Reform spares small business

Health reform spared smaller companies from mandates. Employers with fewer than 50 workers will not have to offer health insurance to their employees.

Companies with 50 or more workers may face financial penalties if they do not offer affordable insurance. Their employees will receive subsidies to buy insurance on the exchanges instead. Most large companies already offer affordable insurance and are least likely to be affected, although more employees probably will participate because of the individual mandate.

Analysts have differed widely concerning the law’s effect on workplace enrollment. The Urban Institute predicted a slight increase at companies with more than 1,000 employees, and little change in smaller companies. Consulting firm Market Strategies forecast a 10 percent decrease in the number of workers offered health insurance by 2014.

Companies are weighing whether to continue offering health insurance or simply to pay the $2,000 penalty for each employee. The decision to discontinue health insurance might be prudent for industries with high turnover, such as hospitality, restaurants and retailers. Larger companies are more likely to conclude that offering insurance is too critical for employee recruitment and retention to abandon.

During the health-reform debate, President Obama repeatedly promised that people would be able to keep their current insurance coverage if they wished to. That is unlikely to be the case.

The law exempted, or “grandfathered,” health plans in place on March 23, 2010, when the law was signed. However, that exemption places tight restrictions on changes that companies can make to their existing plans. These restrictions include no increases in cost-sharing or coinsurance, and limits on deductible increases and employer-contribution decreases. These are tactics businesses typically use to blunt the impact of medical inflation.

The Obama administration expects 39 to 69 percent of employers to relinquish their exemptions by 2013.

Employers are also concerned about the tax implications of offering high-cost insurance policies to their employees. The so-called “Cadillac” or “gold-plated” plans have low deductibles and generous premium contributions. High-cost plans are defined as annual premiums costing more than $10,200 for an individual or $27,500 for a family, including worker and employer contributions. Employers would have to pay a 40 percent excise tax on the value above those thresholds beginning in 2018.

The law targets executives with cushy benefits. However, union and public employees also have generous health insurance. Reformers believe these expensive policies encourage overuse of the medical system. Businesses and governments likely will respond by offering fewer benefits to lower premiums, and raising deductibles and co-payments for employees.

Expect Congress to revisit the Cadillac plan thresholds. A May 2010 survey by Mercer found that this was the No. 1 employer concern regarding health reform. A Towers Watson analysis predicted that more than 60 percent of large-employer plans will be taxed in 2018.

In contrast, companies with 25 or fewer workers will be eligible for temporary tax credits of up to 35 percent. They will also be able to rely on their own health-insurance exchange, called the Small Business Health Options Program (SHOP), to offer standardized, comprehensive coverage at more affordable prices. This should improve their ability to compete with larger companies for employees.

However, health-reform critics say the tax credits are too complex to attract small businesses and probably will help only those companies already offering coverage. A survey of small California businesses found that more than half were unaware of the tax credits or the SHOP exchange. The CBO estimated that the tax credits would reduce the cost of premiums for small businesses by 8 to 11 percent, which translates into a weak incentive.

The RAND Corporation has a much different outlook. Its analysis showed that the number of workers offered insurance at businesses with 50 or fewer workers will rise from the current 60 percent to more than 85 percent. The researchers say the individual mandate and lower-cost insurance on the exchange will fuel employee demand for insurance.

Polypharmacy: Too much Rx

The consumption of all these drugs inevitably has created problems for the health-care system.

The drug-induced deaths of Michael Jackson and Anna Nicole Smith are high-profile examples of larger problems. In 2008, 1.9 million people were hospitalized because of adverse drug events (ADEs), which is more than a 50 percent increase from 2004.

That does not include the 838,000 treat-and-release emergency-room patients affected by ADEs, a number that doubled from four years earlier. More than a third of those were for misuse of prescription painkillers.

The 28,000 prescription overdose deaths in 2007 are five times more than in 1990. Most of those deaths have been from painkillers. The Obama administration has called the current prescription overdose epidemic worse than those of crack cocaine in the 1980s and heroin in the 1990s. The White House launched an anti-abuse plan in April 2011 to cut the rate of abuse by 15 percent in five years.

A study at Pennsylvania-based Geisinger Health System found that more than one-third of patients treated for chronic pain with painkillers met the criteria for addiction. Between 20 and 40 percent of U.S. adults have persistent pain that lasts more than six months.

Seven out of 10 who abuse prescription painkillers got them from a relative or friend. However, physicians have been quick to reach for the prescription pad when patients complain of aches and pains. Spending on prescription painkillers tripled from 1996 to 2006.

The elderly have a particularly difficult time juggling multiple prescriptions. Researchers examined prescription use by people with chronic heart disease, using CVS Caremark data. Patients filled prescriptions for an average of 11 medications during a 90-day period. One in 10 used 23 prescriptions during that period. Each medication a patient takes causes an average of 10 percent additional adverse drug events in a hospital setting.

Dr. Jerry Avorn, in a commentary in the Journal of the American Medical Association, said, “The use of medications in older patients is arguably the single most important health care intervention in the industrialized world.”

However, the Harvard professor listed a number of factors that hamper medication management in the elderly. The fragmented health-care system causes patients with several chronic conditions to see multiple prescribing physicians, most of whom do not communicate with each other. That, Avorn said, creates “pharmacological chaos.”

Clinical drug trials rarely include many over 80 years old, so safety and side effects are less well known among that group. This population may metabolize drugs differently than younger patients and may experience more side effects. Overmedication, also called “polypharmacy,” can increase the risk of falls, cognitive decline and depression. All of that, of course, calls for more prescriptions.

Taking so many drugs is complicated. According to one study, only 15 percent of older adults could consolidate seven drugs into four doses a day correctly. People with less formal education performed even more poorly.

People with chronic conditions consume a prodigious amount of prescription drugs. They account for $3 of every $4 spent on pharmaceuticals. Those with five or more conditions filled an average more than 57 prescription medications a year.

Taking so many drugs, also known as “polypharmacy,” can create problems. A patient may not react to one drug on its own. When drugs are used together, the risk of adverse consequences increases exponentially. Unfortunately, health-care providers often react to these events by adding still more drugs to the mix – called “prescribing cascading” – which can increase the chance of additional adverse reactions.

On the other hand, about half of people who have three or more conditions do not take medicines as directed – often because of cost. Therefore, the risk of taking too many or too few medications is high for those with chronic illness.

U.S. cigarettes a relative bargain

Two significant recent steps should bolster the anti-tobacco effort. First, the federal cigarette excise tax increased from 39 cents to $1.01 in April 2009. Despite that price increase, U.S. cigarettes are among the most affordable in the world.

Second, the U.S. Food and Drug Administration (FDA) can now regulate the manufacturing and marketing of cigarettes and other tobacco products. The U.S. surgeon general declared tobacco a health hazard in 1964. However, over the next 45 years, the No. 1 preventable cause of death remained virtually the last unregulated consumable U.S. product. The regulation likely will have more impact than the 1971 ban against tobacco advertising on radio and television. It probably will eclipse the industry’s $206 billion settlement with the states in 1998.

The regulation bans the use of the terms “light” and “low tar,” as well as the use of fruit and candy flavorings to make products more palatable to children. Advertising and store displays will be restricted to stark black-and-white text. However, the bigger impact is the disclosure and regulation of the estimated 60 carcinogens and 4,000 toxins emitted by cigarette smoke. The FDA will have the ability to make the products less deadly for current users.

The Congressional Budget Office predicted the law would decrease youth smoking by 11 percent and adult smoking by 2 percent, independent of the effects of higher excise taxes and public smoking restrictions.

A 2009 Gallup poll indicated that more than half of Americans disapproved of the FDA regulation. The reasons for lack of support are unclear. However, even many nonsmokers oppose public smoking bans because they place a higher value on freedom of choice than on combating health risks.

Book review: The Blood Sugar Solution

Diabetes may well be the fastest-growing non-communicable epidemic in world history.

From 1983 to 2008, diabetes increased seven-fold from 35 to 240 million worldwide. From 2008 to 2011 alone, 110 more people became diabetics.

Dr. Mark Hyman does a good job of explaining how this is happening in The Blood Sugar Solution: The UltraHealthy Program for Losing Weight, Preventing Disease and Feeling Great Now (Little Brown, $27.99).

He describes “diabesity” as a continuum of health problems from overweight and mild insulin resistance to obesity and diabetes. It is almost entirely caused by environmental and lifestyle factors and, therefore, preventable. About 1 out of 4 cases of diabetes remains undiagnosed, as well as nearly all of those with prediabetes.

Hyman points to the usual dietary suspects that contribute to the problem: excess sugar consumption, processed food and sodium. However, he expands the culprits to include environmental factors such as pollution, pesticides, hormones and antibiotics in food.

The book includes a six-week “action plan” to lower blood sugar and the requisite recipes section. Buyers beware: While the book contains valuable information, it is also a Trojan horse for a website that sells his expensive “recommended” supplements.

Book review: The Ultimate Volumetrics Diet

The Ultimate Volumetrics Diet (Wm. Morrow, $27.50) is the latest in a series of books involving the highly regarded weight-control plan developed by Penn State professor Barbara Rolls.

Unlike the charlatans whose books populate the diet-plan shelves in bookstores, Rolls’ volumetrics is based on solid science and common sense. The idea is to consume foods that are filling, but low in calories. These typically contain lots of water and fiber, such as soups, salads, fruit and low-fat dairy products. The diet does not limit any particular foods and does not promote calorie-counting. However, it provides a context for evaluating the effect of what people consume.

The book contains updated research, as well as a 12-week weight-loss plan and strategies to cope with temptation when eating out and more than 100 new recipes. The goal is to train the reader to think in terms of the calorie density of food, and to track food consumption and physical activity. The book’s calorie comparisons are not unlike those of the Eat This, Not That genre.

Volumetrics practitioners will not find much groundbreaking content in this latest edition. It mostly expands on the franchise.