By Larry Fox
Jim Lyons, retired former head of Cape Cod Healthcare, has a favorite story.
“Years ago, I was in charge of design plans for medical facilities and I had a client in Ontario, Canada, a 400-bed hospital,” he related at the most recent meeting of the Advisory Board of To Your Good Health, A Healthcare Newsletter, at Cape Cod Community College.
“Well, we went through all the planning,” he continued, “and we came to the business office and I said, ‘You’re going to need 35 to 40 people here.’ And the guy said, ‘No, only three…three is all we need.”
This was Mr. Lyons’ introduction to the cost-saving elements embedded in Canada’s government-run health care program.
In the heart of our current presidential campaign, the high cost of health care is of major concern to voters. The Advisory Board discussed this issue in depth.
Mr. Lyons’ anecdote had its point.
“Medicare gets criticized all to hell,” he said bluntly, “but it operates with a mere two percent overhead. Meanwhile, at private insurers like Blue Cross and Harvard-Pilgrim, they run between 10 and 14 percent (for administrative costs). That’s billions…and it has nothing to do with care!
“I’m not advocating government-delivered health care in the Veteran’s Administration style, but perhaps some kind of single-payer financing program. Today hospitals have some 150 forms for each [private] company and people who just deal with that, which is just a whole bunch of stuff in our system that you won’t find in France or Canada or Germany or any other industrial country in the world.”
Margie Hansen, R.N., chief operating officer of Cape Cod Hospital, chimed in with a suggestion that Medicare’s new Part D prescription drug plan also needed revisiting. “The pharmaceutical industry is what forced the public into it, but just talk to anyone who chose the Part D plan and they’ll say life was a lot more simple without it,” she pointed out. “We’ve got to start looking at the pharmaceutical aspect of this as part of health care.”
Dr. Arthur Bickford, medical director of Hospice and Palliative Care of Cape Cod, disputed claims that patients often face a long wait for treatment under government-run single-payer insurance programs.
“Not so,” he thundered, citing personal experience. “I practiced for a while in England and the single-payer system was very, very good to me.”
Ms. Hansen noted that in Massachusetts, the new Connector program was a promising “first real experiment in a version” of the single-payer system “with more and more folks enrolling in it.”
However, she stressed, “It’s still a work in progress, but we should know in the next year or two how it’s going.”
Andrew Young of the Cape Cod Five Cents Savings Bank and a former trustee of Cape Cod Hospital thought “a single-payer system might be the best way to squeeze inefficiencies out of the system, but there still might be some other plans we haven’t even conceived of yet and the Republicans probably will be promoting a market-driven program….”
Dr. William McDermott, former executive director of the Massachusetts Medical Society, was skeptical of the potential solutions being offered by the presidential hopefuls. “They’re all political gambits designed to make people happy,” he charged.
Dr. McDermott conceded that health care costs were rising so rapidly that “by 2050, they’ll equal today’s total national budget.” But he looked in a different direction to reduce this troubling trend.
“Over 40 percent of all deaths in this country are due to behavioral causes, over-weight, over-drinking, over-smoking,” he pointed out. “That’s where we can make the greatest reductions in health care costs. We can do all kinds of different things, but the biggest savings would be from changing our behavioral patterns.”
Yet another angle to the rising cost of health care was cited by Mr. Lyons.
“In our system, the cost of health care is tied to one’s employment,” he explained. “Every time we make something in this country, it costs 15 to 25 percent more because of the medical costs. But in a global marketplace when you go to compete with the Japanese or Koreans, they don’t have that overhead. Of course, the people pay for their health insurance and treatment with their taxes, but that comes out of a different pocket.”
Sue Rohrbach, aide to State Senator Rob O’Leary, called “transparency” one of the biggest issues—“who pays what and for what?”—and she wondered why Hillary Clinton’s health insurance program fizzled in the early days of her husband’s administration. “Was it too complicated?” she asked.
“No,” responded Dr. McDermott, “She developed a plan that hit the insurance industry right in the nose and they said, ‘No, we will beat it,’ and they did.”
Meanwhile, obscured by campaign rhetoric, another health care issue looms large on Capitol Hill.
That would be federal threats to the Home Medical Equipment companies. According to Rob Fessler, Director of Skilled Nursing Residences for Cape Medical Supply, “There are a number of bills pending in Washington that basically will drive a lot of small companies out of business, They don’t accept that we can solve a lot of our (health care cost) problems by keeping people at home and out of the hospitals.”
One key aspect directly impacting the public is a 36-month cap for Medicare reimbursement for home oxygen. (At the end of this period, patients must buy their own equipment.) This really hits here because, as Mr. Fessler points out, “Cape Cod has the largest number of COPD patients than anywhere in the United States next to South Florida.” But the good news is that our region centering around Boston would not be affected by any news legislation before next year.
By Sheila Curtis
Enrollment for the Medicare Part D prescription drug plans ended December 31, 2007. But all is not lost. Massachusetts residents still can join a Medicare Part D plan by enrolling in Prescription Advantage, the State’s Pharmacy Assistance Program. And Prescription Advantage members are allowed to join a Medicare plan without having to wait until next November. If you already are in a Medicare Part D drug plan you should also look into Prescription Advantage.
There is no charge to join if your annual income is less than $30,630/single and $41,070/couple. Prescription Advantage will act as secondary insurance to your drug plan and may pay all or part of your Medicare prescription drug plan’s monthly premium, deductible and prescription co-payments. For more information or if you would like help with the application you can call the Regional SHINE (Serving the Health Information Needs of Elders) office at 1-800-334-9999 or you can make an appointment with a SHINE counselor at your local Senior Center.
Each Year, the Massachusetts SHINE Program, which consists of more than 400 volunteers, provides counseling, education and assistance to thousands of Medicare beneficiaries and their families. SHINE is a free and confidential counseling service funded by the Executive Office of Elder Affairs through grants from the Federal Centers for Medicare and Medicaid Services, and the State government.
SHINE counselors provide information about Medicare, Medicare supplemental insurance, Medicare Advantage plans, claims processing, appeals, prescription drug programs and other health insurance matters.
SHINE volunteer training will be conducted this spring with the 10-day traiing period spread out over several weeks. Ongoing assistance, supervision and monthly updates are provided. Counselors should possess strong communication skills, be respectful of client confidentiality and be willing to commit to volunteer several hours a week.
If you are interested in becoming a SHINE counselor, please contact me, Sheila Curtis, at 1-800-334-9999.
(Ms. Curtis is Regional Director of SHINE, a division of the Massachusetts Executive Office of Elder Affairs.)
Under the state’s new health insurance law, all residents 18 and over, with few exceptions were required to show they had obtained coverage by December 31, 2007.
Now, those individual taxpayers who cannot show that they have health insurance will lose the tax benefit of their personal exemption of $219 on their 2007 Massachusetts income tax return. And non-compliance penalties will increase for 2008.
Most adults already have health insurance, perhaps through their employer or a government program. If you do not have this insurance, the Commonwealth Health Connector can help you or your employer to find the right health plan. You may also purchase plans through approved Massachusetts health insurance carriers.
The Massachusetts Department of Revenue (DOR) has issued draft guidelines on tax penalties for not having health insurance in 2008.
Penalties will apply only to adults who can afford health insurance, based on separate standards established by the state Health Connector on an annual basis and subject to hardship appeals. While the 2007 penalty is pegged at $219, the 2008 penalties will be based on one-half the lowest cost plans available through the Connector as of January 1. Under the draft guidelines, these penalties will range from zero to $912 for an entire year without coverage.
“These proposed guidelines are a direct reflection of the responsibility given to us by the landmark Massachusetts health care reform law as the Commonwealth tries to enroll nearly all adults in health insurance plans,” Revenue Commissioner Henry Dormitzer explained. “With nearly 300,000 newly insured, the state is well on its way to achieving its goal.”
The DOR has worked to ensure that these penalty guidelines are easy to understand, streamlining the schedule to establish only a handful of penalty categories. The penalties will accrue each month an individual does not have health insurance in 2008 and will be due as part of the tax filing process for the year.
Individuals up to the age of 26 with incomes too high to qualify for subsidized health insurance will face a penalty of $672 for an entire year without coverage. People with similar incomes age 27 and over will face a potential annual penalty of $912. Subsidized insurance is available to individuals earning up to $30,636 per year. For a family of four, the threshold is $61,956.
Individuals who meet the income guidelines for subsidized insurance through either the Commonwealth Care program offered by the Health Connector or MassHealth will be penalized based on four income ranges.
Individuals earning up to $15,324 will face no penalty since Commonwealth Care is free for people at this income level. This income cohort represents the largest number of newly insured.
Those earning between $15,325 and $20,424 will face a penalty of $210 per year if they were uninsured the entire year.
For individuals earning between $20,425 and $25,536, the 2008 penalty would be $420 if they were uninsured the entire year.
Individuals earning between $25,537 and $30,636 face a penalty of $630 for the year.
“We have worked to craft these penalties in a manner that is straightforward and easy to understand,” Commissioner Dormitzer said. “We hope they will help encourage people who can afford health insurance to buy it and enjoy its many benefits.”
Information can be obtained by contacting the Commonwealth Health Connector at www.mahealthconnector.org .
By Senate President Therese Murray
In 2006, Massachusetts became the first state in the nation to make health care coverage mandatory for its residents. The legislation blazed a trail of shared responsibility that put the expectation of coverage on the shoulders of government, businesses, insurers and individuals alike. Since the passage of this bill, we have seen more than half of the uninsured in Massachusetts sign up for coverage–far exceeding our expectations.
As with anything that is done for the first time, we recognized from the beginning that adjustments would have to be made along the way to ensure the continued success and sustainability of health care reform. Now is the time to put some changes into effect.
First, it is critical to achieve more public information and transparency regarding increases in coverage premiums. Given the double digit percentage increases for health care coverage, I believe it is important for providers and insurers to release more information about preventable costs, administrative costs, marketing costs and reserves.
I am currently drafting legislation to address this issue and set up a public process to document the need for premium increases above 7 percent annually.
Additionally, it is necessary that we simplify the penalties for those who have chosen not to sign up for insurance so that they are uniform and easy to understand.
For the 2007 tax year, the penalty is straightforward. If you do not have insurance, you will lose the $219 personal exemption on your state income taxes.
After 2007, as the law is written, the penalties get more complicated. Currently, after 2007, uninsured individuals will be required to pay up to one half of the lowest cost premium available to that person. This translates up to 27 different penalties that could be imposed upon those ineligible for subsidized coverage. It also would be based on age and residence, with older individuals paying higher fines.
To comply, people must understand the consequences of being uninsured. We must work on simplifying the penalties so they are equitable and easy for consumers to understand while still creating an incentive for compliance.
In addition to these adjustments, we still face a shortage of nurses and primary care physicians. In order to increase this workforce and improve access to care, we must create initiatives such as partnering with medical schools and hospitals to create loan forgiveness programs for doctors who commit to practice primary care in the state.
We also can increase slots at our state medical school for physicians who commit to stay in-state for a set period of time practicing primary care. We also should realign payment structures so primary care doctors are compensated at or near the rate of specialists.
Another option to increase accessibility is to create a larger role for nurse practitioners by allowing patients to choose them as primary care providers and to support the development of limited-service clinics.
We were able to draft and pass health care reform because we were successful in bringing everyone to the table to craft the best solution. We understood, however, that as we implemented this groundbreaking reform there would be a need for updates, changes and adjustments to continue down the path of success.
That knowledge fueled a willingness to improve upon the bill legislatively and provide the necessary flexibility to make the plan work.
As we continue to see the implementation of health care reform, issues and challenges like these will continue to arise. But, if we maintain our willingness to adapt, health care reform will continue to be a success.
(Senator Murray, D-Plymouth/Upper Cape, is the first female President of the Senate in Massachusetts history.)
The explanation is complicated, but, according to new federal legislation recently signed into law by President Bush, acute rehabilitation hospitals now can admit and treat a wider range of Medicare patients. On the Cape, this pretty much involves the Rehabilitation Hospital of the Cape and Islands.
Under the old law, there were only what one could call 13 specific “primary” conditions. To retain its Medicare certification, 75 percent of a hospitals’ census had to consist of patients being treated for these conditions. That allowed a 25 percent leeway for patients to receive long-term care hospital services.
The new law has dropped the requirement to 60 percent, which means four in 10 patients can be admitted with a wide range of diagnostic conditions that meet the medical necessity requirements for acute rehab.
According to RHCI, the entire Massachusetts congressional delegation was in support of this bill and played an integral role in getting it passed and signed.
The Massachusetts Hospital Association called the legislation “an important, hard-fought victory.”
By Mary Zepernick
Amid the growing focus on health care reform, Cape Cod may lay claim to providing the first single-payer health care model in the nation.
At a citizen-organized forum in October 2003, panelists Brian O’Malley, a primary care physician, and Len Stewart, then-director of Barnstable County Human Services, acted on the outcry for a single-payer system–considered by many the only way to control costs and cover everyone effectively and equitably.
They assembled a group of health care administrators and practitioners, public officials, and business and civic leaders, who spent a year reaching consensus on the values and principles underlying such a plan.
Another group of citizens learned about this effort and took Cape Care public, forming town teams that petitioned to put a non-binding resolution on 14 town agendas in 2006. Following a vigorous public information campaign, the measure passed in 11 towns and the Cape Care Coalition reorganized to support development of an actual plan.
Cape Care is envisioned as a community-directed pool, collecting revenue from various sources and paying institutions and practitioners in a timely manner.
Current health care providers will be benefit from the greater simplicity and efficiency of a single-payer system, and Cape Codders will benefit from equitable and affordable health care as well as community health and wellness programs.
Six community forums this past fall presented this work in progress and they encouraged residents to read and comment on the evolving plan at www.capecare.info. The Barnstable County Assembly of Delegates passed a resolution to “support and encourage” the continued development of Cape Care and the Coalition is collaborating with Mass-Care, a statewide single-payer advocacy group experienced in the state’s legislative process.
The public is invited to the next quarterly meeting of the Cape Care Coalition: March 15, 9:30 to noon, at the Harwich Community Center.
For more information, call 1-877-700-8070.
(Ms. Zepernick is a member of the Cape Care Coalition Steering Committee.)
By Gary Sheehan
I’ve written before here about healthcare legislation and some of the issues that are bound to impact the United States healthcare system in the coming years. Most of my efforts have been focused on the homecare arena, as that is where I operate and I am very passionate about the benefits and savings provided through the effective administration of home healthcare services.
There are, however, broader challenges facing our nation and the healthcare infrastructure now in place to serve Americans in the coming generations. We all recognize the imperative to spend smartly when it comes to taxpayer-funded systems and entitlement programs. And we further understand that there is a looming budgetary crisis that could undermine funding for numerous necessary and critical healthcare programs, along with other social service and infrastructure needs.
As you read more about the changes and begin to consider the impact some of them could have on us, both as healthcare providers and consumers, it is critical that we work to educate others and allow our voice to be heard by elected officials. Not only through the ballot, but also via letters, faxes, phone calls, e-mails, and personal communications to these officials…and their staff.
Is there a particular issue you are concerned about? Is that issue under federal purview as a part of Medicare or another federally or state-funded program? Have you contacted the appropriate personnel at the local and national level and conveyed your thoughts and concerns to them about the propose changes? Have you expressed your concern to your patients or other professionals in your particular specialty? If not, you need to do so. We cannot sit by idly and allow Congress and other elected officials to marginalize programs we are passionate about and believe in. Certainly not without putting up a fight and letting them know how we feel…and why.
There is no denying change is coming, and with the growth of Medicare spending we can’t ignore this reality. However, we can work to try to make those changes intelligent and ensure they improve efficiency instead of burdening the system with unsuccessful outcomes and continued spending escalation.
Search for resources, find your elected officials, and tell your story.
I will be heading to Washington in March to meet with elected officials for a two-way dialogue. I hope to enlighten them as to just what companies like ours do and also advocate for what I believe in. In the process I also expect to be educated myself about the details of our legislative process and become better acquainted with the individuals representing us in Washington.
Maybe we all can’t get to Washington, but there’s nothing to stop any of us from picking up the phone or writing a letter. Don’t underestimate the influence each of us has to create positive change and improve the delivery of healthcare services in the United States of America.
(For more information on your elected officials, and contact information, visit the United States government website; http://www.usa.gov/Contact/Elected.shtml.)
(Mr. Sheehan is President/CEO of Cape Medical Supply, Inc., 1-800-339-3322 or gsheehan@capemedical.net,)
By G. Robert King II, CFP®, AIF®
It’s commonly assumed that paying bills on time automatically translates into a high credit score. Not necessarily so. In fact, yours could turn out to be lower than you might expect.
Credit scores are used by financial institutions to determine whether they should lend money to a potential borrower and, if so, at what interest rate. A higher score means an applicant is statistically less likely to default on the loan so deserves a lower interest rate.
Ignoring your credit score could be costly.
Let's say you bought a $400,000 house with a 30-year fixed-rate mortgage at 6 percent. Over the term of the loan, you would pay interest charges of $463,354. If, however, you had a lower score and your bank bumped your interest rate up to 8 percent, you would pay interest charges of $656,619. The difference? A hefty $193,265.
Many systems are available, but FICO scores are by far the most popular. The system was developed by the Fair Isaac Corporation back in the 1960s. Technically, you have three different FICO scores—one for each of the three major credit reporting agencies.
Knowing how FICO scores are calculated can help you make better decisions about your credit. First, you should be aware of some of the most common misperceptions:
I always pay my bills on time so I must have a high credit score: Paying bills on time is clearly a critical factor, but only accounts for 35 percent of your overall FICO score. The four other components: the amount of debt you owe, the length of your credit history, the number of credit accounts you've recently opened, and the types of credit you use.
Consolidating multiple credit cards will increase my score: Consolidation could make it easier to pay down debt, but your FICO score actually could decrease if those fewer balances you end up with are closer to maximum limits. FICO considers you a lower risk if you have multiple credit accounts, keep the payments up-to-date, and maintain balances between 25 and 35 percent of the available credit.
I don't have any credit cards or other major debt, so I can't have a low score: Your FICO score doesn't take into account your net worth or your income level. It only considers past borrowing history. Your FICO score will be lower if you haven't established a long-term borrowing history with multiple creditors.
Closing a credit card is better for my score than keeping it open: Closing a credit card will not necessarily hurt your score in the short term, but you will eventually lose the positive effects of the long-term credit history that you've established with that lender.
I shouldn't shop around for a mortgage or other large loan because credit inquiries hurt my score: A large number of credit inquiries will lower your score, but FICO is smart enough to know when you are rate shopping. Inquiries for similar types of credit are bundled if they're made within the same 14-day period.
I shouldn't check my credit report more than once a year because credit inquiries hurt my score: Not so. Check as often as you like.
To learn more about how FICO scores are calculated, visit Fair Isaac's web site at www.myfico.com. And while you're at it, you can also order your three scores for a small fee. With a small investment of time, you can make smarter credit decisions and take proactive steps to increase your score.
(Mr. King is a Certified Financial Planner in Hyannis. 1-800-325-1099 or robert@capitalportfolios.net.)