Wait a Minute

An accurate but off-the-mark news headline this week proclaimed that health care costs for people insured in the private sector rose twice as fast as inflation in 2010.  But it didn’t mention that health insurance premium prices rose six times as fast.

The Health Care Cost and Utilization Report, 2010 was released by the Health Care Cost Institute (HCCI).  It was based on claims data for 33 million people – one fifth of those with employer-based health insurance.

The bottom line: the consumer price index rose by only 1.6% in 2010, but health care spending was up by 3.3% for the same year.

The report summarized that “prices increased across all categories of service, with outpatient services experiencing the fastest growth.” 

This is bad news for Americans with private health insurance already fed up with low and flat salaries and the high price of health.  The cost of health care now absorbs over one-sixth of our entire gross domestic product, and just seems to grow every year.

But wait a minute.  There was a piece missing in the HCCI report.  It was related to an insured consumer’s most significant health care expensive – the cost of insurance premiums.

That would have been even more newsworthy.  The price of employer-based family insurance coverage increased by 9%, or almost six times the rate of inflation, for policies renewed in the same time frame.

You won’t find that number headlined in the HCCI report, but you will find it in an equally impressive study released by the Kaiser Family Foundation and Health Research and Educational Trust last August.

How was it possible for HCCI to overlook so significant a cost increase? 

It might have something to do with HCCI’s funding.  HCCIwas formed just last September, “with an aim” according to its website, “of becoming the nation’s leading source of information on health care costs.” An article appearing on May 21, 2012, in Kaiser Health News makes it clear that insurance companies are the sources of both HCCI data and funding.

This bias doesn’t make the data in the report bad.  But it does suggest that the actual aim of HCCI might be better re-stated as “becoming a leading source of information on health insurers’ payments.” 

Especially if HCCI plans to continue to leave out the information about health insurance premiums.

Because when you add that into the mix, here’s another headline. 

At a time when – according to insurance companies themselves – health care costs rose by just over 3%, private insurance companies increased consumer health insurance premiums by three times that amount.

Adding insult to this injury, consumers got hit not once, but twice.  HCCI noted that out-of-pocket health spending increased by 7.1%.  In other words, insurance companies also required consumers to pay twice their fair share of the increase in health care prices.

This begs the question: where did all this money go?

If the purpose of the HCCI report was to deflect our attention away from this, it won’t work. 

The public may not have all the facts at its fingertips, but a March, 2012, survey sponsored by NPR, the Robert Wood Johnson Foundation, and the Harvard School of Public Health was released this week.  It found that 77% of all respondents, and 75% of sick ones, said that insurers “charging too much money” is a major reason for rising health care costs.

Americans don’t buy it when insurers point fingers at providers, any more than they believe major providers who just point fingers at insurers.  In the survey, consumers blamed hospitals and drug manufacturers for the rise in health care costs just as much as they did insurance companies.

So here’s the real bottom line. 

When – in the private sector – health care costs increase twice as fast as CPI, out-of-pocket costs increase four times as fast as CPI, and the cost of insurance increases six times as fast, there’s plenty of blame to be spread around.

The one entity we can’t blame for the increase is the one at which everyone usually points a finger – our government.

This in no way lets the government off the hook.

Instead, the data make a compelling case that elected officials should do more, not less, to contain all health care costs – if for no other reason than to protect the interests of the people who elected them. 

Will they do this, or will they leave us at the mercy of the marketplace?

The Best States for Your Health

When the Supreme Court reviews the constitutionality of the Affordable Care Act next year, it will do so against the backdrop of both a national sentiment for government to do more in the area of health and significant inequalities in access to health and health care based solely on the states in which people live.  

A new poll released last week by the Robert Wood Johnson Foundation and the Harvard School of Public Health found that 52% of Americans want government to put more resources into health. 

Only 41% gave high grades to our health care system, and only 33% gave our public health system high grades.

We would all like a more effective health and health care system.  But a better national delivery system would make a much bigger difference in some states than in others.

This week, Our Health Policy Matters unveils a new ranking of the states that reflects which states invest most effectively in our health and health care. 

It was created by combining four existing rankings and three new ones.  It includes mental health as well as health, the work of other health professionals in addition to doctors, and availability of community care as well as quality institutional care.  It ultimately rates the states based on how good they are at simultaneously:     

• keeping their children and adults healthy; and 
• taking care of their residents when they are sick or have chronic conditions; and 
• providing for both health and health care at a price their residents can afford. 

Taking everything into account, here are the ten best States for Your Health, and why:

1. Massachusetts.  Massachusetts is the only state with five top five finishes among the seven rankings.  It takes good care of its children, invests in wellness and prevention, has many top-rated hospital programs including one of the highest rated mental health facilities in the country, and insures its population well.  Where health and health care are concerned, every state should want to be more like Massachusetts.
2. Connecticut.  Connecticut is near the top in six of the seven rankings.  Its children, working adults, and elders all thrive on a rich set of high-quality prevention and health care services. The only ranking in which it did not excel was one that measured affordability – the high amount its Medicaid program historically spends on hospital and nursing home care. 
3. New Hampshire.  New Hampshire rates as the best state in the nation in three of the individual rankings I combined – the 2011 Kids Count child health and well-being rankings, and two Kaiser Family Foundation State Health Facts rankings – the number of nurse practitioners per 100,000, and the percentage of people who are privately insured.
4. Vermont.   Vermont is number one in the Healthy State rankings and in keeping its Medicaid hospital and nursing home costs under control.  It has figured out that the best way to control Medicaid spending is to keep its population healthy.
5. Utah.  Utah proves that good health is a conservative value.  It takes good care of its children, promotes healthy lifestyles among its residents, and is home to a high percentage of residents with private employer-based insurance – a key measure of affordability.
6. Minnesota.  Strong in the prevention and public health rankings, Minnesota is also home to a top hospital.  It gives its residents access to quality public health and quality health care at the same time.
7. Washington.  Washington cracked the top ten in only one individual ranking, so it may be a surprise that it is ranked so high when they are all combined.  But it does just about everything well compared to other states, and isn’t close to the bottom in any category. 
8. Hawaii.  Hawaii scores high in prevention and keeps Medicaid institutional spending under control.  It doesn’t have any of the top rated hospital programs.  If it did, it would rank even higher.
9. New Jersey.  New Jersey does especially well by its children and its elders, and is in the top ten in three individual categories.  But it is an expensive state for Medicaid recipients to get sick in, and a lot of that money goes to hospitals and nursing homes. 
10. Wisconsin.Like Washington, Wisconsin is consistently in the top half of the individual rankings.  If its residents were able to spend relatively more of their Medicare dollars on community services and less on institutional ones, it would move up.

There are two states that topped individual rankings that didn’t make the top ten.  California, according to US News and World Report the best state in the nation to find high quality hospital programs, tied for 15^th.  Florida, first in per capital Medicare spending on community services, finished 30^th. 

To see the full ranking of all the states, click here.

Next week:  More about why Florida finished where it did, and a closer look at the ten states that finished near the bottom.

If you have questions about this column, or wish to receive an email notifying you when new Our Health Policy Matters columns are published, email gionfriddopaul@gmail.com.

Note: Here are the rankings I used, the reasons I used each of them, and a link to the 

original data: 

• the 2011 Healthy State Rankings and the 2011 Annie E. Casey Foundation Kids Count state rankings – to measure the effectiveness of public health and overall prevention (including mental illness prevention) activities; 
• the Kaiser Family Foundation (KFF) State Health Facts ranking of the percentage of people with private employer-based insurance – to measure health care access and affordability for workers and families; 
• the KFF State Health Facts ranking of the number of nurse practitioners per 100,000 residents – to measure support for non-physician providers and high quality primary care;
• To measure quality of care and medical professional development, I calculated and ranked the states by the number of times a hospital in a state was included in the 2011 U.S. News and World Report rankings of best hospitals in the country across specialties, including mental health and overall rankings of children’s hospitals (33 states had at least one hospital mention);
• To measure the availability of community-based services for elders, I used the most recently available data from the Centers for Medicare and Medicaid Services reporting per capita state spending in each state on Medicare minus hospital and nursing homespending;
• To measure the effectiveness of state intervention to keep people with disabilities in their homes and out of institutions and as a measure of affordability, I used CMS data to calculate per capita state spending on Medicaid hospital and nursing home care as a negative measure.

Because prevention and health care each account for approximately 50% of the gains in life expectancy over the last century, I gave the two prevention-oriented rankings – the Healthy State and Kids Count rankings  – a combined weight equal to that of the other five.  

How Increasing Our Obesity Rate is Becoming Federal Policy

Obesity rates in America are higher than ever.

This is the conclusion in a new Robert Wood Johnson Foundation report entitled F as in Fat: How Obesity Threatens America’s Future.   Released last week, the document notes that one-third of children and two-thirds of adults are now obese or overweight. 

Obesity is no minor health matter.  It is linked to disease, disability, and premature death.

The report received some media attention for a couple of days, but then we had our fill of it.  It faded into the news background largely because we’ve heard the story before. 

No one disputes the two major causes of obesity in America.  Americans take in too many calories, and work off too few.

If we accept these causes at face value, the story ends as we decide that weight is a matter of individual – not governmental – responsibility. 

The individual choice argument is a powerful one for those who do not think that the government needs to “interfere” with people’s food and exercise choices.  But it’s wrong.

The forces of governmental inaction regarding the food we eat are powerful. 

First, the “freedom to choose” argument is the same argument the Tobacco Institute used successfully against governmental regulation of smoking for many years.  Smoking was “an adult custom,” the argument went.  Two-thirds of people chose not to smoke, and those who did should be left alone.

Despite overwhelming evidence about the harmful effects of smoking, it took almost thirty years to overcome most of the prejudice against governmental regulation of smoking in public places.

Second, there is an even stronger prejudice against governmental action regarding weight, because weight doesn’t have second hand effects like smoking.  On the contrary, the weight debate often devolves into an argument about the extremes.  Isn’t it worse to be morbidly underweight than it is to be morbidly overweight?  Many people think so.  Morbid underweight even carries a diagnostic label, anorexia, with no real counterpart on the opposite end of the scale.

When former Surgeon General David Satcher issued a call to action against obesity in 2001, the nation responded by grabbing a snack, taking a seat, and tuning him out.  In a Forward to the RWJF report, he writes that 12% of children were overweight in 2001.  The percentage tripled over the next decade.  Three out of every five adults were overweight in 2001.  Two out of three are today.

So why are we so bad at exercising our individual responsibility to eat well? 

Governmental action, or in this case, inaction, may have something to do with it.  As individuals, we are doing some things right, like eating more fruits, vegetables, and milk products today than we did a generation ago.

But the biggest weight culprit may have nothing to do with individual choice.  It appears to be the sugars added during processing to the foods we eat, and the government’s failure to use its own data to regulate this added sugar effectively.

A recent USDA report notes that Americans now consume 30 teaspoons of added sugars every day.  These are often added to our foods during manufacturing, long before we reach for our own sugar bowls.  They add the equivalent of 477 total calories to our daily diet.  We’re hooked on added sugars, which may well be the nicotine of the 21^st century.

Food manufacturers start spooning added sugars into our mouths early in our lives.  Baby foods need no added sugars.  According to another  USDA report published in 2006, however, more than half of the sugars in babies’ teething biscuits were added sugars, as were two-thirds in a “fruit supreme” baby dessert.

We expect sweet desserts, but some non-dessert products have even more added sugars.  Frozen lemonade from concentrate had more added sugar per 100 grams of carbohydrates than cinnamon raisin sweet rolls or chocolate glazed donuts.  A “low calorie” Caesar dressing had almost as much added sugar as a jelly donut.

Telling us to eat less is just background noise when we’re pumping empty calories into our manufactured foods.

Our government should report on, and regulate, the sugars and other substances that are added to our foods.  But the USDA agency program that produced the two reports lost 10% of its funding in 2010.  It will suffer much deeper cuts if the USDA budget passed by the House in June is approved as part of the deficit reduction deal.

This program area accounts for 2% of USDA spending, and 8/100ths of one percent of the US Federal budget.  Eliminating the program area entirely would close the deficit by two-tenths of 1%.

Without information or regulation, the sugars will keep coming whether we want them or not.  And we’ll continue to get fat.

If you have questions about this column or wish to be added to an email list notifying you when new Our Health Policy Matters columns are published, please email gionfriddopaul@gmail.com.