Category: Health Policy

MedPAC Got It Wrong (pt 1)


This is the first part of former Kaiser Permanente CEO George Halvorson’s critique of Medpac’s new analysis of Medicare Advantage. The rest will be published on THCB later this week. Eventually I’ll be doing a summary article about all the back and forth about what Medicare Advantage really costs!-Matthew Holt

MedPac just did their annual report on Medicare Advantage (MA) and they were extremely wrong on several key points.

The MedPac staff has a long tradition of being critical of MA, and they also, unfortunately, have a long tradition of being inaccurate, misleading, and consistently negative on some key points for no explicable or easily understood reason.

They achieved a new low this year by spending more than 20 pages of the report warning us all in detail about the upcoming cash flow distortions and coding abuses that they say are coming from a risk adjustment model and system that actually no longer exists in 2022 as a functioning system for our Medicare program — and they are also continued their distortion about Medicare overpayment of the plans by running an artificial cost number that functions only to deceive and not to inform and by using what is essentially a fake news number several times in the report.

Coding and Risk Adjustment

CMS has now officially canceled and retired the CMS Hierarchical Conditions Categories Risk Adjustment Model that has been used for almost two decades to calculate risk for plans. It is dead and completely gone for 2022 — and MedPac explained bitterly for more than 20 pages why it was a damaging approach and they somehow did not mention that it was now gone.

CMS has some very good thinking people who brilliantly took that whole set of coding linked issues off the table by making the system that was being potentially abused simply disappear.

MedPac wrote more than 20 pages in this year’s official report about MA complaining about that exact process and system and they didn’t mention that it was gone or explain why it was important to not have that data flow create the risk level information that we will now be using to get diagnostic information into the system.

The new approach for determining patient risk levels is fraud proof. There is no way to put wrong data into the information flow that they are now going to use to see and determine which patients are diabetic and which have heart disease or who has drug abuse issues for the risk discernment processes.

The impact on low income Medicare patients & union members

MedPac also had a major content deficit in their report and managed to leave the most important aspects of the work being done now by the plans to help offset some of the damage done to too many Americans who have been damaged by social determinants of health issues for far too long in their lives. MedPac also completely failed to report and discuss the important reality of the fact that we have now reached the point where two-thirds of our lowest income Medicare beneficiaries are all voluntarily in the MA plans.

They also left out of their report the fact that a significant number of union trust funds and a significant number of employer retirement programs that had made significant promises of retirement health care benefits to their retirees over the past decades are actually having those commitments kept, met, and even enhanced with the relatively new employer-sponsored MA plans that work directly with employer settings.

Five million people who might have had their retirement health care programs bankrupt, underfunded, or at serious risk have found a very strong safety net in the MA program — and MedPac does not think that development was important to understand and probably celebrate.

Anyone looking at the future politics and funding of the MA program will find both that overwhelming support for MA from our lowest income people and from our most well-connected employer retirement funds to be good and important to understand.

MedPac missed every bit of that agenda and set of accomplishments in this year’s report.

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Matthew’s health care tidbits: #Does Medicare Advantage Save the Taxpayer Money?

Each week I’ve been adding a brief tidbits section to the THCB Reader, our weekly newsletter that summarizes the best of THCB that week (Sign up here!). Then I had the brainwave to add them to the blog. They’re short and usually not too sweet! –Matthew Holt

For my health care tidbits this week, the controversy about Medicare Advantage is getting louder and louder. There’s no question that it results in lower out of pocket payments for its members than traditional FFS Medicare. Medicare Advantage members use fewer services, and their care appears to be better “managed” –then again FFS Medicare’s “members” are barely managed at all. 

But the big question is, Does Medicare Advantage save the government money? Critics (notably ex CMS veterans Berwick & Gilfillan) claim that risk adjustment games played by the private plans who run Medicare Advantage have cost up to $200bn over 10 years. Medpac (the independent body that advises Congress) estimates that “Medicare spends 4 percent more for MA enrollees than it would have spent if those enrollees remained in FFS Medicare” and go on to say “In aggregate, for the entire duration of their Medicare participation, private plans have never produced savings for Medicare”. However data from the Medicare Trustees and other research from ACHP & the trade group Better Medicare Alliance suggests that Medpac’s analysis is incorrect and that Medicare Advantage saves the government about 9% per enrollee.

THCB ran a long piece (pt 1pt 2) about Medicare Advantage from former Kaiser Permanente CEO George Halvorson earlier this year, and a related one from current Permanente Federation CEO Richard Isaacs. But it’s much more nuanced than that. J Michael McWilliams has long piece on Health Affairs Forefront trying to capture the various strands of the argument. His conclusion? “The substantial subsidies MA receives are largely responsible for the extra benefits and have more than offset savings from any efficiencies, posing a net cost to Medicare and complicating assessments of MA’s added value.”

Meanwhile CMS has just changed the most controversial aspect of risk adjustment (which is the most controversial part of Medicare Advantage) by banning the plans from doing it, and only allowing providers to be involved.

Whether any of this is going to change CMS regulations or wider government policy regarding MA payments is less certain. CMS is currently dealing with its replacement for the even more controversial Direct Contracting (now called ACO REACH). But Medicare Advantage is the most profitable part of private health insurance and has many knock on effects for care services and technology. So I’ll be watching this space and you should too!

Contemplating Health Data Rights as Civil Rights


Recently, despite decades of experience in cybersecurity, privacy, and data science, I got sent back to school.  

As a member of the Council of the Wise at the Light Collective, a patient advocacy group with a focus on healthcare technology and privacy, I attended a town hall event entitled “No Aggregation Without Representation,” which featured four eminently qualified leaders of the BIPOC and data advocacy communities: Dr Maya Rockeymore Cummings, Tiah Tomlin-Harris, Jillian Simmons, JD and Valencia Robinson. I was unprepared for the ownership and authority of these four leaders – and unprepared, too, for how they were able to transform professional truisms I’ve often relayed myself into something far more personal, meaningful, urgent, and authentic.

The commercial practice of aggregating health and consumer data crosses the borders of healthcare, retail, marketing, communications, transportation, and others. The risks and consequences (including abuse) related to the exploitation and monetization of personal health data are enormous, complex, and largely or entirely borne by the individuals whose data is being collected – whether they know it or not. 

What’s more, none of the current patchworks of 3-letter federal regulatory bodies (FDA, FTC, HHS, FCC) have the remit or resources to encompass the totality of it. Armed with pre-Internet privacy laws from the 1970s or with insurance portability laws from the mid-1990s that have been stretched to cover health and consumer privacy protections, a constellation of advocacy organizations, ethicists, and academics identify problems and offer opinions. All the while, though, data flows like oil to fuel a surveillance economy in which consumers and patients are exploited and harmed. For vulnerable communities including BIPOC and persons with frailties, disabilities, or mental illness, these harms are not only real, but – in light of sad history – they are also unsurprising.

The Deep Roots of Systemic Harm

During the town hall, the panelists describe an ongoing lack of trust that has grown steadily from events such as the Tuskegee syphilis experiments that began in the early 1930s and continued up until the early 1970s, the case of tissues taken without consent or compensation from Henrietta Lacks in the 1950s and used in thousands of experiments, and the continued stigma surrounding diseases such as HIV that are no less potent today than they were in the 1980s. As I listened to the panelists, these events were no longer historical to me, but instead were current events unfolding before my eyes and deeply affecting communities who are well aware that they are being harmed and exploited so that others may profit.  

But just what are those harms, and who feels their effects?  Those who pontificate about the virtues and value of data without boundaries often argue that the benefit to the many outweigh the risks to the few, but it is not “just a few” when we are talking about significant numbers of individuals within minority and underserved communities.  In the last few weeks alone, we have read stories about how data from persons seeking help due to suicidal ideation was captured and monetized by a crisis text line, seen credible evidence of how middleware ad tracking software can track users regardless of stated privacy policies on some health sites, and witnessed another class-action lawsuit against Meta (Facebook’s parent company) for the misuse of personal biometric data. 

Patient populations need rights.  So what?

I once had a mentor who advised me to ask myself, “so what?” at least three times before deciding whether an idea could stick. Let’s play that game using the wisdom shared by these four amazing leaders… 

Dr. Rockeymore Cummings spoke about how she had shared parts of her health journey story online to provide support to others on similar journeys. But the ultimate outcome of this sharing was that her insurance company asserted that because she had advocated for preventative options, the procedures she had undergone were elective, and therefore denied coverage for them.  Where is the internet warning label that advises consumers that the thoughts and experiences they share online may be scraped, scrutinized, and interpreted by their health insurance companies?  Interestingly, when the human genome was first mapped, scientists and ethicists helped ensure the passage of the Genetic Information Nondiscrimination Act (GINA) because they foresaw the potential for abuse when information about individuals’ genetic makeups became available. But over the decades that the internet has been proliferating, no comparable nondiscrimination protections have emerged to cover the myriad other kinds of personal data available online. To surveillance capitalists, this situation is a feature, not a bug.  

Patient populations’ data are owned by companies.  So what?  

Today we live in a world where any given patient population’s collective health data is owned by companies.  And what we share is increasingly part of our permanent public record.  So what?  What if I did say something like that once, and I changed my mind? Or what if I signed up for a service that required some of my data but then decided I was no longer interested, or worse, was worried about things I learned as I became more familiar with the service?  Jillian Simons pointed out that not a single state has passed comprehensive “right to be forgotten” privacy protections, which would grant people the right to have their personal data removed from specific and aggregated datasets. Beyond the obvious assurances, this approach affords to patients and consumers, it’s also an extremely effective way to ensure accountable stewardship of data, even in large, aggregated datasets. The right to be forgotten imposes a duty on the dataset owner/aggregator to know where that individual‘s data resides and where it has been shared; otherwise, their data cannot be found to be erased if they so desire.  As they would say in my hometown of Boston, “wicked smaht.” 

 So what?

If experiencing denial of care or preserving personal autonomy about participating in health websites are not sufficiently compelling issues, let’s get to the tougher stuff. As our preprint article (recently covered by Wired magazine) shows, health sites are using – sometimes without even realizing it – middleware that contains ad trackers. Ad tracking may not seem like something that’s obviously harmful, but such trackers can aggregate strikingly personal information from seemingly benign data. For instance, if you’ve used a ride-sharing app, your physical location might be shared across multiple platforms. Use that ride-sharing platform to visit Planned Parenthood, and various inferences could be drawn. Data from multiple browser windows left open on your phone can be aggregated to know your online purchases, the stores you frequent, the banking tools you use, the restaurants you visit – or when you’re at home waiting for a pizza.  At this point, the question of “so what” should be thoroughly answered. Does all of this still sound benign?  

Real World Data: Meet the Real-World Hazards

Pharma and digital health companies often tout the benefits of real-world data to improve population health.  These data hold power to create huge advancements in our understanding of disease.  We need real world data.  Yet without proper protections and stewardship, these data hold hazards, and are left unprotected.  All of these data and more are being grabbed by stalker were that is proliferating in epidemic proportions, and vulnerable people are most affected. One study in the European Institute for Gender Equality found that 7 out of 10 women in Europe that had experienced cyberstalking were also victims of intimate partner violence.  According to this report, the digital control exercised by a stalker can be immense: reading anything the surveilled person types, including user names and passwords for services such as banking applications, online shops and social networks; knowing where that person is by tracking their movements in real time with GPS; eavesdropping on or even recording phone calls, or even record them; reading text messages (regardless of whether encryption is used); monitoring social network activity; viewing photos and videos; and even being able to switch on the camera. 

Another survey showed that 85% of domestic violence workers reported having cared for victims whose attacker located them by GPS. Further, the statistics on the adverse effects of internet crime on racial and ethnic minorities show that BIPOC communities face identity theft more often, that the social media accounts of BIPOC communities are attacked more often, and that elderly persons are targeted more often than those under 65. Put simply: the more vulnerable are more vulnerable.

So why do we say “no aggregation without representation?”  It’s not an abstract ethical question about privacy or even autonomy. It is the right to be safe. The right to feel secure.  That makes it no less than a civil right

This concept of collective rights, representation, and stewardship of real-world health data is only getting started.   Those of us in healthcare who hold power, privilege, and influence have a responsibility to listen and act.  So what comes next?  

This incredible group will be meeting again at the National Health Policy Conference in Washington DC April 4th and 5th.  I hope you join them.  Thank you, Dr. Maya, Ms. Tomlin-Harris, Ms. Simmons and Ms. Robinson.  I promise I won’t forget what I’ve learned.

Eric D. Perakslis, PhD (@eperakslis) is a Rubenstein Fellow at Duke University.

Where Health Care Value Can Lead


It seems inevitable that, in the near future, an innovative health care organization – Let’s call it The Platform – is going to seize the market opportunity of broader value. It will cobble together the pieces, and demonstrate to organizational purchasers that it consistently delivers better health outcomes at significantly lower cost than previously has been available.

To manage risk and drive performance, The Platform will embrace the best healthcare management lessons of the past decades: risk identification through data monitoring and analytics, driving the right care, quality management, care navigation and coordination, patient engagement, shared decision-making, and other mission-critical health care management approaches. It will practice care that is grounded in data and science, and is outcomes-accountable.

But The Platform will also appreciate that a few specialty vendors have developed deep expertise in dealing with clinical or financial risk in high value niches – where health care’s money is – like management of musculoskeletal care, chronic disease, maternity, surgeries, high performing providers, or specialty drugs. It will understand that it often makes sense to partner with experts who can prove and guarantee high performance rather than trying to learn to achieve high performance within each niche. The Platform also will realize that simplicity is a virtue, and that bundling specialized services under one organizational umbrella is easier for health plan sponsors to manage and for patients to negotiate than an array of individual arrangements.

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Reflections From the Ukraine


The English translator of Tolstoy’s epic Russian novel, “War and Peace”, Richard Pevear, writes in his introduction, “The book is set in the period of the Napoleonic wars (1805-1812) and tells the interweaving historical events of two very different families of the Russian nobility – the severe Bolonskys and the easygoing Rostovs – and of a singular man reminiscent of the author himself – Count Pierre Bezukhov. It embodies the national myth of ‘Russia’s glorious period’ as Tolstoy himself called it…”

On page 348, in a moment of intense introspection, the very same Pierre broodingly reflects, “What is bad? What is good? What should one love, what hate? Why live, and what am I? What is life and what is death? What power rules over everything?”

Pierre’s mind provides this very dark response, “You will die – and everything will end. You will die and learn everything – or stop asking.”

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Matthew’s health care tidbits: The Stupidity Vaccine

Each week I’ve been adding a brief tidbits section to the THCB Reader, our weekly newsletter that summarizes the best of THCB that week (Sign up here!). Then I had the brainwave to add them to the blog. They’re short and usually not too sweet! –Matthew Holt

For my health care tidbits this week, I think we need a new vaccine. We need one that prevents stupidity.

Look I get that some people don’t think the flu vaccine is effective and don’t think the effects are too bad, so they don’t get one every year. Many people don’t get a vaccine for shingles. But as someone who had shingles long before the recommended age for the vaccine, let me tell you, you’ll wish you had the vaccine should you get it. And even sensible liberal Maggie Mahar a long while back was pretty suspicious of Merck’s Gardasil vaccine for cervical cancer–although since then it’s been replaced both by a more effective updated version and by Cervarix and the long term results are really good.

But since COVID-19 appeared the cultural and ideological identification among most Republicans has been that only wussy liberals take the COVID vaccine. This is stupid and indefensible. Even Donald Trump thinks so! But when he told his cult members that, they booed him! And so the US is stuck on not enough people vaccinated to repel variants or stop ICUs filling up. There are now hundreds of thousands of unnecessary deaths among the unvaccinated with no end in sight.

But this isn’t stupid enough. Now we are seeing senior political leaders attacking vaccines for diseases we’ve had under control for ages. We’ve already seen outbreaks of measles in recent years, including one at Disneyland. Last month 17 Georgia state senators proposed banning school mandates for all vaccines including MMR, chickenpox, DtAP, Hep B, Polio and more. It’s amazing that these people don’t believe in science, yet they are probably happy to use a smartphone or get in an airplane.

Sadly there appears to be no vaccine for stupidity on the horizon

Matthew’s health care tidbits: #What is insurance again?

Each week I’ve been adding a brief tidbits section to the THCB Reader, our weekly newsletter that summarizes the best of THCB that week (Sign up here!). Then I had the brainwave to add them to the blog. They’re short and usually not too sweet! –Matthew Holt

For my health care tidbits this week, I was reminded on Twitter that many Americans really don’t understand health insurance. A spine surgeon no less in this thread (no jokes about arrogance please) was telling me that he was paying ~$8,000 a year ($4,000 in insurance and $4,000 in deductible) before he got to “use” his insurance–which, as his medical costs were low, he never did. Others were complaining that the cost of employee premiums were over $20K. They all said they should keep the money and (presumably) pay cash when they do use the system. It’s true that most people don’t use their insurance. That’s the whole point. When you buy house insurance, you don’t expect your house to burn down. You are paying into a pool for the people whose house does burn down.

In the US we are on average spending $12k per person on health care each year. But spending on most people is way under that and for a few it’s way, way over. If you take the rough rule that 50% of the spending is on 10% of the people then 35 million people account for $2 trillion in spending–that’s ballpark $60,000 each. They are the ones with cancer, heart disease, complex trauma, etc, etc. The rest of us are “paying” our $4,000, $8,000 whatever, into the pool to cover that $60,000.

There are only two ways to lower that cost for the healthy who aren’t “using” their insurance. One is to exclude unhealthy people from that insurance pool, which makes the costs for everyone else much less. We did that for years with medical underwriting and it was nuts because it screws over the unhealthy. Fixing the pre-existing condition exclusions was the only bit of Obamacare everyone agrees on–even Trump. But now we are ten plus years into this new reality, some people have forgotten how bad it was before.

The other way is to reduce the costs in the system and lower that $4 trillion overall. How to do that is a much longer question. But it isn’t much connected to the concept of insurance.

The Social Science of Covid


As we enter the third year of the Covid pandemic, with perhaps a partial end in sight, the weight of the debate shows signs of shifting away from genetically engineered therapies, and toward a social science search for historic context.

Renowned historian, Charles E. Rosenberg, envisioned a similar transition for the AIDS epidemic in 1989. He described its likely future course then as a “social phenomenon” with these words, “Epidemics start at a moment in time, proceed on a stage limited in space and duration, follow a plot line of increasing and revelatory tension, move to a crisis of individual and collective character, then drift toward closure.”

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My 22 Oldest Jokes and Why They Still Matter in 2022


I have been studying American healthcare for more than 40 years and I have assembled a large number of one-liners over the years. As we enter 2022, I thought I’d share my 22 oldest jokes and why they still matter. 

Coming to America 

  1. I grew up in Glasgow, Scotland.  In Glasgow, healthcare is a right, carrying a machine gun is a privilege. America got it the wrong way round

Gun violence continues to ravage the United States. We have more guns than people. Kids get gunned down in school playgrounds and classrooms routinely. It happened once in Dunblane, Scotland in 1996 when a local shopkeeper walked into Dunblane Primary School and opened fire, killing 16 5- and 6-year-olds and their 45-year-old teacher.  It so galvanized public opinion, according to Smithsonian Magazine:  “By the end of 1997, Parliament had banned private ownership of most handguns, including a semi-automatic weapons ban and required mandatory registration for shotgun owners”. 

Last time I looked, gun violence was the second leading cause of death in children in the US.  In America when we have mass shootings all we get are thoughts and prayers. 

And when it comes to healthcare as a right, even if we Build Back Better, it won’t be a right for millions of American residents, especially those who are undocumented. 

  1. I am a Scottish Canadian Californian which gives me a unique perspective on healthcare (and all things to do with healthcare, including death and dying) because the Scots see death as imminent, Canadians see death as inevitable, and Californians see death as optional. 

This is one of my oldest jokes and it remains true.  In Silicon Valley, where I live, my affluent VC friends want to live forever and are working out and taking supplements to achieve that. In contrast, my British friend Dr. Richard Smith (former Editor of the BMJ) is sitting on the Lancet Commission on the Value of Death.  Enough said. 

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Climate Change: The Future of the Quality Movement


A little more than 20 years ago, the IOM report To Err is Human catalyzed the profession around the realization that our health care system was killing around 98,000 people a year from medical error. I am part of a generation of professionals that learned to adopt systems thinking; to measure, monitor, and improve; and to ultimately improve quality of care. 

Today, we face a different set of challenges. Health care is in the midst of a global pandemic, a reckoning with systemic racism, not to mention the great resignation. But also, we face a climate crisis. Are these things connected? Is there something we all can do? The answer is undoubtedly yes, and I write to advocate for climate change to be included on this list of strategic and moral imperatives for health care leaders everywhere. 

Why is that?

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