Like waiting outside the Vatican for the puff of white smoke, the nation sits on edge awaiting the Supreme Court’s ruling on the Affordable Care Act. The ruling, which is likely to be announced next week, could toss out the entire healthcare reform bill, chop off one of its limbs (probably the so-called individual mandate), or leave the ACA intact. Whatever the ruling, it will be chum for the blogosophere, particularly in the heat of presidential silly season.
The two fundamental challenges to American healthcare today are how to improve value (quality divided by cost) and how to improve access (primarily by insuring the tens of millions of uninsured people). The bill sought to address these twin challenges in ways that were complex and intertwined. I’ll argue that a decision by the Court to throw out all or part of the ACA will have a profoundly negative effect on the access agenda, but surprisingly little impact on the value agenda. To understand why requires that we focus less on the bewildering details (mandates, insurance exchanges, PCORI, CMMI, IPAB, etc.) and more on some big picture truths and tradeoffs.
The job of any healthcare system is to deliver high quality, safe, satisfying care to patients at the lowest possible cost. Although America certainly does specialty and high tech care like nobody’s business, on all of the key dimensions of value we aren’t very good. The numbers tell the sorry tale: we provide evidence-based care about half the time, there are huge variations in how care is delivered, we kill 44,000-98,000 patients per year from medical errors, and we spend 18% of our gross domestic product on medical care, far more than any other country.
Continue reading “Why the Supreme Court’s Healthcare Decision Will Mean a lot … and Not so Much”
Filed Under: The Business of Health Care
Tagged: Access, cost curve, Costs, Health insurance, Individual mandate, PCORI, Quality, The Affordable Care Act, The Supreme Court Challenge, uninsured, Value
Jun 18, 2012
We are entering the season of presidential politics, of bunting and cries of “What about the children?” and star-spangled appeals to full-throated patriotism.
So here’s mine: Do you count yourself a patriot? Do you care about the future of this country? (And while we are at it, the future of your hospital.) If so, bend your efforts to find ways to care for the least cared for, the most difficult, the chronically complex poor and uninsured.
“But we can’t afford compassion!” Wrong, brothers and sisters, we cannot afford to do without compassion. “But why should we pay to take care of people who can’t take care of themselves?” Because we are (you are) already paying for them — so let’s find the way we can pay the least.
The problem of the overwhelming cost of the “frequent fliers,” people with multiple poorly tracked chronic conditions, has always been that the cost was an SEP — “somebody else’s problem.” Now, increasingly, hospitals and health systems are finding that they are unable to avoid the crushing costs of pretending it’s not their problem, are not being paid for re-admits, and are finding themselves in one way or another at risk for the health of whole populations. They’re also facing more stringent IRS 990 demands that they demonstrate a clear, accountable public benefit.
At the same time, employers and payers are realizing that they end up paying the costs of the uninsured as well as those of the insured who are over-using the system because they are not being tracked. These costs become part of the costs of the system, and the costs are (and must be) shifted to those who do pay. There is no magic money well under the hospital.
Continue reading “Save the Country with Preventive Care”
Filed Under: THCB, The Business of Health Care
Tagged: chronic disease, Costs, Fee-for-service, health care coverage, Healthy Communities, Incentives, national deficit, patient behavior, prevention, public health, safety net, somebody else’s problem, uninsured, Wellness
May 23, 2012
“We are now contemplating, Heaven save the mark, a bill that would tax the well for the benefit of the ill.”
That’s not a quote from oral arguments at the Supreme Court over the constitutionality of the Affordable Care Act or from one of the earnest conservatives demonstrating against it outside. It’s actually the beginning of an editorial in the Aug. 15, 1949 issue of The New York State Journal of Medicine denouncing the pernicious effects of health insurance. To be clear: not government-mandated health insurance, but all third-party health insurance.
I wrote about that editorial in a July 16, 2009 blog entitled, “GOP to Uninsured: Drop Dead.” My blog was prompted by a Wall Street Journal op-ed the previous day from Dr. Thomas Szasz, an emeritus professor of psychiatry, who counseled readers not to confuse ethics and economics:
The idea that every life is infinitely precious and therefore everyone deserves the same kind of optimal medical care is a fine religious sentiment and moral ideal. As political and economic policy, it is vainglorious delusion….We must stop talking about “health care” as if it were some kind of collective public service, like fire protection, provided equally to everyone who needs it….If we persevere in our quixotic quest for a fetishized medical equality we will sacrifice personal freedom as its price.
This was a month before Oklahoma GOP Sen. Tom Coburn, a physician, told a sobbing, middle-aged woman that “government is not the answer” after she confessed she couldn’t afford care for her brain-injured husband. The crowd of Coburn constituents gathered to discuss health care reform applauded. And it was before Texas Rep. Ron Paul, also a physician, responded evasively when asked by moderator Wolf Blitzer at a September, 2011 GOP presidential debate what should be done about an uninsured 30-year-old working man in a coma.
Continue reading “GOP to Uninsured: (Feel Free to) Drop Dead”
Filed Under: THCB
Tagged: GOP, Michael Millenson, Tom Coburn, uninsured
Apr 1, 2012
If you care a great deal, I’ll give you an account number you can use to make a deposit.
[Note to Self: Send this Alert to the folks at Commonwealth. Also to Nancy Pelosi and Harry Reid. CC Uwe Reinhardt as well. You never know what they might do. They certainly talk about this topic a lot.]
While you’re thinking about the initial question, here are a few follow-up questions:
Do you care whether I have life insurance?
What about disability insurance?
What about retirement insurance? (A pension or savings plan.)
Do you care whether I keep my money at an FDIC-insured institution?
Or whether I bought an extended warranty on my car?
Or whether I bought travel insurance before taking my scuba diving trip to Palau? (It pays off if you get sick and can’t go.)
I’m sure there are busybodies who would like to run everyone else’s life. But society as a whole has taken a more rational approach. We basically don’t care whether people insure to protect their own assets (at least we don’t care enough to make them do so). But we do care about events that could create external costs for other people.
Continue reading “Why Do You Care Whether I’m Insured?”
Filed Under: THCB, The Insider's Guide To Health Care
Tagged: Individual mandate, John Goodman, The Industry, uninsured
Oct 5, 2011
There are not very many good things you can say about a deep recession. But from a researcher’s point of view, there is one silver lining. This recession has given us a natural experiment in health economics — and the results are stunning.
But, first things first. Here is the conventional wisdom in health policy:
- In the United States, we ration health care by price, whereas other developed countries rely on waiting and other non-price rationing mechanisms.
- The U.S. method is especially unfair to low-income families, who lack the ability to pay for the care they need.
- Because of this unfairness, there is vast inequality of access to care in the U.S.
- ObamaCare will be a boon to low-income families — especially the uninsured — because it will lower price barriers to care.
As it turns out, the conventional wisdom is completely wrong. Here is the alternative vision, loyal readers have consistently found at this blog:
- The major barrier to care for low-income families is the same in the U.S. as it is throughout the developed world: the time price of care and other non-price rationing mechanisms are far more important than the money price of care.
- The U.S. system is actually more egalitarian than the systems of many other developed countries, with the uninsured in the U.S., for example, getting more preventive care than the insured in Canada.
- The burdens of non-price rationing rise as income falls, with the lowest-income families facing the longest waiting times and the largest bureaucratic obstacles to care.
- ObamaCare, by lowering the money price of care for almost everybody while doing nothing to change supply, will intensify non-price rationing and may actually make access to care more difficult for those with the least financial resources.
Continue reading “How We Ration Care”
Filed Under: OP-ED, THCB
Tagged: John Goodman, Money price of care, Recession, Time price of care, uninsured
Sep 8, 2011
Though thoroughly smothered under 2900 pages of well meaning but poorly focused, expert-driven “good works”, the core of the Affordable Care Act was providing 30 million people subsidized health insurance coverage. As the country continues to decide how it feels about this monumental legislation, a major ideological divide persists over whether the aggressive coverage expansion in health reform was really needed or not.
Far from “selling itself,” as a overconfident White House aide suggested it would back on March 23, 2010, health reform remains strikingly unpopular. Only 37% of the public thinks the country will be better off as a result of health reform, and only 28% think their families will be better off, according to the May Kaiser Family Foundation tracking poll. There is a stark partisan divide over health reform. While 72% of Democrats have a favorable opinion of health reform, a substantial minority believes the bill could have done more (covered more people, provided a public option or path to single payer). Alternatively, 74% of Republicans have an unfavorable opinion of health reform; the same percentage favors repeal. Independents tend to break toward the Republican view of the bill (49% unfavorable vs. 35% favorable). Those opposed feel more intensely about health reform than those in favor.
The Ryan House Budget for 2012 zeroes out all new spending for health reform (while keeping ACA’s Medicare cuts, devoting them to deficit reduction!). The conservative narrative is that the problem of the uninsured was liberal mythology, not meriting major new spending. In the blogosphere, an analysis surfaced suggesting that the real uninsured problem is only about 4 million people. This apparently originated in a Heritage Foundation blog posting from late August, 2009. Other conservative analysts charitably suggest there may be as many as ten to twelve million uninsured worthy of federal help. To take care of this smaller number, you do not need a major coverage expansion, but merely to apply the familiar market oriented remedies: selling insurance across state lines, high deductible health plans, malpractice reform, high risk pools, etc.
Continue reading “The Unbridgeable Gap between Left and Right on Health Reform”
Filed Under: OP-ED, THCB
Tagged: 2012 Election, Health Care Reform, Jeff Goldsmith, Obamacare, Policy/Politics, uninsured
Jun 8, 2011
Phil Lebherz is the Executive Director of the Foundation for Health Coverage Education, which has as its mission the goals of educating uninsured people about their options to get insurance. Phil is also the Founder and Chairman of LISI, a company that provides sales support services for employee benefits insurance brokers. With colleagues at the Foundation (including Alain Enthoven, Len Schaeffer and David Helwig) Phil just released a report that was featured in Health Affairs that basically said that most uninsured people showing up in Emergency Rooms in San Diego should have been covered by Medicaid, and that the set-up of Medicaid in California makes it impossible for them to enroll themselves. This is preciously close to the conservative argument that there are no uninsured because they all “could be” covered by Medicaid. But given that under the ACA Medicaid is going to massively expand, you may surmise that I’m not altogether won over by this argument.
So a fun conversation with Phil ensued. You can listen to it here (and look at for the bit where he claims that Len Schaeffer–the man who built Wellpoint into the force it is today–is really a supporter of universal health care because he ran HCFA under Carter for a few minutes in the 1970s!). And no, it wasn’t all violent disagreement–but enough was to make it interesting.
Filed Under: Matthew Holt, THCB
Tagged: Foundation for Health Coverage Education, Medicaid, uninsured
May 19, 2011
Avik Roy has read and posted about the papers I reviewed as part of my Medicaid-IV series. If you’ve forgotten, the purpose of that series of posts was to examine studies that use proven, sound methods to infer the causal effect of (as opposed to a correlation between) Medicaid enrollment on health outcomes. From that series, I concluded that there is no credible evidence that Medicaid is worse for health than being uninsured. Considering only studies that show correlations (not causation), Avik disagrees.
Avik’s post is long, but you can save yourself some trouble by skipping the gratuitous attack on economists in general, and Jon Gruber in particular, as well as the troubled description of instrumental variables (IV).* About halfway down is his actual review of the papers; look for the bold text.
The point I want to drive home in this post is why an IV approach is necessary in studying Medicaid outcomes. People enrolling in Medicaid differ from those who don’t. They differ for reasons we can observe and for those we can’t. An ideal study would be a randomized controlled trial (RTC) that randomizes people into Medicaid and uninsured status. Thats neither practical nor ethical. So we’re stuck, unless we can be more clever.
The next best thing we can do is look for natural experiments. That’s what IV exploits. In this case, the studies I examined use the state-level variation in Medicaid eligibility (and related programs). That variation obviously affects enrollment into Medicaid (you can’t enroll unless you’re eligible), though it is not determinative. Importantly, state-level variation in Medicaid eligibility rules does not itself affect individual-level health. Other than figuratively, do you suddenly take ill when a law is passed or a regulation is changed? Do you see how Medicaid eligibility rules are somewhat like the randomization that governs an RTC, affecting “treatment” (Medicaid enrollment) but not outcomes directly? (If this is unclear, go here.) Continue reading “Medicaid and Health Outcomes (again)”
Filed Under: Superhealthanomics, THCB
Tagged: Avik Roy, Health Outcomes, Medicaid, uninsured
Mar 4, 2011
Who will be hurt the most by the health reform legislation Congress passed last year?
Answer: The most vulnerable segments of society: the poor, the elderly and the disabled. That’s right. Virtually everyone in Congress who is left-of-center voted for a law that will significantly decrease access to care for the people they claim to care most about.
Why isn’t anyone writing about this?
Answer: Because almost all the people who write about health care know almost nothing about economics.
Basically, there are two ways to reform health care. One way is top down. The other is bottom up. The latter is based on the economic way of thinking. The former rejects that way of thinking. The latter gets the economic incentives right for all the individual actors, leaving the social result largely unpredictable. The former starts with a social goal and tries to impose it from above, leaving individuals with perverse incentives to undermine it. The latter depends for its success on people acting in their self-interest. The former depends for its success on preventing people from acting in their self-interest.
I think I can probably count on the fingers of two hands the number of people in health policy who accept the economic way of thinking. All the rest — 99.9% of the total, including a lot of people with “Ph.D., economist” after their names — reject it in spades.
Continue reading “Victims of Health Care Reform”
Filed Under: OP-ED
Tagged: Medicaid, Medicare, The Affordable Care Act, uninsured
Jan 31, 2011
As a physician who works at Grady Memorial Hospital, I am regularly reminded of the implications of poor access to health care.
One of my regular patients had been suffering from diabetes and hypertension for five years. She was a single, dedicated mother who had been working long hours at a local grocery store to provide for her 15-year-old daughter. She understood that good health meant that she could perform better at work, and the earnings she received from her work would help her provide a stable home for her daughter. Therefore, she did whatever it took to keep herself healthy — monitored her diet, took her medicines diligently and visited the physician regularly.
Things changed one day when during one of her visits to my clinic she said, “Doc, I just lost my job. I don’t have insurance anymore. Medicaid denied me coverage even though they said it was OK for my daughter to have insurance. I can’t pay my co-pays to see you anymore. I may not see you next time.” I was horrified.
A mother who wanted nothing more than to be as healthy as possible for her child should be able to receive care. The health care system in our country that should be serving patients exactly like this one is preventing patients from receiving the care they need and deserve.
In many cases, access to health care coverage is not within the control of patients nor their physicians, resulting in significant consequences. That is, if they don’t obtain coverage, many of our patients will succumb to their (many preventable) illnesses if they don’t have access to their physicians or cannot pay for their medications. My patient’s future could be a testimony to this.
What further confounded me was that Medicaid denied my patient.
Continue reading “Health Care Georgians Deserve”
Filed Under: OP-ED
Tagged: Gayathri Suresh Kumar, Georgia, Medicaid, uninsured
Jan 19, 2011