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Tag: Health Care Reform

Talmudic-Like Studies of Republican Health Reform Ideas

After doing Talmudic-like studies of the doctrines on health reform promulgated by Republican health-policy makers and the conservative economists who inspired them during the past two decades, I am devastated to discover that all of those studies have been for naught. We are now told, sometimes by the same prophets of yore, that these doctrines were not only wrong, but outright heretical, which in this context means un-American.

New doctrines are rumored to be in the making, but the first word on them has yet to be committed to new, sacred tablets, mainly because there have not yet emerged any new ideas worth committing to tablets.

Do not take my word for it. Newt Gingrich, one of the Grand Old Party’s aging prophets, said so himself in his recent speech to the Republican National Committee.

Comes now conservative commentator John R. Graham of the Pacific Research Institute, telling us that Republicans seem lost in the desert even in their hit-and-run insurgency against their sworn enemy, the Affordable Care Act of 2010 (ACA).

What is a befuddled immigrant to the United States like me, eagerly trying to become a right thinking American, to make of it all?

My early introduction to the texts coming from conservative thinking on health reform was the Heritage Plan of 1989, Viewed through the prism of the ACA of 2010, its language seems eerily familiar. One provision, for example, proposed a:

“[m]andate all households to obtain adequate insurance. Many states now require passengers in automobiles to wear seatbelts for their own protection. Many others require anybody driving a car to have liability insurance. But neither the federal government nor any state requires all households to protect themselves from the potentially catastrophic costs of a serious accident or illness. Under the Heritage plan, there would be such a requirement” (p.5).

The Heritage Plan also called for income-related, refundable tax credits toward the purchase of private health insurance. Although it did not call for community rated premiums, it proposed means-tested public subsidies and toward high out-of-pocket expenses of individuals and families. It did not spell out the daunting administrative apparatus that would entail. But one can imagine the required new bureaucratic apparatus, replete with auditors to prevent fraud and abuse. Presumably, income-related subsidies would have involved the Internal Revenue Service (IRS) in some ways as well.

Next came a text put forth by conservative economist Mark V. Pauly and like-minded colleagues in Health Affairs. It is worth a reading again. Here’s the core of these prophets’ proposal:

“In our scheme, every person would be required to obtain basic coverage, through either an individual or a family insurance plan. …All basic plans would be required to cover specified health services; plans could, however, offer more generous benefits or supplemental policies. The maximum out-of-pocket expense (stop-loss) permitted would be geared to income, with more complete coverage required for lower-income people, to ensure that no one faced the risk of out-of-pocket expenses that were catastrophic, given their income.” Again, lots of government intrusion into health care, along with links to the IRS.

There then followed a real life health bill based on these ideas, the late Republican John Chafee’s antidote to the emerging Clinton plan. It was called the “Health Equity and Access Reform Today Act of 1993” and had an impressively long list of Republican co-sponsors, among them Senator’s Orrin Hatch (R-Utah) and Charles Grassley (R-Iowa), now fierce opponents of the ACA. As the folks at the Kaiser Family Foundation have shown, many of its provisions of Chafee’s bill have a striking similarity to provisions in the ACA of 2010 and comparing.

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Enabling the Health Care Locavore

Three juicy lemons came through my inbox this week. The NY Times published an expose of why hip replacement surgery costs 5-10 times as much in the US as in Belgium even though it’s the same implant. JAMA published research and a superb editorial on the Views of US Physicians About Controlling Health Care Costs and CMS put out a request for public comment on whether physicians’ Medicare pay should be made public. Bear with me while I try to make lemonade, locally, from these three sour economic perspectives.

Here’s a super-concentrated summary of the three articles: The hip surgery is more expensive because, in the US, as many as 10 intermediaries mark-up the price of that same hip prosthesis. Then, Tilburt et al said in JAMA that “physicians report that almost everyone but physicians bears responsibility for controlling health care costs.” The physicians reported that lawyers (60%), insurance companies (59%), drug and device manufacturers (56%), even hospitals (56%) and patients (52%) bear a major responsibility to control health care costs. Finally, CMS is trying to balance the privacy interests of physicians with the market failure that my other two lemons illustrate.

Can we apply local movement principles to health reform? How much of our money can we keep with our neighbors? What policies and technologies would enable the health care locavore? The locavore health system couldn’t possibly be more expensive than what we have now and, as with food and crafts, more of the money we spend would benefit our neighbors and improve our community.

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Beyond the Affordable Care Act: A Framework for Getting Health Care Reform Right

The following was drafted quite a few months ago, and had its genesis in a list of recommendations for improving the health care system that David Dranove solicited from a number of academics for an issue of Health Management, Policy and Innovation. I’ve dawdled in finishing and polishing it up, but seeing the stimulating reform proposal posted  recently by Jay Bhattacharya, Amitabh Chandra, Mike Chernew, Dana Goldman, Anupam Jena, Darius Lakdawalla, Anup Malani and Tom Philipson motivated me to return and finish it; so here it is finally.

Introduction

One can hardly say that there’s been too little discussion of health reform recently. However, much of the discussion is focused on the ACA and its details. That’s fine, but we’ve gotten very far away from thinking about overarching principles that we think should guide the design of a health system, and what that implies for what it would look like [1]. What follows are some thoughts on what such a health reform might look like. They are informed by my read of the research evidence, and my observations of the U.S. health care system over a long period of time, but should be understood as representing only my personal opinions.

This is not intended as a criticism of the ACA. While the ACA certainly isn’t perfect, in my opinion we’re better off as a country with it than without it. However, there will be modifications to the ACA and other changes to the health system as we move forward, so having a framework to structure our thinking will be useful as we consider these inevitable changes.

Guiding Principles

What I propose below is guided by the following. First, economic efficiency is a goal. This simply means avoiding waste, i.e, trying to generate the maximum benefits net of costs. The second goal is that no American is exposed to excessive risk to their health or finances due to medical expenses. Last, the overarching design principle is to create basic ground rules for the system and then let the system run, avoiding heavy handed regulation or micro management. The key objective of these ground rules is to give participants the right incentives insofar as possible, while achieving insurance objectives. With that in mind, compassionate, efficient health reform would do the following.

Health Insurance Reform

First, eliminate the tax exclusion of employer sponsored health insurance. The exclusion of employer sponsored health insurance from income taxation distorts the demand for insurance. This leads to people with employer sponsored health insurance holding excessive coverage, which drives up medical spending and thus insurance premiums. Ironically, not taxing health insurance ends up making both health care and health insurance less affordable. Eliminating the tax exclusion of employer sponsored health insurance will eliminate a major distortion in health insurance, health care, and labor markets. It can generate substantial tax revenues (it’s estimated that the value of the state and federal income tax exclusion for 2009 was $260 billion[2]), while potentially allowing for lower income tax rates. It’s also worth pointing out that the subsidy is biggest for those who face the highest marginal tax rates, i.e., it’s regressive.

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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 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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What Health Reform Can Learn from the Environmental Movement

Over past few years, we’ve seen numerous articles about impact of the environment changes on the health of our population.  They range from increased rates and severity of respiratory disease to the resurgence of infectious diseases due to increasing temperatures.   However, it hadn’t really occurred to me until this weekend while attending a film festival in Colorado (name undisclosed because I don’t want it to get more crowded!) that there were interesting parallels between the environmental and health care reform movements.

And while this should probably not be a surprise given that healthcare and the environment are two of the most “wicked problems” facing our country – tough to describe, multiple causes and not easily solved with one answer – I nevertheless was intrigued by the similarities.

1)      Local, local, local– The environmental movement has finally figured out that change will only occur if you make the issues local – it’s not just about the planet but about your backyard.  (My father who could not hear me utter the word climate change without breaking into hives or leaving the room, recently told me he thinks “something may be happening because the fish in the river he spends half his days on are starting to die”)   Those of us in healthcare have known forever that the organization, delivery and financing of healthcare is local.  And while the biggest changes over the past few years have been driven by government policy, the tough part lies ahead and will only be successful because of the actions at the local level.

2)      Show me the money- Whether it’s the environment or healthcare – until it impacts the consumer’s bottom line (property damage, rising gas prices, higher out of pocket expenses), it can be tough to get a majority of people to devote their time and energy to change.   In healthcare we are still in the early days but are starting to see the impact of people having to pay more out of pocket for their medical care.  Time will tell whether the impact is all positive, but at least we are recognizing that financial incentives can play a key role in changing behavior.

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The Wellness Game: The Employer As the New Parent

Eat your vegetables.  Turn off the TV.  Go outside and play.  Go to bed on time.  These four imperatives were once amongst the core messages delivered to children by their parents and neighbors, a setting of behavioral parameters that people intuitively expected would help to produce healthy, well-balanced kids.  We’re not so good at this anymore.  Like so many other behaviors that animate the phrase “personal responsibility”, in the face of economic and demographic tumult we have decided to pass the buck on them in our homes, neighborhoods, schools, and churches.  We now want employers to handle them, and health-contingent wellness is the final step in the ascendancy of the employer as the new parent.

Employers find themselves teaching employees how to read and write effectively, do math, be polite, how to eat in the presence of others, and even how to sleep better.  Why not throw at their feet the notion that employers should coerce workers into intrusive and dubious health-contingent workplace wellness strategies that are easy as pie for the healthiest, but far more difficult for the less fortunate who are, ostensibly, the ones who need the most help?  This is not why most people start businesses (unless, of course, you’re a wellness vendor).  It certainly is not why people devote themselves to work, which is supposed to be for securing (hopefully) individual and familial prosperity and experiencing the unique contribution to personal dignity that comes from purposeful endeavors.

US employers are not responsible for the chronic disease crisis; truth be told, their sufferance of the costs of many wellness-sensitive events is limited because the majority of the medical catastrophes that health-contingent wellness programs promise to prevent (such as heart attacks, strokes, and many cancers) happen predominantly in older people who have mostly left the work force. Employers have been caught up in the maelstrom of demographic, industrial, and technological changes just like the rest of us.  Yet,  not only do we actively seek their participation in fishing expeditions such as health-contingent workplace wellness programs, some of them jump in with both feet.  This should help to remind you that your CEO might just be the one who graduated at the bottom of his class.

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What Do Patients Really Think? A Report From the Third Annual Health Privacy Summit

Health reform activists and privacy mavens have been at loggerheads for years. Those touting health reform complain that an oversensitivity to privacy risks would hold back progress in treatments. Running in parallel but in the opposite direction, the privacy side argues that current policies are endangering patients and that the current rush to electronic records and health information exchange can make things worse.

It’s time to get past these arguments and find a common ground on which to institute policies that benefit patients. Luckily, the moment is here where we can do so. The common concern these two camps have for giving patients power and control can drive technological and policy solutions.

Deborah Peel, a psychiatrist who founded Patient Privacy Rights, has been excoriated by data use advocates for ill-considered claims and statements in the past. But her engagement with technology experts has grown over the years, and given the appointment of a Chief Technology Officer, Adrian Gropper, who is a leading blogger on this site, PPR is making real contributions to the discussion of appropriate technologies.

PPR has also held three Health Privacy Summits in Washington, DC, at the Georgetown Law Center, just a few blocks from the Capitol building. Although Congressional aides haven’t found their way to these conferences as we hoped (I am on the conference’s planning committee), they do draw a wide range of state and federal administrators along with technologists, lawyers, academics, patient advocates, and health care industry analysts. The most recent summit, held on June 5 and 6, found some ways to move forward on the data sharing vs. privacy stand-off in such areas as patient repositories, consent, anonymization, and data segmentation. It also highlighted how difficult these tasks are.

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An Anesthesiologist Thinks Out Loud

Anyone who has read my work knows that articles like the one written in the New York Times on Sunday by Elisabeth Rosenthal will immediately get a response out of me.  If you haven’t read it, here’s the link.

Where do I start with this???  I’m going to let Ms. Rosenthal tell you about how many unnecessary colonoscopies we do.  I’ll let her tell you how much more it costs here than anywhere else.  I will address the anesthesia bit.  Let me tell you a little story.  When I was a baby anesthesiologist my hospital sent anesthesiologists “downstairs” to do anesthesia for GI procedures maybe once a week for a few hours.

This was in 2004 or so.  Now we send three board certified anesthesiologists to various GI units every day all day.  We do maybe 25 cases a day on average.  Now, some of this is due to the aggressive expansion of the advanced GI procedures unit as well as the addition of an outside private group that was recently folded into the greater hospital system.  It’s also because we’re there.  It’s no accident that as soon as we committed troops to the GI battle all of a sudden everybody needed anesthesia.

The NYT article uses Dierdre Yapalater as an example, a healthy 60-something.  Putting aside the ridiculous cost for the overall procedure, she was billed $2,400 for anesthesia.  But she didn’t need anesthesia.  There is absolutely no reason for her to have an anesthesiologist involved for that case.  None.

Anesthesia care used to be limited to very sick patients, not because they are harder to sedate (they’re actually often easier) but to monitor them closely because of their tenuous physiologic status.  Now everybody is getting it.  Why did she get anesthesia, why did the anesthesiologist give it, why does insurance pay for it?

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