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Why Health Reform is a Risky Business for Politicians: Even Winning Can Cost You at the Polls!

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In August 1989, Chicago Congressman Daniel Rostenkowski, then Chairman of the “powerful” House Ways and Means Committee, narrowly escaped an angry mob of seniors in his own district who attacked his car with umbrellas. His crime: eliminating the gaping patient financial exposure built into the Medicare program in 1965 by raising taxes on the “high income” elderly.   In November, 1989 Congress rescinded the so-called Catastrophic Coverage Act, a bipartisan reform signed into law by Ronald Reagan just sixteen months earlier.

In the spring of 1994, Bill and Hillary Clinton abandoned their famously arcane health reform plan and months later, forfeited control over Congress in the 1994 mid-term elections. Health reform was a major factor giving Newt Gingrich’s House Republicans control for the first time in forty years. Twenty five years later, Barack Obama succeeded, with huge Democratic majorities, in passing the Affordable Care Act and . . . lost control of the House less than eight months later in the largest Republican landslide since 1938, due in major part to voter backlash against “ObamaCare”.

What was the common denominator of all these political events? The answer: powerful voter retribution for tinkering with the healthcare system, successfully or not.  Why is health reform such risky business for politicians?

Failure to Translate: Why Have Evidence-Based EHR Interventions Not Generalized?

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The adoption of electronic health records (EHRs) has increased substantially in hospitals and clinician offices in large part due to the “meaningful use” program of the Health Information Technology for Clinical and Economic Health (HITECH) Act. The motivation for increasing EHR use in the HITECH Act was supported by evidence-based interventions for known significant problems in healthcare.

In spite of widespread adoption, EHRs have become a significant burden to physicians in terms of time and dissatisfaction with practice. This raises a question as to why EHR interventions have been difficult to generalize across the health care system, despite evidence that they contribute to addressing major challenges in health care.

Universal Coverage Means Less Care and More Money

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The reported success of the Affordable Care Act (ACA or ObamaCare) is based on enrollment numbers. Millions more have “coverage.” Similarly, the predicted disasters from repeal have to do with loss of coverage. Tens of thousands of deaths will allegedly follow. Activists urge shipping repeal victims’ ashes to Congress—possibly illegal and certainly disrespectful of the loved one’s remains, which will end up in a trash dump.

Where are the statistics about the number of heart operations done on babies born with birth defects, the latest poster children? How about the number of babies saved by this surgery, and the number allowed to die without an attempt at surgery—before and after ACA? I haven’t seen them. Note that an insurance plan doesn’t do the operation. A doctor does. The insurer can, however, try to block it.

Not Really Insurance: The Pre-Existing Condition Debate

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The recent debate over the potential repeal and replacement of the ACA, with the current focus on coverage for preexisting conditions, has drawn a great deal of attention to the concept of health insurance.  While our political leaders are constantly talking about it, few of them seem to understand the “insurance” component of health insurance. As a result, much of what they say about preexisting condition coverage is gibberish. We are here to set the record straight.

At its most basic level, insurance provides protection against the risk of unexpected financial losses. We focus on the term risk because if we were risk neutral (i.e., we were indifferent between sure things and actuarially equivalent gambles), then we would not value this protection. But nearly all of us are risk averse, meaning that we would rather not face having to dramatically reduce consumption of everything we enjoy in the event we are hit with an astronomical medical bill.  Because we are risk averse, health insurance improves our collective well-being by helping us collectively smooth our consumption.  Everyone who purchases insurance consumes somewhat less of everything else when healthy, but does not have to consume dramatically less when sick.

Jimmy Kimmel Left Out Some Important Stuff About Obamacare

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Late-night comedian Jimmy Kimmel, in a recent opening monologue, spoke tearfully of his newborn son Billy, born with a serious congenital heart defect.  Heart defects in newborns, while uncommon, occur in 1 in 100 births.  The more serious ones, meaning those needing surgery in the first year, represent about a quarter of all congenital heart defects.

Jimmy’s son fell into the latter category, with Tetralogy of Fallot, bad plumbing in the heart, causing oxygen-poor blood to circulate out into the body without picking up a fresh supply of oxygen from the lungs.  Hence the newborn baby turning blue.

I have firsthand experience with this, as my youngest son was born with the same heart defect.  He needed surgery as an infant and then two additional open heart procedures before reaching adulthood.  I have walked in Jimmy Kimmel’s shoes and understand exactly what he is feeling – terror, anguish, guilt, helplessness, and hopelessness.

Dear President Trump, About That Health Care Law

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I hope you read this letter. I doubt you will.

I know you’re busy rebuilding Washington, reshaping the international order and doing a lot of other weighty stuff.  Full disclosure, I voted for you.  Not because you promised to repeal the Affordable Care Act, or because you tweeted at me about it, but because our healthcare system is hopelessly broken and requires an overhaul that does not simply convert over to a single payer system.

Recently you were quoted in an interview with Reuters:

“I loved my previous life… I had so many things going… this is more work than my previous life. I thought it would be easier.” Yes. I did too. Welcome to the frustrating world of shaping health care for a nation. It should be about making others’ lives better, but instead it is about padding lobbyist pockets.

There are people who say you’re the wrong man for this job. I think they have it exactly backwards.  You’re famous for your hatred of complicated solutions.  They annoy you. They annoy you because you know they’re a waste of time and energy.  Time and energy that can be put into more important things.

You’re also well known for your distrust of experts, who you’ve learned to dislike after years of doing business and listening to boring presentations by people who don’t know what they’re talking about. There are more experts in healthcare than any other area of the economy.  Does that tell you something? I think it does.

The Return of the Angry Granny State

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Texas should call itself The Granny State. That’s because it’s a nanny state in which the public officials who run the place have the values of a tea-totaling, Bible-thumping biddy who knows how God wants everyone to live and can’t resist telling them. No buying liquor on Sundays when people are supposed to be at church. No gambling ever. No whacky-weed for medicinal uses or recreation, even in the privacy of one’s home. No gay marriage, preferably no gays, and no transgender folk deciding which restrooms to use. And, of course, no sex, sex education, birth control, or abortions. Women should have sex only in marriage and then only to reproduce, and those who get pregnant must carry their babies to term, regardless of the consequences for themselves or anyone else.

These religion-inspired policies have served Texans poorly. The state’s maternal mortality rate nearly doubled in just two years after Texas cut its budget for family planning by two-thirds and eliminated funding for Planned Parenthood clinics. It’s now the worst in the developed world, not just in the US. Texas ranks 8th from the bottom in the frequency of STDs and has the 5th highest teen pregnancy rate too. Its 35 births per 1,000 girls aged 15-19 are nearly double the national average. Meanwhile, Colorado and other states have achieved miraculous reductions in teen pregnancy rates and abortion rates by providing young women with long-acting contraceptives, like implants and IUDs. If Texas is following God’s plan, then God’s plan is a bust.

Now Granny is once again sticking her nose where it doesn’t belong. Currently before the Texas legislature is Senate Bill 25, which would eliminate the wrongful birth cause of action that the Texas Supreme Court recognized four decades ago in Jacobs v. Theimer. The facts were as follows. While traveling, Dortha Jacobs became ill. Upon returning home, she consulted a physician, Dr. Louis Theimer, who discovered that she was newly pregnant. Fearing that the illness was rubella—also known as the German measles—Jacobs asked Dr. Theimer if there was reason for concern. Rubella can injure a gestating fetus severely. Dr. Theimer told her not to worry, but he did so without performing an available diagnostic test. In fact, the disease was rubella and the child “was born with defects of brain, speech, sight, hearing, kidneys, and urinary tract,” among others. The medical expenses were extraordinary.

The Fairy Tale of a Non-Profit Hospital

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Nonprofit hospitals have higher profit margins than most for-profit hospitals after accounting for their tax obligations.  3900 (62%) of U.S. Hospitals are non-profit and therefore tax-exempt: they pay no property tax, no federal or state income tax, and no sales tax.  An article published in Health Affairs found seven of the nation’s 10 most profitable hospitals were of the non-profit variety, each earning more than $163 million from patient care services. Revoking their property tax-exempt status for not functioning as a charitable entity could return billions in healthcare dollars to local government, communities, and citizens, struggling to afford quality health care.

The idea of exempting nonprofits from paying taxes in the first place is based on the belief these entities provide charity for the underserved and underinsured who would otherwise require the government to lend a helping hand.  As the percentage of uninsured declines as a result of the ACA, the justification for tax exempt status is being called into question.

A Modest Health Care Economics Experiment to Fight Rising Costs

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Healthcare providers, medical institutions, local pharmacies and pharmaceutical companies generally set the price of their products/services well above the payment they expect to receive from all insurers. These healthcare vendors set their fee schedule at 150%, 200% or 1,000% of the maximum payment they expect to receive from their most generous payor.

Here in Massachusetts, when a healthcare product or service is consumed and the patient has health insurance, the vendor submits a bill to the insurance company who specifies the “allowed fee,” which is considerably less than the “billed fee,” and the vendor “writes off” the balance of the  “billed fee” from their books.

For example, I recently had some blood tests done at Quest Diagnostics. Quest Diagnostics sent a bill to my insurance company for $660. The “allowed payment” was $110, so Quest wrote-off $550 and the “allowed payment” of $110 was divided between me and my insurance company.

MACRA Is Broken. It Needs to Go Away Now.

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At its January 12, 2017 meeting, the Medicare Payment Advisory Commission (MedPAC) made it clear they had reached the conclusion that the Merit-based Incentive Payment System (MIPS) cannot work (see my last post ). MIPS is the larger of the two programs within MACRA; the Alternative Payment Model (APM) program is the other. The commission’s primary rationale for its conclusion about MIPS is that it’s not possible to measure physician “merit” (cost and quality) at the individual physician level.

But rather than recommend that Congress repeal MACRA (the Medicare Access and CHIP Reauthorization Act), MedPAC decided to try to fix it. At the January and March 2 meetings, the commissioners discussed a staff proposal to amend MIPS substantially and to tweak the APM program. Those discussions went nowhere.

I give MedPAC credit for finally stating unequivocally that MIPS cannot work. But MedPAC should never have volunteered to fix MACRA. It can’t be done. By proposing modest amendments to MACRA and thereby implying it’s fixable, they stepped into an intellectual tar pit. I will illuminate this tar pit by describing the commission’s unproductive discussion about the staff’s proposed amendments to MACRA. To give you a sneak preview of what that discussion was like, I give you two excerpts from the transcript of the January meeting: