In the giddy days after the passage of ACA, I was chatting to a PhD student in health economics. He was in love with the ACA. He kept repeating that it would reduce costs, increase quality and increase access. Nothing original. You know the sort of stuff you heard at keynotes of medical meetings; ‘Healthcare post Obamacare’ or ‘Radiology in the new era.’ Talks warning us that we were exiting the Cretaceous period.
He spoke about variation in healthcare, six sigma, fee-for-value and ‘paying doctors to do the right thing.’
‘How?’ I asked.
‘I just told you, we need to pay doctors for value and outcomes.’ He smugly replied.
‘How?’ I asked again.
He did not answer. Instead he gave me the look that one gives an utter imbecile who doesn’t know the difference between a polygon and a triangle. Continue reading “Grubernomics”
Filed Under: Economics, THCB
Tagged: Affordable Care Act, Economics, Gruber, Obamacare
Nov 18, 2014
In more stunning proof that America’s 18th century style governing process just doesn’t work, a subset of a regional Federal court ruled against part of Obamacare. The Halbig ruling is certain to be overturned by the full DC court and then probably will stay that way after it makes it’s way through the Supremes–at least Jonathan Cohn thinks so.
But think about what the Halbig ruling is about. Its proponents say that when Congress (well, just the Senate actually as it was their version of the bill that passed) designed the ACA, they wanted states only to run exchanges and only people buying via states to get subsidies. But that they also wanted a Federal exchange for those states that couldn’t or (as it turned out) wouldn’t create their own. But apparently they meant that subsidies wouldn’t be available on the Federal exchange. That would just sail through Logic 101 at any high school. Well only if the teacher was asleep, as apparently most Senators were.
Now two judges interpret what was written down to imply that subsidies should only be available on state exchanges–even though logic, basic common sense and fairness would dictate that if we’re going to subsidize health insurance we should do it for everyone regardless of geography.
Don’t forget that in the House version of the bill there was only a Federal exchange. Continue reading “Halbig corpus interruptus”
Filed Under: THCB
Tagged: ACA Database, Health Care Reform, Health Insurance Exchanges, Matthew Holt, Obamacare, The Supreme Court Challenge
Jul 23, 2014
Being against Obamacare has been the keystone, the capstone, the mighty sledgehammer, the massive metaphor of your choice for the right for five years now. They couldn’t stop it from being passed. They couldn’t stop it at the Supreme Court.
They weren’t able to choke it off by “defunding” it. They rejoiced at the rubber-meets-the-sky rollout of Healthcare.gov, but then the kinks got worked out of that.They railed at the administration using discretionary powers built into the law to help it work better. Every horror story of Obamacare ruining people’s lives they came up with turned out to be false.
Almost all of the people cynically cancelled by the insurance companies as a way to sell them more expensive insurance got insured again fairly quickly. Then 7 million people signed up on the exchanges, and altogether some 10 million formerly uninsured people now have medical coverage.
But the right still needs to call it a “train wreck.” The magic mantra has to work for them. Just this morning, here’s a Republican Congressman saying that we have to cut Food Stamps because: Obamacare. Say that again slowly?
It’s getting harder and harder on the right to come up with new ways to say it isn’t working when it actually seems to be working. I have to hand it to them, though: Those spin factories are filled with hard-working creative people. Get to work early, stay late, trash Obamacare. Hey, it’s a living.
So what’s the latest? This fall, Obamacare premiums are going to “skyrocket”!
Continue reading “Obamacare Premiums Are Going To “Skyrocket”? Forget About It.”
Filed Under: THCB, The Business of Health Care
Tagged: Death Spirals, MLRs, Obamacare, Premiums, Reinsurance, Risk adjustment
Apr 5, 2014
You’ll be hearing a lot about the number six point five million over the next few days.
Six point five million — or whatever the exact number turns out to be at the end of the day — being the number of people that the administration say signed up for Obamacare through the exchanges when open enrollment ends March 31st.
How meaningful the official numbers are will be open to debate. The bloviation factor will be in full effect. The critics will be downplaying the administration’s number, ACA supporters defending it. Data geeks-turned-media stars will explain what it all means.
Here’s a guide to some of the other numbers we should be talking about as we try to make sense of what’s really going on and what really happened during the Obamacare rollout.
FUDs: The number of people who are innocently living their lives thinking they have bought health insurance, but who, for one reason or another, be it technical glitch, bureaucratic incompetence or technicality – are going to wake up one morning not long from now and discover that they do not have health insurance.
And who one day soon will discover that they do not have health insurance. This is the group that causes people in Washington to lie awake at night; because they are going to complain – and complain loudly. While the talk from the administration to this point has been all tough, it seems logical to assume it will build an appeal mechanism that will allow FUDs back into the system. The early signs are that this is the case.
404s : The number of people / applications lost in the system, either as a result of the Healthcare.gov fiasco or because their application is sitting forgotten on somebody’s desk somewhere or on a laptop. Anybody who tried to log into Healthcare.gov at the height of the meltdown or who has gone back and forth with their insurance company over a bill gets it.
It is safe to assume that this is another number that keeps planners up at night. Let’s just say it is safe to assume that there are a lot of 404s.
CANCELS: The number of people who had their insurance plans cancelled by insurers on the grounds that they did not meet the standards set by the Affordable Care Act. In a way, being a cancel can be considered a badge of honor in the gamification of the healthcare system that is Obamacare.
UNCANCELS: The number of people who had their plans cancelled by the health insurers only to have them declared “uncancelled” by the Obama administration or their state. Nobody really knows how many uncancels there are. Don’t ask. Yes, it will take a really long time to sort out the uncancels from the cancels and the QHPs.
And you will probably want to shoot the person explaining it to you. In the gamification of the healthcare system, level ups go to people who have been cancelled, uncancelled and bumped.
BUMPS: The number of people who have been “bumped” out of network and are being forced to change doctors. What’s going on? In gamification terms, bumps make things more exciting. In real life, they suck. Getting bumped off a flight is annoying, getting bumped in the health care system is potentially life-threatening.
LIVES SAVED: As we speak Nate Silver or a smart person who looks and sounds a lot like Nate Silver is sitting at a computer in a darkened room somewhere trying to come up with a reliable quantification of the number of lives the Affordable Care Act has saved and will save by shielding people from the barbaric US healthcare system.
How would you go about coming up with that number? Would you look at people turned away from emergency rooms? Would you look at the number of preventable deaths under the old system? Would you total the number of deaths from cancer, heart attack and stroke? Compare mortality rates over the decade from 2004-2014 with those from 2014-2024? It will be long time before we have the data we need to really understand how well we’ve done.
You can forget the nonsense we’ve been hearing about Obamacare costing the lives of thousands of Americans by taking their health coverage away from them. There is a difference between losing your coverage temporarily because the system is in transition and losing it and knowing that you’ll never be able to get it back. Ever.
Calculated over decades to come the number of lives saved is likely to total in the thousands, if not the millions. And that will be the true test of the Affordable Care Act as a historical accomplishment for Barak Obama and his administration.
Continue reading “Numbers We’d Rather Be Talking About”
Filed Under: THCB, The Business of Health Care
Tagged: 404s, Bumps, cancels, FUDS, John Irvine, narrow networks, Obamacare, Open Enrollment, Pre-Exs, True Enrollment, uncancels
Mar 29, 2014
So many old rules in health care and insurance no longer seem to apply.
I keep stumbling upon situations, where, what used to be up is now down and what used to be down is now up.
No one seems to know for sure how things will settle out under the new reality created by Obamacare and the even more unpredictable reactions to the law by health care companies, employers and, most especially, you and me.
I’ve started using the term “weightlessness” to describe this state we’re in. Picture the astronauts on the international space station, floating through a room, flipping at will, as likely to settle on a wall or on the ceiling as on the floor.
That’s what life is like under Obamacare now—for physicians, hospital administrators, insurance executives, benefits brokers and employers.
Here are a few examples:
1. I wrote last week about how a chunk of workers, even at large employers with generous benefits, would actually get a better deal on health insurance from the Obamacare exchanges than from their employers. So their employers are starting to consider whether they should deliberately make health benefits unaffordable for those low-wage workers, so they can qualify for Obamacare’s tax-subsidized insurance.
That could be good for both employers and employees. The effect on taxpayers, which would switch from granting a tax credit to employers to instead granting it to the employees, is unclear.
2. Even though insurers were certain that price would be king on the Obamacare exchanges, that hasn’t led most customers to buy the plans with the cheapest premiums. As I wrote Friday, 76 percent of those shopping on the exchanges in my home state of Indiana have picked the higher-premium silver and gold plans, with only 24 percent picking bronze plans.
“There are a few geographies where we believe we are gaining share despite lower price competition which points to the value of our local market depth, knowledge, brand, reputation and networks,” WellPoint Inc. CEO Joe Swedish said during an January conference call with investors.
It’s possible that’s a result of older and sicker patients being the earliest buyers on the exchange, and that as healthier people buy coverage, they’ll gravitate to the low-cost bronze plans. But that hasn’t happened—which, as I wrote on Friday, has proved wrong hospitals’ concerns about the super-high deductible bronze plans.
Continue reading “The Weightlessness of Obamacare”
Filed Under: Uncategorized
Tagged: Benefits, Employers, Insurers, J.K. Wall, Milliman, Obamacare, Risk adjustment, Subsidies, the business of healthcare
Feb 18, 2014
Rumors have been circulating in the marketplace all week that the administration was thinking of extending the individual health insurance policies that Obamacare was supposed to have cancelled for as much as three more years.
Those rumors have now come out into the open with Tom Murphy’s AP story on Friday.
That the administration might extend these polices shouldn’t come as a shock. My sense has always been that at least 80% of the pre-Obamacare policies would ultimately have to be canceled because of the administration’s stringent grandfathering rules that forced almost all of the old individual market into the new Obamacare risk pool.
But with the literal drop dead date for these old policies hitting by December 31, 2014, that would have meant those final cancellation letters would have had to go out about election day 2014. That would have meant that the administration was going to have to live through the cancelled policy nightmare all over again––but this time on election day.
The health insurance plans hate the idea of another three-year reprieve. They have been counting on the relatively healthy block of prior business pouring into the new Obamacare exchanges to help stabilize the rates as lots of previously uninsured and sicker people come flooding in.
With enrollment of the previously uninsured running so badly thus far, getting this relatively healthier block in the new risk pool is all the more important. The administration’s now doing this wouldn’t just be changing the rules; it would be changing the whole game.
Republicans, and a few vulnerable Democrats, had essentially called for this last fall when legislation was floated in both the House and Senate with the “If You Like Your Policy You Can Keep It,” proposals. At the time, the administration and Democratic leaders rightly said if this sort of thing would have been made permanent it would have a very negative impact on what people in the new pool would pay––and on their already high deductibles and narrow networks.
At the beginning of this post I asked, Is Obamacare unraveling?
First, as I have said before on this blog, the law’s reinsurance provisions will mean Obamacare can keep limping along for at least three years. And, even making this change won’t alter my opinion on this. It will just cost the government more reinsurance money to keep the carriers whole.
By asking if it is unraveling, what I really wonder about is the whole sense of fairness in the law and the expectation that everybody needs to get the Democrat’s definition of “minimum benefits” whether they want them or not.
Continue reading “Is Obamacare Unraveling?”
Filed Under: The Business of Health Care
Tagged: Enrollment, Health Insurance Exchanges, Health Plans, Individual mandate, Obamacare, Open Enrollment, Robert Laszewski, The ACA
Feb 9, 2014
The Republicans have an alternative to Obamacare and they may have given the Democrats a big political gift.
The proposal was unveiled last Monday by Republican Senators Richard Burr, (NC), Tom Coburn (OK), and Orrin Hatch (UT).
The Republican plan targets many of the most unpopular parts of the Affordable Care Act such as expensive mandated benefits and the resulting lack of choice, the individual mandate, the employer mandate, and age-rating disruptions.
My sense is that most independent voters––the ones that matter in an election-year––don’t want Obamacare repealed; they want it fixed.
The problem for Republicans is that they have such a visceral response to the term “Obamacare” that they just can’t bring themselves to fix it. The notion that Obamacare might be fixed and allowed to continue as part of an Obama legacy and as a Democratic accomplishment is something they can’t get past.
So, the only way Republicans can propose an alternative to Obamacare is to first wipe the health insurance reform slate clean and start over.
Continue reading “The Republican Alternative to Obamacare: Their Aversion to Fixing it May Prove to Be a Political Mistake”
Filed Under: THCB
Tagged: Employers, Insurance Subsidies, Medicaid Expansion, Obamacare, Pre-Existing Condition, Republicans, Robert Laszewski, Tax Exclusion, The ACA
Feb 4, 2014
Here’s a point most of us can agree on. Tackling ballooning health care costs requires more than insurance reform because the charge and cost structure for health services in the U.S. is inconsistent and irrational. The same quality CT scan that costs $500 at one outpatient facility costs $2,000 at a nearby teaching hospital.
Obamacare’s typical high-deductible insurance plans encourage many cost-conscious consumers to shop around for low-ticket items below their deductible — and that is good. However, the bulk of health care spending is attributable to patients who rapidly blow through their deductible, after which they have no incentive to shop for value. Those 5 percent of people — who spend a whopping 50 percent of the nation’s health care dollars — have little incentive to consider price. With the cost of multiple medications, frequent doctors visits, use of specialists and one or more hospitalizations a year, these 5 percent will exceed even the highest deductible in the first few months of each year.
So what might be the single most powerful tool to slow the seemingly intractable yet unsustainable increases in health spending affecting practically every family in America? “Referenced-based” pricing for health services encourages patients — most significantly, those with the highest costs — to act as smart consumers by seeking the most cost-effective care, even after they have exceeded their deductible.
Here’s how it works. Insurance companies or employers set a limit they are willing to pay for a specified service of excellent quality — say, $1,000 for a CT scan — and communicate that reference price clearly to consumers. If patients choose a location where the charge is below the maximum set reimbursement rate, they pay nothing. If they choose a provider where the charge is higher, they pay the difference.
As patient-consumers shop around for the best price and quality services, competition in the market pushes prices down and value up.
Continue reading “Prices Drop When Health Consumers Shop Around For Healthcare”
Filed Under: Economics, OP-ED
Tagged: Costs, Obamacare, Reference-based pricing, The ACA, William Frist
Jan 25, 2014
It is now becoming clear that the Obama administration will not have Health.care.gov fixed by December 1 so hundreds of thousands, or perhaps millions, of people will be able to smoothly enroll by January 1.
Why do I say that? Look at this from the administration spokesperson’s daily Healthcare.gov progress report on Friday:
Essentially what is happening is people [those working on the fixes] are going through the entire process. As we have fixed certain pieces of functionality, like the account creation process, we’re seeing volume go further down the application. We’re identifying new issues that we need to be in a position to troubleshoot.
Does that sound like the kind of report you would expect if they were on track to fix this in less than three weeks? Their biggest problem is that they admittedly don’t know what they don’t know.
The spokesperson also reiterated the administration intends to have Obamacare’s computer system “functioning smoothly for the vast majority of users” by the end of the month.
It’s time for the Obama administration to get real.
It takes months to properly test a complex data system like this. Two things are obvious:
- When they launched on October 1, very little of the testing had been completed.
- They are now in the midst of that many months long testing and fixing period. It is clear they don’t have a few weeks of work left; they have months of work left. Continue reading “A Plan B For Healthcare.gov?”
Filed Under: THCB
Tagged: Affordable Care Act, Healthcare.gov, Obamacare, Robert Laszewski, Termination letters
Nov 10, 2013
Since October 1, I have logged on to various websites across the Internet to book three flights, make hotel reservations in four cities, buy a pair of boots, some t-shirts and a set of nifty retro Mason jars.
What I haven’t bought: health insurance through healthcare.gov.
Nor have I tried, even after being able to (finally) create an account and see the prices on specific plans offered here in South Jersey, after weeks of frustration.
Here’s why: Given my family’s initial experience in setting up an account and the horror stories that continue to pour out day by day, we simply have no faith that the system will work if we attempt to sign up. And, given the bungling to date, we are not confident our insurance will be there January 1 – even if we are able to Whac-A-Mole our way through the registration process.
Think about it this way: If you really need to get to Miami, would you attempt to buy a plane ticket on a sketchy site that may or may not sell you a ticket that may or may not be waiting for you for a plane that may or may not be there when you get to the airport on the travel day?
Of course not. Nor are we comfortable relying on healthcare.gov, 1-800 numbers, navigators or parchment to sign up for health insurance through the federal exchange at this point.
Continue reading “I Give Up”
Filed Under: OP-ED, THCB
Tagged: Exchanges, Life In the Affordable Care Act, Obamacare
Oct 28, 2013