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Why Surgical Volumes Should Be Public

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Her voice cracked with strain. I could imagine the woman at the other end of the line shaking, overcome with remorse about the hospital where her husband had had esophageal surgery. Might he still be alive, she asked me, if they had chosen a different hospital?

The couple had initially planned to have the procedure done at a well-known medical center, but when she went online to do her homework, she discovered that the hospital’s patient safety scores were poor. Another hospital in her community had stronger patient safety ratings, so they decided to have the procedure there.

It made sense. Why wouldn’t they go to a safer hospital?

What she didn’t know was that multiple studies over several decades have shown outcomes are better when procedures are handled by surgeons and hospitals with higher volumes, and while the well-known hospital had performed the procedure her husband needed many times during the previous year, the hospital they chose had done one.

Repealing the Right to Redistribute ‘Other Peoples’ Money’

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Republicans are having a hard time agreeing on how and when to repeal Obamacare. The Patient Protection and Affordable Care Act (ACA) is difficult to unravel because it was designed to alleviate a problem too costly for the government alone to fix. The health care law was passed to make medical care more accessible for low-income Americans and those with pre-existing conditions. This was to be done largely by socializing the costs and spreading the burden among a much broader segment of the healthy population. This is not unlike a pyramid scheme, where a broad base of people at the bottom get ripped so a few at the top can benefit.

Republicans have it within their power to use a process known as budget reconciliation to repeal Obamacare provisions that involve the budget, with a simple majority vote. For example, Republicans can repeal the taxes, fees and appropriations that fund the ACA. The individual and employer mandates, with associated penalties, can also be repealed. What Republicans cannot do is repeal the costly insurance regulations that drive up premiums for most people. That would require the help of perhaps a dozen skeptical Democrats.

Purging Healthcare of Unnatural Acts

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Everyone knows (or should know) that forcing a commercial health insurer to write for an individual a health insurance policy at a premium that falls short of the insurer’s best ex ante estimate of the cost of health care that individual will require is to force that insurer into what economists might call an unnatural act.

Remarkably, countries that rely on competing private health insurers to operate their universal, national health insurance systems all do just that. They allow each insurer to set the premium for a government-mandated , comprehensive benefit package, but require that each insurer “community-rate” that premium by charging the company’s individual customers that same premium, regardless of their health status and even age (with the exception of children).

American economists wonder why these countries do that, given that in the economist’s eyes community-rated health insurance premiums are “inefficient,” as economists define that term in their intra-professional dictionary. 

The Affordable Care Act of 2010 (ACA, otherwise known as “ObamaCare”) also mandates private insurers to quote community-rated premiums on the electronic market places created by the ACA, allowing adjustments only for age and whether or not an applicant smokes. But within age bands and smoker-status, insurers must charge the same premium to individual applicants regardless of their health status.

As fellow economist Mark V. Pauly points out in an illuminating two-part interview with Saurabh Jha, M.D., published earlier on this blog, aside from the “inefficiency” of that policy, it has some untoward but eminently predictable consequences. It happens when healthier people disobey the mandate to purchase insurance, leaving the risk pools of those insured in the ACA market places with sicker and sicker individuals, thus driving up the community-rated premiums. As Pauly points out at length, a weakly enforced mandate on individuals to be insured can become the Achilles heel of community rating.   

Data For Improving Healthcare vs Data For Exasperating Healthcare Workers

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The phrase “healthcare data” either strikes fear and loathing, or provides understanding and resolve in the minds of administration, clinicians, and nurses everywhere. Which emotion it brings out depends on how the data will be used. Data employed as a weapon for purposes of accountability generates fear. Data used as a teaching instrument for learning inspires trust and confidence.

Not all data for accountability is bad. Data used for prescriptive analytics within a security framework, for example, is necessary to reduce or eliminate fraud and abuse. And data for improvement isn’t without its own faults, such as the tendency to perfect it to the point of inefficiency. But the general culture of collecting data to hold people accountable is counterproductive, while collecting data for learning leads to continuous improvement.

This isn’t a matter of eliminating what some may consider to be bad metrics. It’s a matter of shifting the focus away from using metrics for accountability and toward using them for learning so your hospital can start to collect data for improving healthcare.

And the Democrats Wonder Why They Lost the Election?

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Now I have insurance. But I can’t use it. What am I supposed to do? I know this one is long but it’s worth a read if you want to understand issues pertinent to the Affordable Care Act. My personal story illustrates many of the problems with the ACA.

I started taking notes on the Health and Human Services Secretary hearing, and I will share more as I scrutinize the hearing in more detail but let’s start with the breakdowns below and my experience with Obamacare.  Here goes:

These are the breakdowns of who gets what coverage in the United States:

Medicare 18% – 52m

Employer 61% – 178m

Medicaid 22% – 62m

Individual 6% – 18m (exchanges cover 4% of the 6%–these are the people who have been forced onto the Obamacare plans)

Note: this writer is in the BOTTOM of the barrel here (Individual). Most of the individuals in the “Individual” category are either the upper contingent of the working poor, those who work for small businesses like restaurants or family owned grocery stores and the like that don’t provide health insurance benefits (more and more common these days), and/or sole proprietors like myself. Many health care providers are self employed hence we have been forced into the Obamacare exchanges if we are not high earners. High earners won’t buy on the marketplace and will purchase individual plans outside of the marketplace.

It’s Up to Clinicians, Not the Government or Payers, to Control Health Care Costs

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Behind many of the economic and political tensions of our time lurks the growing burden of health care costs. Does that claim sound inflated? Consider: when the public complains of stagnating wages, we can put our finger on health care costs as the monster that gobbles up employee compensation. When economists fret over the future burden of Social Security and Medicare (a cry echoed across the world as populations age), we have to recognize the scourge of increased health care costs. Most of the current debates over the Affordable Care Act–a recurring issue during the presidential campaign–touch explicity or implicity on health care costs.

The upward curve in costs became less of a run-away trend during the recession. Although the ACA might take a bit of the credit, most observers attribute the softening of the cost rises to belt-tightening by patients, and perhaps also to lower inflation. Inexorably, though, costs do rise. Small businesses and people on individual plans suffer most–a burden for which the ACA is not responsible, but that it brought to public attention–and the rest of us are bedeviled by rising premiums and deductibles as well. A study found spending increases across the board in 2015 by individual households, businesses, and governments alike. A number of people give up on health insurance because it’s still too expensive and does not end up covering their needs.

Insurers are suffering too, which is why even major companies such as Blue Cross and UnitedHealth are abandoning some markets.

Mylan Fiasco May Be “The Shot Heard Round the World”

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The Mylan EpiPen debacle may have inadvertently weakened the grip Big Pharma on U.S. lawmakers.  Last week, a bill proposed by Senator Bernie Sanders was narrowly rejected by a vote of 52-46.  Unexpectedly, 12 Republicans and 1 Independent voted with Senator Sanders in favor of allowing pharmacists and distributors to import cheaper prescription drugs from Canada and other foreign countries (something typically favored by Democrats.)  The winds of change are starting to blow in the bipartisan direction when it comes to the pharmaceutical industry.    

U.S. Healthcare needs a revolution ; ‘the shot heard round the world’ often refers to the opening shots of the American Revolution in 1775.  The Big Pharma lobby is holding the American people hostage with their exorbitant ransom demands.  Last summer, Mylan Pharmaceuticals, led by CEO Heather Bresch, overplayed their hand.  Mylan came under fire for a 400% price increase in the EpiPen two-pack.  This device is considered life-saving for children and adults with anaphylactic reactions to various food, insect, or environmental insults.  Ms. Bresch insisted the significant price increase ($600-$700 for a medication which costs pennies) was justified due to the more ergonomic appearance of the delivery device and improved safety profile.  Her miscalculation seems to have indirectly incited the war on Big Pharma by angering the public, the media, and the government simultaneously. 

Resist the Evil Fiction That Is Health Insurance

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It has come to pass. President Donald J. Trump. Are you scared? Are you planning to “resist” the policies you imagine President Trump will pursue by tweeting furiously with clever hashtags galore? Would you prefer to move my fastidious quotation marks from “resist” to “President”? This is after all, the first President in a very long time to take office without the blessings and financial support of established “world order” leaders. It must be rather disconcerting to proceed without clear guidance from our betters, especially seeing how well they served us over the last decades, and particularly when it comes to affordability of health care in America.

Are you binge-watching the Obamacare drama playing on America’s center stage these days? Are you tweeting and retweeting every shred of information that proves Obamacare is a huge success, and its repeal will mean certain death for millions? Or are you busy proclaiming your faith in free markets, the (undemocratic) government of Singapore, or the charitable nature of Americans in general and doctors in particular?  Is President Obama your tragic hero, or your shifty villain? Is President Trump your great liberator (although he promised not to do anything you really want), or the Grinch who will steal health care (although he promised to preserve everything you really like)? Are you not entertained? Pass the bread, please.

Interview with Mark Pauly: Part 1

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Community Rating – The Worst Possible Way To Do a Good Thing

I have a grudging respect for health economists, “grudging” because, like many doctors, I want my pieties unchecked. Health economists check our pieties with quantitative truths. They describe the way the healthcare world is – a view from 29, 000 feet, pour cold water on the way we think the world should be, and guide, with abundant disclaimers, the way we can make things better. It’s unwise climbing Everest without a Sherpa, nor is it wise reforming healthcare without listening to health economists from across the political spectrum.

President Trump, along with the Republican House and Senate, will be dismantling the Affordable Care Act (ACA). In a sense, President Trump is not just descending Everest, a treacherous feat in its own right, but scaling a peak arguably more dangerous than Everest. Despite their differences, Mr. Obama and Mr. Trump share one commonality – an implicit distrust of the health insurance industry.

How did the American health insurance industry become so vilified? This is, in part, because necessity is the father of all vilification. Insurers are a necessary evil in a country where there’s still deep mistrust of the government. Partly, this is because we transfer our angst about the uncertainty of our future, the dice which plays with our lives, to insurers who are in the business of rolling the dice. But mostly it’s because the misdeeds of the insurance market have been grossly exaggerated, and the benefits of the market have been attenuated by a few damning anecdotes. This is what Mark V. Pauly (MVP), Professor of Health Economics at the University of Pennsylvania, and one of the most eminent health economists of his generation, believes.

Bringing the “Art of the Deal” to Healthcare

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Obamacare, at least in its original incarnation, is on its way out. The pressing question now is whether “art of the deal” health care will remain.

“The Art of the Deal” is the title of the 1987 best-seller that catapulted real estate developer Donald Trump to national prominence. Although Trump has denounced Obamacare as a “disaster,” and Republicans have voted for its repeal, their attacks have focused mostly on sections of the Affordable Care Act that expanded access to health insurance.

At least as important, however, are the lesser-known parts of the law that have let Medicare use its financial clout to push for better, safer, and less expensive medical care. In Trump’s terminology, it’s been a “terrific deal” for anyone who’s seen a doctor or gone into the hospital, saving a staggering 125,000 lives and $28 billion in just four years, according to the Department of Health and Human Services.

Unfortunately, Trump’s pick as HHS secretary, orthopedic surgeon and Georgia Republican Representative Tom Price, appears at best a lukewarm supporter of this approach. Will Trump protect Americans’ great health care deal? Or might Price be the first cabinet secretary to hear, “You’re fired!”?