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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!”?

Not Normal Chaos

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The short version of Vox’s Sarah Skiff on “Why Republican disarray on health care doesn’t doom repeal efforts” would read something like: “It always looks this way in the throes of preparing major legislation. Remember how wild and confusing it was when the Democrats were trying to put together healthcare reform in 2009? Joe Lieberman was insisting on a public option, ‘pro-life’ Democrats were insisting that anti-abortion language be written in? Just because it’s chaotic doesn’t mean it won’t get anywhere.”

She’s right, of course — and she’s wrong in a significant way: In 2009 Congress was debating different policy approaches and the tradeoffs involved. There was never a question whether what they were attempting was possible, just whether it was possible to find a political compromise that could garner enough votes to pass. This meant that it was reasonably predictable that they would come up with something they could call “healthcare reform.” 

Congressional Republicans are up a different creek right now: What they are attempting is mathematically impossible. The things they and President Trump have promised do not add up. Literally. Their problem is arithmetic. Getting more people covered, with better coverage, with lower deductibles and out-of-pocket costs — all that will cost more money, lots of it. Getting rid of the tax penalties for not having insurance (the “individual mandate” that is the most-hated part of Obamacare) and the taxes built into Obamacare on wealthy people and on segments of the healthcare industry — all these will cost the government revenue, the very revenue it would need to pay for the better coverage of more people. All this while they aim to cut taxes and lower the deficit. And of course they have on every Holy Book within reach that they will repeal Obamacare, so they can’t just leave it in place. This means it is highly unpredictable what they will come up with, or that they will come up with anything at all.

Pig in a Poke Health Reform

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Uwe ReinhardtFrom a political perspective, House Speaker Paul Ryan’s trashing of ObamaCare (a.k.a. the Affordable Care Act or ACC) during CNN’s recent town hall meeting probably was quite effective. One would, of course, not expect a staunch political opponent of ObamaCare to render a “fair and balanced” picture of the program, to plagiarize a Fox News mantra. Not surprisingly, the Speaker dwelt solely on some serious shortcomings of ObamaCare that are by now well known among the cognoscenti.

The question now is precisely what would replace ObamaCare, as Republicans fall over one another in their haste to repeal it. Enumerating principles, as has been done in sundry tracts in recent years and is done once again in the House of Representatives’  “A Better Way”, is no longer enough. Yet even at this time of imminent repeal of ObamaCare, the crucial details of any replacement plan remain a mystery. Surely the time has come to let the cat out of the bag.

During the town hall meeting, for example, Speaker Ryan proposed the general outline of a system that would rely on high risk pools for Americans with pre-existing medical conditions, coupled with a market for individually purchased insurance policies whose modus operandi was largely unspecified. What would be the parameters of the high risk pools? Granted, it would have been difficult to be much more specific on this point than the Speaker was in a town hall meeting. But it would certainly have been helpful had there been a website to which he could have directed his audience for the specifics of a replacement plan built on a Republican consensus.  To my knowledge, there is no such website.

Risk pools have long been the workhorse of Republican rhetoric on health reform. One can think of such a pool as just another health insurance company selling insurance in the individual market for such policies to relatively sick applicants for insurance. To assess the merits of the coverage it sells, one surely would want to know: 

The Arc of Justice in Healthcare

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We all fear that phone call.  A medical report turns out the wrong way and life may never be the same.  When that call arrives we all have the same needs:  A doctor who cares, a place to go for treatment and the finances to afford what’s needed.  Starting on January 20th, some of my patients will join the 20 million whose lifeline to those fundamental needs becomes jeopardized.  

One of my patients facing this threat lost his job and health insurance during the 2008 recession.   Because he’s a diabetic and has a special needs son, no insurance company would sell his family a policy.   Why would they?   Diabetics and others with serious illnesses pose high risks for future health expenses.  Insurance companies make money by avoiding such risk.   After exhausting all the options, he sweated out 18 months with no coverage.   Finally, the roll-out of the California Exchange, funded by the Affordable Care Act (ACA), allowed him to buy an Anthem Blue Cross policy for his family.  

Do we really want millions of our fellow Americans to relive those nightmares?  We all benefit from the ACA’s fundamental commitment: That everyone deserves access to healthcare regardless of their ability to pay.  The policies guided by this principle moved us toward the achievement of universal coverage without changing the existing care of the majority of working families with employer based plans nor those with self-funded coverage.   

A Brief History of Why the Republicans Have No Replacement For Obamacare

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There is no conservative replacement health reform plan for Obamacare — because Obamacare is a conservative health reform plan.

After six years of promising to repeal ‘n’ replace the President’s signature domestic achievement, Republican lawmakers have no coherent alternative to the Affordable Care Act for one good reason: because the Affordable Care Act was once the market-based alternative to a real, not imagined, “government takeover” of health care.

What has always made the ACA a political pariah to Republicans, typified by the bizarre claim by House Speaker Paul Ryan (R-WI) on Wednesday that “Obamacare” has “ruined” and “dismantled” our health care system, is the plan’s namesake — far more than its necessarily complex architecture or any of its actual details, unless you count the details they made up.

America’s Health and The 2016 Election: An Unexpected Connection

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Donald Trump’s stunning upset victory has occasioned a lot of searching among political analysts for an underlying explanation for the unexpected turn in voter sentiment. Many point to Trump’s galvanizing support among white working class and middle income Americans in economically depressed regions of the US- particularly Appalachia and the upper middle west “Rust Belt” – as the main factor that put him in office.

While the Democrats concentrated on the so-called “coalition of the ascendant”- voter groups like Hispanics and Millennials that are growing, Trump rode to victory on a “coalition of the forgotten”- working class Americans in economically depressed regions of the U.S. who had been left behind by the economic expansion of the past seven years.

When the Economist searched for a more powerful predictor of the Trump victory than white non-college status, they found a surprise winner: a composite measure of poor health (comprised of diabetes prevalence, heavy alcohol consumption, lack of physical activity, obesity and life expectancy). Believe it or not. this measure of health status predicted a remarkable 43% of the improvement of Trump’s vote percentage compared with the 2012 Republican candidate Mitt Romney, compared to 41% for white/non-college.

A month after the election, the Centers for Disease Control released its 2015 morbidity and mortality trends in the US.  The CDC Report showed that  Americans’ life expectancy actually declined for the first time in 22 years. Except for cancer where we saw continued progress, death rates rose for eight out of the ten leading causes of death, most sharply for Alzheimer’s Disease.  The decline in life expectancy was confined entirely to the under 65 population!

National Health Expenditures Continue to Accelerate in 2015. What Does That Mean?

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In 2009 a youthful Barack Obama addressed a joint session of congress on health care on a cold fall evening.  The country was still recovering from the great financial crisis, and the new President was now attempting to turn the nation’s eye to health care. As he had done many times before, Obama spoke powerfully of the tragedy of millions of citizens with ‘no access’ to health care, but spoke practically of the unsustainable and untenable economics of health care.

Finally, our health care system is placing an unsustainable burden on taxpayers.  When health care costs grow at the rate they have, it puts greater pressure on programs like Medicare and Medicaid.  If we do nothing to slow these skyrocketing costs, we will eventually be spending more on Medicare and Medicaid than every other government program combined.  Put simply, our health care problem is our deficit problem.  Nothing else even comes close.  Nothing else.  (Applause.)

Now, these are the facts.  Nobody disputes them.  We know we must reform this system.  The question is how. “

These were the indisputable facts, he said.  ‘Nobody disputes them’.

Knowing What Not to Do

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“The essence of strategy is choosing what not to do.”  Michael Porter.

It is so often the case that organizations try to do things they should not do.  Call it irrational exuberance; getting out in front of the curve; or a bridge too far.  Hospital systems are examples of that.  Already large, complex organizations doing incredibly challenging things with billions of dollars flowing through their systemic blood vessels, they are understandably tempted to do more.  They always are.  That is the inevitable urge of active hospital board members and ambitious executives.  Do more; not do less.  After all, who arrives to such an exalted position to do less?

Their collective corporate eye is cast toward health insurers who have been called bloated and inefficient; dinosaurs; dim witted at best.  The President of the United States, no less, disparaged insurers while promoting the ACA, labelling them the “villains” of the healthcare system.  Speaker Pelosi called them “immoral.”  How difficult can it be to do health insurance better than the insurers have done it? Should be easy for people as smart as those who run complex healthcare delivery systems.

“Hospitals think this is a way to cut out the middle person, tailor care more closely and save a lot of extra money, but there’s a history to this and it generally doesn’t work,” said Howard Berliner, a visiting professor of health policy at NYU. “It sounds easy, but it winds up being incredibly complicated.”