Healthcare in a Minute – July 2017

By George W. Chapman


The Republican-controlled Senate is planning to vote on a revised American Health Care Act bill by the end of June. (This may or may not have happened by the time you read this.) Congress goes into summer recess July 4. The Senate seems to be rushing this through without much analysis, especially after the Congressional Budget Office projected 23 million people would lose their insurance if the ACHC passes as is. Political insiders think the Senate wants to vote before recess (get it out of the way) so it can concentrate on other issues like tax reform and infrastructure funding when they return to work. If the bill is put up for vote before recess and does not pass the Senate, many believe nothing or little will be done until much later in the year. Consequently, the ACA (ObamaCare) would remain law of the land.

NYS Medicaid

Gov. Andrew Cuomo has proposed to ban any insurer from participating in NYS Medicaid if they exit from the NYS insurance exchange where individuals go to buy insurance, sometimes subsidized depending on income. The ban does not prohibit insurers from selling employer-based health insurance. The ban extends to any contracting with state agencies. Cuomo does not want the state “to go backwards” when it comes to healthcare. Insurers doing business in NYS must continue to provide the 10 essential health benefits and pre-exiting conditions guaranteed under the ACA. The bill currently under consideration in the US Senate (TrumpCare) would allow states to reduce some or all of the 10 essential benefits including hospitalization, mental health, pediatric and maternity services.

NYS Universal Healthcare Bill

Overshadowed by the constant media attention on TrumpCare, on May 27 the NYS Assembly quietly passed a universal healthcare bill, called the New York Health Act, 92 to 52. The universal health bill would cover the 9.7 million New Yorkers (49 percent of 19.8 million total residents) currently covered through their employers. The remaining 51 percent of New Yorkers are covered by either Medicaid, Medicare, VA or federal employee insurance. Like many states, because of the uncertainty of the AHCA in Washington, NYS is taking matters into its own hands. Proponents estimate it will save New Yorkers money saying the NYHA could be funded by an income assessment averaging 8.1 percent of payroll. Currently, employer contributions to insurance averages 12.8 percent of payroll. Opponents argue it would be more expensive than what employers are paying now. The NYS “normal” budget is expected to be about $82 billion the first year of the NYHA, 2019. Critics figure the NYHA will cost an additional $91 billion and that would prove to be prohibitive. But if the NYS Senate does not pass the bill, all speculation is for naught. To pass, all 31 democrats, virtually half the Senate, would have to vote yes.

New Medicare Fraud

Typically, Medicare fraud is committed by a legitimate provider of care billing for services never provided or by an illegitimate/phony provider billing for services never provided. Now insurance companies can get in on the act. America’s First Choice Holdings of Florida was fined $32 million in a case brought by a whistle blower. Medicare pays Advantage plans a premium for each member enrolled by them. The premium is based on an individual’s claims experience. Basically, the sicker a member (one requiring a lot of services), the higher the premium paid to the Advantage plan by Medicare. In order to maximize premiums received, First Choice “made material misrepresentations” which means inflating the sickness or utilization score of patients enrolled. United Health Care has also been accused of similar fraud but is fighting Medicare.

Kudos to Crouse Hospital

C-sections are the most common surgeries performed by hospitals. According to the Centers for Disease Control and Prevention, almost a third of babies are delivered via C- section and almost half the C-sections performed are unnecessary. Consequently, Health and Human Services has set a goal of 24 percent C-section rate for low-risk births. Only 44 percent of hospitals are currently under 24 percent threshold. Crouse Hospital in Syracuse had the lowest rate in the country at just 6 percent.

Drug prices

Everyone seems to agree drug prices in the US are absurdly high and something has to be done. Both Trump and Clinton campaigned for allowing the US to import cheaper drugs from Canada and other countries. And this would include drugs literally made in the US and imported from other countries back to the US. Drug stocks stumbled when president elect Trump vowed “to bring down drug prices.” This is one of the few things all Americans want and something both parties could agree upon in Congress and get something done. Then the powerful drug lobby reared up. Suddenly, despite reassurances that the FDA would approve imports as it does now, staunch supporters of drug importation developed “real concerns over safety.” One senator had the audacity to proclaim the importation bill didn’t meet his safety standards. Ironically, 40 percent of all drugs sold in the US are already imported from all over the world. The pharmacy manufacturing industry spent over $900 million on lobbying between 1998 and 2005, or well over $100 million a year. There are about 1,300 registered drug lobbyists which is about 2.4 per member of Congress.

Ideas for Change

Physician Jim Weinstein, CEO of New Hampshire-based Dartmouth-Hitchcock Health, has always been an outspoken advocate for redesigning our faulty healthcare system. Some of his ideas, recently presented at a national healthcare symposium are: 1. Mandate the transparency of a procedure cost and expected outcome. You have the right to know both. 2. Focus on top 5 percent of healthcare utilizers who account for a staggering 50 percent of all costs, while half of us account for just 3 percent. 3. Quickly transition from fee-for-service reimbursement to value-based payments. It’s still all about the almighty buck instead of quality. 4. Require those who make over $100,000 annually to contribute more to their healthcare. Eliminate the maximum taxable earnings for Social Security ($127,200) to shore up Social Security and level the playing field among us. 5. Perform preventive or routine care visits remotely. (Telehealth).The 50 percent of us that consume only 3 percent of costs would be the prime audience. 6. Trump wants to incentivize drug manufacturers to return overseas profits to the US through tax breaks. Drug companies should then establish endowments for people who cannot afford their products.

George W. Chapman is a healthcare business consultant who works exclusively with physicians, hospitals and healthcare organizations. He operates GW Chapman Consulting based in Syracuse. Email him at