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The Great American Health Care Divide

In 1883, the authoritarian imperial government of Prince Otto von Bismarck – who famously declared, “It is not by speeches and majority votes that the great issues of our time will be decided…but by blood and iron” – established national health insurance for Germany.

The rationale for national health insurance is as clear now as it was to Bismarck 130 years ago. A country’s success – whether measured by the glory of its Kaiser, the expansion of its territory, the security of its borders, or the well-being of its population – rests on the health of its people.

Serious illness can strike anyone, and seriously ill people, as a rule, do not earn much money. The longer the seriously ill are untreated, the more costly their eventual treatment and maintenance become.

Private savings, as a rule, can pay the costs of treatment only for the thrifty and the well-off. So, unless we adopt the view that those without ample savings who fall seriously ill should quickly die (and so decrease the surplus population), a country with national health insurance will be a wealthier and more successful country. These arguments were entirely convincing to Bismarck. They are equally convincing today.

On January 1, 2014, the United States will partly implement a law – the Affordable Care Act (ACA) – that will not establish national health insurance, but that will, according to projections by the Congressional Budget Office, reduce by almost one-half the number of people in the US without health insurance. Back in 2009, President Barack Obama could have proposed a program as comprehensive as the one initiated by Bismarck. Such a program could have allowed, encouraged, and made it affordable for uninsured Americans to obtain health insurance similar to what members of Congress have; or it simply could have expanded the existing Medicare system for those over 65 to cover all Americans.

Instead, Obama put his weight behind the complicated ACA. The reason, as it was explained to me back in 2009, was that the core of the ACA was identical to the plan that former Massachusetts Governor Mitt Romney had proposed and signed into law in that state in 2006: “ObamaCare” would be “RomneyCare” with a new coat of paint. With Romney the Republican Party’s presumptive nominee for the 2012 presidential election, few Republicans would be able to vote against what was their candidate’s signature legislative initiative as governor.

Thus, the US Congress, it was supposed, would enact the ACA with healthy and bipartisan majorities, and Obama would demonstrate that he could transcend Washington’s partisan gridlock.

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My Family’s Obamacare

How will the Affordable Care Act affect my family and me? The answer, like the law itself, is complicated. There will be as many stories about health reform as there are families. But I’m confident that most of these stories will be good.

I say this both as a health-policy wonk, with my own health policy consulting firm, and as a husband and father. My wife and I live in Sacramento, California, and we have a five-year-old son. My wife also happens to have a pre-existing health condition. It’s nothing life-threatening but it’s just serious enough that she has been turned down for regular health insurance coverage. Up to a third of Americans face a similar issue, according to the Government Accountability Office.

Finding affordable, high-quality health coverage for my family has been, even for me, an “expert” in the area of health insurance, very complicated and frustrating. So I work with a health insurance broker to understand my options.

Currently, we have “COBRA” coverage for my wife, a type of health insurance you can get for 18 months after you’ve left employer-sponsored health coverage and that is available regardless of health history. It is expensive, though, costing us $655 per month. Then, since I don’t have an employer to provide coverage, I buy a separate policy in the so-called “individual market” to cover my son and myself. That costs $482 per month.

So before we get to any out-of-pocket medical expenses, we’re shelling out $13,644 per year in health insurance premiums. That’s actually quite a bit less than the average premium cost of $18,430 for people with employer-sponsored insurance (as calculated in the Milliman Medical Index of 2013), but the difference is that people with employer-sponsored insurance don’t have to take out their checkbook and pay the entire bill, since their company covers part of it and takes the rest out of their pay.

Our coverage is good for what we pay, but not extraordinarily so. It’s a pair of similar PPO (Preferred Provider Organization) products through Blue Shield of California that have a fairly broad network of doctors and hospitals.

Will my life get less complicated and frustrating on January 1, 2014, the day that health reform coverage starts? I believe it will.

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What Happens In New York Stays In New York

While sitting in the crowded waiting room of a medical specialist’s office I was forced to listen to the television set directly over my head. Cranked up so that everyone could listen above the din of conversation, Wolf Blitzer introduced a video clip of the President hailing the latest news from New York about health insurance exchanges.

Speaking as if he was still on the campaign trail, the President’s words came through loud and clear over the television: thanks to his health reform, premiums in the New York exchange would be half that of premiums in the individual market. This was a model the entire nation should embrace.

No one heard me mutter under my breath that this was a model for New York and a small handful of other states that previously regulated their individual insurance markets effectively out of existence.

What the President undoubtedly knows, but dared not say, is that New York’s individual insurance market is unlike any other state. In New York, insurers cannot charge higher premiums to high risk enrollees.

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As a result of this aggressive community rating, high risk individuals are disproportionately represented in New York’s individual policy risk pools. This drives up premiums, which drives away low risks, driving premiums even higher. Insurers in New York are counting on the purchase mandate, combined with purchase subsidies, to lure low risks into the pool.

This is why they have lowered premiums.

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What You Need to Know About Obamacare Scams

The FTC has found that healthcare fraud has been on the rise lately, and will likely continue to increase until October. Let’s talk about how to spot the scams and avoid any problems when you’re ready to make the switch over to Obamacare.

The Obamacare Card Scam

One of the most popular healthcare scams that’s  been circulating as October 1st approaches is known as the “Obamacare card.” It’s a technique used by fraudsters to steal consumers’ credit card information and social security numbers.

How does the Obamacare card scam work? Basically, victims get a phone call from someone claiming to represent the government. The caller informs them that they need this insurance card to be eligible for coverage under the Affordable Care Act, or they may say the Obamacare card provides extra discounts. They ask for private personal information so they can send you the card.

But there’s no such thing as an Obamacare card — you’re just giving your info to scammers and identity thieves.

The health insurance marketplace goes into effect in October, and the FTC expects the number of related scams to rise in the meantime.

The Information Update Scam
Another popular scam involves fraudsters posing as Medicare officials. These fake Medicare representatives call consumers and say they’re updating or verifying personal information. The consumers are told that they might face some sort of consequence if they don’t comply.

The Sacramento Bee has more:

“…impostors claiming to be from Medicare told consumers they needed to hand over their personal or financial information in order to continue eligibility because ‘change is on the horizon.’

But nothing in the Affordable Care Act threatens existing benefits or medicare Enrollees…”

In other words, you shouldn’t be getting any Medicare calls because of the Affordable Care Act. If you have concerns about your Medicare benefits, don’t respond to a cold-caller. Instead, contact your Medicare representatives directly.
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As the Debate Over Obamacare Implementation Rages, a Success on the IT Front

Just a little over four years ago, President Obama, in his inaugural address, challenged us as a nation to “wield technology’s wonders to raise health care’s quality and lower its costs.”  This was an awe-inspiring, “we will go to the moon” moment for the healthcare delivery system.  But the next thought that ran through the minds of so many of us who work on health IT issues was this: how were we going to get there?

We were essentially starting from scratch.  Less than 1 in 10 hospitals had an electronic health record, and for ambulatory care physicians, the numbers weren’t much better – about 1 in 6 had an EHR.  Hospitals and physicians reported an array of challenges that were holding them back.  No nation our size with a healthcare system as complex as ours had even come close to universal EHR use.  Yet, the President was calling for this by just 2014.

And it was clear why.  The promise of EHRs was enormous and we knew that paper-based records were a disaster.  They lead to lots of errors and a lot of waste.  I have cared for patients using paper-based records and using electronic records – and I’m a much better clinician when I’m using an EHR.  In the weeks that followed Obama’s inaugural address, the U.S. Congress passed, and the President signed the Health Information Technology for Economic and Clinical Health Act, which contained a series of incentives and tools to drive adoption and “meaningful use” of EHRs. None of us knew whether the policy tools just handed to the Obama administration were going to be enough to climb the mountain to universal EHR use.  We were starting at sea level and had a long climb ahead.
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The GOP’s Endless War on Obamacare-and the White House Delay

The official reason given by the Administration for delaying, by one year, the Affordable Care Act’s mandate that employers with more than 50 full-time workers provide insurance coverage or face fines, is that employers need more time to implement it. The unofficial reason has more to do with the Republicans’ incessant efforts to bulldoze the law.

Soon after the GOP lost its fight against Obamacare in Congress, it began warring against the new legislation in the courts, rounding up and backstopping litigants all the way up to the Supreme Court. Meanwhile, House Republicans have refused to appropriate enough funds to implement the Act, and have held a continuing series of votes to repeal it. Republican-led states have also done what they can to undermine Obamacare, refusing to set up their own health exchanges, and turning down federal money to expand Medicaid.

The GOP’s gleeful reaction to the announced delay confirms Republicans will make repeal a campaign issue in the 2014 midterm elections, which probably contributed to the White House decision to postpone the employer mandate until after the midterms. “The fact remains that Obamacare needs to be repealed,” said Senate Republican leader Mitch McConnell, on hearing news of the delay.

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Health Insurance Exchange Subsidies–Another Warning Sign???

Come October millions of people will be applying for tens of billions of dollars in federal health insurance premium subsidies on the honor system.

On the Friday after the Fourth of July––when the administration apparently hoped no one would be paying attention––the Obama administration dropped 606 pages of regulations. Buried inside was the news that that insurance exchanges can ignore any personal income information they get from the Federal Data Hub during 2014 if it conflicts with “attestations” made by individuals.

That came three days after the administration announced it was putting the employer mandate on hold––and therefore not requiring detailed information from employers regarding the health plans they offer to their workers. The administration said the delay was because of the burden the reporting put on employers. But, was the administration ready to handle the data?

Because there will be no employer reporting in 2014, the administration also said in the Friday regs that the new health insurance exchanges “may accept the applicants attestation regarding enrollment in eligible employer-sponsored plan…without verification.” Given the incredibly complex “ObamaCare” 60%/9.5% employer benefit eligibility rule, that will be a challenge for most citizens.

But here’s the biggest deal in the new “ObamaCare” regulation: The exchanges are to rely upon the applicant’s statement regarding their income the vast majority of the time. Instead of requiring proof of their income, as had been expected when the Federal Data Hub couldn’t verify someone’s representation, the exchanges will only do a formal check on a “statistically valid sample” of applications.”

For those not part of this “statistically valid sample,” “the Exchange may accept the attestation of projected annual household income without any further verification.”

Apparently, millions of people will receive tens of billions of federal premium subsidy dollars “without any further verification.”

It would appear that the administration is going to rely upon subsequent 2014 tax filings, made in early 2015, to reconcile what it paid people compared to what they were actually eligible for.

That presents some big issues.

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Getting Obamacare’s Messaging Right

Recently, there was a bit of a dust-up over whether it was appropriate for the Secretary of Health and Human Services (HHS) to engage the National Football League (NFL) to help HHS with the process of drumming-up enrollment for health insurance exchanges. In the end, the NFL and other sports leagues decided they were not going to be involved fearing the appearance of taking political sides.

In our view HHS is better off with this outcome. To our way of thinking the exercise would not have delivered the desired results and would have left individuals confused and created a political distraction. At the heart of most public health communication plans are three main functions: create a message, deliver the message and get people to act on the message (many variations: exampleexample, and example). The HHS/NFL combo would likely have failed the test:  What exactly does someone who catches a football for a living say that would make the uninsured purchase insurance on an exchange? While it’s easy to single out HHS and the administration, the opposition party also thinks messaging alone will solve all of its ills but that is far from correct assumption in our view. 

In terms of creating a message, our first instinct would be to recommend a governmental agency like the FCC but for healthcare. We would call it something like the clinical communications clarification committee (CCCC).  However, given recent concerns about “Orwellian” government information gathering, perhaps a more open-source, crowd-sourced approach to communicating may be more readily accepted. What we have in mind is a something like Pubmed meets Wikipedia where the information is readily available, credible, and based on updated facts. Inevitably something like this would need to be proctored to keep unreliable information out. Many crowd-sourced communities do a good job of self-policing but it couldn’t hurt to have an adult watching just in case.

Assuming we can create information (the message) in a way that is understandable and credible, how to transmit this information (the medium) becomes the next challenge. While we are pretty sure the “wired generation” who wear body monitoring devices are getting the “right” information via mobile devices, the web etc., we think that more important populations that are not technologically savvy may be missing out. Dual-eligibles for example, who are major drivers of cost and poor outcomes in the system, are not in our view, easily able to access useful information via high-tech gadgetry.

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Hospitals Lost Jobs Last Month. Should We Be Surprised?

An old data series got new life, when the Brookings Institution issued a report that compared health care jobs growth versus all other industries.

It’s “a truly astonishing graph,” according to Derek Thompson at The Atlantic. “I knew health care had been the most important driver of national employment over the last few years, but I had never seen the case made so starkly.”

Thompson wasn’t alone in his surprise. (Hopefully, readers of The Health Care Blog would be less astonished.) But lost within the reaction—and even mostly overlooked within the industry—is that not all health care jobs are growing, or at least not growing at the same pace.

Take a look at the following chart. It resembles the Brookings data, with one major change: The hospital employment curve has been separated from all other health care jobs growth.

 

Notice how hospital employment essentially flatlined across 2009—a hard year for the sector, which was still insulated compared to the rest of the economy. But many organizations pared back on staff and sought to cut non-essential services to survive the Great Recession.

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What’s Changed Since the Obamacare Verdict

Ever since its controversial passage in 2010, the Affordable Care Act has been plastered with a range of polemic labels. Critics say Obamacare is job-killing; supporters herald it as life-saving.

Here’s another, perhaps unexpected label: personally profitable.

If you were among the true believers in the law a year ago today, there was easy money to be made. Nearly 80% of bettors on InTrade expected the law to be found unconstitutional; strategically spending about $25 in favor of the ACA could’ve netted you $800, based on how InTrade’s short-selling rules worked.

Much has changed, certainly, since Chief Justice John Roberts cast the deciding vote to uphold the law. (Beyond those bettors’ account balances, and the existence of InTrade itself, which mysteriously shut down in March.)

Here’s a look at how the Supreme Court’s decision on June 28, 2012, affected five hot-button issues related to the health law.

States’ decisions on Medicaid expansion

As of June 27, 2012: Several states with progressive governors and legislatures, like California, had moved to expand Medicaid ahead of the Supreme Court’s ruling. The Golden State’s leaders also had pledged to pursue universal coverage if the ACA was ruled unconstitutional.

But most states were waiting on the resolution of the constitutionality battle.

Since June 28, 2012: After the Court’s decision that the mandate was constitutional but that the Medicaid expansion was optional for states — which “took everyone by surprise,” said Matt Salo, executive director of the National Association of Medical Directors — governors were suddenly forced to decide whether the expansion made financial, and political, sense. Within a week, about ten states had signaled they’d expand Medicaid under the ACA.

However, many wary governors chose to wait for the November elections, and the knowledge of who would hold the White House, before announcing their plans; following President Obama’s reelection, a flurry of governors clarified their Medicaid stances throughout the winter and spring.

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