Category: Health Policy

Halbig corpus interruptus

Jul 23, 2014• 59

By MATTHEW HOLT

In more stunning proof that America’s 18th century style governing process just doesn’t work, a subset of a regional Federal court ruled against part of Obamacare. The Halbig ruling is certain to be overturned by the full DC court and then probably will stay that way after it makes it’s way through the Supremes–at least Jonathan Cohn thinks so.

But think about what the Halbig ruling is about. Its proponents say that when Congress (well, just the Senate actually as it was their version of the bill that passed) designed the ACA, they wanted states only to run exchanges and only people buying via states to get subsidies. But that they also wanted a Federal exchange for those states that couldn’t or (as it turned out) wouldn’t create their own. But apparently they meant that subsidies wouldn’t be available on the Federal exchange. That would just sail through Logic 101 at any high school. Well only if the teacher was asleep, as apparently most Senators were.

Now two judges interpret what was written down to imply that subsidies should only be available on state exchanges–even though logic, basic common sense and fairness would dictate that if we’re going to subsidize health insurance we should do it for everyone regardless of geography.

Don’t forget that in the House version of the bill there was only a Federal exchange. Continue reading…

How Can Patients on Medicaid Possibly Be Worse Off than Those Who Don’t Have Insurance?

Dec 31, 2013• 94

By Saurabh Jha, MD

“Extraordinary claims require extraordinary evidence,” said Carl Sagan.

The claim that health insurance improves health outcomes is hardly ground breaking. Studying whether insurance affects health status is like wondering whether three meals a day lead to a higher muscle mass than total starvation.

Well that’s what I thought. Until I read the study on Oregon’s Medicaid program by Baicker and colleagues in the NEJM earlier this year and, more recently, Avik Roy’s short treatise “How Medicaid Fails the Poor”.

Baicker et al found that Medicaid enrollees fared no better in terms of health outcomes than those without insurance. That is, no insurance no difference.

The study is an exemplar of policy research laced with regression equations, control of known confounders and clear separation of variables. There is only so much rigor social science can achieve compared to the physical sciences. Yet this is about as good a study as is possible.

The one thing the study did not lack was sample size. It’s useful to bear in mind sample size. Large effects do not need a large sample size to show statistical significance. Conversely, if study with a large sample size does not show even a modest effect, it means that the effect probably does not exist.

There are several interpretations of the Medicaid study, interpretations inevitably shaped by one’s political inclination. The ever consistent Paul Krugman, consistent in his Samsonian defense of government programs against philistines and pagans, extolled critics of Medicaid as “nuts” and asked, presumably rhetorically, “Medicaid is cheaper than private insurance. So where is the downside?”

Unlike Krugman I am not a Nobel laureate and am about as likely to win a Nobel Prize as I am of playing the next James Bond, so it’s possible that I am missing something blatantly obvious. Could the downside of a government program paying physicians, on average 52 cents, and as low as 29 cents, for every dollar paid by private insurance in a multiple payer system be access?

Indeed, it’s darn impossible for patients on Medicaid to see a new physician. As Avik Roy explains “…massive fallacy at the heart of Medicaid….It’s the idea that health insurance equals healthcare”.

But wait. It gets better.

I am accustomed to US healthcare throwing more plot twisters than Hercule Poirot’s sleuth work. But one I least expected was that patients on Medicaid do worse than patients with no insurance (risk-adjusted, almost). I am not going to be that remorseless logician, which John Maynard Keynes warned us about, who starting with one mistake can end up in Bedlam, and argue that if you are for Medicaid that is morally equivalent to sanctioning mass murder. Rather, I ask how it is possible that possessing Medicaid makes you worse off than no insurance whatsoever.

To some extent this may artifactually appear so because poverty correlates with ill health, and studies that show Medicaid patients faring worse than uninsured, cannot totally control for social determinants of health.

The bleak state of the (health care) economy

Aug 8, 2011• 4

By MATTHEW HOLT

Health care spending increased at 3.9%, its slowest rate for decades in 2010 following a slowdown in 2009. Merill Goozner has the play by play but it’s clear that the numbers are starting to reflect what Jeff Goldsmith said in his keynote at Health 2.0 last year.–even the health care industry can not grow geometrically forever.

But there’s something hiding in these data. Recently I gave an update for a talk that I’d given 15 years before at the Oregon Medical Association. I reviewed the 2010 year forecast I did for IFTF in 1997 and I was struck by how in our scenarios we had overestimated the per capita spend on health care, but underestimated its share of GDP. That meant while overall health spending didn’t grow as fast over the decade as we’d forecast, the economy grew much slower. And of course the big jumps in health care as share of GDP that we saw in 1991-4 and 2007-9 came when the economy tanked

As we enter the 7th year of our lost decade with the stock market starting to predict a double dip recession, and real unemployment in the high teens, we face the prospect of getting to 20% of the GDP going to health care via not a boom in spending brought on by the ACA or a rich economy making rational choices, but by default. Of course these days the loonies in the Tea Party are reminding us of the other meaning of the word default!

Wellpoint and Their “39%” Rate Increase

Feb 11, 2010• 45

By MATTHEW HOLT

Wellpoint is getting killed in the press over a “39%” rate increase for their individual health insurance block in California.

HHS Secretary Sebelius has pointed to the Wellpoint individual rate increases demanding an explanation. The President even brought it up in his interview on Sunday. At a time Democrats are fond of calling insurance executives “villains” this story just adds more fuel to the fire.

No less than five reporters called me the day the story broke asking me to explain it all.

Falling back on my industry experience it is probable:

The “39%” headline is anecdotally the biggest increase the press has found—the average is probably less albeit in the high 20% range.
This is likely driven by a combination of increasing medical cost trend, a bad economy, and anti-selection as healthier people disproportionately drop their coverage leaving a sicker group in the pool.
The rate increase is probably “defensible,” at least actuarially, based upon the actual experience in that block.

When the day is done this probably says more about why systemic health care reform is so critical than about any one company’s behavior. Last week we heard national health care spending skyrocketed to 17.3% of the economy. This is a real life example of what that macroeconomic statistic really means.

A vote for single payer, austerity-style

Jan 20, 2010• 13

By MATTHEW HOLT

I spent summer 1984 in Boston and generally found it an oppressively hot place. I’ve spent a few winter days there and found it an oppressively cold place. I’ve always thought that, given the absence of passport controls, if you lived there and could move to California and didn’t, you were probably crazy. And yesterday the residents of that fair state proved me right.

As I said earlier this week, it now appears that health care reform is dead. I just can’t see a scenario in which there are 60 votes to pass anything. I also don’t see the Dems having the cojones to go to reconciliation or to cram the current Senate bill through the House quickly. Instead (as Bob Laszewski says below) the moderate Dems will run for their lives away from health insurance reform—although I just don’t understand what Bob thinks “reform” would have meant if it had really required 6–10 Republican Senators.

So my prediction is that we end up with nothing.

Thinking the unthinkable–no Health Care bill?

Jan 18, 2010• 76

Matthew Holt

By MATTHEW HOLT

After a resounding Democratic Presidential election win, a terrible recession, and a bruising year of politics, it would be just like America that a crazy election result torpedoes the health care reform bill. It would be the first Republican Senator win in 43 years in Massachusetts, a state that’s bluer than blue, and the actual seat being elected on Tuesday hasn’t been won by a Republican since 1947!

But it’s becoming more and more possible, and the latest polls are all over the map.

Let’s play out what happens if we go back to a 59–41 Senate. The current Senate rules basically allow the minority to shut down proceedings. Harry Reid has in fact performed miracles to keep Lieberman, Nelson and some of the rest on board. Obama, Reid & Pelosi are now working the deal out with the unions and all the rest to make sure that what’s a pretty slim majority in the House will essentially accept the Senate bill—with some sop to the unions on the “Excise tax”. There are some other technicalities about the Exchange et al, but in the end we have a fair idea of what’s going to be the result.

Abortion Should Not Imperil Health Care Reform

Dec 8, 2009• 9

By MELISSA REED

The House vote to establish near-universal health-care coverage came at a steep cost to women. That cost, issued as an amendment by Rep. Bart Stupak (D-Mich.), eliminates abortion coverage by private insurance companies even when women are paying for all or most of the premium.

Stupak’s amendment is a cynical attempt to push an anti-choice agenda that imperils badly needed reform. His amendment restricts women’s access to abortion coverage in the private health insurance market as well as in a “public option,” undermining the ability of women to purchase private health plans that cover abortion. It reaches much further than the Hyde Amendment, which has prohibited public funding of abortion in most instances since 1977.Continue reading…

Sell Patients like Baseball Players – Seriously

Nov 16, 2009• 37

By JOE FLOWER

Here’s a health care reform strategy that I have not heard anywhere else. Think about this:

Why aren’t health plans more aggressive in promoting the long-term health of their members, like getting them to eat better, stop smoking, get a little exercise, and all that? Because of “churn.” For something that has immediate consequences, helping their members stay healthy has an immediate payoff for the health plans. But most of the big things that would make you healthier take a longer time to manifest: You quit smoking or start eating better, you will have a much better health profile in five years, but it won’t make as much of a difference in, say, one year.

“Churn” is the industry term for the annual percentage of members who leave a health plan, and it can be surprisingly high. If each year 20 percent of a health plan’s members go to some other health plan for whatever reason (they move, lose their job, change employers, get Medicare, find a better deal), then it is not worth it for the health plan to invest in their members’ long-term health. If the health plan invests time and effort (which means money) to get you to quit smoking, and you then quit and become someone else’s customer, they lose that investment – and the other company gains, by getting a customer who is less likely to need expensive long-term treatments.

But what if they did not lose that investment?

The Outlook for a Health Reform Bill in 2009

Nov 15, 2009• 2

Congress BY Robert Laszweski

Readers know of my year long pessimism over our getting a trillion dollar health care bill in 2009.

With the historic passage of the House bill, are we now on our way to a big health care bill in 2009—or even by early 2010? Clearly, Democrats desperately want to pass a bill. Given their compromise over abortion and the neutering of the public option in the House legislation—things most liberals said they would never agree to—it is clear the Democratic leadership will take any deal they can get.

But there are still some giant obstacles on the way to a Rose Garden bill signing late this year or early next:

1. Getting and keeping 60 Senate votes across a wide spectrum of complex issues. Senate Majority Leader Reid has not achieved a 60-vote consensus on any of the dozen or more contentious issues. In the wake of Pelosi not being able to get more than a two-vote margin for the neutered public option, some Democratic Senators will have no interest in the “robust” version with the state opt-out Reid has been talking about. He has made even less progress on all of the other contentious issues–and you can put abortion on the top of that list. Figuring out the “sweet spot” on each issue that keeps the same 60 votes on side for the entire bill would take a super computer—if that were even possible. The growing angst over these health bills not bending any cost curves and actually getting the savings from Medicare that is projected. With the demise of the robust public option even a lot of “sympathetic voices” are having second thoughts. How many op-eds and editorials can you have announcing this is not health care reform and it is likely to continue adding to deficits before everyone wants out?The latest blow was the report from the CMS actuary that says Medicare beneficiaries will suffer from the program cuts in the bills and health care costs will more likely continue to add to the deficits. I expect opponents are cutting new ads using the CMS report against the Democratic bills at this moment.
2. The polls are still showing opposition well ahead of support for the Democratic bills. Pollster.com combines a number of polls finding 42.5% favor and 48.6% oppose. How do you pass so big a piece of legislation with approval ratings in the 40% range?

If Reid finds a way to keep 60 Senators onside it will be an example of a political master performance. If he fails it will be the more likely outcome.

More than anything else, I sense a rising tide of anxiety particularly among people who understand this issue and want a health care bill: Somewhere we lost our way on the road to health care reform and we now find ourselves headed to an entitlement bill that falls far short of achieving universal access and a bill we still can’t afford. This will eventually spill over to mainstream voters already anxious about a trillion dollars in new spending in the midst of an economic crisis.

That is not the place Democrats would have wanted to be just when they need to overcome what would have been stiff resistance under the best of all circumstances.

Robert Laszweski has been a fixture in Washington health policy circles for the better part of three decades. He currently serves as the president of Health Policy and Strategy Associates of Alexandria, Virginia. Before forming HPSA in 1992, Robert served as the COO, Group Markets, for the Liberty Mutual Insurance Company. You can read more of his thoughtful analysis of healthcare industry trends at The Health Policy and Marketplace Blog, where this post first appeared.