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When Health Insurance is Free

• 44

By JOHN GOODMAN

Did you know that an estimated one of every three uninsured people in this country is eligible for a government program (mainly Medicaid or a state children’s health insurance plan), but has not signed up?

Either they haven’t bothered to sign up or they did bother and found the task too daunting. It’s probably some combination of the two, and if that doesn’t knock your socks off, you must not have been paying attention to the health policy debate over the past year or so.

Put aside everything you’ve heard about ObamaCare and focus on this bottom line point: going all the way back to the Democratic presidential primary, ObamaCare was always first and foremost about insuring the uninsured. Yet at the end of the day, the new health law is only going to insure about 32 million more people out of more than 50 million uninsured. Half that goal will be achieved by new enrollment in Medicaid. But if you believe the Census Bureau surveys, we could enroll just as many people in Medicaid by merely signing up those who are already eligible!

What brought this to mind was a series of editorials by Paul Krugman and Robert Reichand blog posts by their acolytes (at the Health Affairs blog and at my blog) asserting that government is so much more efficient than private insurers. Can you imagine Aetna or UnitedHealth Care leaving one-third of its customers without a sale, just because they couldn’t fill out the paperwork properly? Well that’s what Medicaid does, day in and day out.

Put differently, half of everything ObamaCare is trying to do is necessary only because the Medicaid bureaucracy does such a poor job — not of selling insurance, but of giving it away for free!

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CLASS-Gate

• 5

By AVIK ROY

I’ve written previously about the looming train wreck from Obamacare’s new long-term care entitlement for the elderly, called the CLASS (Community Living Assistance Services and Support) Act. Democratic Senator Kent Conrad (D., N.D.), you may recall, once described the CLASS Act as “a Ponzi scheme of the first order, the kind of thing that Bernie Madoff would have been proud of.” The Obama Administration strongly supported the CLASS Act’s inclusion in the Affordable Care Act, and Conrad ended up voting for it anyway.

However, the case for the CLASS Act has been rapidly unraveling. In February, HHS Secretary Kathleen Sebelius testified before the Senate Finance Committee, admitting for the first time that CLASS is “totally unsustainable.” Under questioning by Sen. John Thune (R., S.D.), she pointedly refused to rule out an individual mandate that would force everyone to join the program. Though Sebelius assured Thune that she had broad authority to fix CLASS’ structural problems, I obtained a Congressional Research Service report that stated the opposite. In the July/August issue ofForeign Affairs, former White House budget director Peter Orszag proposed an individual mandate as one of “the only solutions” to CLASS’ unsustainability.

So, we’re all in agreement that CLASS is a mess that could cost taxpayers hundreds of billions of dollars. So why was it included in our new health law in the first place?

The reason is simple: budget gimmickry. CLASS will rake in $86 billion in premiums from 2012-2021, but pay out substantially more than that over the long-term, rapidly generating deficits and bankruptcy. However, the Congressional Budget Office can only score the law’s impact over the next ten years, a period in which CLASS “reduces” the deficit. The claim that Obamacare was budget-neutral was critical to winning the approval of skittish moderate Democrats.

And now, today, a new Congressional investigation led by John Thune reveals that the Obama Administration knew all along that CLASS was unsustainable. “As a result of this investigation,” the authors write, “it is now clear that some officials inside HHS warned for months before passage that the CLASS program would be a fiscal disaster. Within HHS the program was repeatedly referred to as ‘a recipe for disaster’ with ‘terminal problems.’”

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Maryland Regulators Holding Hospital Costs in Check

• 2

By MERRILL GOOZNER

President Obama’s health care reform bill is filled with experiments on how to hold down health care costs.  There will be bundled payments for episodes of care and extra payments for raising quality standards. It calls for the reorganization of hospitals and physician practices into “accountable care organizations,”  which will share in savings if their costs fall below previous levels.

What’s not in the legislation is old-fashioned hospital rate regulation, which only one state in the nation uses. The latest results from Maryland suggest rate regulation works.

The state’s Health Services Cost Review Commission (HSCRC) announced earlier this week that average costs per stay at Maryland’s 51 hospitals rose just 2 percent in 2010, significantly less than the 3 percent national average. Since 1977, when rate regulation went into effect, hospitals costs in Maryland have experienced the lowest cumulative growth rate of any state in the nation, going from 26 percent above the national average to almost exactly average, according to data contained in HSCRC’s latest annual report .

Maryland, which had the sixth highest hospitalization costs among 50 states and the District of Columbia in the mid-1970s, today ranks squarely in the middle of the pack. Its $10,983 in average costs per equivalent admission in 2010 was slightly less than the $10,996 national average.

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5 Ways You Can Avoid Being Misdiagnosed

• 15

By EVAN FALCHUK

Billionaire Teddy Forstmann has apparently been diagnosed with a serious form of brain cancer.  There’s a tragic twist to the story: according to Fox Business News, Forstmann believes that for more than a year, he had been misdiagnosed with meningitis.

ABC News wonders:

How could such a misfortune befall a billionaire —- a man able to afford the best doctors, best technology and the most sophisticated diagnostic tests?

They’re missing the point.  Misdiagnosis happens with shocking regularity – as much as 44% of the time, depending on the illness.

I’m sure that, as with most things, being a billionaire is better.  But as a neurosurgeon quoted by ABC News points out, even for a billionaire, getting the right care is “still a bit of a crap shoot.”

So how can you improve your odds?  Here are 5 tips that work.

1.  Know your family history – and remind your doctor of it. Don’t assume your doctor remembers that time you told him that two of your aunts died of breast cancer, or that your grandfather and father have a history of malformed blood vessels in their brains.  Research studies have shown that a family history may be a better predictor of disease than even genetic testing.  Find out about your family’s medical history, write it down (the Surgeon General has a good on-line tool to help you do this), and make sure your doctor knows about it – especially if you’re sick and they’re trying to decide what’s wrong.

2.  Ask questions.  The typical doctor sees as a many as 40 patients a day, spending 15 minutes or less with each one.  It’s all too easy to be referred to a specialist and start treatment without having all of your questions answered.  But asking questions won’t just make you feel more comfortable – it can disrupt your doctor’s thought process and make him think about your case in a way that may save your life.  Dr. Jerome Groopman, one of the world’s foremost researchers on how doctors think (he’s written the definitive book on it) agrees:

“Doctors desperately need patients and their families and friends to help them think. Without their help, physicians are denied key clues to what is really wrong. I learned this not as a doctor but when I was sick, when I was the patient.”

You can find some useful tips on how to do this at the U.S. government’s web site, called “Questions are the Answer.”

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Have We Not Been Looking at Things We Should Have Seen?

• 1

By PAUL LEVY

A remarkable aspect of the Parkland Memorial Hospital saga was the degree to which the hospital’s Board was not given information by senior management about the clinical outcomes in their hospital.  The lack of transparency, in other words, even went to management’s relationship with its fiduciary board.

A recent article by the Dallas Morning News outlines some of these points:

On August 19, the hospital’s seven-member board of directors got its first chance to read the full report by the U.S. Centers for Medicare & Medicaid Services.  Almost 10 days had passed since [the CEO] first received the findings.  As members began leafing through pages of the report, surprise, even shock, began to register.

The Chair of the board said, “We had direct culpability, but none of us even knew we were in the report.”

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The Anti-Injunction Act Complications

• 8

By BRAD JOONDEPH

The big news from [last Friday’s] two decisions was not that Virginia lacks standing; that was a problem lurking in that case from the beginning, a nettlesome issue going all the way back to Judge Hudson’s first opinion (in August 2010) rejecting the United States’s motion to dismiss on 12(b)(1) grounds. Virginia would have stood on much stronger ground had it also alleged an injury in fact from the effect of the minimum essential coverage provision’s necessarily pushing more Virginia residents onto the state’s Medicaid rolls, and thus imposing a significant financial cost on the state. But the Commonwealth failed to do this, instead resting on the claim that it had standing based on the alleged “conflict” between its Virginia Health Care Freedom Act and the individual mandate. This was a weak argument from the beginning, and the Fourth Circuit’s holding was entirely unsurprising.

What is surprising–perhaps not on the merits, but in relation to the attention the issue has received to date, from the courts and the parties–is the court’s holding in Liberty Universityv. Geithner that federal courts lack any subject matter jurisdiction over a suit seeking to enjoin enforcement of the individual mandate because such jurisdiction is precluded by the Anti-Injunction Act. In this respect, there are some important points worth noting:

* This is a potential problem in every lawsuit currently challenging the individual mandate. That is, if the Fourth Circuit’s analysis is correct, then the Supreme Court would lack jurisdiction to hear any private plaintiff’s claim that the minimum coverage provision exceeds Congress’s enumerated powers until after a taxpayer was assessed a penalty under ACA 1501, paid the penalty, and sued the federal government for a refund. The case thus would not reach the Supreme Court until somewhere in the neighborhood of 2015 or 2016.

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We’re From The Government. We’re Here To Help …

• 5

By WHITECOAT, MD

The clock is ticking for Parkland Memorial Hospital in Dallas.

Earlier this month, Parkland was cited by the Centers for Medicare & Medicaid Services for several “serious threats” to patient safety. As a result, the hospital is now in jeopardy of losing its ability to participate in the Medicare program unless it submits “correction plans” to CMS by August 20, 2011.

According to a CMS spokesperson, two violations relating to infection control and emergency care issues were “so serious that they triggered ‘immediate jeopardy’” for the hospital. In fact, the reasons for the citation were so heinous that CMS won’t even disclose them to the public until Parkland submits plans on how to fix those super secret problems. That’s the subject of another WTF discussion, but we’ll save that one for later.

The event triggering the CMS investigation involved a schizophrenic psychiatric patient with a heart condition who died while in the emergency department. The report states that the technicians who subdued the man did not have “effective training” and that the patient was not closely monitored before his death.

According to the article and an interview Parkland’s Chief Medical Officer, Parkland was cited for several reasons. Based on what I can gather from the article, two of the hospital’s citations were for:

– Moving patients with less serious symptoms to a separate urgent care center for medical screening
– Staff touching a patient and then touching other surfaces that people would come into contact with

Think about how grave these dangers are.

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Time to Make Joint Commission Surveys Public

• 1

By PAUL LEVY

Can anyone doubt that the recent kerfuffle faced by Parkland Memorial Hospital in Dallas would have had a greater chance of being avoided if earlier reviews by the CMS-designee, the Joint Commission, would have been made public?  Yet, JC surveys are held in confidence.  This is a matter of federal law.

Currently, the results of hospital accreditation surveys cannot be accessed by the public under Section 1865 [42 U.S.C. 1395bb] (b) of the Social Security Act, which reads as follows:

“(b) The Secretary may not disclose any accreditation survey (other than a survey with respect to a home health agency) made and released to the Secretary by[615] the American Osteopathic Association[616] or any other national accreditation body, of an entity accredited by such body, except that the Secretary may disclose such a survey and information related to such a survey to the extent such survey and information relate to an enforcement action taken by the Secretary.”

When I was CEO of a hospital, we voluntarily made our JC surveys public, posting them on our corporate website.  We felt that it was important for all staff in the hospital to have the chance to review the findings and act on them, and we also felt that public confidence in our hospital would be enhanced by this kind of transparency.  While this practice has spread somewhat, most hospitals still do not make their surveys public.

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How We Ration Care

• 27

By JOHN GOODMAN

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.

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U.S. Hospitals Face Gloomiest Economic Outlook in 20 Years

• 4

By JANE SARASOHN-KAHN


Revenues = volume x price. This is the financial reality for every organization that makes its money serving customers, whether for-profit or not-for-profit.

For the U.S. hospital sector, both volumes and prices are falling, leading to a depressed top-line. Reimbursement reductions from Medicare, Medicaid and commercial health plans are all under pressure: that’s the ‘price’ part of the equation. On the volume multiplier, the recession economy has caused patients to delay care, such as elective surgeries. Hospitals are forced to scrutinize every aspect of operations, according to Hospital Revenues in Critical Condition; Downgrades May Follow, from Moody’s Investors Service.

Moody’s points to declines in inpatient admissions, and falling outpatient indicators including ER visits, outpatient visits, and outpatient surgeries, all due to the “sluggish economy,” the agency wrote.

Exacerbating the negative bottom-line impact is the continued growth of uncompensated care: that is, health services provided to patients who leave the hospital without paying their bill.

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