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Individual Mandate: Can PPACA Survive Without It?

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By DAVID E. WILLIAMS

Ever since the Patient Protection and Affordable Care Act (PPACA) was passed, opponents have looked for ways to overturn it in the court of law and the court of public opinion. They’ve had reasonable success in both arenas, using opposition to the individual mandate to buy health insurance as Exhibit A. Ironically, President Obama wasn’t a big fan of the individual mandate at the outset. In the primary election, Hillary Clinton favored an individual mandate while Obama opposed it. But somehow the mandate –at its core a Republican concept of personal responsibility– has become synonymous with so-called Obamacare.

With the recent court decision, it seems reasonably likely we will end up in a situation where the individual mandate is overturned but the rest of the law is upheld. Observers have some thoughts on what would happen:

  • Insurance companies will be unhappy. PPACA puts many restrictions on health plans, e.g., minimum medical loss ratio, no exclusions for pre-existing conditions but the upside is the mandate: lots of new customers, and a reduction in adverse selection, because everyone has to buy insurance and you can’t wait till your sick
  • Many fewer people will be enrolled in insurance.  Jonathan Gruber’s objectivity may be suspect, but he persuasively argues that repeal of the mandate would lead to many fewer people in coverage and higher premiums due to adverse selection. And the cost of the law wouldn’t drop by much despite the lower impact
  • Some opponents think/hope that eliminating the mandate will cause the whole law to collapse. I really doubt it.

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Attacks on IPAB Gather Strength—And Waste Energy?

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By ROGER COLLIER

The Washington Post reports that the Affordable Care Act’s Independent Payment Advisory Board, intended to constrain Medicare spending increases, is under increasing pressure from Republicans, health care lobbyists—and a significant number of Democrats.

As specified by the ACA, the IPAB will consist of fifteen health care “experts” to be appointed by the president and confirmed by the Senate, with authority to make cuts to Medicare if spending exceeds specified targets, starting in 2015. Congress could overrule the panel, but only by mustering a super-majority in the Senate or by creating an alternate plan to save the same amount.

The ACA imposes narrow limits on the IPAB. By law it cannot ration care, cut benefits, change eligibility rules, or raise revenue by increasing beneficiary premiums or cost-sharing, nor can it—until 2020—reduce payments to hospitals. This means that the brunt of any IPAB-proposed savings will fall on physicians and drug and medical device companies.

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Why the 11th Circuit’s Opinion on Health Care Reform Self-Destructs

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By MARK HALL

Like a tragic literary figure, the 11th Circuit’s opinion declaring the individual mandate unconstitutional is doomed to failure by its own internal contradictions.  What follows is a series of quotes directly from the opinion, paired to show how desperately the majority twisted logic in order to find its path to a unsupportable conclusion:

1.  On the key necessary and proper argument, the court obfuscated as follows:

The government’s argument derives from a Commerce Clause doctrine of recent [1995] vintage: . . . the “essential part of a larger regulation of economic activity” language in Lopez. . . . Raich [is the] the only instance in which a statute has been sustained by the larger regulatory scheme doctrine.

HOWEVER, the court was well aware that

The Supreme Court’s most definitive statement of the Necessary and Proper Clause’s function remains Chief Justice Marshall’s articulation in McCulloch v.Maryland: 17 U.S. (4 Wheat.) 316, 421 (1819).

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In Obamacare Case, Constitution Is Victor

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By ILYA SHAPIRO

Today is a great day for liberty.  By striking down the individual mandate, the Eleventh Circuit has reaffirmed that the Constitution places limits on the federal government’s power.  Congress can do a great many things under modern constitutional jurisprudence, but, as the court concludes, “what Congress cannot do under the Commerce Clause is mandate that individuals enter into contracts with private insurance companies for the purchase of an expensive product from the time they are born until the time they die.”  Indeed, just because Congress can regulate the health insurance industry does not mean it can also require people to buy that industry’s products.

One of the striking things about today’s ruling is that, for the first time in one of these cases, a Democrat-appointed judge, Frank Hull, has ruled against the government.  Just as the Sixth Circuit Judge Jeffrey Sutton made waves by being the first Republican appointee to rule in the government’s favor, today’s 300-page ruling shows that the constitutional issues raised by the healthcare reform—and especially the individual mandate—are complex, serious, and non-ideological.

Supporters of limited constitutional government need to temper their celebrations—just as they wisely tempered their sorrows after the last ruling—because we must all now realize that this will not end until the Supreme Court rules.  Nevertheless, today’s decision gives hope to those who believe that there are some things beyond the government’s reach and that the judiciary cannot abdicate its duty to hold Congress’s feet to the constitutional fire.

Ilya Shapiro is a senior fellow in constitutional studies at the Cato Institute and editor-in-chief of the Cato Supreme Court Review.

This post first appeared at Cato@Liberty – Cato Institute Blog.

Healthcare is Different

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By JOHN HALAMKA, MD

I’m often asked why healthcare has been slow to automate its processes compared to other industries such as the airlines, shipping/logistics, or the financial services industry.

Many clinicians say that healthcare is different.

I’m going to be a bit controversial in this post and agree that healthcare has unique challenges that make it more difficult to automate than other industries.

Here’s an inventory of the issues

1.  Flow of funds – Hospitals and professionals are seldom paid by their customer.   Payment usually comes from an intermediary such as the government or insurance payer.  Thus, healthcare IT resources are focused on back office systems that facilitate communications between providers and payers rather than innovative retail workflows such as those found at the Apple Store.

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The July Effect

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By BOB WACHTER, MD

“Don’t get sick in July!” We’ve all heard patients and family members say this – part declaration, part wishful thinking – in reference to the perceived summertime risks of teaching hospitals. When I hear it, I usually respond with comforting bromides like “robust supervision” and “cream of the crop.” But deep down, if I had the choice of entering a teaching hospital in July and April, I’d choose the latter.

This preference comes partly from my recollections of my own training experience. The day before I began my residency at UCSF, my entire intern class gathered to meet our new bosses. We were on pins and needles – laughing at jokes that weren’t really funny, suspiciously eyeing our colleagues, whose admission to the program (unlike our own) could not be explained by clerical error. The chief of service, Greg Fitz, a brilliant gastroenterologist with a disarming “aw shucks” manner and a Southern drawl (he’s now Dean at UT Southwestern), stood to address us.

“I know you’re all nervous,” he said, catching our collective mental drift. “But don’t worry. If we can turn bread mold into penicillin, we can turn you guys into doctors.”

I was only partly reassured.

The next day, I began my internship on the wards at San Francisco General Hospital. I picked up the service from a graduating intern. His sign out to me was pithy. “Sucker!” he shouted gleefully, as he jammed his beeper into my abdomen like a football. Panicked, I managed to survive my first few weeks on the wards without killing any patients.

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Let’s Hope ACOs Aren’t Our Last, Best Chance for Delivery System Reform

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By DAVID E. WILLIAMS

After reading the July edition of Health Affairs, I’m concerned about the impact of Accountable Care Organizations (ACOs) on cost trends in the US health care system.

In The Accountable Care Organization: Whatever Its Growing Pains, The Concept Is Too Vitally Important To Fail, Francis Crosson of the Kaiser Permanente Institute for Health Policy plays down the various criticisms of ACOs (that they may stifle innovation, unleash a torrent of regulation, and rely too heavily on fee for service payment methodologies) and argues that we need to help them succeed because there are no good alternatives. If not,

both public and private payers will probably be forced into across-the-board reductions in payment rates to providers, because the state of the economy will require cost reductions, and there will be no other obvious course to pursue. Reductions in quality and access may follow…

But the emergence of ACOs is driving hospitals to consolidate, buying other hospitals and physicians practices.

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Reduce Antibiotic Resistance: Get Your Flu Vaccine

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By LAURI HICKS, DO, SEEMA JAIN, MD, & RAMANAN LAXMINARAYAN

A study published in the July issue of Infection Control and Hospital Epidemiology shows that antibiotic prescriptions tend to spike during flu season, even though influenza is caused by a virus and cannot be treated with antibiotics.

Some of these antibiotic prescriptions are justified – bacterial pneumonia, which must be treated with antibiotics, is also common during the winter months. And getting the flu puts you at higher risk for developing complications from secondary infections, including bacterial pneumonia.

Yet some people suffering from the flu virus alone may demand–and get–an antibiotic even though viral infections do not respond to antibiotic treatment.

According to Extending the Cure, a nonprofit project funded by the Robert Wood Johnson Foundation’s Pioneer Portfolio, between 500,000 to one million antibiotic prescriptions are filled each year during flu season for patients who have the flu and no bacterial illness.

Why should we care about how many antibiotics are prescribed?

When antibiotics are overused or inappropriately used, bacteria can develop antibiotic resistance, or the ability to withstand antibiotic treatment, making bacterial infections difficult to treat. Antibiotic resistance can develop quickly. Today’s antibiotics – the wonder drugs that transformed modern medicine – are used so commonly that we face the prospect of a future with a multitude of resistant bacteria and a shelf full of ineffective drugs.

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From EHR to HIE and Back

By MARGALIT GUR-ARIE

According to the latest count, there are 255 Health Information Exchange (HIE) organizations across the country, which amounts to an average of 5 in each State. If you are a practicing physician and have an EHR, chances are someone already knocked on your door offering to connect your practice to the local HIE for a small fee. If you don’t have an EHR, you may have had offers to access an HIE web portal, or maybe an HIE supplied EHR Lite, allowing you to at the very least view clinical data from other sources. Perhaps for free. If you are the proud owner of one of the full-featured EHRs, you may wonder what an HIE can do for you that your EHR is not already doing, and whether that service is worth your hard earned money.

In theory, a top-shelf EHR should be able to connect your practice to multiple facilities and allow you to exchange information to the best of all participants’ abilities. Granted most EHRs are still working on some of the connections, particularly to local facilities, but all in all, an EHR should be able to eventually provide for all your connectivity needs as shown in Figure 1. Note that for some types of connections, your EHR vendor can use a clearinghouse or portal approach to simplify and reduce costs of connectivity. For example, you don’t need a separate interface for each pharmacy – you use Surescripts as the clearinghouse and let them worry about it. You also don’t need an individual connection to each patient’s home – you communicate with all of them through one portal. With the exception of Surescripts pharmacy connectivity and a small number of reference labs, each connection, or interface, is costing you a pretty penny, and the more local the connection, the longer it takes to build.

 

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The Fallen Souffle Economy

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By  JEFF GOLDSMITH


It is increasingly clear that the United States’ economic troubles are far from over.

The stock market plunge that began in earnest last week reflects the market’s belief that we’re not going to recover fully from the recession that began in 2007. As a Wall Street Journal commentator said mid-Monday’s plunge:  “The market is pricing in a double dip recession”. In reality, the 2007 recession (caused initially by $150 a barrel oil) never really ended.

Past remedies for recession basically involved nearly free money and Keynesian pump priming to stimulate demand with either borrowed or freshly printed money. The most recent (bipartisan) stimulus effort, nearly a trillion worth of extended Bush tax cuts, unemployment extensions, payroll tax cuts, etc. which Congress and the Obama Administration negotiated in December, seems to have disappeared into thin air, producing a whopping 0.8% economic growth in the first half of 2011 and a July unemployment rate of 9.2%. This Economist analysis argues that the political system has exhausted its remedies for our economic problems.

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