News

On August 1, 2010, the U.S. District Court in Virginia ruled that the lawsuit against the Affordable Care Act (ACA) can proceed. Judge Hudson defined the issue as: “whether or not Congress has the power to regulate – and tax – a citizen’s decision not to participate in interstate commerce [by choosing not to buy health insurance.]” A summary judgment hearing on the case will occur on October 18 and every state and the federal government will be watching closely to see how the judge rules on the merits.

I have no expertise to comment on the merits of the case – there are attorneys on all sides of this question making what seem to me to be persuasive constitutional arguments both for and against the federal government’s authority as expressed in the ACA. And, clearly, the Virginia case will not be the last word on this issue. No matter what the outcome of that case, we know it will be appealed and the court action on the ACA will continue for a long time.

What I do want to comment on, however, is the merits of the idea of having a “mandate” – whether it is a true mandate or a tax is irrelevant to the way it is intended to operate in practicality. Recently, the Wall Street Journal reported that in many ways, health reform will represent a redistribution of benefits  This article focused on the transfer of funds and benefits from the old to the young.

Many more of our safety net programs transfer assets and costs from the young to the old – with a different framework of social justice: namely, the idea that older, retired members of society who have made their contribution should be supported by younger, working adults. The idea behind the redistribution of assets in health care reform is based on two fundamental principles: one a pragmatic, actuarial concept and the other a philosophical framework.

The actuarial concept behind the ACA’s requirement that all citizens have health insurance coverage is this: unless everyone is required to have coverage, only those who are or expect to get sick will get coverage. Over time, that would lead to what’s known as an “adverse risk spiral”: healthier individuals decide they don’t want to pay the costs of coverage, leaving behind a sicker population that raises the cost of coverage for everyone.

This issue is dealt with for the majority of those with coverage, by virtue of the employer-based group coverage approach used in the United States. In that model, all members of a group are required to be included in coverage, whether they want or need that coverage or not. This model has been somewhat modified in recent years as some employers have encouraged employees forgo health insurance for a cash bonus. But, the basic approach stands: group coverage always includes a mix of relatively healthy and relatively sick individuals, with some range of ages and circumstances as well. As such, group coverage is less vulnerable to the adverse risk spiral found in individually purchased coverage. The mandate component of health reform is an attempt to shift the individual market to look more like the group market, thereby making it more sound.

But, there is another issue at work with the ACA’s mandate– an issue about social justice and equity. Essentially, the ACA puts in place a principle that says it is in the public interest for all in society to have health coverage. There are many rationales for this principle. One is that insurance coverage is important in the context of population health: that is, we know that those with health coverage have better health status than those without. Another rationale is an economic one for society: those in better health are more productive than those who carry a significant disease burden. Additionally, health insurance coverage for all has an important component of fairness: that is, everyone will become sick at some point and when individuals with no health coverage end up sick, any care they receive is subsidized by the rest of us – the “free rider” effect. So assuring that everyone is required to have coverage does increase societal fairness for all.

Whatever happens in the health reform lawsuits, the underlying principles about how health insurance works – a pooling of the risks and sharing of the costs – cannot be forgotten. Like it or not, the individual mandate will make the private insurance market work better. And, it certainly improves fairness as well. Let’s not forget these important fundamentals in all the debate about taxation, states’ rights and the Constitution.

This past week, our Center released a report on the cost of chronic disease in Michigan. As we noted in that report, nationally, five percent of the U.S. population accounts for almost half of all health care spending and 20 percent accounts for 80 percent. In addition, according to the U.S. Department of Health & Human Services, chronic disease accounts for 7 out of 10 deaths annually in the United States.

In our report, we noted that for Blue Cross and Blue Shield of Michigan in 2008, those with no chronic conditions cost an average of $2,800 annually. By way of comparison, those with congestive health failure, the most expensive chronic condition we profiled, cost an average of $41,000 annually. Those with three or more chronic conditions incurred 10 times the medical expense of those with no chronic conditions.

What is particularly important to note about the conditions we profiled is that some of the most significant complications and resultant costs are either entirely or partially preventable. Hospitalizations associated with coronary artery disease, congestive heart failure, diabetes, chronic obstructive pulmonary disease, and asthma are all considered by the Agency for Health Care Research to be preventable. And, many would contend that early treatment would also prevent a significant amount of hospitalizations associated with mental disorders and osteoarthritis (the other conditions covered in our report).

And, perhaps even more significantly, many of these conditions could be entirely prevented in many people. The risk factors of obesity and smoking underlie many of these conditions and either cause or exacerbate them. While the number of smokers in our state and country has declined, smoking rates are still too high: 20.5 percent in Michigan and 18.4 percent in the U.S. overall (Michigan ranks 16th highest nationally in the relative percentage of smokers). And, obesity is increasing dramatically in our state and country. 29.5 percent of those in Michigan were considered obese in 2008 and 26.7 percent in the U.S. overall. Michigan’s obesity rate was 9th highest in the U.S.

So, the key take-away from this issue brief should be: we can do something about these issues. First of all, we know many things that work to reduce chronic disease. Value based insurance design encourages early intervention by reducing the barriers to needed and proven treatments. Community based strategies can help by preventing many of these diseases: indeed, we now have years of research on approaches that work to reduce smoking, and we know a lot can be done to keep people from smoking in the first place (or help them quit if they already smoke). Higher cigarette taxes, certain stop smoking campaigns, and laws that require smoke free work places all have been shown to work.

The research is less clear on what makes the most difference in reducing obesity (we know that bariatric surgery works to help those who are already obese but we know less about what is effective for keeping people from becoming obese in the first place). We do know the importance of multipronged strategies and working with schools and communities to help prevent childhood obesity.

We also know that we can’t afford to focus on just one issue when it comes to chronic disease. Steve Schroeder and Ken Warner made a powerful argument in the New England Journal of Medicine , reminding us that we have not won the war on tobacco use in this country. They pointed out that too many foundations and others have shifted their priorities toward reducing obesity, at the expense of initiatives to reduce the use of tobacco. And, while we clearly do need to focus on obesity, it shouldn’t be either/or. If we are going to really change the trajectory of chronic disease in this country – along with the attendant human misery and costs – we absolutely must use every proven tool and strategy we have. Prevention is the goal, but early intervention can make a huge and important difference, too.

One of the provisions I particularly like in the Affordable Care Act is the section that provides $1.5 billion over five years to states for home visiting programs for new mothers.

Under the Maternal, Infant, and Early Childhood Home Visiting Program, nurses, social workers, or other professionals are expected to meet with at-risk families in their homes, evaluate the families’ circumstances, and connect families with help related to health care, developmental services for children, early education, parenting skills, child abuse prevention, and nutrition education or assistance.

On July 21, HHS announced that it had awarded the first $88 million in funding for this initiative. Forty-nine states, the District of Columbia, and five territories applied for and were awarded these funds (principally distributed based on the relative proportion of children in poverty in the states). The first step in this initiative will focus on a needs assessment with additional funding coming later for programming based on the results of that needs assessment.

This provision is modeled on the David Olds’ Nurse Family Partnership program and underlines decades of research into the value of investing in our youngest children and their families. Indeed, this past week, David Leonhardt of the New York Times (I seem to quote him a lot in these blogs: he has a great perspective – or maybe, we just agree!) wrote a piece reporting on some recent research about how valuable it is to invest in young children. These researchers from Harvard looked at adult success based on the quality of kindergarten experience. One of the economists who conducted the research noted that a stand-out kindergarten teacher is worth $320,000, because that is what the success of children from their classes translated to in improved lifetime earnings and the like.

This research echoes the research on a cohort of children that attended the Perry Preschool program from 1962-1967 in our own backyard in Ypsilanti, Michigan. Larry Schweinhart and colleagues at the Highscope Research Foundation have been looking at cohort data for the Perry Preschool Program (a high quality early childhood program for three and four year olds) for four decades and found that benefits from high quality programs grow over time. The 40-year cohort study showed a return of $16 for every tax dollar invested in the Perry early care and education initiative.  Most of that return was the result of a combination of higher earnings and fewer crimes committed among this population as compared to the control group.

The Nurse Family Partnership Program, which was a foundation for the provision in the Affordable Care Act, is also a research-based program based on the theory that new, low income mothers can benefit from the ongoing involvement of a nurse in helping them to become better mothers. The nurse engagement starts prenatally and continues through the first two years of the child’s life. Nurses were selected for this work because the research showed that they are most trusted of practitioners and were able to build strong relationships with the women they were helping. The nurse family partnership program has documented a solid return on investment of at least 2:1 and as much as 5:1 in reduced child behavioral problems, crimes, and child abuse/neglect.

It is very significant that the Maternal, Infant, and Early Childhood Home Visiting Program is a provision of the health reform law that is not only authorized but also appropriated and was one of the earliest components of health reform to be implemented. $1.5 billion is a big commitment to an effort that is not as directly related to insurance coverage and medical care as the rest of the law. But, this is one effort that is truly at the core of what know can improve the lives of our children and reduce unneeded costs to society. This initiative is pure prevention at its best: research-based, public health-oriented and targeted to those it can help the most.

On July 13, 2010, HHS released final rules telling providers of care how to demonstrate the “meaningful use” of electronic medical records in order to be eligible for incentives starting in 2011. By 2015, most providers who don’t adopt electronic medical records will face penalties. The originally proposed rules were considered too rigid by many, and would have made it too difficult for hospitals and physicians to earn incentives. The final rules do give more flexibility than the initial rules published in January: the threshold to earn incentives is set somewhat lower and the bar is not an “all or nothing cliff.”

But even though the final rules are an improvement over the initial proposals, the provider community remains skeptical that the incentives – or penalties – in the rules are sufficient to entice a large number of providers to convert to electronic records. Most are predicting the dissemination will not be as fast or as deep as many would hope.

There is widespread support for the concept that electronic records can improve care. Global measures of the quality and safety of medical care show the potential impact of electronic records: countries with more extensive electronic records have better overall quality of care than the United States.

Yet, the data are also pretty clear about changing practice structure: it is hard and won’t happen overnight. Indeed, we already have data to say that the movement towards electronic records is going to be slow and somewhat painful.  A new study from the Center for Studying Health System Change (CHSC) tracks the use of e-prescribing and shows the scope of the problem.

Some consider e-prescribing an entry level component of a full electronic medical record; many groups and individuals have been promoting the use of e-prescribing systems for years. Indeed, vendors have all but given away these systems to encourage their use by physicians. But despite these efforts, the CHSC study shows that only two in five physicians in office-based ambulatory practice reported that IT was available in their practice to write prescriptions in 2008. And, I think, most critically, the authors reported that physicians who had access to e-prescribing did not necessarily use it routinely. Notably, about a quarter of those physicians reported using the technology “occasionally” or “not at all.” All told, in 2008, somewhat less than one third of ambulatory physician practices both had and used IT for prescription drugs.

The CHSC study was completed prior to the advent of federal financial incentives for the use of electronic records. It is almost certain that the numbers will improve as a result of the incentives and impending penalties. Even so, the CHSC findings are instructive about the challenges the implementation of full blown EMR strategies are likely to face.

The reality is: human behavior is difficult to change. And, though business schools have spent years developing change management structures for corporations, these methods are – at best – nascent in most physician practices in this country.

It is terrific that the federal government is providing technical assistance to practices to help them with IT implementation: that will certainly help with their success. But, we must be realistic about what can be accomplished and how long it will take. I do believe we will get there. But, this is truly a long distance race, not a sprint.

While my personal thoughts frequently center around issues such as “being,” on a professional level I have probably given more thought to the issue of physician employment than any other.

I am old enough to recall when an employed physician was actually an oddity. During my many years working on the provider side of the business, I experienced the rush to employ physicians (by hospitals in the 80s) that was akin to the gold rush. Many advisers and consultants, including think tanks like the Healthcare Advisory Board, suggested the real key to success was going to be physician employment.

You may recall this also ushered in the era of “physician practice management” companies that were going to hit it rich in the physician employment/management business; some, like Phycor, made it all the way to Wall Street.

And of course, we all remember hospitals that experienced devastating losses by acquiring physician practices. Subsequently, many hospitals and health systems reversed course – like ships heading for icebergs – and dumped all or many of their employed practices.

Throughout this time, reams of literature have been written on the pros and cons of the private practice of medicine. Many articles have extolled the virtues of “The Staff Model.” In addition, numerous “physician relationship” models have been published and promoted, claiming to be the Holy Grail of physician compensation and management.

When considering the topic of physician employment, the obvious question arises: By whom? Earlier I mentioned hospitals and physician management companies, but they are only two of an array of options. Foundations, for-profit companies, physician organizations, and multi-specialty groups are just a few other possibilities.

The topic of physician employment is once again front and center, and it continues to pique my interest as an insurance executive due to the implications for provider reimbursement models and physician/provider relationship issues. It certainly has bearing on current hot topics, such as patient centered medical home (PCMH), accountable care organizations (ACOs), etc. This issue has also become personal to me now that I have children who are physicians.

At the present time, it is pretty clear that many – if not most – hospitals have once again embarked upon aggressive plans to employ physicians. Interestingly, a few never stopped, particularly those who have based their systems on the Staff Model and Foundation Model. I have also talked with some hospitals who are not ramping up their employment of physicians and who still believe strongly in a pure private practice model.

Many articles in the literature indicate that recent healthcare reform legislation is likely to fuel consolidation in the provider community. Increased physician employment by hospitals and health systems would seem to be a likely outcome.

One of the big questions I have is: What has changed since the last time hospitals employed physicians that is fueling the current drive to employ physicians? Recent articles suggest the employment model will be “different” this time, yet, as I speak to hospital executives, they inform me that the losses incurred by employed physicians are similar to what I saw/experienced in the 1980s (approximately $20-$120K per year per employed physician).

I have also seen reports in the literature that each physician has the potential to bring $1-$3 million dollars in referral revenue to a hospital. Perhaps this is a motivation for employment. Yet, this logic only holds up if one is able to move business from competitors and produce adequate margin on that business to offset total cost. This logic didn’t seem to work out in the 1980s. It certainly doesn’t make sense if you are already the recipient of this business, except from a defensive posture.

Then there is the issue of independence and productivity. I have heard arguments on both sides of this issue from numerous physicians. It is a tough call and probably a very individual matter whether an independent or employed physician is more productive. I have personally seen proprietary data, during my days on the provider side, which demonstrated that employed physicians definitely demonstrated a higher level of loyalty to their employer than independent physicians.

It does seem clear that current medical school graduates have less of an appetite for setting up a private practice. This could be a generational or cultural/lifestyle issue. It could also be a function of debt load upon graduation, or a variety of other factors.

My colleague Tom Simmer, M.D. and I have had a number of provocative discussions on this topic. Based upon those discussions, and my utmost respect for Dr. Simmer’s opinion, I have come to believe that, in spite of the current trend to employ physicians, private practice physicians will continue to survive and thrive alongside their employed colleagues, at least during our lifetime.

I would love to hear your opinion on this evolving topic!

Bob Milewski is senior vice president of Contracting and Hospital Relations for Blue Cross Blue Shield of Michigan and a member of CHRT’s board of directors.

Early reviews are in and they are favorable! Public opinion polls show support for the Affordable Care Act (ACA) creeping up to 48 percent. All of that is good news, and a well-deserved commentary on health reform: States and the U.S. Department of Health and Human Services have been moving quickly to put in place the most immediate requirements of the law, and communities, providers, and others are stepping up to participate in health reform opportunities (e.g., funding for more primary care training slots through the Prevention and Public Health Fund). In addition, states have announced the beginnings of temporary high risk pools, and the federal government has debuted a new website – www.healthcare.gov – to help consumers in every state navigate their health care options.

These achievements are quite impressive. The work produced to date has been of good quality and has moved quickly in accordance with the commitments made in the ACA. And all of this has happened without a Medicare/Medicaid director in place – which will now change given President Obama’s recess appointment of Don Berwick.

These early steps are critical: their importance cannot be over-estimated. Indeed, if one looks closely at the dialog around health reform, it seems clear that the tone and expectations around the ACA have changed in a significant way: it’s beginning to feel like the ACA (in its broadest principles at least) will survive.

While the lawsuits challenging the ACA continue (testimony was given in the first lawsuit in Virginia on July 1, and hearings will begin in Michigan and California later this month) and are likely to end up in the Supreme Court, the work of implementation goes on. The activity around the implementation of health reform is building a sense of permanency around the ACA. Even states who are suing to stop the law are simultaneously moving forward to take advantage of many of its provisions.

Advocates bemoan the fact that the major coverage elements don’t go into effect until 2014, and many feel without those elements, most people won’t really see how health reform benefits them. But as health reform is unfolding, and with everything that is happening before 2014, it is now apparent that people all around the country will feel the effects of health reform long before the major coverage elements go into effect. And even if court challenges are successful, unwinding health reform will be difficult at best. Moving a bureaucracy to implement new things is tremendously difficult (especially when dealing with one sixth of the economy): reversing directions is even harder.

Those who want to see this law succeed might now see real hope for at least key elements of the law to survive. And while the individual mandate is the piece of the law with the least public support and the greatest risk in the courts, there is much more in health reform to improve the system beyond the individual mandate.

Now, if just a little more effort could be put into helping the public at the grass roots level understand just what health reform really is and how it benefits them, maybe even the individual mandate will survive…

The confirmation process for Don Berwick as President Obama’s nominee to be director of the Center for Medicare and Medicaid Services within the Department of Health and Human Services should be a most distressing sight to anyone who has spent their careers in health policy – or who even has a passing interest in the policies and politics of health care. And, if Dr. Berwick’s critics prevail, all citizens should be concerned about the message that would send about health care in this country.

It was bad enough last summer when provisions in the health reform bill that would have supported patients, families and clinicians with help they desperately need at the end of life got characterized as “death panels.” Those debates raised unnecessary fears and ended up diluting the end of life provisions in the final law such that families are getting less help than they might have. But, those debates did not go to the underlying and sweeping issues in health care. The current critiques of Dr. Berwick do. The Congressional critics of Berwick attack fundamental issues with a particular focus on how we use resources in this country. The outcome of this debate will have an impact on all citizens that will go far beyond health care.

Dr. Berwick has been “accused” of embracing the British system of health care. Heaven forbid that he should have good things to say about a system that has better health outcomes than ours on a population basis and at significantly lower cost (see the latest Commonwealth Fund report for its seven country comparison). The critics have said that Dr. Berwick’s embrace of the British system means that he is a big fan of another dreaded concept, “rationing.”

Dr. Berwick and most health policy analysts actually don’t disagree with that point, but note that rationing goes on every day in the current health care system in America – we just don’t make it very explicit – and that in the end, some form of rationing is necessary because we have limited resources and they must be used wisely so that multiple public needs can be served.

Many analysts have pointed out that the American health care system today rations care based on ability to pay. I actually think a more comparable situation to the British approach can be found within the health plans of those who are already insured. That is, I don’t know any health plan that pays for every procedure that has ever been invented. Rather, all health plans make choices about what to cover and what not to cover. Some couch those choices in a phrase in employee plan information called “medically necessary”, i.e. plans say they will only pay for what is medically necessary leaving the details of that definition up to the health plan itself. Some give a specific list of procedures that are excluded. But, none pay for everything.

This is rationing by any definition being used in Congress today: it’s just a less transparent, private sector approach to rationing in contrast to the British system that actually has a public entity that makes explicit decisions along these lines and that allows public debate of the pros and cons of these decisions.

Taking the arguments of the opponents of Dr. Berwick to their logical extension, they are either saying we should simply pay for as much health care as anyone, anywhere in the country wants (hmm, wasn’t there an argument that the Affordable Care Act didn’t have enough cost control in it?) or that it’s better to make these kinds of decisions through the inconsistent, somewhat ad hoc process that we have in place today. It is hard to draw any other conclusions from their arguments.

Over the year, Dr. Berwick has said things such as that in America we have a “dangerous, toxic and expensive assumption that more is better.” And, he has made clear his (and most other health care analysts’) belief that we can cut health care spending without harming patients because there is so much misspending in the current system. As a result, he has urged practitioners do things such as “reduce the use of unwanted and ineffective medical procedures at the end of life.” So, if this is the kind of “rationing” the critics disagree with, well, to do anything else would be plain…irrational.

Earlier in June, the New York Times ran an article by Adleson and Reed questioning the findings in the Dartmouth Atlas. Jack Wennberg and colleagues have been working in this field and documenting small area variation in health care since the 1970s. However, the work was not much recognized outside of academic and health care analytic circles until the start of the discussion on national health reform. In a very short period of time, the analysis went from being in the sole domain of providers and policy wonks (hmm, could that be me?) to being on the tip of the tongue of policy makers in Congress and the White House. Tracing the trajectory of this research from relative obscurity to the New York Times article provides an interesting insight into both the policy making process and the risks and opportunities inherent in trying to translate research into public policy.

The basic concept behind small area variation analysis is that health care utilization differs by community in ways that cannot be fully explained by the characteristics and medical need of the population being served in that community. Stated in this way, I think there are few who would actually disagree with that observation. On this point, the data are strong and have been consistent for the more than 40 years history of this kind of analysis. While the methodology has changed over time to look at these trends, the simple fact of unexplained variation is a robust concept. However, taking that observation and deciding what to do about it is an entirely different issue. To craft an intervention that tries to reduce unexplained variation, there must be a theory behind what causes the variation – and therein lies the rub.

There are many different theories to explain why there is so much regional variation in health care. Some believe that the variation is principally driven by the supply of providers (for those of us who went to public health school some time ago, the old Milton Roemer law: “a built bed is a filled bed is a billed bed”). Some believe that the variation is a result of practice patterns that have grown up regionally over time combined with a lack of clarity in the evidence base for treatments. Some argue that the variation has to do with true differences in patient characteristics that aren’t accounted for in the methodology. And, some contend that the way care is organized and delivered accounts for these differences.

While these explanations are not mutually exclusive (and many think there are elements of all of them at work), the explanation one believes is most important will lead to different ways to address the issue. And, beyond that, there is an underlying difference of viewpoint as to whether such variation is good or bad, i.e. whether areas with higher use rates are providing better or worse care and producing better or worse outcomes. For some discussion of this issue, it is useful to look at Dartmouth’s response to the New York Times article.

What happened with these data, however, is instructive and illustrative of the challenges inherent in translating research into policy. When Congress started paying attention to the data and seeing it as an opportunity to help with the cost savings needed to make health reform work – surprise, surprise –the “what to do about it” question became over simplified and the answers started a debate between high spending and low spending states about who should get more of the Medicare pie. That high profile debate resulted in the research itself becoming open to more and more scrutiny and critique and to the ultimate challenge posed in the New York Times article.

In the end, there probably isn’t one explanation for the variation or one set of solutions. The data included in the Dartmouth Atlas and in other analyses like this are a starting point for understanding where the opportunities are for quality and cost improvement – more analysis is really needed to get behind the numbers to understand the dynamics that lead to them. What would be most unfortunate in all of this debate, however, would be to lose sight of the fact that the degree of regional variation in how medical care services are provided in this country is enormous and much of it cannot be easily explained by differences in patient characteristics. The data in the Dartmouth Atlas are important indicators of opportunities to reduce health care spending in this country, and while there can be debate about how much and in what ways, the data must be taken seriously.

Today, we are releasing our 2010 report on health care coverage in Michigan. This report includes comprehensive data on the uninsured, publicly, privately insured and the safety net. In addition, we have included a final chapter on what could be the impact of health reform on coverage in Michigan. The 2010 report principally includes data from 2007/8, the most recently available comprehensive data on health care coverage in the U.S. and Michigan.

Perhaps not surprisingly, the picture of health care coverage in our state in 2007/8 looks considerably worse than it did in 2005/6. The degree of change in a negative direction is greater than we expected and most concerning. For example:

• While still better than the national average, Michigan’s uninsured increased significantly between 2005/6 and 2007/8. Michigan now ranks 16th lowest in the country in terms of the percent of the State’s population who are uninsured compared to 10th lowest in 2005/6 – that’s a concerning change in ranking in just one year.

• Medicaid expenditures continued to grow representing 22.2 percent of the total state budget in 2008, a considerable increase from the 18.9 percent it represented in 1999. Michigan ranked 16th highest in terms of state expenditures for Medicaid – a big change from 2007 when Michigan ranked 27th highest.

• The rise in the uninsured and publicly insured has been a direct result of the continued decline in private coverage in the state, going from 77.5 percent of the state’s population in 2003/4 to 74 percent in 2007/8. And for those with coverage, there has been a significant increase over the past several years in the share of premiums individuals are paying.

The report also notes the strain on the safety net these changes are taking – with more than $2 billion in uncompensated care now being provided by hospitals and safety net providers being challenged to care for all those in need.

We do project a very positive impact on these trends due to health reform. Indeed, if everyone who becomes eligible for Medicaid enrolls and everyone who is mandated to have private coverage, purchases that coverage, the number of uninsured in the state could go from more than 1 million in 2007/8 to less than 150,000 in 2014, mostly undocumented immigrants. And many will likely benefit from the subsidies and tax credits included in health reform. But, the most significant health reform changes won’t take effect until 2014 – 4 years from now. And, when we look at these data again for what has happened in 2009/2010, the trends are likely to be worse.

But given that the most significant changes from health reform won’t take effect until 2014 (and 2009/10 is likely to look worse than 2007/8), should we all just hunker down until then? Well, no. There are two charts in the report that I think are very significant and give us both hope and a challenge. If you look at nothing else in the report, take a look at the charts on pages 47 and 115 (ok, not a test to see if you read it!). On page 47, we noted that the state peaked in terms of enrollment in Medicaid in 2005 – a time when Michigan had a very robust outreach effort designed to get kids enrolled. At that time we had more than 55,000 kids enrolled in MiChild. The number has now dropped to less than 44,000 – not because the need or eligibility have changed but because there is no longer the outreach program as a result of state budget challenges.

Similarly, our data on page 115 show that almost 16 percent of those who are currently uninsured – more than 165,000 people are Medicaid eligible today under the current eligibility rules. So, these are our opportunities and our challenge: we can get many more people enrolled in coverage if we want right now – we don’t have to wait until 2014.

And, lest we get too overwhelmed with the negative, there is one piece of really good news in the report: again this year, Michigan health insurance premiums are less than the US average. In 2008, Michigan family premiums averaged $11,300, $1,000 per person less than the U.S. average of $12,300. Now, that is something to build on!

The recently passed “Patient Protection and Affordable Care Act” a/k/a “health care reform” is a monumental piece of legislation, both literally and figuratively. Despite its supposed intent to “reform” the health care system, however, it is quite tepid on reform and very aggressive on enhancing coverage.

The legislation contains a virtual smorgasbord of programs, directives, initiatives, instructions, orders, regulations, requirements, recommendations, exchanges, options, incentives, rewards, pilots, demonstration projects, commissions, task forces, centers, institutes, fees, grants, taxes, tax credits, and mandates. Unfortunately, very few of these components address, in any serious manner, what many clearly feel is the most critical problem of our current health care “non-system”: the ability to constrain the unrelenting and unsustainable increase in the cost of care.

For example, the chance to implement meaningful tort reform, substantially revise the provider reimbursement structure to reward value (quality) instead of productivity (quantity), improve end-of-life care, or link cost-effective analysis with coverage decisions was either relegated to small pilot programs (malpractice and reimbursement) or ultimately dismissed because of a lack of political courage (cost-effective coverage decisions and end-of-life care). The end result is that the legislation largely addresses coverage expansion and essentially ignores the underlying structural cost drivers. To put it more succinctly, the bill “dumps’ over 30 million newly insured members into a highly dysfunctional, inefficient, fragmented, and extremely costly health care non-system.

Notwithstanding the rhetoric of the bill’s partisan supporters that it will reduce health care costs (by “eliminating waste, fraud and abuse”!) and the federal deficit (by “bending the cost curve”!), the final result will inevitably be an acceleration and heightening of an already out-of-control cost issue. I would suggest that anyone who thinks otherwise probably needs an urgent head CT scan, immediate detoxification or an emergency psychiatric referral (or perhaps all three!). All of these services by the way will be readily available, at little or no cost and with little or no scrutiny, under a poorly designed, heavily regulated, quasi-government run, plan.

What is unfortunate about this situation is that our “leaders” had a real opportunity to truly “reform” (revolutionize?) the health care system but that chance is probably now lost. It is highly unlikely that any substantial or meaningful efforts or revisions along with these lines will be forthcoming in the near future. Instead, the focus will be on establishing the detailed rules and regulations that will govern the existing legislation. Attention will therefore be on the trees instead of the forest.

Smorgasbord sandwiches often taste good initially but when completely digested, the full effects become readily apparent. Under the circumstances, consulting your local gastroenterologist would seem to be a prudent next step.

Guest blogger Douglas R. Woll, M.D. recently retired from his position as senior vice president and chief medical officer for Blue Care Network of Michigan, the HMO subsidiary of Blue Cross Blue Shield of Michigan. Prior to joining the Blues in 1998, Woll spent almost a decade at SelectCare, where he served as senior vice president and chief medical officer. He served as a senior staff physician at Henry Ford Hospital from 1980 through 1989. Woll is certified by the American Board of Internal Medicine, and was elected a fellow of the American College of Physicians in 1998. He is involved with several professional organizations, including the Quality Committee of America’s Health Insurance Plans.