Health Care Reform

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”

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Until now, virtually every president who has dabbled with comprehensive health reform has failed spectacularly, often at huge political cost. Think of Harry Truman’s lonely campaign for national health insurance, Jimmy Carter’s devastating conflict with the late Senator Edward Kennedy over universal health care coverage, the first George Bush’s ineffectual (and little-remembered) health insurance proposal, or Bill Clinton’s damaging first-term effort to pass health reform.

Health reform is a presidential nightmare. No sane presidential consigliere would ever recommend his or her boss try it. Our health care system is so complicated and convoluted that any conceivable proposal is bound to make someone worse off. And in health care, worse off can mean real pain and suffering that creates powerful, emotional stories that echo through the news cycle. There is simply no way for presidential health care reformers to avoid grievous political harm, as the experience of President Barack Obama is now demonstrating in spades.

Which raises the question: why bother? It would have been so easy for President Obama, in the midst of the Great Recession of 2008, to kick the health care can down the road, saying that his all-consuming priority was economic revival, and that health reform could wait.

The answer provides critical context for the relentless stream of troubling news—and the cacophony of charges and counter-charges—about the implementation of the Affordable Care Act (ACA) that fill the media each day. The reason to proceed with this painful technical and political process is that there is no alternative. Before the ACA, the current health care system—and especially its private insurance market—was collapsing before our eyes, like a house tipping into a sinkhole.

Continue reading “The Presidential Healthcare Curse – Why Do They Even Try?”

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My wisest and longest-time friend in health care, Jane Sarasohn-Kahn has a new project, new research and a new website called HealthcareDIY out today. I encourage all of you to look around her new site and consider the stories she is telling, as they matter to all of us.–Matthew Holt

We’re DIY’ing home renovations, photo development, music playlists, personal financial management, and travel reservations. Increasingly, we’re also DIY’ing health. Think: Maker Faire-Meets-Health.

My thinking about HealthcareDIY was first inspired by my mother Polly, who died 34 years ago this month. She was my first role model for an engaged patient. When she was diagnosed with Hodgkins lymphoma in 1971, there was no internet for her to tap into for a patient network, a clinical trial, or a directory of oncologists or centers of excellence that were Top Doctors for treating the condition.

Polly did, however, absorb the books of Adelle Davis and her Let’s Get Well series on nutrition and health. Polly’s good friend, a librarian with whom she worked, tapped into the Index Medicus on her behalf and retrieved abstracts of articles on blood cancers that he printed out from the microfiche. Polly partnered with her doctor, an internist with a keen interest in hematology, for her care. She also had a huge and diverse social network (offline, of course) that surrounded her with a whole lot of love. Her M.O. was informed by Dr. Bernie Siegel, who started Exceptional Cancer Patients in 1978 and evangelized about patient engagement, living fully with cancer, and dying in peace, which she did, in October 1979.

Among many legacies Polly left me was her can-do attitude when faced with a six-month-prognosis upon diagnosis with Hodgkin’s. Mom worked full-time until the last two years of her life, wore beautifully tailored clothes and put on lipstick every day, and project-managed her health through eight years of treatment: primarily, radiation and blood transfusions. Polly figured out how to take control where she could, and she did it with grace, humor and sheer human will.

She DIY’d her health given the resources she had at-hand between 1971 and 1979: books, cassette tapes, in-person support groups, medical journals in print, a specialist and internist, and lots of love.

In the three decades since Polly’s death, two seismic forces have structurally changed consumers in America: the Great Recession beginning in December 2007, and the near-universal use of the internet in health. Ogilvy’s report, Eyes Wide Open, Wallet Half Shut, found two countervailing forces re-shaping U.S. consumers: re-trenching and re-imagining. On the retrenching side of behavior, people began to do more binging: in media consumption, drinking, and eating.

On the re-imagining front, some people looked to re-invent themselves, reconnect with others, and re-train to re-tool careers. This group of people has sought to be more active and more deliberate, and accept more complexity in daily living. These people are more mindful, more frugal, and open to trading down. 9 in 10 use coupons, shop at discount stores, and buy more store brands and generics.

For this latter group, Ogilvy said, “Self Reliance is the new insurance policy,” with a group ethos believing that, “Americans need to be strong, get their house in order, and protect themselves,” per the report.

That’s where HealthcareDIY comes into play. Continue reading “HealthcareDIY: An Old Idea Made New”

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Since its Sundance premiere in 2012, ESCAPE FIRE has screened for national leaders, medical experts, thousands of students, and the general public. The film opened in theatres last October, and had its broadcast premiere on CNN March 10th. From the Pentagon to local communities, ESCAPE FIRE has reached an incredibly diverse audience.

Last year, ESCAPE FIRE: The Fight to Rescue American Healthcare screened on college campuses nation-wide two weeks before opening in theaters. Almost 6,000 students came together to watch the award-winning documentary, and to host discussions about the current state of the American healthcare system. The sentiments from these discussions became calls to action: service projects, course work, and blogs for undergraduates and medical students across the nation.

This year we’re doing it all again. On September 17th, ESCAPE FIRE will play at more than 60 college and university campuses across the country, followed by panel discussions and Q&As. We’ve partnered with the Institute for Healthcare Improvement (IHI), one of the widest-reaching non-profit health organizations in the US, to make sure as many students are aware of the opportunity as possible.

We’re taking the event a step further this year by donating an Educational copy of ESCAPE FIRE to each participating campus, allowing the event to incite change for years to come. Our hope is that students, after attending an entertaining event and participating in thoughtful conversations about their communities, will take on an active role in transforming healthcare.

In order to make sure this discussion doesn’t stop after school or with student groups, we have accredited ESCAPE FIRE for both Continuing Medical Education units and Continuing Nursing Education contact hours. Now, anyone who views the film, can get educational credit. And for the week of September 17th through 30th, the film will be available on iTunes for $0.99.

This is a unique and unprecedented chance for healthcare providers to utilise the film to elevate and deepen the national dialogue about our healthcare system and our role in leading it out of crisis.

Spread the word about this event on Facebook and Twitter. And find a screening near you.

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There is nothing controversial about stopping Obamacare. A majority of Americans dislike the law and want it repealed. Obamacare is disastrous for individuals, businesses, and doctors alike. It is unaffordable and unworkable, and the Obama Administration has also made it unfair by giving its pet interest groups waivers and opt-outs.

Conservatives are also united behind full repeal of Obamacare, despite what you may hear from the media and liberal operatives. The debate right now is on how this goal is best achieved.

Debate is healthy for society, and also for a movement. Conservatives should not want to become the empty echo chamber that has become the liberal political/media/academic establishment.

With that in mind, let’s turn to the debate over how to save the country from Obamacare. Our view is that the most effective way to delay Obamacare is to cut off funding. Congress can halt Obamacare’s disastrous impact by defunding it entirely before the law’s health insurance exchanges take effect on October 1.

This approach would prevent further implementation of the law; it is the only tactic that fully achieves the objective that advocates of delay seek to accomplish.

Some conservatives believe they can achieve delay without defunding by postponing the individual mandate and employer mandate for one year while leaving firmly in place the massive federal spending on Obamacare’s new health care entitlements—$48 billion next year, and nearly $1.8 trillion over 10 years. Others, acknowledging that a delay of the mandate is insufficient, are now calling for Congress to delay the mandates and the new entitlements.

Continue reading “The Most Effective Obamacare Delay is Defunding”

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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”

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After doing Talmudic-like studies of the doctrines on health reform promulgated by Republican health-policy makers and the conservative economists who inspired them during the past two decades, I am devastated to discover that all of those studies have been for naught. We are now told, sometimes by the same prophets of yore, that these doctrines were not only wrong, but outright heretical, which in this context means un-American.

New doctrines are rumored to be in the making, but the first word on them has yet to be committed to new, sacred tablets, mainly because there have not yet emerged any new ideas worth committing to tablets.

Do not take my word for it. Newt Gingrich, one of the Grand Old Party’s aging prophets, said so himself in his recent speech to the Republican National Committee.

Comes now conservative commentator John R. Graham of the Pacific Research Institute, telling us that Republicans seem lost in the desert even in their hit-and-run insurgency against their sworn enemy, the Affordable Care Act of 2010 (ACA).

What is a befuddled immigrant to the United States like me, eagerly trying to become a right thinking American, to make of it all?

My early introduction to the texts coming from conservative thinking on health reform was the Heritage Plan of 1989, Viewed through the prism of the ACA of 2010, its language seems eerily familiar. One provision, for example, proposed a:

“[m]andate all households to obtain adequate insurance. Many states now require passengers in automobiles to wear seatbelts for their own protection. Many others require anybody driving a car to have liability insurance. But neither the federal government nor any state requires all households to protect themselves from the potentially catastrophic costs of a serious accident or illness. Under the Heritage plan, there would be such a requirement” (p.5).

The Heritage Plan also called for income-related, refundable tax credits toward the purchase of private health insurance. Although it did not call for community rated premiums, it proposed means-tested public subsidies and toward high out-of-pocket expenses of individuals and families. It did not spell out the daunting administrative apparatus that would entail. But one can imagine the required new bureaucratic apparatus, replete with auditors to prevent fraud and abuse. Presumably, income-related subsidies would have involved the Internal Revenue Service (IRS) in some ways as well.

Next came a text put forth by conservative economist Mark V. Pauly and like-minded colleagues in Health Affairs. It is worth a reading again. Here’s the core of these prophets’ proposal:

“In our scheme, every person would be required to obtain basic coverage, through either an individual or a family insurance plan. …All basic plans would be required to cover specified health services; plans could, however, offer more generous benefits or supplemental policies. The maximum out-of-pocket expense (stop-loss) permitted would be geared to income, with more complete coverage required for lower-income people, to ensure that no one faced the risk of out-of-pocket expenses that were catastrophic, given their income.” Again, lots of government intrusion into health care, along with links to the IRS.

There then followed a real life health bill based on these ideas, the late Republican John Chafee’s antidote to the emerging Clinton plan. It was called the “Health Equity and Access Reform Today Act of 1993” and had an impressively long list of Republican co-sponsors, among them Senator’s Orrin Hatch (R-Utah) and Charles Grassley (R-Iowa), now fierce opponents of the ACA. As the folks at the Kaiser Family Foundation have shown, many of its provisions of Chafee’s bill have a striking similarity to provisions in the ACA of 2010 and comparing.

Continue reading “Talmudic-Like Studies of Republican Health Reform Ideas”

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Three juicy lemons came through my inbox this week. The NY Times published an expose of why hip replacement surgery costs 5-10 times as much in the US as in Belgium even though it’s the same implant. JAMA published research and a superb editorial on the Views of US Physicians About Controlling Health Care Costs and CMS put out a request for public comment on whether physicians’ Medicare pay should be made public. Bear with me while I try to make lemonade, locally, from these three sour economic perspectives.

Here’s a super-concentrated summary of the three articles: The hip surgery is more expensive because, in the US, as many as 10 intermediaries mark-up the price of that same hip prosthesis. Then, Tilburt et al said in JAMA that “physicians report that almost everyone but physicians bears responsibility for controlling health care costs.” The physicians reported that lawyers (60%), insurance companies (59%), drug and device manufacturers (56%), even hospitals (56%) and patients (52%) bear a major responsibility to control health care costs. Finally, CMS is trying to balance the privacy interests of physicians with the market failure that my other two lemons illustrate.

Can we apply local movement principles to health reform? How much of our money can we keep with our neighbors? What policies and technologies would enable the health care locavore? The locavore health system couldn’t possibly be more expensive than what we have now and, as with food and crafts, more of the money we spend would benefit our neighbors and improve our community.

Continue reading “Enabling the Health Care Locavore”

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The following was drafted quite a few months ago, and had its genesis in a list of recommendations for improving the health care system that David Dranove solicited from a number of academics for an issue of Health Management, Policy and Innovation. I’ve dawdled in finishing and polishing it up, but seeing the stimulating reform proposal posted  recently by Jay Bhattacharya, Amitabh Chandra, Mike Chernew, Dana Goldman, Anupam Jena, Darius Lakdawalla, Anup Malani and Tom Philipson motivated me to return and finish it; so here it is finally.

Introduction

One can hardly say that there’s been too little discussion of health reform recently. However, much of the discussion is focused on the ACA and its details. That’s fine, but we’ve gotten very far away from thinking about overarching principles that we think should guide the design of a health system, and what that implies for what it would look like [1]. What follows are some thoughts on what such a health reform might look like. They are informed by my read of the research evidence, and my observations of the U.S. health care system over a long period of time, but should be understood as representing only my personal opinions.

This is not intended as a criticism of the ACA. While the ACA certainly isn’t perfect, in my opinion we’re better off as a country with it than without it. However, there will be modifications to the ACA and other changes to the health system as we move forward, so having a framework to structure our thinking will be useful as we consider these inevitable changes.

Guiding Principles

What I propose below is guided by the following. First, economic efficiency is a goal. This simply means avoiding waste, i.e, trying to generate the maximum benefits net of costs. The second goal is that no American is exposed to excessive risk to their health or finances due to medical expenses. Last, the overarching design principle is to create basic ground rules for the system and then let the system run, avoiding heavy handed regulation or micro management. The key objective of these ground rules is to give participants the right incentives insofar as possible, while achieving insurance objectives. With that in mind, compassionate, efficient health reform would do the following.

Health Insurance Reform

First, eliminate the tax exclusion of employer sponsored health insurance. The exclusion of employer sponsored health insurance from income taxation distorts the demand for insurance. This leads to people with employer sponsored health insurance holding excessive coverage, which drives up medical spending and thus insurance premiums. Ironically, not taxing health insurance ends up making both health care and health insurance less affordable. Eliminating the tax exclusion of employer sponsored health insurance will eliminate a major distortion in health insurance, health care, and labor markets. It can generate substantial tax revenues (it’s estimated that the value of the state and federal income tax exclusion for 2009 was $260 billion[2]), while potentially allowing for lower income tax rates. It’s also worth pointing out that the subsidy is biggest for those who face the highest marginal tax rates, i.e., it’s regressive.

Continue reading “Beyond the Affordable Care Act: A Framework for Getting Health Care Reform Right”

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In 1883, the authoritarian imperial government of Prince Otto von Bismarck – who famously declared, “It is not by speeches and majority votes that the great issues of our time will be decided…but by blood and iron” – established national health insurance for Germany.

The rationale for national health insurance is as clear now as it was to Bismarck 130 years ago. A country’s success – whether measured by the glory of its Kaiser, the expansion of its territory, the security of its borders, or the well-being of its population – rests on the health of its people.

Serious illness can strike anyone, and seriously ill people, as a rule, do not earn much money. The longer the seriously ill are untreated, the more costly their eventual treatment and maintenance become.

Private savings, as a rule, can pay the costs of treatment only for the thrifty and the well-off. So, unless we adopt the view that those without ample savings who fall seriously ill should quickly die (and so decrease the surplus population), a country with national health insurance will be a wealthier and more successful country. These arguments were entirely convincing to Bismarck. They are equally convincing today.

On January 1, 2014, the United States will partly implement a law – the Affordable Care Act (ACA) – that will not establish national health insurance, but that will, according to projections by the Congressional Budget Office, reduce by almost one-half the number of people in the US without health insurance. Back in 2009, President Barack Obama could have proposed a program as comprehensive as the one initiated by Bismarck. Such a program could have allowed, encouraged, and made it affordable for uninsured Americans to obtain health insurance similar to what members of Congress have; or it simply could have expanded the existing Medicare system for those over 65 to cover all Americans.

Instead, Obama put his weight behind the complicated ACA. The reason, as it was explained to me back in 2009, was that the core of the ACA was identical to the plan that former Massachusetts Governor Mitt Romney had proposed and signed into law in that state in 2006: “ObamaCare” would be “RomneyCare” with a new coat of paint. With Romney the Republican Party’s presumptive nominee for the 2012 presidential election, few Republicans would be able to vote against what was their candidate’s signature legislative initiative as governor.

Thus, the US Congress, it was supposed, would enact the ACA with healthy and bipartisan majorities, and Obama would demonstrate that he could transcend Washington’s partisan gridlock.

Continue reading “The Great American Health Care Divide”

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