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$2 Trillion+ in New Taxes for Single Payer, or $50 Billion to Strengthen ObamaCare? Next Question, Please

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By BOB HERTZ

It is not wise for Democrats to spend all their energy debating Single Payer health care solutions.

None of their single player  plans has much chance to pass in 2020, especially under the limited reconciliation process. In the words of Ezra Klein, “If Democrats don’t have a plan for the filibuster, they don’t really have a plan for ambitious health care reform.”

Yet while we debate Single Payer – or, even if it somehow passed, wait for it to be installed — millions of persons are still hurting under our current system.

We can help these people now!

Here are six practical programs to create a better ACA.

Taken all together they should not cost more than $50 billion a year. This is a tiny fraction of the new taxes that would be needed for full single payer. This is at least negotiable, especially if Democrats can take the White House and the Senate.

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Improving the Affordable Care Act Markets (Part 1)

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By JONATHAN HALVORSON, PhD

With each passing year, the Affordable Care Act becomes further entrenched in the American health care system. There are dreams on both the far left and far right to repeal and replace it with something they see as better, but the reality is that the ACA is a remarkable achievement which will likely outlast the political lifetimes of those opposing it. Future improvements are more likely to tweak the ACA than to start over from scratch.

A critical part of making the ACA work is for it to support healthy, competitive and fair health insurance markets, since it relies on them to provide health care benefits and improve access to care. This is particularly true for insurance purchased by individuals and small employers, where the ACA’s mandates on benefits, premiums and market structure have the most impact. One policy affecting this dynamic that deserves closer attention is risk adjustment, which made real improvements in the fairness of these markets, but has come in for accusations that it has undermined competition.

Risk adjustment in the ACA works by compensating plans with sicker than average members using payments from plans with healthier members. The goal is to remove an insurer’s ability to gain an unfair advantage by simply enrolling healthier people (who cost less). Risk adjustment leads insurers to focus on managing their members’ health and appropriate services, rather than on avoiding the unhealthy. The program has succeeded enormously in bringing insurers to embrace enrolling and retaining those with serious health conditions.

This is something to celebrate, and we should not go back to the old days in which individuals or small groups would be turned down for health insurance or charged much higher prices because they had a history of health issues. However, the program has also had an undesired effect in many states: it further tilted the playing field in favor of market dominant incumbents.

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How are hospitals supposed to reduce readmissions? Part III

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By KIP SULLIVAN, JD

The Medicare Payment Advisory Commission (MedPAC) and other proponents of the Hospital Readmissions Reduction Program (HRRP) justified their support for the HRRP with the claim that research had already demonstrated how hospitals could reduce readmissions for all Medicare fee-for-service patients, not just for groups of carefully selected patients. In this three-part series, I am reviewing the evidence for that claim.

We saw in Part I and Part II that the research MedPAC cited in its 2007 report to Congress (the report Congress relied on in authorizing the HRRP) contained no studies supporting that claim. We saw that the few studies MedPAC relied on that claimed to examine a successful intervention studied interventions administered to carefully selected patient populations. These populations were severely limited by two methods: The patients had to be discharged with one of a handful of diagnoses (heart failure, for example); and the patients had to have characteristics that raised the probability the intervention would work (for example, patients had to agree to a home visit, not be admitted from a nursing home, and be able to consent to the intervention).

In this final installment, I review the research cited by the Yale New Haven Health Services Corporation (hereafter the “Yale group”) in their 2011 report to CMS in which they recommended that CMS apply readmission penalties to all Medicare patients regardless of diagnosis and regardless of the patient’s interest in or ability to respond to the intervention. MedPAC at least limited its recommendation (a) to patients discharged with one of seven conditions/procedures and (b) to patients readmitted with diagnoses “related to” the index admission. The Yale group threw even those modest restrictions out the window.

The Yale group recommended what they called a “hospital-wide (all-condition) readmission measure.” Under this measure, penalties would apply to all patients regardless of the condition for which they were admitted and regardless of whether the readmission was related to the index admission (with the exception of planned admissions). “Any readmission is eligible to be counted as an outcome except those that are considered planned,” they stated. (p. 10) [1] The National Quality Forum (NQF) adopted the Yale group’s recommendation almost verbatim shortly after the Yale group presented their recommendation to CMS.

In their 2007 report, MedPAC offered these examples of related and unrelated readmissions: “Admission for angina following discharge for PTCA [angioplasty]” would be an example of a related readmission, whereas “[a]dmission for appendectomy following discharge for pneumonia” would not. (p. 109) Congress also endorsed the “related” requirement (see Section 3025 of the Affordable Care Act, the section that authorized CMS to establish the HRRP). But the Yale group dispensed with the “related” requirement with an astonishing excuse: They said they just couldn’t find a way to measure “relatedness.” “[T]here is no reliable way to determine whether a readmission is related to the previous hospitalization …,” they declared. (p. 17) Rather than conclude their “hospital-wide” readmission measure was a bad idea, they plowed ahead on the basis of this rationalization: “Our guiding principle for defining the eligible population was that the measure should capture as many unplanned readmissions as possible across a maximum number of acute care hospitals.” (p. 17) Thus, to take one of MedPAC’s examples of an unrelated admission, the Yale group decided hospitals should be punished for an admission for an appendectomy within 30 days after discharge for pneumonia. [2]

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Can Rah-Rah, Blah-Blah and Meh Accelerate Digital Health Innovation?

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By MICHAEL MILLENSON

Can combining health tech “rah-rah,” health policy “blah-blah” and the “meh” of academic research accelerate the uptake of digital health innovation?

AcademyHealth, the health services research policy group, is co-locating its Health Datapalooza meeting, rooted in cheerleading for “Data Liberación,” with the National Health Policy Conference, rooted in endless debate about policy detail.

Sharing a hotel room, however, does not a marriage make. In order to get better digital health interventions to market faster, we need what I’m calling a Partnership for Innovators, Policymakers and Evidence-generators (PIPE). As someone who functions variously in the policy, tech and academic worlds, I believe PIPE needn’t be a dream.

The potential of digital health is obvious. Venture funding of digital health companies soared to $8.1 billion in 2018, up 40 percent from 2017, according to Rock Health, with another $4.2 billion invested during the first half of this year. Meanwhile, MedCityNews proclaimed 2019 “the year of the digital health IPO,” such as HealthCatalyst and Livongo.

Separately, Congress has sought to speed digital health innovation through bipartisan efforts such as the 21stCentury Cures Act and the formation last year of the Bipartisan Health Care Innovation Caucus. The Department of Health and Human Services (HHS) is also pursuing innovator and advocacy group input on regulatory relief.

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The Efficiency Mandate: To Achieve Coverage, the U.S. Must Address Cost

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By MIKE MAGEE, MD

It is now well established that Americans, in large majorities, favor universal health coverage. As witnessed in the first two Democratic debates, how we get there (Single Payer vs. extension of Obamacare) is another matter altogether.

295 million Americans have some form of health coverage (though increasing numbers are under-insured and vulnerable to the crushing effects of medical debt). That leaves 28 million uninsured, an issue easily resolved, according to former Obama staffer, Ezekiel Emanuel MD, through auto-enrollment, that is changing some existing policies to “enable the government agencies, hospitals, insurers and other organizations to enroll people in health insurance automatically when they show up for care or other benefits like food stamps.”

If one accepts it’s as easy as that, does that really bring to heel a Medical-Industrial Complex that has systematically focused on profitability over planning, and cures over care, while expending twice as much as all other developed nations? In other words, can America successfully expand health care as a right to all of its citizens without focusing on cost efficiency? 

The simple answer is “no”, for two reasons. First, excess profitability = greed = waste = inequity = unacceptable variability and poor outcomes. Second, equitable expansion of universal, high quality access to care requires capturing and carefully reapplying existing resources.

 It is estimated that concrete policy changes could capture between $100 billion and $200 billion in waste in the short term primarily through three sources.

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Why Medicare for All Will Not Cure What Ails the Hahnemann

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By ASEEM R. SHUKLA, MD

The impending closure of Hahnemann University Hospital is a local tragedy.  Eliminating a 170-year old institution is certain to exaggerate the daily travails of the economically disadvantaged inner-city population that Hahnemann serves as a safety-net hospital.  The closure is also a national tragedy. Hospitals are the towering, visible monuments of our healthcare system, and closings imply that something insidious ails that very system—that all is not well.  

Hospitals are complex entities with varied financial drivers, and the solution is never simple.  And the moment is too rich for politicians who see Hahnemann’s failure as the culmination of their dystopian predictions.  Bernie Sanders, most prominently, stood on the hospital’s doorstep and pitched his deceptively simple solution—Medicare for All.  Medicare for All, Sanders said, would ensure that every patient carries the same coverage, hospitals are paid a predictable rate, and voila, no hospitals need to close.  Private insurance would disappear, and no one would be without coverage.  

Even physicians have jumped on the Medicare for All bandwagon.  Some doctors insist that once profit is removed as a motive for hospital bottom lines, and government bodies decide which hospitals can buy a surgical robot, build a new wing or offer proton beam treatment cancer treatment centers, then all hospitals will do better.  

But these arguments miss a fundamental point: why pitch government insurance for all, like Medicare and Medicaid (a federal and state insurance plan to cover low income adult and children) as a remedy, when it is precisely government-run insurance that is killing Hahnemann and other hospitals in distress? 

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The Rebellion of the Buyers

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By JOE FLOWER

Did you catch that headline a few weeks back?

An official of a health system in North Carolina sent an email to the entire board of the North Carolina State Health Plan calling them a bunch of “sorry SOBs” who would “burn in hell” after they “bankrupt every hospital in the state.”

Wow. He sounds rather upset. He sounds angry and afraid. He sounds surprised, gobsmacked, face-palming.

Bless his heart. I get it, I really do. Well, I get the fear and pain. Here’s what I don’t get: the surprise, the tone of, “This came out of nowhere! Why didn’t anyone tell us this was coming?”

Brother, we did. We have been. As loudly as we can. For years.

Two things to notice here:

  1. What is he so upset about? Under State Treasurer Dale Folwell’s leadership, the State Health Plan has pegged its payments to hospitals and other medical providers in the state to a range of roughly 200% of Medicare payments (with special help for rural hospitals and other exceptions). In an industry that routinely says that Medicare covers 90% of their costs, this actually sounds rather generous.
  2. What is the State Health Plan? It’s not a payer, that is, an insurer. It’s a buyer. Buyers play under a different set of rules and incentives than an insurer.
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How a Value Focus Could Change Health Care

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By BRIAN KLEPPER, PhD

How will the drive to health care value affect health care’s structure? We tend to assume that the health care structure we’re become accustomed to is the one we’ll always have, but that’s probably far from the truth. If we pull levers that incentivize the right care at the right time, it’s likely that many of the problems we think we’re stuck with, like overtreatment and a lack of accountability, will disappear.

A large part of getting the right results is making sure that health care vendors have the right incentives. All forms of reimbursement carry incentives, so it’s important to align them, to choose payment structures that work for patients and purchasers as well as providers. Fee-for-service sends exactly the wrong message, because it encourages unnecessary utilization, paying for each component service independent of whether its necessary and independent of the outcomes. Compare US treatment patterns to those in other industrialized nations and you’ll find ours are generally bloated with procedures that have become part of practice not because they’re clinically necessary but simply because they’re billable.

By contrast, value-based arrangements are really about purchasers demanding that health care vendors deliver better health outcomes and/or lower cost than what they’ve experienced under fee-for-service reimbursement, and the payment structure often asks the vendor to put his money where his mouth is, at least where performance claims are concerned. In a market that’s still overwhelmingly dominated by fee-for-service arrangements, one way for a vendor to get noticed is to financially guarantee performance. Integrated Musculoskeletal Care, a musculoskeletal management firm based in Florida, guarantees a 25% reduction in musculoskeletal spend on the patients they touch. This typically translates to a 4%-5% reduction in total health plan spend, just by contracting with this vendor, a compelling offer in an environment that makes it hard for upstarts to get market traction.

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A Proposal to Improve Healthcare and Make It More Affordable

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By STEVE ZECOLA

Americans spend about $3 trillion per year on healthcare, or about $10,000 per person per year. Despite these expenditures, Americans are worse off than their international counterparts with respect to infant mortality, life expectancy and the prevalence of chronic conditions.

In policy debates, Republicans mostly prefer to let the marketplace devise the appropriate outcomes, but this approach ignores the market failures that plague the industry.

On the other hand, Democrats propose a variety of solutions such as “Medicare for All” which nationalizes all healthcare insurance or, as a variant, “Medicare as an Option for All” which further extends the federal government into the provision of healthcare insurance. Such approaches could actually result in a less efficient outcome, or worse yet, create a market beset by political ping pong when Administrations change.

This paper proposes a new standards-based approach for fixing the inefficiencies plaguing the healthcare industry in the United States. As described herein, a non-profit standards body would be established by Congress to bring a coordinated approach to healthcare for each of the top ten chronic diseases.

Such an approach would establish consistent priorities and practices across all of the components of the healthcare industry affecting these chronic diseases, including standards of care, areas of research emphasis and insurance guidelines.

Under such an industry structure, patient care would improve and the overall costs for the provision of healthcare would drop significantly.

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Doctors Will Vote With Their Patients

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By MIKE MAGEE, MD

As Robert Muller’s testimony before Congress made clear, we owe President Trump a debt of gratitude on two counts. First, his unlawful and predatory actions have clearly exposed the fault lines in our still young Democracy. As the Founders well realized, the road would be rocky on our way to “a more perfect union”, and checks and balances would, sooner or later, be counter-checked and thrown out of balance.

On the second count, Trump has most effectively revealed weaknesses that are neither structural nor easily repaired with the wave of the wand. Those weaknesses are cultural and deeply embedded in a portion of our citizenry. The weakness he has so easily exposed is within us. It is reflected in our stubborn embrace of prejudice, our tolerance of family separations at the border, our penchant for violence and romanticism of firearms, our suspicion of “good government”, and –unlike any other developed nation – our historic desire to withhold access to health services to our fellow Americans.

In the dust-up that followed the New York Times publication of Ross Douthat’s May 16, 2017 article, “The 25th Amendment Solution for Removing Trump”, Dahlia Lithwick wrote in SLATE, “Donald Trump isn’t the disease that plagues modern America, he’s the symptom. Let’s stop calling it a disability and call it what it is: What we are now.”

Recently a long-time health advocate from California told me she did not believe that the majority of doctors would support a universal health care system in some form due to their conservative bend. I disagreed.

It is true that, to become a physician involves significant investment of time and effort, and deferring a decade worth of earnings to pursue a training program that, at times, resembles war-zone conditions can create an ultra-focus on future earnings. But it is also true that these individuals, increasingly salaried and employed within organizations struggling to improve their collective performance, deliver (most of the time) three critical virtues in our society.

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