Diabetes Population to Double, Diabetes Costs to Nearly Triple, in 25 Years, New Study Shows.

Findings Underscore Urgent Need to Reform CBO Scoring of Preventive Care

The diabetes population in the United States will almost double over the next 25 years and annual medical spending on the disease is projected to hit $336 billion, up from $113 billion today, according to a study published in the December issue of Diabetes Care. The National Changing Diabetes® Program (NCDP), a program of Novo Nordisk, commissioned the analysis by a team from the University of Chicago.

According to the forecast, the number of Americans living with diabetes will rise from 23.7 million in 2009 to 44.1 million in 2034. For the Medicare program, the increases over the next 25 years are even more dramatic: the number of Americans living with diabetes and covered by Medicare will rise from 6.5 million to 14.1 million, and Medicare spending on diabetes will almost quadruple, skyrocketing from $45 billion this year to $171 billion in 2034. Based on this projection, “Medicare spending alone will represent just over 50% of direct spending on diabetes in 2034,” the authors concluded.

Factors not used in government budget analysts

Unlike past efforts to predict trends in diabetes, the model developed by the University of Chicago team considers the natural progression of the disease, effects of treatment and obesity rates in the United States, which are “factors that are currently not used by government budget analysts,” according to the authors.

“Obesity is a significant driver of future increases in the number of Americans with diabetes,” said Michael O’Grady, Ph.D., one of the study authors and a senior fellow at the National Opinion Research Center at the University of Chicago. “While our modeling, as well as that done by the Centers for Disease Control and Prevention, project obesity rates leveling off, neither model has obesity rates lowering substantially. High obesity rates among the American population over an extended period of time substantially increases the probability of developing type 2 diabetes.”

This forecasting model, which the authors contend improves the rigor of the estimates of health care spending for diabetes, was designed to inform policymakers as they explore ways to control spiraling health care costs. Currently, official government estimates of the potential costs and cost offsets associated with proposed preventive health legislation do not consider savings that may occur more than 10 years out, thus providing an incomplete view of preventive health measures as an investment.

“The size of the current diabetes population exceeds many prior forecasts and we expect that the future growth of population and its associated costs will be explosive. Finding ways to reduce the number of people who develop diabetes is both a national public health priority and a fiscal imperative,” said Dr. Elbert Huang, the lead author of the paper and an assistant professor of medicine in the Department of Medicine at the University of Chicago. “The best way to stem the dramatic rise in diabetes is to implement proven preventive care programs on a national level. This will require that policymakers understand that diabetes prevention is a long-term investment that will only reap benefits over decades, not years.”

The Congressional Budget Office (CBO), which assesses the cost of proposed legislation, does not typically consider any cost savings beyond 10 years. Because diabetes develops over a long period of time, with the highest costs coming later in life of the disease, savings are far more apparent at 25 years than at 10 years. For this reason, policymakers need a long-term analysis of costs in order to make accurate decisions that reflect the true impact of prevention programs.

“Managing diabetes means preventing the pain and expense of diabetes complications, including heart disease, amputation, kidney disease, and blindness,” said Michael Mawby, Chief Government Affairs Officer and director of the NCDP, a diabetes leadership initiative established by Novo Nordisk to drive health systems change at the national and local level, which funded the research. “Therefore, it is critical that lawmakers see the long-term projections of the impact of diabetes interventions.”

Legislation introduced earlier this year is designed to lead to a more accurate assessment of the costs and benefits of preventive health, including preventing complications and delaying progression of chronic diseases such as diabetes. The bipartisan Preventive Health Savings Act of 2009 (HR 3148), calls on the CBO to weigh clinical or observational studies when modeling projected costs and savings related to preventive health, and in certain circumstances, to look beyond the traditional 10-year budget window.

About the National Changing Diabetes® Program

The National Changing Diabetes® Program (NCDP) is a multi-faceted initiative that brings together leaders in diabetes and policy to improve the lives of people with diabetes. NCDP strives to create change in the U.S. health care system to provide dramatic improvement in the prevention and care of diabetes. Launched in 2005, NCDP is a program of Novo Nordisk. For more information, please visit www.ncdp.com.

About Novo Nordisk

Novo Nordisk is a healthcare company with an 86-year history of innovation and achievement in diabetes care. The company has the broadest diabetes product portfolio in the industry, including the most advanced products within the area of insulin delivery systems. In addition to diabetes care, Novo Nordisk has a leading position within areas such as hemostasis management, growth hormone therapy, and hormone therapy for women. Novo Nordisk’s business is driven by the Triple Bottom Line: a commitment to social responsibility to employees and customers, environmental soundness and economic success. With headquarters in Denmark, Novo Nordisk employs more than 27,550 employees in 81 countries, and markets its products in 179 countries. Novo Nordisk’s B shares are listed on the stock exchanges in Copenhagen and London. Its ADRs are listed on the New York Stock Exchange under the symbol ‘NVO’. For global information, visit novonordisk.com; for United States information, visit novonordisk-us.com.

Source: National Changing Diabetes Program

Health Plans That Use Member Enrollment Data to Push Their Political Agenda Might Violate HIPAA.

HEALTH PLAN WEEK is reporting is this week’s issue that health plans could face stiff penalties under HIPAA if they use enrollment information to contact members without their permission and urge them to join grassroots advocacy campaigns or take a stance on a political issue.

As a case in point the article cites a September incident where Humana Inc. pulled 900,000 names and addresses from its Medicare Advantage database and sent those beneficiaries letters recommending that they fight against proposed “significant cuts” to the MA program. CMS ordered Humana to cease all such mailings, which it says violated the health insurer’s Medicare contract. CMS also says the letters might have violated HIPAA, and asked the HHS Office for Civil Rights (OCR) to investigate

However, Jeff Drummond, a partner Dallas-based law firm, says Humana could defend the use of its enrollment data as falling into the HIPAA exemption for operations, contending this was an effort to communicate benefits information to its members, much like describing changes in a drug formulary, he tells HPW.

For more information visit the original article here.

How Health Care Reform Could Fall Apart.

Politico.com is pointing out that just because Senate Majority Leader, Harry Reid eked out 60 votes on a procedural motion to start the health care debate Saturday night there’s no guarantee he can pass a bill on the merits.

The article says that the reasons are clear: deep divides among Democrats on a public insurance plan, abortion, tax hikes and cost-cutting. Liberals want the plan to be generous enough. Moderates fear a budget-buster. And everyone is trying to avoid angering seniors.

For more information visit the original article here.

Democrats Focus on G.O.P. Senators From Maine.

The New York Times is reporting today that Obama administration officials and their Congressional allies are stepping up overtures to select Senate Republicans in hopes of winning their ultimate support for the healthcare reform bill.

Sen. Harry Reid

Sen. Harry Reid

The two moderate Republican senators from Maine, Susan M. Collins and Olympia J. Snowe, both say Senator Harry Reid, the majority leader, reached out to them after he unveiled the Senate measure, encouraging them to bring forward their ideas and concerns.

The Times reports that both senators have been talking privately with Democrats and independents about devising joint amendments in such areas as cost control, and both said they would continue to look for compromises.

“I’m prepared to continue to work to improve the legislation,” said Ms. Snowe, who said how her proposals are handled will “be a true test of whether there is a will to improve this legislation in a non-ideological, bipartisan manner.”

While the two women are the main focus of Democrats at the moment, officials said they will be weighing opportunities to appeal to others. They also hope that any final joint House-Senate proposal could attract at least a few Republicans in each chamber.

For more information visit the original article here.

Blue Cross Blue Shield Association says Senate Bill Would Make Healthcare Less Affordable.

The Blue Cross and Blue Shield Association (BCBSA) issued the following statement regarding the Senate introduction of the “Patient Protection and Affordable Care Act”:

The Blue Cross and Blue Shield Association is committed to working with Congress and the Obama Administration to enact bipartisan legislation this year that improves quality, reins in costs and extends coverage to everyone.  However, we are disappointed that the Senate bill includes a government-run health program, even though the Senate Finance Committee rejected such a proposal.  Analyses, including those by the Congressional Budget Office, show that a government-run plan would do nothing to make healthcare coverage more affordable for consumers and will in fact have the opposite effect.  Not only would a new government-run plan be more expensive than coverage offered in the current marketplace, but it also would jeopardize access to coverage for the 160 million people who receive their benefits through their employers today.  Given the negative impact such a plan would have on both affordability and access, creating a government-run plan is misguided public policy that will compromise the impact of broader healthcare reform.

To be successful and sustainable, healthcare reform must not only expand coverage to the uninsured, but it also must make healthcare more affordable for everyone.  Many provisions in the Senate bill, including allowing people to wait to buy coverage until they are sick, limiting age discounts for the young and healthy, and a new $6.7 billion annual insurer tax, will increase costs for millions of consumers.  Any bill that raises costs for people buying coverage fails to pass the affordability test.

As we review the bill, the Blue Cross and Blue Shield companies will continue to work with the Congress to educate Senators on the unintended consequences of this legislation and to help fix the bill in order to create affordable and sustainable healthcare reform for everyone.

The Blue Cross and Blue Shield Association is a national federation of 39 independent, community-based and locally operated Blue Cross and Blue Shield companies that collectively provide healthcare coverage for 100 million members – one-in-three Americans. For more information on the Blue Cross and Blue Shield Association and its member companies, please visit www.BCBS.com.

AHIP Reacts to Proposed Senate Heath Legislation.

Karen Ignagni, President and CEO of America’s Health Insurance Plans (AHIP), released the following statement on the release of proposed Senate healthcare reform legislation:

Karen Ignagni

Karen Ignagni

“The promise of health care reform is that it will provide all Americans coverage, allow them to keep their coverage if they like it, and bends the cost curve to put the system on a sustainable path.  These are the standards by which any reform bill should be judged, and the Senate bill falls short of meeting them.  We believe that these issues can be addressed and improved to achieve these goals, and we will continue to work with policymakers toward that end.

“We believe that all Americans, regardless of health status or medical history, should have guaranteed access to affordable coverage.  We have proposed guarantee issue coverage with no exclusions for pre-existing conditions in conjunction with a coverage requirement and adequate subsidies for working families.  We also have made a commitment to do our part by proposing far-reaching administrative simplification reforms that improve efficiency, reduce costs, and free up time for physicians to focus on patient care. We stand by these commitments, but agree with a wide range of health policy experts that market reforms will not work if there is not an effective coverage requirement.

“This proposal encourages people to wait until they are sick to purchase coverage, which will significantly drive up costs for those who are currently insured. The legislation also imposes rating rules that will raise the cost of coverage for millions of young families in more than 40 states.

“The new health care taxes and fees will raise the cost of coverage for individuals, families, and employers.  Health plans will be required to pay a $6.7 billion tax beginning next year for the next 10 years, in addition to ‘stabilization’ fees of $25 billion in 2014, 2015, and 2016.  According to Fortune magazine’s analysis of the companies listed under ‘Insurance and Managed Care’, earnings in 2008 totaled $8.61 billion with a profit margin of 2.2% — ranking the industry 35th on the Fortune list.

“This bill will also exacerbate the health care cost shift as health care providers offset reductions in public program reimbursements by charging more to families and employers who have private coverage. The new government plan will cause even more cost-shifting and threaten the employer-based coverage with which Americans are overwhelmingly satisfied.

“The $117 billion in cuts to Medicare Advantage will threaten the choices that seniors have across the country and significantly reduce seniors’ benefits in many major metropolitan areas.

Source: AHIP.org

Patient Protection and Affordable Care Act by the Numbers.

$2.5 trillion — Cost of the bill is  over 10 years of full implementation

$848 billion — Subsidies provided through the exchanges, increased net outlays for Medicaid and the Children’s Health Insurance Program (CHIP), and tax credits for small employers.

$493.6 billion — New taxes on individuals and employers

$464 billion — Cuts to Medicare

$149 billion — Excise tax on high-premium insurance plans

$130 billion — The projected net reduction in federal deficits of  over the 2010-2019 period

$120 billion — Changes to existing law regarding tax preferences for health care and effects of other provisions on tax expenditures for health care

$25 billion — Unfunded state mandates in additional Medicaid expenditures over the 2010–2019 period

$15 billion — Amount allocated to  establish a Prevention and Public
Health Fund.

$8 billion — Penalty payments by employers whose workers received subsidies

25 million –  People who would purchase their own coverage through the new insurance exchanges

24 million — People would be left without insurance

19 million — People who will get a subsidy to help them buy health insurance

4 million — People the CBO estimates will choose the public option

$23,000 — The initial threshold for a single policy that will be subject to a
40 percent excise tax

$8,500 — The initial threshold for a single policy that will be subject to a
40 percent excise tax

2,074 — Number of pages of the bill

2,014 — The year most nonelderly people with income below 133 percent of the Federal Poverty Level would be made eligible for Medicaid.

$750 — The penalty an employer would have to pay for each full-time worker who obtained subsidized coverage (See 50)

50 — The number of workers an employer must have before they would have to pay a penalty if they did not offer coverage (See $750)

Source: CBO letter to Senate Majority Leader Harry Reid dated November 18, 2009. Website: http://www.cbo.gov/doc.cfm?index=10731

Illinois Takes Decisive Step Towards Health Insurance Reform.

While the U.S. Congress is still working to strike a comprehensive health reform package, Illinois is said to be leading the way for the rest of the nation with legislation aimed at helping consumers who are forced to go the private insurance market to get the care they need. An AARP-backed bill establishing stronger consumer protections in the private health insurance market passed in the Illinois House on Thursday night, and is on its way to the Governor’s desk for his signature.

According to a release, The Individual Health Insurance Fairness Act (House Bill 3923), introduced by State Representative Greg Harris (D-Chicago), and State Senator Heather Steans (D-Chicago), addresses key barriers facing consumers who struggle with unfair and inconsistent industry practices.

According to AARP Illinois, which strongly backed the bill, The Individual Health Insurance Fairness Act will:

  • Bring transparency to the insurance industry in Illinois – letting consumers see critical information regarding industry profits and premium increase.
  • Establish, for the first time in Illinois history, the right to an independent external review for members of PPO plans (approximately 90 percent of the insured market in the state).
  • Simplify the complex application process for both individual and small group markets by creating a standard application, making it easier for them to get the coverage they need.

The release notes that nationally, over 4 million people have lost their health care since the recession began, while roughly 17 million purchase their own coverage. In the private market, an average annual premium for a family of four has risen to nearly $5,500, while an individual premium costs $2,500 in Illinois. A recent AARP study found that adults aged 50-64 spend roughly 10% of their income on health coverage, and paying three times as much as their peers with employer-sponsored coverage.

State Lawmakers Push for Health Care Opt-out.

The Kansas City Star has picked up on a story that could begin the shape the healthcare reform process. Apparently, three Republican lawmakers in Kansas want to give the state an opt-out should Congress pass health reforms that mandate individual health insurance. The amendment would say no law can require individuals or employers to buy health insurance.

The Star goes on to say that their proposal, which would alter the Kansas Constitution, is similar to efforts under way in more than half the states. It’s a pointed attempt to get President Barack Obama and Congress to back off efforts to retool the nation’s health care system.

These state initiated efforts may be more of an attempt to influence policy in Washington than they are legitimate effort s to block legislation that may get passed by Congress.

To be added to the state constitution in Kansas, the legislation must be passed by a two-thirds majority of the Kansas House and Senate and then be approved by voters next year.

Still, it will be interesting to see if any of these state level push-backs build any traction.

Christmas Comes Early for Some Senate Healthcare Reform Objectors.

Harry Reid

Christmas is coming early to some of the Senators who say that the have objections to the the Senate healthcare bill.

The Los Angeles Times reported this morning that Majority Leader Harry Reid (D-Nev.) has intensified negotiations with a handful of Democrats whose support is crucial to passing the legislation.

You see, Reid needs 60 votes to prevent the Republicans from using parliamentary tricks that would keep the bill from coming to the floor — and eventually from being brought to a final vote.

That means that Reid will need the votes of all 58 Democrats and the two independents who caucus with the Democrats, or some Republican defectors, in order to keep the bill alive.

So, according to Times, there is some old fashioned horse trading taking place to ensure that the votes line up when they are needed.

Let’s see what is on the wish lists of some of these key votes. First, the Times reports, that Indiana Sen. Evan Bayh, says he is worried about the bill’s fiscal impact. But Reid has made him more amenable to it by promising to modify a proposed 10-year, $40-billion excise tax on manufacturers of medical devices, a major Indiana industry.

Next, Sen. Ben Nelson (D-Neb.), a former state insurance commissioner, is adamantly opposed to a provision that would impose new antitrust requirements on the health insurance industry, which is also one of his big campaign contributors. So, according to the Times, the Democratic leadership is exploring ways to address Nelson’s concerns.

Then there is Sen. Mary L. Landrieu (D-La.) who says she is “very skeptical” of the public option, yet wants a “principled compromise” that would drive down insurance costs.

The Times noted that, for her, Democratic leaders may find another point of leverage far removed from the healthcare bill: Landrieu’s conservative state has been clamoring for more government aid for Hurricane Katrina damage.

So, if you are a Democratic Senator wanting to grease the skids of some favored project, now would be the time to let Harry Reid know that you have an objection to the healthcare bill. All this must be keeping Harry Reid very busy these days.