By JOE FLOWER
Leading lights of
the health insurance industry are crying that Medicare For All or any kind of
universal health reform would “crash the system” and “destroy
healthcare as we know it.”
They say that like
it’s a bad thing.
They say we should
trust them and their cost-cutting efforts to bring all Americans more
affordable health care.
We should not trust
them, because the system as it is currently structured economically is
incapable of reducing costs.
Why? Let’s do a
quick structural analysis. This is how health care actually works.
Health care, in the
neatly packaged phrase of Nick Soman, CEO of Decent.com, is a “system designed
to create reimbursable events.” For all that we talk of being
“patient-centered” and “accountable,” the fee-for-service, incident-oriented
system is simply not designed to march toward those lofty goals.
Jim was at his desk, looking weary.
The last few weeks had been brutal. Despite working twelve-hour days, he felt that he had little to show for it. His annual board meeting was to take place the next day, and he expected it to be tense.
With a replacement bill for the ACA about to be voted on, and with Trump in the White House, the situation seemed particularly precarious. The board members had asked him to present a contingency plan, in case things in DC didn’t go well.
As CEO of a major health insurance company, Jim was well aware that business as usual had become unsustainable in his line of work. No matter what insurers had tried to do in the last few years—imposing onerous rules, setting high deductibles, pushing for government subsidies—prices had been going up and up.
Premiums, of course, had had to do the same but, evidently, the limit had now been reached. The horror stories being told at town hall meetings across the country were all too real. People were fed up, and politicians were feeling the heat.
Something needed to be done to change course, but what? He did not have any good plan to propose to the board.
Hi, today on THCB I’m glad to introduce Jessica DaMassa a new face who’ll be doing many more interviews in the future, focusing on thought leaders in health and health technology.–Matthew Holt
Ian Morrison is probably the best known health care futurist in America, despite being a Scottish-Canadian-Californian. He gave the keynote at last Fall’s Health 2.0 Conference, and gave his thoughts about the role of technology in the future of care delivery.
The world is not going to end. We witnessed a revolution earlier this week. The people have spoken and they chose the anti-establishment, street smart, government shrinking candidate who bucks the status quo. We find ourselves in uncharted territory, with an unpredictable President-elect, who has unclear plans for healthcare. Here is what we do know. Mr. Trump is a successful entrepreneur. Forbes describes the entrepreneurship pathway as having no clear story line, but a “sense of chaos, hectic decision making, and moments of great fear and doubt.” Improving our broken healthcare system will involve decision making in the face of great uncertainty. Mr. Trump has a well-developed tolerance for this sort of ambiguity and is likely the right man for the job.
Mr. Trump won over the white working-class individuals in small rural areas. Sluggish economic recovery in these areas played a significant role in his unanticipated victory. It is these disenchanted individuals watching the American Dream slip through their fingers who voted for Mr. Trump. Those same people want the freedom to buy the insurance they need, and not what the bloated government shoves down their throats. 25% of the population lives in rural areas yet only 10% of the physicians practice in there. Physicians are leaving the system in droves, closing their patient panels, and not keeping up with demand, thereby threatening patient access in these isolated locales.
Hillary Clinton is now the presumptive Democratic nominee and the odds-on favorite to be our next president.
For healthcare, that could be a very good thing, not just compared to a Trump (or Cruz) presidency but for the following reasons:
(1) Hillary knows and cares deeply about healthcare.
Even if you don’t support or like her, she’s been a tireless advocate for reform and coverage expansion for decades. She worked, for example, in the 1980s with the Children’s Defense Fund and other groups to enhance coverage for children.
As first lady, of course, Bill put her in charge, in 1991, of developing a health reform plan. Though the process had its flaws, she was steeped in the subject for over a year and learned it inside and out.
Famously, the legislation failed in 1993-94 due to staunch Republican opposition (and, yes, a bungled legislative strategy by the White House). A widespread impression still exists that Hillary slunk back from the issue after the Clinton reform failed. Not true. Continue reading…
As President Obama’s healthcare reform unfolds in the last years of his administration, critics and supporters alike are looking for objective data. Meaningful Use is a funding program designed to create health IT systems that, when used in combination, are capable of reporting objective data about the healthcare system as a whole. But the program is floundering. The digital systems created by Meaningful Use are mostly incompatible, and it is unclear whether they will be able to provide the needed insights to evaluate Obamacare.
Recent data releases from HHS, however, have made it possible to objectively evaluate the overall performance of Meaningful Use itself. In turn we can better evaluate whether the Meaningful Use program is providing the needed structure to Obamacare. This article seeks to make the current state of the Meaningful Use program clear. Subsequent articles will consider what the newly released data implies about Meaningful Use specifically, and about Obamacare generally.
In the midst of sluggish economic growth, finding a sector of the economy growing from 15 percent of the economy up to 19 percent would normally be a cause of celebration, except that this is health care. The lack of good cheer about this growth is an indirect acknowledgement of a stark reality: We are not realizing much increased value as we spend more on health care because too much of our health dollars are going to ineffective (and often harmful) procedures.
Estimates of the waste from this overconsumption of health care range from 30 percent to 50 percent. While all of the experts talk about reducing this waste (the phrase of the day is “bending the cost curve”), the reality is that hospital administrators, pharmaceutical companies, device manufacturers, insurers, consultants, think tanks and government bureaucrats all are seeing their power, control and financial remuneration increase due to this medical-care consumption growth.
All of the reformers’ trendy ideas have failed and will likely continue to fail in spite of the experts telling us they will soon figure it out. Electronic health records are a hugely expensive disaster. So far, they decrease doctor efficiency, reduce quality and increasingly make patients fearful of sharing sensitive information with their doctors for fear hackers or others will access their private data. Accountable Care Organizations turn doctors into rationers, introducing a conflict of interest between doctor and patient. Price controls by Congress or bureaucrats or oligarchic insurers only reduce access to care, demoralize doctors and introduce the risk of game playing by health systems by “up-coding” (labeling a doctor visit as more complex than it is).
A personal account of a transaction that went very badly, and rules of Health Reform were not followed.
Accountable Care and associated transparency have not made it to Florida, at least not in this physician’s office.
I made an appt with an ENT (ear nose and throat doctor) for ear wax. When I get there, I need to fill out 5 papers (EMRanyone??), and I’m told there is a $35.00 copay, which she says I can pay on my way out.
The 5 page HIPAA form says they can share my info with other providers who are trying to collect fees. But you only learn this, among other clauses, if you read the form that is tacked on the wall–it’s not in the form the patient signs.
I asked the receptionist how much the office visit is, and she said, “On your insurance there’s a $35.00 copay.” Yes, but is there an additional fee for removal of ear wax? How much? “We can’t tell you that until after the doctor sees you and marks what is done. And besides, we don’t know if you have satisfied your deductible.” I tell her I have not, but because I have to guarantee payment if the insurance company denies anything, I’d like an estimate of charges. She repeats the deductible statement and I say yes, I understand, but that’s a problem, as I haven’t satisfied my deductible so I need to know how much this will be. She tells me she will get the Office Manager (OM).
The Office Mgr (who is disguised in a clinical suit) tells me, “You have to sign this financial form before the doctor sees you because after, you will have received the services so you or the insurance company owe the money.” No problem say I, but I need an estimate, and I can’t sign a financial responsibility form that allows you to bill me if my insurance company doesn’t pay you in 45 days AND that tacks on a 30% interest fee, when I don’t know if I can afford it.
Two visits into the doctor’s lair, she comes out and says, “Dr M is more than willing to provide the services you need but he cannot be interrupted to tell you the costs of the services.” BOOM.
There are dozens of ways to take stock of the Affordable Care Act as it turns 5 years old today. According to HHS statistics:
- 16.4 million more people with health insurance, lowering the uninsured rate by 35 percent.
- $9 billion saved because of the law’s requirement that insurance companies spend at least 80 cents of every dollar on actual care instead of overhead, marketing, and profits
- $15 billion less spent on prescription drugs by some 10 million Medicare beneficiaries because of expanded drug coverage under Medicare Part D
- Significantly more labor market flexibility as consumers gained access to good coverage outside the workplace
Impressive. But the real surprise after five years is that the ACA may actually be helping to substantially lower the trajectory of healthcare spending. That was far from a certain outcome. Dubbed the Patient Protection and Affordable Care Act for public relations purposes, there were, in fact, no iron clad, accountable provisions that would in the long run assure that health insurance or care overall would become “affordable.”
ACA supporters appear to have lucked out—so far. Or maybe, just maybe, it wasn’t luck at all but a well-placed faith that the balance of regulation and marketplace competition that the law wove together was the right way to go.
To be sure, other forces such as the recession were in play—accounting for as much as half of the reduction in spending growth since 2010. But as the ACA is once again under threat in the Supreme Court and as relentless Republican opposition continues, it’s worth paying close attention to new forecasts from the likes of the Congressional Budget Office (CBO) and the actuaries at the Centers for Medicare and Medicare Services (CMS).
The ACA is driving changes in 17 percent of the U.S. economy that, if reversed or interrupted, would have profound impact on federal, state, business, and family budgets. A quick look at some important numbers follows:
By now, every reader of THCB must be aware the Supreme Court is hearing arguments this week in a case that could undermine much of Obamacare. Simplifying somewhat, the plaintiffs in King versus Burwell argue that the phrase “exchange established by the state” in the Affordable Care Act’s section 1311 dealing with tax subsidies precludes making such subsidies available to those who enroll through the federal exchange(s). The government argues (a) that other sections of the law make it apparent that all exchange enrollees are potentially eligible for subsidies, and (b) that language in section 1321 providing that HHS shall “establish and operate such exchange within the state,” where a state is unable or unwilling to create their own exchange, essentially establishes a state exchange.
As many media articles have commented, the implications of a SCOTUS ruling for the plaintiffs are huge. Some five to eight million enrollees in the 34 federal exchange states would lose their subsidies, making insurance unaffordable for many of them, and premiums in these states would skyrocket—all while leaving the existing tax fines for being uninsured in place.