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Tag: Policy/Politics

POLITICS/POLICY: Social mobilty, and its impact on health care politics

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This is taken direct from Ezra Klein’s piece on “Brave New Economy, With Such Immobility In It” and it goes to the heart of why insecurity over health benefits will be the political issue of the next ten years.

The Center for American Progress just released a comprehensive study of economic mobility and income volatility. And, according to its data, Andy’s right about the American lack of fatalism, the belief in opportunity and mobility. When asked if people get rewarded for their effort, 61 percent of Americans agreed, versus 49 percent of Canadians, 33 percent of the British, and 23 percent of the French (weirdly, the Philippines win this one, with 63 percent agreeing). But of all these societies (save the Philippines), America is one of the least mobile, which is to say the least dependent on hard work rather than social station. In Denmark, the relationship between your parent’s income and yours is 15% percent or so. In Canada, it’s 19% percent. In France, it’s 41 percent. And in America, it’s 47 percent. The only country more hidebound and hierarchal is Andy’s native England (50 percent), also the country most closely approximating the American economic model.As it is, if you’re born in the lowest income quintile, you have a 1 percent chance of reaching the top 5 percent. If you’re born rich, you’ve a 22 percent shot at remaining there. For the middle class, hard work and productivity have begun to count far less. In 2003 and 2004, years when the GDP saw strong growth, the median household was no more upwardly mobile than in 1990-91, during a deep recession. Think about that for a second: inequality has reached such a height that the average household is actually worse off during today’s expansion than yesterday’s recession.There’s been a serious increase in downward mobility, too, with only 13 percent of families seeing $20,000 (in real terms) loss during the 1990-91 recession, while nearly 17 percent experienced such a drop during the 2003-04 expansion. Households in the top 10 percent have, by contrast, seen a reduction in downward mobility during the same period. And while it used to be the case that you could combat stagnation through hard work, even that’s dying out. Households where the adults worked more than 40 hours a week were able, during 1990-91 and 1997-98 able to translate their labor into upward mobility. Now, the correlation has disappeared.

Now overlay over that the findings from Commonwealth (which I wrote about over at Spot-on yesterday) that health insurance from employers is declining fastest amongst those in the third and fourth lowest income quintiles, and that those earning between $20K and $40K—who are probably pretty much the same people—have seen their likelihood of being uninsured at some point in the last year go from 28% to 41%. Add to that picture the fact that the top 10% of Americans have seen their share of national income increase in the past twenty years, while everyone else has suffered a relative (and in many cases a real) decline in income.

So adding it all up, despite a rise in the number of high income households, if you don’t start off that way you’re much less likely to trade up in class or income. You’re going to be making relatively less money than your parents were. And the rising cost of health care is going to manifest itself in your greater likelihood to lose insurance coverage.

This has to keep playing itself out for a while longer before it has any real political effects. But unless these underlying trends reverse, by definition, the politics of redistribution will come up. And because of its crucial and emotional nature, they’ll come up first in health care. Of course we have to get that pesky Iraq situation taken care of first.

 

POLICY/PHARMA/TECH/PHYSICIANS: The Industry Veteran thinks Uwe and McLellan are missing the point

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It’s been a while since we heard from The Industry Veteran, but the dialogue between Mark McClellan and Uwe Reinhardt I reported on at WHCC last week did raise his hackles. I love Uwe’s analysis and think McLellan is very sensible (though suffering from obvious political restraints). But the Veteran didn’t exactly see it that way. Here’s his sense of what ‘s wrong with health care and how to fix it.

The dialogue you reported between Mark McClellan and Uwe Reinhardt was hugely disappointing as both appeared more intent on glad-handing each other than identifying culprits in the health care system. I offer the following as a useful rule of thumb for THCB readers: whenever someone says more IT represents a principal solution to a better health care system, the red light should flash on one’s shit detector.As uncle Marcus Aurelius advised, let’s return to first principles. Assuming THCB wishes to address the big issues and not turn into a blog for techie nerds, the problems of health care cost, quality and access in the U.S. result from some basic factors. The first of these is that there are too many middle men extracting too much profit (or, in Marshallian terms, too much economic rent) from the system. Among these, third-party payers are both pernicious and dispensable. Most analysts euphemistically classify payers and the efforts of other sectors to deal with them as “administrative costs.” It seems I’ve been seeing these administrative costs pegged at 25-30% of the health care bill for the past twenty years. Since Bush’s millenarian-oil junta has been running the country, I would guess that figure to be substantially higher because payments to providers have been tapering while premiums keep escalating. Given that the administrative costs for Medicare are approximately 2%, it appears self-evident that the current system, based on employers and insurance companies, should appeal only to Reagan-Bush types who consider the proper role of government to be one of handmaiden to business.Within the provider segment, specialist physicians are another extortionist bunch. There is simply no defensible reason for every mother’s doctor-son to expect an annual income between a quarter-million dollars and $650,000. Do I hear in the background, diminuendo, the arachnid voices of techie wonks crying for tactical proposals in lieu of venting and ideology? Sink your incisors into these. (1) Use relative value reimbursement scales to promote a systematic de-skilling. (2) Increase the labor supply in the medical specialties with U.S. citizens who graduate from foreign medical schools. (3) Feminize the medical profession by elevating nurse practitioners and using staff-model and other arrangements that permit 9-to-5 shift work.Manufacturers, particularly in pharmaceuticals, are due their reproach as parasitic middle men. The European countries routinely use reference pricing to help keep them in line and health care’s Iron Triangle of cost-access-quality does not appear worse there than here. In fact the WHO rates U.S. health care as thirty-something in world while France receives the number one spot.Now you’re probably correct, Matthew, in pointing out that the public opinion polls on health care have to show a larger percentage of people expressing a vehement discontent with the system over a sustained period before substantive change can occur. To foster that attitude, I humbly advise interested parties to hammer away at the big issues instead of creating diversions and wasting time with minor tributaries such as IT. I believe there is sufficient greed to expose, enough contradictions to raise and tragedies to highlight, all of which can help prepare the public mood. The drama that can affect public attention, however, seldom resides in the IT department

POLICY/PHARMA: Part D–Lying with numbers

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The filthy commies at the Wall Street Journal are out doing themselves this week. Not only attacking Bill McGuire for being a(little bit too) successful capitalist, but now attacking our beloved government on the way it counts Medicare Part D enrollment. And boy is that 30 million number convoluted. Here’s the WSJ article basically in full liberated from behind their firewall. You may note that it’s basically what I, Kate and the rest of the gang over at TPMCafe’s Drug Bill Debacle blog, Joe Paduda and others have been saying for months—voluntary enrollment in this plan is low, and may be too low for it to avoid adverse selection. Read on to figure out how and why

Are Medicare Estimates Too High?Government Says 30 MillionAre Enrolled in the ProgramBy SARAH LUECKApril 21, 2006

At first glance, information released Thursday by Medicare seems to indicate that 30 million people are getting prescription-drug insurance from the federal health program for the elderly and disabled.

Not exactly.

Despite the headline on a government press release — “30 million Medicare beneficiaries now receiving prescription drug coverage” — a smaller number is actually enrolled in the new program, and some of that group had coverage before. As of April 18, 19.7 million beneficiaries are getting drug insurance from Medicare. Of that group, 5.8 million already had coverage from Medicaid, the state-federal program for the poor. An additional 6.8 million people are getting drug coverage from former employers; the coverage is partially subsidized by Medicare. That means a total of 26.5 million people now are benefiting from the Medicare drug program.

To get to 30 million, government officials also counted 3.5 million people who have drug coverage from the military’s TRICARE program or federal-employee benefits, but aren’t signed up for the Medicare benefit. Christina Pearson, a spokeswoman for the Department of Health and Human Services, says the Medicare beneficiaries, regardless of source of coverage, “were able to make the choice that works best for them” because of the new drug-benefit program.

To judge the progress of the enrollment effort, it’s important to account for Medicare beneficiaries who have drug coverage from other sources because they aren’t likely to sign up for the new program. In addition to the 3.5 million Tricare and federal government retirees, an estimated 5.8 million Medicare-eligible people get drug access through the Veterans Administration, their current employers or companies not taking a Medicare subsidy.

When people with other sources of coverage are added to people signed up for Medicare drug plans, about six million people remain, and presumably don’t have drug coverage. This group is the target of the massive campaign by the government, insurance companies and consumer groups to maximize enrollment by May 15.

The Medicare drug benefit has become a political issue, with Democrats criticizing it as too confusing for many seniors. Enrollment numbers, too, have become a flashpoint, with Bush administration officials saying they have “passed their projections,” as Health and Human Services Secretary Michael Leavitt said Thursday. A critic of the drug benefit, Medicare Rights Center President Robert M. Hayes countered, “Every few weeks the administration lowers its standard for success.”

Ms. Pearson, the HHS spokeswoman, said that’s not true. “We’ve consistently said our goal was 28 to 30 million,” she said. “And by any measure we’ve surpassed that goal.”

In fact, Mr. Leavitt and Medicare chief Mark McClellan, have used that estimate since last year, citing Wall Street analysts. A higher projection by Medicare actuaries, of 39 million, was published in the Federal Register in Jan. 2005. That, too, included retiree plans. Now, the actuaries’ projection is lower, at 37 million as of February. Medicare has not yet said why.

Dan Mendelson, president of Avalere Health LLC, a Washington-based consulting firm, and a former Clinton administration official, said the numbers are consistent with what he had expected. “I think they’ll pick up another group of enrollees before the deadline, maybe a million. Then everyone will squabble over whether it’s a big number of a small number.”

At the recent WHCC congress an audience member (well, as I had control of the question device I’d better admit that it was me) asked this question of Abby Block, the person at CMS who runs the program. Here’s the take from my post earlier this week.

There’s more than a little obfuscation about these numbers, especially the 29 million number. How many people over 65 now have drug coverage who did NOT have it before? Abby: that number cannot be determined! We know how many have enrolled but we don’t know what they had before

So rationally we know that only a maximum of 7 million people could have new coverage, and of course some of those had coverage anyway before even if it wasn’t as good. So as the bill is supposed to cost $900 billion over 9 years or whatever tehe final estimate was, we’re spending some undisclosed number north of $100 billion a year, to get drug coverage to less than 7m million people! This to me sounds damn expensive. Then of course cynics can note that not all that money is going to the patients. A few other people are getting their palms greased in the process. Another article in the WSJ today (this one’s free) points that out pretty clearly….and you know who they are!

POLICY/PHYSICIANS: Mother of all comment threads

If you haven’t been reading, there are now some 46 long detailed and excellent comments in the article called Can the real HSA fan, please stand, please stand up?.

Speaking as someone who’s been through the academic mill, this comment thread provides about a semester and more’s worth of education on the entire topic of health management and health policy. Note Steve Beller’s excellent summary of the conversation so far at around comment #30!

Fantastic work—my hat is off to all the commenters

 

POLICY/PHARMA/POLITICS: Losing it with the WaPo

It’s interesting tracking intellectual BS. The latest one is all the surveys selecting only people who have signed up with Part D and then reporting their experience, without mentioning that they’re likely to be happy because it’s a self selected group! And of course not surveying those who didn’t sign up about their experience. Over at TPMCafe I explain why the Washington Post continues to look like a bunch of idiots for using the Administration’s data, and—worse—for commissioning a survey continuing the lie!

HEALTH PLANS/POLICY/POLITICS: Geography-lock–Why can’t you move individual insurance to another state?

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This is how the cause of universal health care wins the hearts and minds….damn slowly and one by one. So I get an email exactly like this:

This is not something I have seen addressed anywhere and it pertains to the plight of the individual insurance plan holder. I have been enrolled in the same medical plan through a high profile insurance company since 1989. About 15 years ago I added my husband and later a child. Our premiums are larger than many people’s mortgage payments and we have $2500 deductibles and a host of out of pocket costs. We nonetheless are grateful to have insurance.

However, I naively thought that our coverage was nationwide…In fact, my original policy made repeated reference to the fact that our coverage was good in “50 states.” We relocated to another state a couple of years ago. We could not get new coverage without re-application and underwriting. However my husband was (successfully/surgically) treated for localized prostate cancer in recent memory and has moderate hypertension. It appears that this alone would cause us to be denied coverage and force him at least into a high risk pool and none exists in the state we moved to. So we were forced to return to the state where we have health coverage…

Why is it that HIPAA or coverage portability is limited to people in group plans? This seems so patently discriminatory to me. I have paid over $100,000 in health premiums alone with no interruption of coverage for 17 years as a self employed individual. And I have received NO tax credits for same. I am not able to change my location and improve our quality of life and am feeling increasingly desperate about the increases in our premium costs and our ability to even hold onto coverage which we have.

If you can explain this phenomenon I would be grateful. But more importantly, is there any medical watchdog group available to lobby on behalf of the individual? Would anything be served by a lawsuit? I have no confidence in legislators.

So I reply

The problem with the “coverage in 50 states” thing is that it’s OK for your state-based insurance company (and they all are as they’re state regulated) to cover you if you travel outside their state. But they are restricted from offering the insurance of one state to someone in another.  This is actually what the whole AHP argument is about, otherwise states which impose certain regulations on their carriers (e.g. New York) would find that a plan setting up in Guam or Montana or wherever) could offer much cheaper insurance in New York by using Guam’s rules. Of course when you move from one state to another you are switching insurance companies even if the corporate parent of that company is the same. And of course they will take that chance to underwrite you.

The only way around this for an individual is never to move (as you are finding out) or get an employer who’ll cover you in their group, or (most appropriately) to campaign for universal health insurance.

And my correspondent retorts

Honestly though, what can be the justification for ensuring that group policies are portable, yet individual policies are not? I am not sure what the parallels are in other avenues of industry, but if we can deregulate banks, why not insurance companies? Or perhaps it is another issue… This is evocative of a monopoly, replete with price fixing, bad faith, and discriminatory practices. I have no protection nor am I treated equally under the law–other than the fact that the insurance company cannot cancel me as long as I pay my premiums (and reside in the service area).

My premiums are basically whatever they say they are.  I know that individual policies are a fraction of their business but I am paying top dollar for the privilege. If I have uninterrupted service I don’t feel I should be treated as a different class by HIPAA.

We are healthy people for the most part who eat well, don’t drink or smoke. But hey, we are older, and between the Scylla and Charibdys of private insurance and Medicare. In the 10-15 years we have prior to Medicare eligibility we will spend a couple hundred thousand *more* dollars, and having done the math on what we have cost the insurer to date, we have more than self funded our own medical care. They have easily captured more than 75% of what we have spent.

They use age banding, tiering, and geographical/demographic data and god knows what else to determine the cost of the premiums, so I know they are not doing this for free…

When I pay my taxes I pay the employee and employer side. I don’t object to paying taxes or medical premiums actually. I know that medical costs are through the roof and that individuals and employees in group plans have to shoulder more of the burden. But again, this means we should receive equal treatment. Anyway, I would be more than willing to be the poster child for changing this process. But I think it has to happen through the courts. Is there any move afoot in Congress to level the playing field?

So I pull out the nuclear arsenal and start explaining the ERISA launch code sequence

The problem is that self-insured group plans are regulated by a Federal law (called ERISA) while individual plans are regulated by individual state laws. It makes no sense. Welcome to America.

Incidentally, group plans are no bargains either…but in terms of geographic coverage so long as the corporation can stay self insured, they avoid having to obey state mandates and therefore can offer similar benefits across the country. Because you are not a beneficiary of a corporation, you are subject to the individual law of each state and hence are starting afresh after a move.

I’m not sure what a court could do. ERISA has been to the Supreme Court and won. If Congress passes the AHP law it would allow an insurer to  offer insurance in a different state, but no one’s going to offer cheaper insurance to your family because they will underwrite you because of your husbands condition. The only solution is for a universal insurance nationwide risk pool–that’s what Medicare is. And that needs a political solution

And in the end we’ve at least got one more small business owner on board.

Thank you. At least I now understand the issues. I did vote for universal health insurance in the last presidential election so to speak but my guy did not win.

Now if we could only get the rest of the NFIB to see sense. But that won’t happen, so this frog will continue to boil one degree at a time.

POLICY: I think Borowitz has got it

From the always good but sometimes brilliant The Borowitz Report. This one finally explains the point of Medicare Part D.

U.S. CONFUSES INSURGENTS WITH PRESCRIPTION DRUG PLANMilitary Launches ‘Operation Incomprehensible Program’ Across IraqIn an effort to confuse Iraqi insurgents, the Pentagon announced today that the U.S. had begun bombarding insurgent positions with copies of President Bush’s Medicare prescription drug plan.At a press briefing at the Pentagon, Secretary of Defense Donald Rumsfeld said that the idea of confusing the insurgents with the President’s Medicare plan was hatched last week, after Mr. Bush appeared at a series of town hall meetings at which seniors in his audience seemed thoroughly bewildered by the intricate new program.“We realized, if this prescription drug plan is that confusing in English, imagine how incoherent it would seem once it was translated into Arabic,” Secretary Rumsfeld said.As soon as Pentagon planners seized upon the idea of using the
President’s plan to confuse the insurgents, Operation Incomprehensible
Program was launched.

According to Secretary Rumsfeld, U.S. warplanes pounded insurgent
positions in the citiers of Tikrit and Najaf with copies of the
prescription drug plan in the early morning hours of Monday.
Mr. Rumsfeld said that satellite photos of those positions have
been encouraging thus far, showing dozens of Iraqi insurgents reading
the prescription drug plan and scratching their heads.
The Defense Secretary said he was hopeful that Operation
Incomprehensible Program would leave the Iraqi insurgents totally
baffled, but he hinted that the Pentagon had other tactics up its
sleeve: “We are fully prepared to bombard them with copies of my press
briefings.”

POLICY/TECH: Gingrich Discusses Health Care

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Newt is at it again. This is one speech for which I assume he didn’t get his $40K going rate as it was to the Florida House. As usual he said tech would solve all our problems— he should know enough to shut up about that line, or at least qualify it by now. My views on this are well known to THCB readers but suffice it to say it’s not an accident that health care doesn’t use IT the way Newt would like it to and his solutions appear to operate in a vacuum. Still if health care companies keep ponying up $200K a year for the right to listen to those brilliant statements (and not of course just to get close to a big Republican mover and shaker), who am I to judge? But in the middle he said this:

"Current federal law is stunningly stupid and destructive because it blocks hospitals from giving away electronic health records to doctors," he said.

Maybe I’m dumb but didn’t MMA explicitly say that this was OK? And hasn’t CMS and DOJ ruled that this is a safe harbor? And aren’t hospitals already doing this?

Then he said:

In many ways, he said, Florida is the nation’s most innovative state in health care.

I assume he was talking about innovation in spending three times as much as other states for the same results, and leading the league in health care fraud.

Meanwhile he’s speaking out about transparency in hospital supply pricing while my spies tell me that MedAssetts the GPO is a big backer. Although that’s not a bad thing given the opaqueness in traditional GPO business practices.