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Category: Health Policy

We Are the Ever Given

By KIM BELLARD

The Ever Given is free! 

Admit it: you’ve been following the story about the huge container ship stuck in the Suez Canal.  It’s about the size of the Empire State building laid flat, and somehow ended up blocking one of the busiest waterways in the world. 

As serious as this was for global shipping and all of us who depend on it, much hilarity ensued.  Memes exploded, using this as a metaphor for almost everything, healthcare included.  Once there started to be hope for getting the Ever Given free, people started new memes that it should be “put back.” 

Well, I’m a sucker for a funny meme and a good metaphor too.  Our healthcare system is that canal, and we’re the unfortunate ship.  Only it doesn’t look like we’re getting unstuck anytime soon.

The Ever Given got stuck a week ago.  It is one of the world’s largest container ships, but high winds, poor visibility (due to a dust storm), and, perhaps, human error caused things to go sidewise, literally.  It got stuck on the banks.  Over 300 other ships have been blocked as a result; alternative routes add several thousand miles to the trip, making it a tough choice between waiting/hoping and rerouting. 

The Suez Canal carries about 10% of worldwide maritime traffic, worth as much as $10b daily.  It has been around since 1869 – far longer than the similarly important Panama Canal – and has been widened/deepened several times since.  Ships keep getting bigger and bigger, carrying more and more cargo, as globalization has created boom times for shipping (or, rather, shipping created boom times for globalization). 

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And You Thought Health Insurance Was Bad

By KIM BELLARD

I spend most of my time thinking about health care, but a recent The New York Times article – How the American Unemployment System Failed – by Eduardo Porter, caught my attention.  I mean, when the U.S. healthcare system looks fair by comparison, you know things are bad.

Long story short: unemployment doesn’t help as many people as it should, for as much as it should, or for as long as it should. 

It does kind of remind you of healthcare, doesn’t it?

The pandemic, and the associated recession, has unemployment in the news more than since the “Great Recession” of 2008 and perhaps since the Great Depression.  Last spring the unemployment rate skyrocketed well past Great Recession levels, before slowly starting to subside.  Still, last week almost a million people filed for unemployment benefits, reminding us that unemployment is still an issue.

Keep in mind that unemployment rates do not tell the full story, as they don’t count those only “marginally attached” to the workforce – people who would like to work but have given up – and counts part-time workers who would like to work full time as “employed.”  The “true” unemployment rate is reckoned to be much worse than the official rate.

Congress has enacted several COVID relief measures, including in late December, to extend duration, amount, and applicability of unemployment benefits, but our unemployment systems remain predominantly state designed and administered.  The shortcomings of these systems have been severely exposed over the past few months: neither the processes nor the actual technologies supporting them proved robust enough for the volume of applicants.  Last December Pew Trusts reported that “unemployment payments were weeks late in nearly every state.” 

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Evaluating President-Elect Biden’s Healthcare Plan | Part 2

By TAYLOR J. CHRISTENSEN

In Part 1 of this series, I reviewed the relevant context of our post-ACA healthcare system to show why President-Elect Joe Biden’s healthcare plan is perfectly reasonable. In this part, I will critically evaluate that plan to show what he got right and what he got wrong or missed altogether.

Joe Biden plans to get rid of the current limit (400% of the federal poverty level) on who qualifies for health insurance premium subsidies and instead convert it to a flat percentage of income (8.5%), which means anyone whose health insurance is going to cost more than 8.5% of their annual income would qualify for a subsidy. And those subsidies would be more generous, being based on a gold-level insurance plan’s price rather than a silver-level insurance plan. He also plans to create a new government-run health insurance company to offer an insurance plan—a “public option”—on the private market, which would be available to private market health insurance shoppers and some other groups as well.

Ok, now for some evaluation of all that.

First, let me frame how I am going to evaluate Joe Biden’s plan.

There are three problems healthcare reformers are usually trying to solve. They want to (1) increase access to care, (2) decrease healthcare prices, and (3) improve the quality of care.

But if we merge the last two goals into one, we can say they want to (1) increase access, and (2) improve the value of care (Value = Quality / Price). We will take these one by one.

Goal 1: Increase Access

How will Joe Biden’s plan do at increasing access?

There are three things to consider when evaluating access-increasing policies. The first is how many people will be covered. The second is how much it will cost. And the third, almost universally forgotten, is how much it will interfere with efforts to accomplish the second goal to improve the value of care.

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No Names, Please

By KIM BELLARD

Feeling good about your holiday spending?  You’ve made it through most of this mostly horrible 2020, maybe lost a job or even a loved one, but still probably found a way to buy presents for your loved ones and maybe even to give some money to charity.  Indeed, charitable giving was up 7.5% for the first half of 2020, despite the economic headwinds.

Then there’s MacKenzie Scott.

Ms. Scott, as you may recall, is the former wife of Amazon founder/CEO Jeff Bezos.  She got Amazon stock worth some $38b in their 2019 divorce, which is now estimated to be worth around $62b.  She just gave away $4.2b – and that’s on top of $1.7b she gave away in July. 

In case your math skills are impaired, that’s $6b in six months, which Melissa Berman, chief executive officer of Rockefeller Philanthropy Advisors told Bloomberg: “has to be one of the biggest annual distributions by a living individual.”   Ms. Scott has vowed: “I will keep at it until the safe is empty.”

Kenzie Bryant, writing in Vanity Fair, marveled: “It gives a whole new meaning to “fuck-you money.” 

Private foundations are required to distribute at least 5% of their endowments each year; Ms. Scott not only has given away 10% of her net worth this year alone, but she hasn’t even used a foundation to do so.  As The New York Times reported: “Ms. Scott’s operation has no known address — or even website. She refers to a “team of advisers” rather than a large dedicated staff.”

She doesn’t make recipients plead for money through grant applications.  She doesn’t specify how the money is to be used, or require reports on how it is spent.  She doesn’t expect her name on anything.  She doesn’t even make public how much she is giving each recipient (although some choose to do so).

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The “Right” to Health Care in America

By MIKE MAGEE

I’ve been working on a Spring lecture for President’s College at the University of Hartford titled, “The Constitution and Your ‘Right to Health Care’ in America.” 

My description reads, “This lecture explores the recent political history and legal controversy surrounding attempts to establish universal health coverage in America. “Is health care a right?” viewed within the context of the Bill of Rights and especially the 9th and 10th Amendments?”

Self-described libertarian-conservative John R. Graham, a health policy analyst in the Trump administration’s HHS, writing on the topic in 2010 stated that, “As a non-lawyer, my understanding is very simple: The Ninth Amendment states that ‘the enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.’ So, if you claim a ‘right to health care,’ there’s nothing in the Constitution that denies your claim. Indeed, libertarians and conservatives should be more willing to concede a ‘right to health care,’ because once it’s defined as a right, the entire weight of the Constitution comes down against federal (and perhaps even state) control.”

This bit of semantics crash-lands with common sense, as it did in my own state in 1965 when the Supreme Court in a 7 to 2 decision (Griswold v. Connecticut) dismantled an 1873 Comstock Law that prohibited married couples from buying and using contraceptives. Writing for the Court, Justice William O. Douglas declared that “specific guarantees in the Bill of Rights have penumbras, formed by emanations from those guarantees that help give them life and substance.” Though marital privacy was not mentioned in the Bill of Rights, legal analysts have suggested that Douglas was asserting that logic dictated that marital privacy “is one of the values served and protected by the First Amendment through its protection of associational rights, and by the Third, the Fourth, and the Fifth Amendments as well.”

Justice Goldberg concurred at the time, writing: “The language and history of the Ninth Amendment reveal that the Framers of the Constitution believed that there are additional fundamental rights, protected from governmental infringement, which exist alongside those fundamental rights specifically mentioned in the first eight constitutional amendments. . . . To hold that a right so basic and fundamental and so deep-rooted in our society as the right of privacy in marriage may be infringed because that right is not guaranteed in so many words by the first eight amendments to the Constitution is to ignore the Ninth Amendment and to give it no effect whatsoever.”

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A Cure at Any Cost? Time to Shine a Light on Drug Pricing

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By CECI CONNOLLY and BOBBY CLARK

We are all are anxiously awaiting the approval and delivery of a cure to the novel coronavirus – or better yet, a vaccine.

Amid the race to develop a safe and effective vaccine, some may be inclined to give drug companies a pass on their well-established bad behavior related to pricing and market competition.

But that would be an awfully expensive mistake.

As the COVID-19 pandemic claims more lives and families’ livelihood, policymakers and the public must press drug makers for more information on the products they are developing. The country must be protected against price-gouging for therapies that could bring the pandemic to a halt.

Yes, we need America’s biopharmaceutical companies to develop a cure or vaccine so we can resume our normal lives. And yes, they should be compensated for their work.

But no, a cure should not come at any cost.

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Value-based care – no progress since 1997?

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By MATTHEW HOLT

Humana is out with a report saying that its Medicare Advantage members who are covered by value-based care (VBC) arrangements do better and cost less than either their Medicare Advantage members who aren’t or people in regular Medicare FFS. To us wonks this is motherhood, apple pie, etc, particularly as proportionately Humana is the insurer that relies the most on Medicare Advantage for its business and has one of the larger publicity machines behind its innovation group. Not to mention Humana has decent slugs of ownership of at-home doctors group Heal and the now publicly-traded capitated medical group Oak Street Health.

Humana has 4m Medicare advantage members with ~2/3rds of those in value-based care arrangements. The report has lots of data about how Humana makes everything better for those Medicare Advantage members and how VBC shows slightly better outcomes at a lower cost. But that wasn’t really what caught my eye. What did was their chart about how they pay their physicians/medical group

What it says on the surface is that of their Medicare Advantage members, 67% are in VBC arrangements. But that covers a wide range of different payment schemes. The 67% VBC schemes include:

  • Global capitation for everything 19%
  • Global cap for everything but not drugs 5%
  • FFS + care coordination payment + some shared savings 7%
  • FFS + some share savings 36%
  • FFS + some bonus 19%
  • FFS only 14%

What Humana doesn’t say is how much risk the middle group is at. Those are the 7% of PCP groups being paid “FFS + care coordination payment + some shared savings” and the 36% getting “FFS + some share savings.” My guess is not much. So they could have been put in the non-VBC group. But the interesting thing is the results.

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New Technologies Drive Cost Growth Over Time

By KEN TERRY

(This is the eighth and final installment in a series of excerpts from Terry’s new book, Physician-Led Healthcare Reform: a New Approach to Medicare for All, published by the American Association for Physician Leadership.)

Medical technologies include drugs, devices, tests, and procedures. Considered as a whole, these technologies are the key driver of growth in health costs, according to Georgetown University professor Gregg Bloche and his associates.

Bloche, et al., view insurance coverage as the chief enabler of these technological innovations. In a 2017 Health Affairs Blog post, they said, “Drug and device developers, clinical researchers, and their financial backers anticipate coverage for new tests and treatments with little concern for whether they add substantial therapeutic value, and they make research and development decisions accordingly.”

In an interview, Bloche further explained, “If you’re a technology developer, you can reasonably anticipate that if your product achieves a low but significant health gain, insurers are going to be under pressure to pay for it.”

Insurers do cover most new drugs, although they may make it difficult for patients to access the ones that they deem to be low-value, notes Peter Neumann, director of the Center for the Evaluation of Value and Risk in Health at the Institute for Clinical Research and Health Policy Studies at Tufts Medical Center in Boston.

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Biden’s Nov 9th speech: “Don’t you force me to pass Medicare 4 All”

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By MATTHEW HOLT

The new Supreme Court, in all likelihood including just nominated Justice Amy Coney Barrett, will be hearing the California v Texas suit against the ACA on November 10th, seven days after the election. The lower courts have already ruled the ACA unconstitutional. Some hopeful moderates among my Democratic friends seem to believe that the justices will show cool heads, and not throw out the ACA. But it’s worth remembering that in the NFIB vs. Sebelius decision which confirmed the legitimacy of most of the ACA back in 2011 all the conservative justices with the exception of John Roberts voted to overturn the whole thing. With Ginsburg being replaced by Barrett there’s no reason to suppose that she won’t join Thomas, Alito, Kavanagh & Gorsuch and that Robert’s vote won’t be enough to stop them this time. The betting odds must be that the whole of the ACA will be overturned.

There is nothing the Democrats can realistically do to prevent Barrett filling RBG’s seat on the court, but assuming Biden wins and the Democrats take back the Senate, the incoming Administration can give the Supremes something to think about regarding the ACA. I would not suggest this level of confrontation before the election but, if Biden wins, the gloves must come off.

Assuming he wins and that the Dems win the Senate, this is the speech Biden should give on November 9th. (The TL:DR spoiler is, “Keep the ACA or I’ll extend Medicare to all ages”)

“I’m directing this speech to an extremely select number of people, just the Supreme Court Justices appointed by Republican Presidents. It is obviously no secret that we have political differences on many issues and we find ourselves in the strange situation in which I am the incoming President with an incoming Democratic Senate majority and yet you are considering overturning the signature bill of the administration in which I was Vice-President. You may recall that at the time of its signing I told President Obama that it was a “big f****** deal”  and, although many of my colleagues in the more progressive wing of the Democratic Party have criticized the ACA since its passage, it turns out that I was right. 

I am not referring here to the apoplexy that the ACA created amongst the Republican Party including not only the current and outgoing President but also almost all Republican members of Congress between 2010 and 2018. Instead I’m referring to the ACA’s impact on the nation and its health care system. 

Since 2010 there have been many changes to the way our nation’s health care system operates; almost all of them have their roots in the ACA. 

First, the ACA gave access to health insurance coverage to many people who had great trouble getting it before. That includes young people moving between their parent’s home, college and getting into the workforce; small business owners; freelance workers; the unemployed; people with low incomes; and people with underlying “pre-existing” health conditions. I remind you that due both to the pandemic and changes in our economy, there are many, many more of these people now than there were in 2009. 

Before the ACA these people were either not well served by the private health insurance industry or literally were unable to buy coverage at all. This not only caused extreme personal and financial suffering and in some cases death to the people affected, but also impacted the economy. It restrained innovation and entrepreneurship, and it meant that the participants in the health care system–including very many well meaning clinicians and provider organizations–had to play very inefficient games in order to try to provide those people with much-needed care, which drove up the cost of care to everyone else. Warren Buffet calls that the tapeworm in the US economy.

The ACA changed this in two main ways.

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Congress Is Getting the Transition to Alternative Payment Models Wrong

By TAYLOR CHRISTENSEN

Alternative payment models (APMs) are a hot topic these days, and everyone seems to agree that we need to transition toward them and away from fee for service (FFS). But how should we do it?

First, let’s think about this task as government policy makers would think about it.

They would probably start by saying, “We need to find a way to give incentives to providers and payers to try out these different APMs.” This would be fairly easy to do through Medicare, so they would create some Medicare APM programs and structure them in a way that makes the benefits of joining large enough that lots of providers will want to participate.

And for the sake of uniform provider incentives, they would also want to encourage private insurer-provider diads to start using APMs, preferably ones as similar to the Medicare APM programs as possible. And so they would probably have to offer private insurers and/or providers money to do so.

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