NEJM: Perspectives from Aaron, Reinhardt, Iglehart, Annas, Chambers and others

Apr 8 2011

This week's New England Journal of Medicine features perspectives from prominent authors on Medicare and Medicaid. NEJM granted KHN permission to excerpt substantial portions of these columns.

How Not To Reform Medicare
The reform flavor of the day is "premium support." What is it? What are its strengths and weaknesses? ... Robert Reischauer and I coined the term "premium support" for a plan ... [which] would be tied to average health care costs, not an economic index. The menu of private insurance plans would be limited to facilitate informed choice by enrollees. A nonprofit or government agency would provide explanatory literature and extensive counseling and handle sales to avoid misleading and costly sales methods. Group-based, retrospective risk adjustments — financial transfers among plans based on the risk profiles of actual enrollees — would make competition based on risk selection unprofitable.

Current versions of voucher plans lack all or most of these features. ... Only systemic health care reform holds out real promise of slowing the growth of Medicare spending. Predicted savings from vouchers or premium support are speculative. Cost shifting to the elderly, disabled, and poor and to states is not. Medicare's size confers power, so far largely untapped, that no private plan can match to promote the systemic change that can improve quality and reduce cost (Henry J. Aaron).  

Medicaid At A Crossroads  
Enacted in 1965 as an afterthought to Medicare, Medicaid has become a vast public enterprise that underscores the limits of the private insurance market even as it squeezes state budgets already stretched by the recession. These realities, along with the fact that an increasingly conservative electorate has given Republicans control of the U.S. House of Representatives, raise a fundamental question for policymakers: What level of support should government provide to people who can't afford private insurance and are not offered employer-sponsored coverage? ...

Medicaid stands at a crossroads. With policymakers poised to address large budget deficits, the program is vulnerable because of controversies surrounding it and states' inability to sustain its rapid growth. Ultimately, policymakers will revisit the decision Democrats made in the last Congress to greatly expand the program — thereby offering another answer to the question of the politically acceptable level of public support that the United States should provide to its poorest citizens (John K. Iglehart).  

Our Flawed But Beneficial Medicaid Program 
Many U.S. governors are proposing or implementing deep cuts to their states' Medicaid programs to address budget shortfalls, and some are calling for Medicaid to be converted to a block-grant program. Some commentators defend such policy retrenchment by claiming that Medicaid coverage fails to improve health outcomes — indeed, that its beneficiaries may have worse health outcomes than patients with no insurance at all. To make that case, these commentators have creatively interpreted observational studies that have examined clinical outcomes associated with particular medical interventions according to the patient's insurance type — Medicaid, Medicare, private coverage, or none — and found that outcomes for Medicaid patients are worse than those for uninsured patients.

... It's far more likely that such results are driven by selection bias. Medicaid enrollees (including dual-eligible recipients of both Medicaid and Medicare) tend to be sicker than uninsured patients and to have lower socioeconomic status, poorer nutrition, and fewer community and family resources. Medical and social service providers may also help the sickest or neediest patients to enroll in Medicaid — a more direct cause of selection bias.

... Medicaid has many problems, low reimbursement rates being arguably the most serious. If Medicaid's critics were seeking to raise its reimbursement rates and increase spending on the program, we would join their chorus. But they are using the invalid argument that Medicaid coverage is worse than no coverage at all to support proposals to cut back the program. Such an attack further damages this highly challenged program by undermining the political case for additional resources (Austin Frakt, Aaron E. Carroll, Harold A. Pollack and Uwe Reinhardt).

Women And Children Last — The Predictable Effects Of Proposed Federal Funding Cuts 
"Women and children last" might as well be the refrain of the current U.S. Congress's new health care budget cutters. We have seen similar efforts before. In the mid-1990s, managed care organizations tried to save money by limiting hospitalization benefits for new mothers and their infants to 24 hours after a vaginal delivery and 48 hours after a cesarean section. As with current Congressional proposals, financial savings were seen as more important than the health of women and children. Because only women get pregnant and give birth, restricting access to reproductive health care is discriminatory on its face and undermines the social and economic gains that women have made in the United States.

Yet there are at least two major reasons why proposals to limit or eliminate federal funding for women's reproductive health services appeal to some politicians. The first is that the primary beneficiaries of those services are low-income women and their children, a group with virtually no political influence — and no financial resources with which to fight these cuts. Second, comprehensive reproductive health care includes pregnancy terminations, and although women have a constitutional right to terminate a pregnancy before fetal viability, abortion remains the most contentious issue in U.S. politics.

... [U]nless the U.S. Senate and the President continue to stand with American women in promoting reproductive health rights as a fundamental part of their health and human rights ... women will see their rights and their health care eroded rather than improved under the [health law]. Political compromise is inevitable, but it should not continue to come primarily at the expense of women's health (George J. Annas and Wendy K. Mariner).

Listening to Provenge — What a Costly Cancer Treatment Says about Future Medicare Policy  
In April 2010, the Food and Drug Administration (FDA) approved sipuleucel-T (Provenge), a novel cellular immunotherapy for the treatment of asymptomatic or minimally symptomatic, metastatic, castration-resistant (hormone-refractory) prostate cancer. The pivotal clinical trial demonstrated the benefits of sipuleucel-T: an increase in median survival of 4.1 months as compared with placebo and fewer side effects than occur with docetaxel. Priced at $31,000 per treatment, with a usual course of three treatments, sipuleucel-T is one of the most expensive cancer therapies ever to hit the marketplace. In June 2010, in response to questions about whether and how its regional contractors would pay for the treatment, the Centers for Medicare and Medicaid Services (CMS) opened a national coverage analysis for sipuleucel-T. On March 30, the CMS issued a proposed decision stating that it will allow national coverage in line with the FDA-approved indication.

The CMS's decision to conduct its own evaluation of sipuleucel-T raises the question of why a second government agency must review the same medical technology (with the same evidence at hand) after one government agency has already approved it. The second review risks duplication of effort, impeded access for patients, and costly delays for manufacturers seeking to commercialize innovations.

... Although the FDA approved the drug, the CMS still faced a difficult decision: what to do about an expensive new cancer agent and the fact that each year tens of thousands of Medicare beneficiaries receive a diagnosis of prostate cancer. ... Of course, patients who wanted sipuleucel-T could opt into traditional Medicare to obtain it, but the traditional program may ultimately disappear as the new payment models take hold. Sipuleucel-T is a new treatment option for patients with prostate cancer. It raises important questions about prospects for parallel review by the FDA and the CMS. From a health policy standpoint, however, its lasting legacy may be its role in accelerating overdue payment reforms (James D. Chambers and Peter J. Neumann).