simultaneously considers a patient’s social, behavioral and emotional well being in addition to their physical health.  

While this may sound intuitive, this ‘whole patient’ approach has only recently been considered in most disaster plans.  In the past, disaster health plans have typically addressed matters of physical health in isolation from other factors.  Adaptation of alternate standards of care, the establishment of temporary medical treatment sites and the maintenance of healthcare business continuity are all usually considered, along with plans for addressing mental, behavioral and emotional health independent of one another.  But only the most robust plans consider the connectivity of all these elements as they are related on one another in actual practice.  It has been said that ‘no man is an island.’  In the same way, in a crisis no responder is an island – and disaster planners must consider this in the next iteration of healthcare emergency plans.  

Rarely are personnel from the myriad of government and health response agencies brought together to discuss essential interorganizational cooperation and collaboration. The CHI symposium brought this concern to the forefront by highlighting the degree to which healthcare disaster teams, agencies and businesses are inextricably and forever reliant upon one another. With all the constructive and beneficial information presented by the distinguished speakers, that was perhaps the most valuable lesson of all.

Against Universal Flu Immunization

by Philip Alcabes, Ph.D.

In a strong piece at CNN online yesterday, Jen Christensen points out that no European countries expect the entire population to be immunized against flu — unlike the US, where everyone over the age of 6 months is urged to get flu vaccine every year.

Why does CDC recommend (based on advice by the Advisory Committee on Immunization Practices in 2010) that all Americans — from infancy on up — get immunized against flu?

A few possibilities:

1.  Public health benefit?

No.  Over the past twenty years, flu-vaccine coverage — the proportion of the population that is immunized — has been going up progressively.  But flu hospitalization and mortality rates have been basically constant.  If mass immunization had any public health value, those rates should go down as coverage goes up.

(A technical note: this means that coverage remains below the threshold needed to reduce influenza transmission population-wide, i.e., it isn’t high enough for herd immunity.  But that’s the point.  In order to be of public health benefit, flu vaccine would have to be accepted by almost everybody, every year.  And even that might not be enough:  For a nice explanation of why the efficacy of flu vaccine is limited, see Vincent Racaniello’s blog post.)

2.  Exceptional efficacy of the vaccine?

No.  Based on an observational study of acute respiratory illness patients published this month, the effectiveness of this year’s flu vaccine is 55% against illness caused by influenza type A (which accounts for about 80% of flu cases).  Effectiveness is 70% against type B.  Overall, the chances of being protected against symptomatic flu are less than two out of three.

Jefferson and colleagues found that the overall efficacy of  flu vaccines at reducing influenza A or B infection in children aged 2-16 is only about 65%, and that inactivated vaccines (i.e., the usual injection) had little impact on serious illness or hospitalization from flu-like conditions in this age group.

As with this month’s observational study, Jefferson et al.’s meta-analysis of multiple studies on flu immunization found that the inactivated vaccine had about 73% efficacy at preventing infection in healthy adults — but that efficacy can be as low as about 50% in years when the vaccine isn’t well-matched to the season’s circulating viruses.

Importantly, the Jefferson studies found that effectiveness of immunization — the prevention of serious illness or hospitalization from influenza-like illness — is very low.

There’s no sound public health rationale for encouraging everyone to be immunized against flu every year.

People who are likely to develop serious complications if they are infected can benefit from immunization.  But for most of us, immunization only reduces (by two-thirds) the already rather small chance of infection with influenza.  And it doesn’t protect us much from serious respiratory illness during flu season.

I commented in 2011 on public officials striving to help pharmaceutical companies profit from flu fears. And that’s what we’re seeing again this season — with exaggerated warnings and declarations of flu emergencies. Even though the latest national summary from CDC shows that less than 30% of all influenza-like illness is actually caused by flu this season — and that’s likely an overestimate, since it’s based on testing of more severe cases of acute respiratory illness.  And the surveillance data suggest that the season’s flu outbreak might already be past its peak.

Get immunized against flu if you’re worried.  But keep in mind that vaccination against flu is not going to help the public’s health, and it isn’t highly likely to help yours — it’s primarily your contribution to the profits of Sanofi-Pasteur, Novartis, GSK, or Merck.

Readers wishing to comment can visit Dr. Alcabes original post.

Philip Alcabes is a professor in the Adelphi University School of Nursing and director of the Public Health Program. He is an epidemiologist and has studied the history, ethics, and policy of public health.

The Myth of Normal Weight

by Philip Alcabes, Ph.D.

Don’t miss Paul Campos’s commentary on overweight and obesity in today’s NYT.  Responding to the latest report by Katherine Flegal of CDC and coworkers, Campos points out that:

If the government were to redefine normal weight as one that doesn’t increase the risk of death, then about 130 million of the 165 million American adults currently categorized as overweight and obese would be re-categorized as normal weight instead.

The report by Flegal et al., published this week in JAMA, is a meta-analysis of 97 studies on body-mass index (BMI) and mortality.  This new analysis found that mortality risks for the “overweight” (BMI 25-29.9) was 6% lower than that for “normal” BMI (18.5-24.9) individuals.  And those in the “grade 1 obesity” category, with BMIs from 30 to 34.9, were at no higher risk of dying than those in the so-called normal range.   Only those with BMIs of 35 and above were at elevated risk of dying, and then only by 29%.

In other words, people who are overweight or obese generally live longer than those who are in the normal range.  Only extreme obesity is associated with an increased probability of early death.

Flegal and colleagues already demonstrated most of these findings using administrative data, in an article appearing in JAMA in 2005.  There, they reported no excess mortality among people labeled “overweight” by BMI standards, and that about three-quarters of excess mortality among the “obese” was accounted for by those with BMIs above 35.

What’s notable about this week’s publication is that it has attracted the attention of some heavy hitters in the media.  Pam Belluck covered the JAMA report for the NYT.  Although her article seems more interested in propping up the myths about the dangers of fat than in conveying the main points of the new analysis, Belluck does acknowledge that some health professionals would like to see the definition of normal revised.

Dan Childs’s story for ABC News gives a clear picture of the findings, and allows the obesity warriors, like David Katz of Yale and Mitchell Roslin at Lenox Hill, to embarrass themselves — waving the “fat is bad” banner under which they do battle.  MedPage Today gives the storystraight up.   In NPR’s story, another warrior, Walter Willett of Harvard, unabashedly promoting his own persistently fuzzy thinking, calls the Flegal article “rubbish” — but the reporter, Allison Aubrey, is too sharp to buy it from someone so deeply invested.  She ends by suitably questioning the connections of BMI to risk.

Campos’s op-ed piece does the favor of translating the Flegal findings into everyday terms (and without the pointless provisos that burden the NYT’s supposed news story):

This means that average-height women — 5 feet 4 inches — who weigh between 108 and 145 pounds have a higher mortality risk than average-height women who weigh between 146 and 203 pounds. For average-height men — 5 feet 10 inches — those who weigh between 129 and 174 pounds have a higher mortality risk than those who weigh between 175 and 243 pounds.

Is the hysteria about overweight and obesity is over?  I’m sure not.  In today’s article, Campos — who was one of the first to explode the fiction of an obesity epidemic, with his 2002 book The Obesity Myth – reminds us of a crucial fact about public health:

Anyone familiar with history will not be surprised to learn that “facts” have been enlisted before to confirm the legitimacy of a cultural obsession and to advance the economic interests of those who profit from that obsession.

There’s too much at stake with the obesity epidemic for our culture’s power brokers to give it up so quickly.  One day, some other aspect of modernity will emerge to inspire dread (and profits).  In the meantime, we might at least hope to see some re-jiggering of the BMI boogeyman.

This post was originally published on January 3, 2013.

Philip Alcabes is a professor in the Adelphi University School of Nursing and director of the Public Health Program. He is an epidemiologist and has studied the history, ethics, and policy of public health.