Researchers at USC recently published a study designed to find out how much people are willing to pay for better drug coverage from their health insurance plan. The question they posed to the general public was straightforward: How much extra money would you pay per month for a health insurance plan that would pay for “specialty drugs” if you need them?
Specialty drugs are expensive new treatments for diseases like leukemia, multiple sclerosis and rheumatoid arthritis. These drugs often cost tens of thousands of dollars, and in some cases even run into six figures per patient. But these high costs can be accompanied by significant benefit. Gleevec for example can dramatically increase life expectancy for people with otherwise fatal leukemia.
Keep in mind that not only are specialty drugs expensive but they are being used with increasing frequency. According to the USC team, 3 out of 100 people in the United States will use at least one specialty drug in the following year.
How much would you pay to make sure you aren’t responsible to pay for these drugs out of pocket? Would you be willing to give your insurance company an extra $5 per month? $10? Maybe even $20?
The USC team found that, on average, people were willing to spend around $13 extra per month to make sure their health insurance plans cover such specialty drugs. (The study was published in the April issue of Health Affairs, and was led by John Romney.) To put that into perspective, the actuarial cost of such coverage—how much insurance companies would expect to spend per person if everyone obtained such coverage—is around $5 per month.
Peter Kinhan, general manager of Clinical Transformation Solutions for GE Healthcare, spoke with Matthew Holt at HIMSS12. Clinical Transformation Solutions is a business that will support GE and Microsoft’s new joint venture Caradigm.
What would individual health insurance cost if the court strikes the mandate down and still requires insurers to cover everyone?
With the Supreme Court justices sounding like they might strike the mandate down, this is a question I’ve been getting a lot lately.
I have pointed to New Jersey as a real life example of what can happen when insurance reforms take place but there is no incentive for consumers to buy it until the day they need it.
In 1992, New Jersey passed health insurance reform that required insurance carriers to either offer individual health insurance on a guaranteed issue basis or pay an assessment to carriers that did. Other elements of the legislation were:
- Guaranteed coverage and renewability for all eligible people regardless of their health status. A pre-existing condition exclusion does allow insurers to limit coverage during the first 12 months (a limitation which is not contained in the Affordable Care Act).
- Guaranteed renewal of policies, provided (1) the insured does not become eligible for coverage under a group plan; (2) premiums are paid in a timely fashion; and (3) no fraud is committed by the insured.
- Community rating of the premiums, with variation allowed only for family status (single, adult plus child, husband and wife, and family). (The Affordable Care Act allows rate variations of up to three times from young to old.)
- Standardized insurance plans, referred to as Plans A, B, C, and D (indemnity options) and a single HMO plan.
Yes, I am going to talk about…autism. The last time I did so I was inundated with people trying to convince me of the dangers of immunizations and their causal link to autism. I really, really, really don’t want to go anywhere near that one.
No, I am not going to talk about the cause of autism; I am going to talk about my observation of the rise of the diagnosis of autism, and a plausible explanation for part, if not most of this fact. The thing that spurs me to write this post is a study by the CDC which was quoted in the NY Times:
The new report estimates that in 2008 one child in 88 received one of these diagnoses, known as autism spectrum disorders, by age 8, compared with about one in 110 two years earlier. The estimated rate in 2002 was about one in 155.
The rise in numbers is cited as one of the main evidences for some external source – a new thing in our environment – that is causing this rise. The article, however, gives another clue:
The frequency of autism spectrum diagnoses has been increasing for decades, but researchers cannot agree on whether the trend is a result of heightened awareness, an expanding definition of the spectrum, an actual increase in incidence or some combination of those factors. Diagnosing the condition is not an exact science. Children “on the spectrum” vary widely in their abilities and symptoms, from mute and intellectually limited at one extreme to socially awkward at the other.
Children with such diagnoses often receive extensive state-financed support services — which some experts believe may have contributed to an increase in numbers.
That last sentence holds the golden ticket. What would make me think this? My experience.
It’s been said that losing weight is much harder than kicking cigarettes or alcohol. After all, because one doesn’t need to smoke or drink, the offending substances can simply be kept out of sight (if not out of mind). Dieting, on the other hands, involves changing the way a person does something we all must do everyday.
It’s no surprise, then, that reports of problematic doctor interactions with social media are popping up with metronomic regularity. When it comes to the smorgasbord of information coursing through those Internet tubes, increasingly, we all have to eat. And that makes drawing boundaries a challenge.
While most early reports on the perils of social media concerned inappropriate postings by physicians, a new hazard has emerged recently: digital distraction. On WebM&M, the AHRQ-sponsored online patient safety journal that I edit, we recently presented a case in which a resident was asked by her attending to discontinue a patient’s Coumadin. As she turned to her smart phone to enter the order, she was pinged with an invitation to a party. By the time she had RSVPed, she had forgotten about the blood thinner – and neglected to stop it. The patient suffered a near-fatal pericardial hemorrhage.
In a commentary accompanying the case, the impossibly energetic John Halamka, ED doctor and Harvard’s Chief Information Officer, described all of the things that his hospital, Beth Israel Deaconess Medical Center, is considering to address this issue. It’s not easy: whereas the hospital owns the Electronic Health Record and can manage access to it, the vast majority of mobile devices in the hospital today – at BI and everywhere else – are the personal property of the users. So Halamka is testing various policies to place some digital distance between the personal and professional, including blocking personal email and certain social networking sites while on duty. He’s even investigating the possibility of issuing docs and nurses hospital-owned mobile devices at the start of shifts, collecting them at the end.
With the Supreme Court hearings it was like taking a time machine back to late 2009, early 2010. Had you forgotten when the news was all health reform all the time?
Those of us who are in the industry have been paying close attention, exchanging transcripts each afternoon, and reading a lot about which way the Justices will go. But it’s all speculation. The only thing certain is more uncertainty.
One set of “victims” of the uncertainty are insurers, hospitals, doctors and others in the field who have spent money over the last two years to comply with ObamaCare thinking it was a done deal. Now there are a couple months to wait until the June ruling. Then we’ll find out if the Justices rip up the bill entirely, modify it in some way, or do nothing.
Even If the law is upheld, a GOP victory in November may achieve the same partial or full repeal. Any outcome here is going to be unsettling to managers who will have to redo their strategies.
Here are three considerations while we are in ObamaCare Limbo:
1. Keep Reforming
The Patient Protection and Affordable Care Act is really two bills combined into one. The first is an entitlement plan that involves redistributing income and changing the way insurance is paid for–with subsidies, exchanges, regulations on who’s covered, and public program expansion. All that will disappear, at least for a while, if there’s a repeal. In that case the payer mix of insured versus uninsured would change. Overall health spending will decrease.
But the other half of the bill is a grab bag of reforms that pilot new ways to pay for care (bundles, Accountable Care Organizations), promote primary care (medical homes, clinics, medical education, ACOs again), and endorse evidence-based medicine (the Independent Payment Advisory Board).
There is no doubt that a state can constitutionally require citizens to have health insurance. Why, then, is the Supreme Court fussing over the constitutionality of the individual mandate provision of the Affordable Care Act?
The answer is simple. States have plenary authority to legislate on matters of public policy. The national government, however, is a government of limited powers. It cannot constitutionally act unless the Constitution authorizes it to do so. The central question in the case now pending before the Supreme Court is whether the Constitution grants Congress the authority to require individuals to have health insurance. Opponents of the law argue that it exceeds the legitimate authority of the national government.
The government defends the constitutionality of the individual mandate on the basis of the Commerce Clause of the Constitution, which provides in Article I, Section 8, that Congress shall have the power “to regulate Commerce … among the several States.”
Over time, the Supreme Court has held that under this provision Congress can constitutionally regulate activity if, in the aggregate, it has “a substantial economic effect on interstate commerce.” Moreover, as Justice Rehnquist explained in 1995, the Court’s role in determining the constitutionality of federal legislation under the Commerce Clause is limited to deciding whether Congress “had a rational basis … for concluding that a regulated activity sufficiently affected interstate commerce” to merit federal action.
I know that secretly you’re all bored of this Supreme Court nonsense, and want to get back to the real business of health care, which is often the ongoing war between regional insurers and regional health systems. And the war in Pittsburgh between Highmark and UPMC has been as fierce as anywhere. But it’s been lacking in the kind of juice that makes for a good Friday afternoon scandal. Until now.
Last Sunday Highmark CEO Ken Melani got arrested. (This is a real arrest not one of the fake kind featured in last Friday’s funny). Melani’s mistress was some 25 years younger than him and had been working for him at Highmark. That then progressed to her moving in with him. But after an argument with Melani last Sunday she went back to her husband’s place. Melani went around there and apparently accused her of only wanting him for his money –he was on about $4.5m a year–and ended up in a fist fight with her husband. Apparently his mistress wasn’t leaving him for good and wasn’t intending to get back with her husband, but one policeman apparently heard Melani say that he’d have killed both of them if the police hadn’t stopped him. Either way it’s juicy stuff for health care.
Highmark is in the process of buying the only non-UPMC chain in Pittsburgh, West Penn Allegheny, and is still trying to get to a contract with UPMC that keeps it playing in the town–which UPMC of course dominates. Melani is now on unpaid leave and presumably not coming back any time soon, while as of today Highmark Chairman Robert Baum has taken the reins.
This may end up meaning nothing in the ongoing UPMC/Highmark battle, but I do sit here musing that the only way this would have been better for the Friday Funny is if the mistress in question had been UPMC’s CEO Jeffrey Romoff’s wife–who herself is some 30 years younger than Romoff and happens to be wife number 4. But as the Rolling Stones say, you can’t get everything you want!
Sharp questioning in oral arguments before the Supreme Court raised serious questions about whether the “individual mandate” — the requirement that people carry health insurance — will survive.
At issue is Obamacare’s central requirement that every American buy health insurance or pay a penalty. Critics say this is an unprecedented expansion of federal power — that if the government can force people to buy insurance, it can force them to buy anything.
Supporters, including me, say the mandate is just a logical extension of federal authority to regulate this market — a market that everyone eventually participates in at one time or another. We also know that if the mandate is struck down chaos is inescapable.
Under one scenario, the court would invalidate the requirement while leaving the law’s many other rules and regulations in place.
In that event, insurance companies would have to insure anyone who asked for coverage — but they would be barred from charging premiums equal to a best guess of what the new customers will cost.
Limiting how much insurers charge can work, but only if the mandate is in place — if everyone, the healthy as well as the sick, has to have insurance. It can’t work if people can go without insurance until they get sick and only then call up their friendly insurance broker and say “Cover me.”
So, Congress would have to do something. But what? One option would be to repeal the parts of the law that the Supreme Court left standing. Finding the votes to repeal the health reform is unlikely, as the next Congress is almost certain to be closely divided.
In politics, a month is a lifetime, and 7 months is an eternity. It’s four months from now to late June when the Supreme Court issues its ruling on the health law, and it’s several months until the election.
No one knows what will happen between now and the election. But whatever occurs, it will be a psychological and political time.
Democrats will put on a brave face. They will say it’s not over until it’s over, that the individual mandate was originally a Republican and Romney idea, that the justices will come to their senses, that this is a moral not a constitutional issue.
Republicans will say that the health law is a train wreck, that it was rooted in ego and arrogance of an overly ambitious president, that Democrats poisoned the whole politics process by completely ignoring the other party and the American public, and that the whole idea of individual and Medicaid mandates is toast.
If they are smart, and there is no guarantee of that, the GOP will issue a detailed alternative plan resting on incremental market reforms with proper government oversight.
“Inaction “ on Massive Scale
Over the next seven months, we are likely to have “inaction,” if I may borrow a term from the hearings, on a massive scale.