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A Special Edition of Health Wonk Review

American Health Care Reform:
Observations From Health Care Analysts
Edited by Brian Klepper

Here we are, with the first edition of Health Wonk Review (HWR) in a new decade. It is a pregnant moment, as reconciliation begins between the House and Senate health care reform bills, when the best health wonks are weighing in on how we arrived here and what it will probably mean to have a few key successes and some very significant failures at a time when most everyone in the country who doesn’t have power yearns for real solutions. Joe Paduda summed it up very nicely on Managed Care Matters, “…after all this, we’re going to end up with a bill that won’t work – it will not appreciably reduce health care costs today, tomorrow, ever.” Alas, the result is much more a reflection of what America has become than what health care is about.

And so, I have exercised my editor’s prerogative, and veered away from HWR’s standard format to focus this edition on the best, recent health writing I’m aware of, rather than just summarize the writings of submitters. Please indulge me as I have passed over some strong pieces in favor of a smaller, more selective number of consistently very thoughtful, insightful and meaty writers.

I’m hoping this selection will satisfy readers interested in deeply provocative discussions of the most pressing issues at hand, particularly around reform. There’s a lot to chew on here, and I’d urge each of you to curl up on a cold afternoon and read through every one of these columns.

A Face Full of All That Other Mud

Let’s begin with J. D. Kleinke’s thoughtful meditation on yesterday’s Health Care Blog, Is It 2013 (or 2014) Yet?, on the horrific compromises made in the name, not of problem solving, but of ideology. Referring to the watered down Senate bill, he notes that it

“has been so stripped of government management options and control that it is best characterized as the exact opposite of a government takeover. Rather, the bill now on trajectory to become The Plan is – paradoxically – a privatization of the public health problem of the uninsured, a corporatization rather than nationalization of health care’s rotting safety net.”

And this: “…people…have been using the health care reform stage to act out their bigger grievances, philosophical angst, and political frustrations…Something as literally critical to all of our lives as our health care system – regardless of which way an eventual bill goes (including the remote but real possibility of it just going away) – deserves better than a face full of all that other mud.”

Reform Based On The Principles of Competition

On The Health Affairs Blog (12/22/09), Alain Enthoven rebuts Atul Gawande’s New Yorker article that compares the health care bills’ pilot programs to those of the Agricultural Extension service that “sparked the agricultural revolution that so benefited the US economy in the first half of the 20th century. “

Both Enthoven and Gawande are icons, and justifiably so for their insights into how health care does and should work. Gawande’s June, 2009 piece, The Cost Conundrum, on health care profiteering in McAllen, Tx, was a sensation in DC, and became required reading for White House staffers looking forward to reforms that could impact the kinds of circumstances Gawande recounted so eloquently.

But in this piece, many of us thought his thesis was a stretch, and Dr. Enthoven lays out the case. One of his conclusions: that we need a commitment to structural reforms, rather than just more experimentation.

“If America wants 1,000 pilot projects to blossom and grow into significant improvements in health care delivery, it must reform its system based on the principles of competition and wide, responsible, informed, individual consumer choice of health plans. Experience shows that people will join if they get to keep the savings.”

The Nearly Trillion-Dollar Lake Mead of Money

In There Be Dragons, The Fiscal Risk of Premium Subsidies in Health Reform (12/14/09), Jeff Goldsmith, with unfailing attention to detail, takes us through a variety of health care principles to explain why 1) the Congressional Budget Office’s (CBO) attempts to model the impacts of subsidies on the private health coverage market are, at best, shots in the dark, and 2) its probably not wise to bet on our political system’s ability to say “no.”

He concludes, “All in all, the fiscal risks from an open-ended new entitlement to premium subsidies are likely to be significantly larger than CBO estimates. Instead of neat economic models with ten variables, we need something closer to chaos theory to explain how the nearly trillion-dollar Lake Mead of money will behave when we completely re-engineer its flow pattern…Behavioral economists would add that anxious health insurance and provider executives would behave differently, perhaps, than entirely rational actors, and act aggressively to preserve their franchises and operating margins. I wouldn’t bet the farm on moderation of present cost and rate trends. All the big risks are on the upside.”

The Medical Cost Tidal Wave

In a simple but straightforward column (12/22/09) on the health plan’s blog, Bruce Bullen, the Interim CEO at Harvard Pilgrim, explains how the structural provisions of the Senate’s final health reform bill will worsen current health care cost trends, which have been more than 4 times general inflation over the last decade.

“… expansion of eligibility and other reforms are largely delayed to 2014, but changes having the effect of increasing health insurance premiums will take effect prior to 2014. Before seeing any material benefits of reform, some will see their Medicare payroll tax rate increase, many fully insured subscribers will, beginning in 2011, see the effects of the health insurance premium tax, and everyone in the commercial market will see the cost-shifting effects of Medicare payment reductions and the tax on drug and medical device manufacturers. Medicare Advantage plan enrollees will also see sharp increases in premiums. Since there is no significant cost containment in the bill, these increases will occur on top of normal medical trend. And because the universal requirement to purchase coverage is weak, adverse selection will further increase costs starting in 2014.”

He concludes, “We can focus on insurance reform all we want, but the medical cost tidal wave continues.”

The Unintended Consequences of Hopelessly Complex and Poorly Thought-Out Laws and Regulations

At the Disease Management Care Blog (12/27/09), Jaan Siderov explicates the seemingly straightforward provision of the Senate bill that would require commercial insurers to “rebate” any excess profitability, if they have a medical loss ratio lower than 80%-85%. The rub lies in the definitions of medical costs and administrative costs, and what is contained in each. Under the Senate’s Management Amendment, the National Association of Insurance Commissioners (NAIC) would be charged with defining each term. But so far,

“the NAIC has not done well [clarifying] if the costs of wellness, prevention, care management, or patient-centered medical home support programs are costs that are assigned to the medical costs that make up the medical loss ratio or if they are administrative costs.”

It remains to be seen whether a compromise plan will correct this kind of confusion.

The Evidence In a typically pithy and to-the-point read (12/31/09), Roy Poses crystallizes what many of us have thought about the national squashing of the US Preventive Services Task Force guidelines for breast cancer screening. Here’s a quote:

“…after 30 years and 8 trials, we still have no convincing evidence that mammographic screening for 40-49 year old women saves lives (which is different from reducing deaths due to breast cancer), or reduces morbidity, improves function, or improves quality of life in the screened population.  In the absence of such evidence, how can anyone fault the USPSTF for recommending (not that women not be screened), but that decisions to screen individual people should be based on considered discussion between them and their physicians?”

Dr. Poses calls for better clinical and comparative effectiveness research, another area given short shrift in the current reform proposals.

Who’s Kidding Who

In a policy environment in which half-truths and whoppers are the coin of the realm, nobody pours on the cold water of reality better than Bob Laszewski at Health Policy and Marketplace Review A former Liberty Mutual health insurance executive, Bob’s deep health finance experience has been refined by his long standing in the DC community as a health policy advisor. Throughout the reform process, Bob has written often, and his insights are always to the point. Take, for example, this simple observation from a 12/19/09 post, Coal in Your Christmas Stocking?

“…the Democrats [will] face four health insurance renewal cycles and two elections between 2010 and 2014 when the benefits of the health care bill would finally become effective. That’s four years of new taxes and continuing big health insurance rate increases before voters see any big benefits from what looks like will be a very unpopular bill.”

As I understand it, Bob’s blog is the most widely-read source for DC health wonk types. There’s a good reason for that.

Later

In Health Reform – When Will The Next Shoe Drop (12/22/09) at Managed Care Matters, Joe Paduda lays out an enticing scenario for straightforward, important changes that can’t happen when 60 votes are required, but are eminently doable if the goal is 51. He writes:

“I’d look for a requirement that the Feds negotiate drug prices for Medicare and lower payments for Medicare Advantage plans to start…And it won’t stop there. There is a large and growing concern about the cost of entitlement programs and Part D is particularly problematic. By attacking drug costs and thereby reducing Medicare’s future liability, liberal Democrats will make it very tough for their opponents to use the ‘big spender’ attack angle in November.”

Two On What To Expect

Jane Sarasohn-Kahn, one of our most gifted, industrious and grounded health care prognosticators, has a broad-reaching summary of the certain trends – employee cost-sharing, employer ‘nudging’ of employees toward wellness, health information technology becoming more mainstream among physicians, participatory medicine/online health tools – that will remain in play in “What to Expect When You’re Expecting…Health Reform on Health Populi. She says,

“With the US still in recession, the issue of managing costs will be Job #1 in health care for institutional and business stakeholders, from health plans and employers to pharma and medical device companies.”

Matthew Holt, a Founder of Health Wonk Review as well as The Health Care Blog, and one of the most incisive, if irreverent, health care commentators writing today, suggests five major trends. He wonders how the changes brought about in policy will take shape in the market, and how changes in the political winds will affect the ability to continue reforms. He thinks that HHS’ Office of the National Coordinator for Health IT’s transformation initiatives will have a profound impact on everyone in health care – “’It’s clear that we are not going to simply see mass adoption of the mainstream EMR vendors’ products.” – and that patients are beginning to expect more access to information, especially their own. And that quality of care, especially at the end of life, is finally becoming a concrete, mainstream issue.

The Verdict

Each of these voices describes different facets of a complex process. These are some of the most experienced and prominent health care authorities working today, and they don’t hesitate to conceal their disappointment at what is passing for reform.

It is not enough to dismiss this Congressional health care reform process as just another example of sausage-making. As David Kibbe, Alain Enthoven, Bob Laszewski and I discussed here, America’s health care industry has placed the national economic security in deep peril. An important goal, a commitment to structural changes that can significantly reduce the one-third or more of health care cost that is waste, now appears to have been squandered by a system that welcomes influence over policy in exchange for special interest financial contributions.

It is unlikely that meaningful health care change will be forthcoming after this process. The forces of special interest influences are vigilant.

Nor will the problems that were on the table now disappear just because they’ve been ignored. They’ll fester and worsen until business rises up in revolt to force the issue, or necessity overwhelms the capacity of lobbying to drive public policy. Unfortunately, the process of getting to that inevitable terrible moment won’t be pretty or pleasant.

Brian Klepper is a health care analyst and commentator based in Atlantic Beach, FL.

Plan B, Mr. President?

Robert LaszewskiAs the State of the Union approaches Democrats are considering their health care policy options. There are lots of reports about “Plan B”—pushing through the Senate bill with a parallel corrections bill that could be passed in the Senate using reconciliation rules.

That’s as dead as the original House and Senate health care bills. Moderate Democrats have no stomach for such a legislative stunt in the face of Massachusetts and bad health care polls. Many liberals even question that strategy.

Everyone is awaiting this week’s State of the Union speech. Will the President:

  1. Embrace the call by many on the left to Democrat-up and just ram it through?
  2. Call for a scaled back bill built around modest and popular first steps that could attract bipartisan support?
  3. Just jabber in a way no one can figure out which course he really supports?

My bet is on number three.

Continue reading…

The Filibuster, Supermajority and the Constitution

Ezra Klein has published an engaging series of interviews regarding the filibuster, and the prospects and shape of reform for the Senate’s much maligned rule of procedure. The prospects for reform don’t look particularly bright. And as we come to reckon with one of the final products of the filibuster floor, the Senate’s health reform bill, we may want to take a moment to consider the filibuster itself– this need for 60 votes.

Klein writes:

According to UCLA political scientist Barbara Sinclair, about 8 percent of major bills faced a filibuster in the 1960s. This decade, that jumped to 70 percent. The problem with the minority party continually making the majority party fail, of course, is that it means neither party can ever successfully govern the country.

It should also be noted that unlike today, a filibuster in the early 60’s required the arduous (and, it would seem, daunting physical task of continued speech and an inability to consider other legislation during the pendency of the filibuster. A set of circumstances which at times brought sleeping cots onto the Senate floor and may have served to limit the filibuster’s use.

Continue reading…

The Coming Clash over “Cadillac” Plans

GooznerNow that the Senate has passed its version of health care reform along partisan lines, let’s look ahead to  the single biggest issue that will draw the most heat in conference: The tax on so-called “Cadillac plans,” the largest revenue raiser in the Senate legislation.

As regular readers of this blog know, I consider it ill-considered and unfair, a tax on people stuck in expensive plans because they belong to groups with older and sicker beneficiaries who use more health services; small groups generally; or who live in areas with expensive delivery systems. The idea that taxing those plans will somehow encourage people to reduce their utilization is wishful thinking that ignores who actually makes health care decisions — doctors, hospitals,  drug companies, and other providers.

It also ignores why most people use health care — it’s because they are sick. The latest research shows less than 4% of the higher cost of some plans is due to extra benefits. Most of the rest is due to the higher claims of people in those more expensive plans, or the fact that the plans cover people in areas with expensive medicine.

Continue reading…

Voters Want Abortion-Neutral Health Care Reform

Mark-Mellman-resized A few months ago, I warned that some folks were attempting to misuse healthcare reform to restrict access to abortion. They have come a long way since then, endangering the vital struggle for healthcare — indeed, torpedoing reform is a key goal for many involved in this effort.

Americans oppose using abortion as a means of derailing health care reform and oppose using health care reform as a means of restricting abortion. The more voters find out about what is happening on Capitol Hill with respect to this issue, the angrier they are getting, because language inserted in the House bill will take away coverage for abortion that tens of millions of women already have.

Taking away existing coverage not only violates the public will, but also does fundamental violence to Democrats’ explicit promise that if you like what you have, you will be able to keep it.

Continue reading…

Senate passes bill, more to come

It’s Christmas Eve and the Senate just passed a major health reform bill. Personally I think the reforms in it are relatively minor, but the passage of the bill itself is a screaming big deal. When I say minor, what I mean is that we’re leaving in place the inefficient employment-based health benefits system, and we’re expanding insurance mostly by putting more people into the separate but equal Medicaid program.

But this bill is a statement, and an important one.

For the first time we’re acknowledging that everyone ought to have health insurance and that those unable to afford it should be subsidized by the government. We’re also saying that insurance companies should take all comers at a consistent price without respect to health condition (and hopefully we’re implying that their job is to manage care not risk-select). Finally we’re saying that the majority of the cost can be paid for by redirecting inefficient spending within the health care system, and by taxing benefits that are only tax-free because of historical accident.

Continue reading…

Why Health Care Reform Is So Difficult in the United States

Humphrey_Taylor_HIWhy is it so hard to change the American health care system? And so much easier to change other countries’ systems?

I pondered this question recently while attending the Commonwealth Fund’s International Symposium on Health in Washington where our latest survey comparing primary care in eleven countries was discussed. I heard presentations describing changes that have been, or are being, implemented in England, France, Germany, Norway, Sweden, Switzerland, the Netherlands, Canada, Australia and New Zealand. In some cases, these are fundamental reforms in how medical care is delivered and how providers are reimbursed. Many of these countries can demonstrate real improvements in the quality of care and efficiency in their systems.

Continue reading…

Enthoven beats up Gawande

I finally got around to reading Atul Gawande’s New Yorker piece on why the current reform bill mirrors early 20th century agriculture. I learned lots about the role of the Department of Agriculture in teaching farmers what to do. In post-war Britain the radio soap opera The Archers did much the same thing.

I was actually encouraged to remember that in almost every industrialization process, intelligence, leadership, and usually money, from the government was a key factor.

But I felt very uncomfortable with the analogy. First, the incentive for the farmers was to be more productive—even if in the long run productivity meant a relative fall in the price of food and eventually the rise of agri-business decades later. If they did things right there was an immediate market reward. Whereas we know that (from the Virginia Mason and Intermountain examples) increasing quality and productivity in health care leads to negative financial consequences.

Secondly, Gawande seems to be fine with saying that “we don’t know how to be more efficient, productive and effective, so let’s do pilots for years and figure it out.” This is just crap. We’ve both done pilots for decades, and have examples of organizational forms (you know who I mean!) that get it right. It’s just made no sense for most of the health care system to adopt those techniques and organizational forms because they make more money by doing what they’re doing—and government and employers keep paying them.

I was going to write a long piece detailing my complaints blow by blow, but luckily Alain Enthoven has done it for me!

This doesn’t mean I’m against the current bill as I suspect Enthoven is. There is some hope that ACOs and other modern terminology for the types of organization he’s espoused over the years, will arise more quickly from the “pilots” in the bill than Enthoven suspects. But more importantly, I support the bill because the saving money part is the second of my “two rules to judge a bill.” The first and most important rule is

Rule 1 A health care reform bill needs to guarantee that no one should find themselves unable to get care simply because they cannot afford it. Neither should anyone find themselves financially compromised (or worse) because they have received care.

And the current bill just about does that….although Maggie Mahar is pretty doubtful, especially for near-seniors in the first few years.

Senate Deal on Health Care Bill Done

As it's a work day for the Senate worth reporting here that Ben Nelson’s vote has been bought for more Medicaid spending for Nebraska and a complex formula for States to opt out of exchanges being able to fund abortions. So presuming there’s no problems in reconciliation we can expect the reform bill to be done relatively soon. Full details on what’s in the new bill on Think Progress’ The Wonk Room.

The netroots left has been complaining loudly over the last couple of days since Lieberman was bought off by dropping the public option and the Medicare buy-in. Howard Dean and Markos of Daily Kos both called for massive changes to the bill, or killing it and the debate between the “sensible left” and the “this is a sellout to insurers” has got a little silly. However, (unless Bernie Sanders pulls  fast one) none of the more left wing Senators (Sherrod Brown et al) are going to vote against the bill, so what we see now is what we get.

The real issue will be when the voting public finds out that nothing happens for 3 years.

MedEncentive’s Five Year Report

As many involved in the worlds of Health 2.0 and Information Therapy know, some of the most interesting experiments in the world of patient-physician engagement have been happening in the somewhat unlikely environs of small town Oklahoma. There the City of Duncan has put its employees (and their providers) into a system that incents (but doesn’t mandate) physicians to practice according to accepted guidelines, and incents (but doesn’t mandate) patients to read information prescribed by their physicians about their treatments (and tests them about it). The system then asks each party to rate the other.

It sounds simple and frankly, compared to much in health care, it is. The system is supplied by MedEncentive, an Oklahoma City firm led by the charming and engaging Jeff Greene. While I remain fascinated by MedEncentive’s program (and FD MedEncentive has sponsored the Health 2.0 Conference in the past), it’s perhaps grown a little more slowly than Jeff and other fans might have liked—given the scope of the problem.

But the results have been impressive in reducing costs (mostly by reducing hospitalizations) and increasing patient involvement. Yesterday MedEncentive released a five year retrospective. The key finding?:

City of Duncan costs for the most recent year was 8.6% less than five years ago prior to implementing the Program, which is 34.9% less than the projected costs. The resultant four year savings equates to an 8:1 return on investment. (emphasis added)

Jeff abandoned a lucrative business in physician practice management to have a go at this intractable problem. Five years on he deserves plaudits for what he and his team have achieved, and hopefully we’ll see much more innovation like this mushrooming in the future.

Given the relatively lightweight nature of the intervention, I’m amazed that many much larger payers/employers haven’t given it a try. After all, whatever else they’re doing doesn’t seem to be exactly working too well!

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