While fierce debate continues to envelop much of the Affordable Care Act, financial data for many of the nation’s health systems reveal one clear fact: the optional Medicaid expansion has resulted in hospital haves and have nots.
An analysis by PwC’s Health Research Institute (HRI) of newly released earnings and patient volume data shows a clear financial split between healthcare providers operating in states that expanded Medicaid and those that have not. The law as written would have provided Medicaid coverage to every American earning less than 138% of the federal poverty level ($16,105 for an individual). But a June 2012 Supreme Court ruling made the expansion optional for states, creating a patchwork of coverage.
Health systems and physician groups delivering care in the 26 states and the District of Columbia that have embraced the federally-funded expansion have reported a significant rise in patient volumes and paying consumers and a measureable reduction in uncompensated care levels.
This year alone LifePoint Hospitals has seen a 30.3% reduction in its uninsured and charity care patients, according to filings with the Securities and Exchange Commission. Tenet Healthcare, which operates in five Medicaid expansion states, saw uninsured and charity care admissions decline by 46% in the expansion states, coupled with a 20.5% increase in Medicaid inpatient admissions in those same states, according to an HRI analysis which will be released next week.
In all, HRI analyzed financial data from the nation’s five largest for-profit health systems—HCA Holdings, LifePoint, Tenet, Community Health Systems and Universal Health Services, representing 538 hospitals in 35 states. Our team also reviewed data from several mid-sized hospitals, government reportsand industry surveys.
Continue reading “Medicaid 2.0″
Filed Under: THCB, The Business of Health Care
Tagged: ACA, Community Health Systems, HCA Holdings, LifePoint, Medicaid, Medicaid Expansion, Tenet, Universal Health Services
Sep 2, 2014
Prior to the Affordable Care Act (ACA), with 47 million Americans uninsured, advocates and policy experts focused on expanding health insurance coverage for those who lacked it. Now that the law has broadened access to insurance, states are turning their attention to protecting enrollees from disruptions when they transition from one type of coverage to another, movement known as churn.
Churn is typically caused by a change in eligibility status, which itself stems from fluctuations in income, loss of a job, or changes in family circumstance, such as pregnancy. Short of a system, such as single-payer, where people may stay on the same plan for most of their lives, churn is inevitable. Indeed, in our fragmented health insurance system, millions of people naturally churn over the course of a given year, moving from employer-provided insurance to private insurance, or from private insurance to Medicaid, and so on. At low income levels, employment is particularly unstable, leading to high levels of churn among that population. For example, a newly-eligible Medicaid beneficiary (in an expansion state) who experiences a change in income over the course of a year—such as picking up an extra retail job during the holiday season—may lose his or her Medicaid eligibility as a result. Switching over to the exchange for new coverage could mean a totally different network of doctors, new drug formularies, and higher premiums and cost-sharing, not to mention the complexity and burden of going through a new and different enrollment process.
Is the ACA to blame for churn? No—in fact, the ACA directly reduces one form of churning, and offers tools to mitigate the impact of other forms. Before the ACA, millions churned off insurance coverage for all the reasons mentioned above. And after losing coverage, many people—especially those with preexisting conditions—found it hard, if not impossible, to get it back. Because the ACA makes the individual health insurance market more accessible and affordable, the law creates a new culture of coverage with a continuum of options, and actually cuts down on churning into uninsured status.
Continue reading “Churn and the ACA”
Filed Under: Economics, THCB
Tagged: Churn, Employer-based insurance, Job loss, Medicaid, Pregnancy, private insurance, QHPs
Aug 11, 2014
In measuring the effects of health insurance coverage expansion as part of our ACAView initiative with Robert Wood Johnson Foundation (RWJF), an important factor to consider is state policy towards Medicaid expansion.
The intention of the Affordable Care Act (ACA) was to expand coverage through two mechanisms: 1) People with moderate incomes could gain coverage through the exchanges, often encouraged by subsidies; and 2) those with lower incomes could gain coverage through an expansion of Medicaid eligibility to include groups that had not traditionally qualified for Medicaid.
For many years, states had widely varying Medicaid eligibility rules, with some states covering only women and their children in need of public aid and low-income people with disabilities. Other states had expanded eligibility to include people at income levels higher than the federal poverty level.
Given the differing Medicaid expansion decisions among states, we examined our data on visits to primary care physicians (PCPs) separately for states with and without Medicaid expansion.
Figure 1 shows proportions of visits between January 2012 and May 2014 for four groups of adults (18-64): uninsured individuals in Medicaid-expansion states; uninsured individuals in non-Medicaid expansion states; Medicaid beneficiaries in expansion states; and Medicaid beneficiaries in non-expansion states.
Two observations are worth noting:
- ACA coverage expansion appears to be widening a pre-existing gap between states that have elected to pursue Medicaid expansion and those that have not. Providers in the Medicaid-expansion states were already seeing higher proportions of Medicaid beneficiaries in 2013. For example, in December of 2013, 12.3% of 18-64 year- old visits to PCPs in expansion states were from Medicaid beneficiaries, compared with 5.9% in non-expansions states, a 6.4 percentage point differential. By May 2013, that difference had expanded to a 9.3 percentage point differential, as the percent of Medicaid visits increased in Medicaid expansion states but held constant in non-expansion states.
- The proportion of uninsured fell in both categories, from 4.5% to 3.3% in expansion states and 7.0% to 5.8% in non-expansion states (figures for January through May for both years, respectively).
Figure 2 expands the Medicaid payer mix analysis to other specialties.
In Medicaid expansion states, all four specialty types showed a substantial increase in the proportion of visits by Medicaid beneficiaries. In contrast, in non-Medicaid expansion states, the proportion of visits by Medicaid beneficiaries decreased for all four specialty groups.
As a result of these changes, by early 2014 PCPs, surgeons, and other specialists in expansion states saw two to three times more adult Medicaid patients (in proportional terms) than in non-expansion states (for example, 15.6% versus 6.3% for PCPs; 11.6% versus 3.1% for surgeons).
For OB-GYN, the ratio between the proportion of visits by Medicaid beneficiaries in the expansion and non-expansion states is much smaller, 19.4% versus 13.4%. This may reflect more generous Medicaid eligibility in non-expansion states for pregnant women compared to other adults.
As we monitor these metrics, a few questions will be of particular interest:
- Where will the increase in Medicaid volumes in expansion states level off?
- To what extent is the increase in Medicaid visits driven by established patients who were previously uninsured?
- What are the effects of increased Medicaid volumes on medical practices?
We will attempt to address these (and other) complex issues throughout the year.
For a better understanding of our goals, methodology, data sample size, and full findings since the inception of the ACAView series, please read our first report, “First Observations Around the Affordable Care Act.”
Filed Under: Economics, THCB
Tagged: Expansion, Expansion states, Medicaid, Non Expansion states
Jul 14, 2014
Avik Roy has done the unthinkable. In a recent op-ed title he used “conservative’s case” and “universal healthcare” in the same sentence. And bridged these disparate words by the preposition for.
Spoiler alert: Roy has asked Republicans to embrace universal healthcare.
The Twitterverse is abuzz. An angry Gary P. Jackson, a self-affirmed conservative, tweeted:
“there is NEVER a conservative case for Marxism….especially Universal healthcare.”
Stated differently, universal healthcare is the worst form of Marxism except for all other forms of Marxism.
Thus far Roy has not been asked to produce his birth certificate, which is just as well. Roy, a prolific Forbes columnist and a scholar at the Manhattan Institute, was healthcare policy adviser to Mitt Romney. He is not a cheerleader of the Affordable Care Act.
There are things one may disagree with Roy. However, his short treatise, How Medicaid Fails the Poor, was impressive, as it deftly dealt with Medicaid’s structural problems. That a right-of-center policy analyst would write a book with that title is one of the many ironies I am now accustomed to encountering (the other delicious irony was the love of Cadillac health plans by unions).
In The Washington Examiner and National Review Online, Roy urges conservatives to acknowledge and embrace universal healthcare, in no uncertain terms:
“…[conservatives] have to agree that universal coverage is a morally worthy goal.”
The arguments put forward by Roy are pure common sense. No one objects to public education as “socialized education.” If conservatives are afraid that universal healthcare means big government, government is already heavily involved in healthcare.
And not just Medicare, which a certain tea party placard asked the government to keep its hands off!
Continue reading “The Conservative’s Faustian Fear”
Filed Under: Uncategorized
Tagged: Avik Roy, Medicaid, National Review, Saurabh Jha, The ACA, The Washington Examiner, universal healthcare
Jan 24, 2014
“Extraordinary claims require extraordinary evidence,” said Carl Sagan.
The claim that health insurance improves health outcomes is hardly ground breaking. Studying whether insurance affects health status is like wondering whether three meals a day lead to a higher muscle mass than total starvation.
Well that’s what I thought. Until I read the study on Oregon’s Medicaid program by Baicker and colleagues in the NEJM earlier this year and, more recently, Avik Roy’s short treatise “How Medicaid Fails the Poor”.
Baicker et al found that Medicaid enrollees fared no better in terms of health outcomes than those without insurance. That is, no insurance no difference.
The study is an exemplar of policy research laced with regression equations, control of known confounders and clear separation of variables. There is only so much rigor social science can achieve compared to the physical sciences. Yet this is about as good a study as is possible.
The one thing the study did not lack was sample size. It’s useful to bear in mind sample size. Large effects do not need a large sample size to show statistical significance. Conversely, if study with a large sample size does not show even a modest effect, it means that the effect probably does not exist.
There are several interpretations of the Medicaid study, interpretations inevitably shaped by one’s political inclination. The ever consistent Paul Krugman, consistent in his Samsonian defense of government programs against philistines and pagans, extolled critics of Medicaid as “nuts” and asked, presumably rhetorically, “Medicaid is cheaper than private insurance. So where is the downside?”
Unlike Krugman I am not a Nobel laureate and am about as likely to win a Nobel Prize as I am of playing the next James Bond, so it’s possible that I am missing something blatantly obvious. Could the downside of a government program paying physicians, on average 52 cents, and as low as 29 cents, for every dollar paid by private insurance in a multiple payer system be access?
Indeed, it’s darn impossible for patients on Medicaid to see a new physician. As Avik Roy explains “…massive fallacy at the heart of Medicaid….It’s the idea that health insurance equals healthcare”.
But wait. It gets better.
I am accustomed to US healthcare throwing more plot twisters than Hercule Poirot’s sleuth work. But one I least expected was that patients on Medicaid do worse than patients with no insurance (risk-adjusted, almost). I am not going to be that remorseless logician, which John Maynard Keynes warned us about, who starting with one mistake can end up in Bedlam, and argue that if you are for Medicaid that is morally equivalent to sanctioning mass murder. Rather, I ask how it is possible that possessing Medicaid makes you worse off than no insurance whatsoever.
To some extent this may artifactually appear so because poverty correlates with ill health, and studies that show Medicaid patients faring worse than uninsured, cannot totally control for social determinants of health.
Continue reading “How Can Patients on Medicaid Possibly Be Worse Off than Those Who Don’t Have Insurance?”
Filed Under: OP-ED, THCB
Tagged: Medicaid, Medicaid Expansion, Saurabh Jha, Wellness
Dec 31, 2013
If you wanted to know what doctors thought about money and medical practice, including plumber envy, you’d read American Medical News(AMN). That’s the biweekly newspaper the American Medical Association just announced it’s shutting down.
Unlike JAMA, in which doctors appear as white-coated scientists, AMN focused on practical and political issues, not least of which was the bottom line. For outsiders, that’s provided a fascinating window into the House of Medicine.
Take, for instance, the sensitive topic of plumber envy. A 1955 AMA report I discovered during research on a book I wrote some years ago lamented physicians’ “consistent preoccupation with their economic insecurity,” including envious comparisons to “what plumbers make for house calls.”
Flash forward to 1967. Thanks to most patients now enjoying private or public health insurance, doctors’ incomes have improved substantially. The pages of AMN include advertisements for Cadillacs and convention hotels (Miami Beach is “Vacationland USA”). However, one man’s income is another man’s expenses, and complaints about rising medical costs have surged. When AFL-CIO president George Meany joins the chorus of carping, an AMN headline asks, “How about plumbing?”
If today’s doctors have finally piped down about plumbers – an electronic search of AMN archives back to 2004 produced no plumbing references – it may be because the average plumber earned about $51,830 in 2011, according to the Bureau of Labor Statistics, while the average general internist earned $183,170. Meanwhile, the AMN ads for cars were long ago replaced by ads for drugs, where influencing a doctor’s choice can drive millions or billions in revenue.
Unsurprisingly, the issue of rising medical costs and its causes has been a persistent theme in AMN since its launch in 1958. (For my book research, I pored through its indexes and old issues.) While AMN ran articles with titles like, “Medicine Called ‘Best Bargain Ever,’” the AMA leadership knew health cost unhappiness was not a psychosomatic disorder.
Continue reading “What the Death of American Medical News Says About the Future of American Medicine”
Filed Under: Physicians, THCB
Tagged: American Medical Association, American Medical News, GOP, Health Care Reform, Heritage Foundation, Medicaid, Medicare, Michael Millenson, Obamacare, Physicians
Aug 20, 2013
“Half of primary care physicians in survey would leave medicine … if they had an alternative.” — CNN, November 2008
“Doctors are increasingly leaving the Medicare program given its unpredictable funding.” – Forbes, January 2013
Doctors, it seems, love medicine so much … that they’re always threatening to quit.
In some cases, it’s all in how the question is asked. (Because of methodology, several eye-catching surveys have since been discredited.)
But physicians’ mounting frustration is a very real problem, one that gets to the heart of how health care is delivered and paid for. Is the Affordable Care Act helping or hurting? The evidence is mixed.
Doctors’ Thoughts on Medicare: Not as Dire as Originally Reported
The Wall Street Journal last month portrayed physician unhappiness with Medicare as a burning issue, with a cover story that detailed why many more doctors are opting out of the program.
And yes, the number of doctors saying no to Medicare has proportionately risen quite a bit — from 3,700 doctors in 2009 to 9,539 in 2012. (And in some cases, Obamacare has been a convenient scapegoat.)
But that’s only part of the story.
What the Journal didn’t report is that, per CMS, the number of physicians who agreed to accept Medicare patients continues to grow year-over-year, from 705,568 in 2012 to 735,041 in 2013.
Continue reading “Why Reports of the Death of Physician Participation in Medicare May Be Greatly Exaggerated”
Filed Under: Physicians, THCB
Tagged: Dan Diamond, Medicaid, Medicare, Nurse Practitioners, Physicians, Scope of Practice, The ACA, WSJ
Aug 6, 2013
I am known in the disease management and wellness fields as a naysayer, critic, curmudgeon, and/or traitor…and those are only the nouns that are allowed to be blogged across state lines. This is because I am driven not by wishful thinking but rather by data. The data usually goes the wrong way, and all I do is write down what happened. Then the vendors blame me for being negative — sort of like blaming the thermometer because the room is too hot — because they can’t execute a program.
However, the nonprofit Iowa Chronic Care Consortium (ICCC) apparently can execute a program. They reduced total diabetes events by 6% in the rural counties they targeted. This success supports a hypothesis that in rural (presumably underserved) areas, disease management fulfills a critical clinical gap: it provides enough basic support that otherwise would not be provided even to those who actively seek it to reduce near-term complications and exacerbations.
This result will likely produce its own unanticipated consequence: because many people now believe (thanks, ironically, to some of my own past work) that disease management doesn’t produce savings, there will be widespread skepticism about the validity of this study. Quite the opposite: this “natural experiment” is as close to pristine as one could hope for in population health, for five reasons:
- There was no participation/self-selection bias because outcomes were measured on all Iowa Medicaid members.
- The program was offered in some Iowa counties but not others, so there was no eligibility or benefits design bias, Medicaid being a statewide program.
- The program encompassed only one chronic condition (diabetes) rather than all five common chronic conditions normally managed together (asthma, CAD, CHF, and COPD being the other four). Since all five conditions were tracked concurrently, whatever confounders affected the event rate in one of those conditions should have affected all of them. And event rates in the four other conditions did indeed move together in both the control and study counties. Just not diabetes.
- The data was collected exactly the same manner by the same (unaffiliated) analysts using exactly the same database so there is no inter-rater reliability issue.
- Both groups contained hundreds of thousands of person-years and thousands of events.
As one who has reviewed another high-profile “natural experiment,” North Carolina Medicaid, and found that the financial outcomes were the reverse of what the state’s consultants originally claimed (incorrectly, as they later acknowledged by changing their answer), I can also say that natural experiments in population health don’t harbor some as-yet-unidentified confounder that causes the study population to outperform the control population.
Continue reading “Stop the Presses: A Disease Management Program Worked”
Filed Under: THCB
Tagged: Al Lewis, Disease Management, Iowa Chronic Care Consortium, Medicaid, Population Health, prevention, Wellness
Jul 30, 2013
Oct. 1, 2013 is a focus of increasing anxiety in this country. That’s the date when enrollments begin for the federally run health insurance exchanges, created under the Affordable Care Act (ACA). No one really knows what to expect, but it could be far worse than advertised —and for a reason that has more to do with the federal deficit than health care.
What’s anticipated is unsettling enough. President Obama speaks of inevitable “glitches and bumps” in the implementation. Senate Finance Committee Chairman Max Baucus (D-Mont.) sees the possibility of “a huge train wreck” if the public isn’t adequately educated and prepared. Supporters of the ACA, especially Democrats in the Congress, are nervous about taking the blame if the exchanges don’t unfold as intended.
All these worries are legitimate. The American people, already burdened by a numbingly complex, inefficient and inequitable tax system, now wonder if an increasingly government-run health care system will follow suit. Many are concerned that some employers will dump their current health care plans and pay the relatively modest fine. There’s also worry that young people will opt out of the exchanges (preferring to pay the small penalty), leaving the exchanges with a disproportionately older and sicker pool. Then there’s the very real uncertainty surrounding the ACA’s ultimate cost — illustrated by the impact of Medicare alone, which the Office of the Chief Actuary of Medicare estimates could cost cost $10 trillion more than claimed.
Amid all these concerns and speculations, almost no attention is being paid to the opportunity that the ACA’s insurance exchanges could represent for state and local governments’ retiree health care programs. It’s time to think about it because the consequences could be far-reaching.
States in a deep hole
We already know that many state and local governments are in a financial hole that keeps getting deeper. A newly released report by the U.S. Government Accountability Office (GAO) makes clear that, absent significant reforms, the fiscal picture for most state and local governments will steadily worsen through 2060. A main cause, in addition to Medicaid, is the cost of health care for state and local government retirees. These largely unfunded obligations are similar to the pressures on the federal government to fulfill its unrealistic Medicare promises.
Continue reading “When Retiree Benefits and Obamacare Collide”
Filed Under: THCB, The Business of Health Care
Tagged: David M. Walker, Health Insurance Exchanges, Health Plans, Medicaid, Medicare, retirees, risk pools, The ACA, the business of healthcare, The States
Jun 7, 2013
Much has already been written about the Oregon Medicaid study that just came out in the New England Journal of Medicine. Unfortunately, the vast majority is reflex, rather than reflection. The study seems to serve as a Rorschach test of sorts, confirming people’s biases about whether Medicaid is “good” or “bad”.
The proponents of Medicaid point to all the ways in which Medicaid seems to help those who were enrolled – and the critics point to all the ways in which it didn’t. But, if we take a step back to read the study carefully and think about what it teaches us, there is a lot to learn.
Here is a brief, and inadequate, summary (you should really read the study): In 2008, Oregon used a lottery system to give a set of uninsured people access to Medicaid. This essentially gave Kate Baicker and her colleagues a natural experiment to study the effects of being on Medicaid.
Those who won the lottery and gained access were compared to a control group who participated in the lottery but weren’t selected. Opportunities to conduct such an experiment are rare and represent the gold standard for studying the effect of anything (e.g. Medicaid) on anything (like health outcomes).
Two years after enrollment, Baicker and colleagues examined what happened to people who got Medicaid versus those who remained uninsured. There are six main findings from the study. Compared to people who did not receive Medicaid coverage:
- People with Medicaid used more healthcare services – more doctor visits, more medications and even a few more ER visits and hospitalizations, though these last two were not statistically significant.
- People with Medicaid were more likely to get lots of tests – some of them probably good (cholesterol screening, Pap smears, mammograms) and some of them, probably bad (PSA tests).
- People with Medicaid, therefore, not surprisingly, spent more money on healthcare overall.
Continue reading “Misunderstanding Oregon”
Filed Under: OP-ED, THCB, The Vault
Tagged: Ashish Jha, health care access, Medicaid, NEJM study, Oregon Medicaid Experiment, Outcomes, Quality
May 2, 2013