Tag: The ACA

Money and Healthcare Reform

Congress handed the Congressional Budget Office (CBO) some assumptions, the computers came up with the mix of adjustments needed to give a magic number under $1 trillion in 10 years, and the “Affordable Care Act” (ACA) emerged.

The “affordable” trillion apparently means net additional federal government expenditures, with the Treasury envisioned as one big pot of liquid gold. All the revenue gets mixed in, and the financial engineers turn the valves to direct the outgo. Less will go into some channels (“savings”), and more into others.

Numbers are thrown about—but where’s a spreadsheet of the money flows? The President couldn’t exercise a line-item veto even if he had one because there aren’t any line items. For example, how can you budget for each of the new bureaucracies if you don’t even know exactly how many there are (159—more or less)? And are they counted in the $1 trillion cost?

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Swamp Creature

Many people forget that before Washington DC was our nation’s capital, it was a pestilential swamp, whose few hardy residents regularly succumbed to tropical diseases like malaria. It was virtually uninhabitable in the summer (some say it still is), and like Houston and New Orleans, really began to boom only after the advent of affordable air conditioning. It is also a political swamp, infested with lobbyists and special interests, and Washington “lifers” – commentators, political operatives, consultants, intellectuals and bureaucrats who outlive increasingly fragile Presidential administrations. The electorate despises Washington, and sends waves of “outsiders” (e.g. ordinary Americans) to drain the swamp.

Though President Obama signed it into law in March, the new Affordable Care Act of 2010 is a swamp creature. Written by an exhausted Congress, half beast, half plant, the ACA is a seething, octopus-like tangle of well meaning but opaque government projects intended to expand health coverage and fix the health system’s numerous problems. Far more than “insurance reform”, it sprawls over and touches virtually every corner of our $2.5 trillion health system, bringing change, uncertainty and a ton of taxpayer dollars. It also has sunk its taproots deep into the national treasury and extends its feeding tentacles to an obese and hungry industry that already claims 17% of the national wealth.

A new wave of Republicans are about to hit town, fired up by their stunning mid-term election victory and control over the House of Representatives. One of their campaign pledges is to kill the swamp creature. They will shortly charge off into the swamp to try and kill it, like the British army tried to kill Francis Marion. In doing so, they expose themselves to a whole bunch of hidden hazards, including the beast itself. Handled thoughtlessly, the Republican campaign against health reform could damage the party’s prospects in 2012, even if the economy continues to sputter.

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The Republican Landslide and the Affordable Care Act

After their resounding triumph in yesterday’s midterm elections, House Republicans will likely act on their promise to repeal the Affordable Care Act, the health reform bill President Obama signed into law last March.

Their efforts could be blocked by the Democratically controlled Senate or, if necessary, by a veto from the Big O himself. But the Boehners might still get the final say, since they have the power to halt appropriations funding for large swaths of the law.

These realities have health-industry groups, some of whom vigorously supported Democratic efforts to pass the law, cozying-up to the GOP like a Snuggie on a cold winter night.

Private insurers want Congress to nix that $70 billion tax that will be levied against them beginning in 2014. They’d also like lawmakers to permit them to widen the rating bands which cap the amount of money they can charge older enrollees.

Insurers and providers want Congress to add a tort reform rider to the law, preferably one that protects physicians against malpractice lawsuits if they adhere to best practice guidelines. Drug companies want to kill the proposed Independent Payment Advisory Board, whose job it is supposed to be to control the rate of growth in Medicare spending. The Board’s recommendations would, after all, likely include reduced federal spending on prescription drugs which is very bad for their business.

Yet these same groups are worried sick that Republicans might go too far in their zeal to repeal the deal. The baby in the bathwater for these trade groups is the individual mandate: a provision in the law that requires most Americans to carry health insurance.

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How Come Comparative Effectiveness Research is All the Rage?

Comparative Effectiveness Research (CER) is suddenly a hot topic at all the health care conferences. How come? Everybody agrees that we have to decrease per-capita cost and increase quality. Why? Government programs like Medicare and Medicaid foot more than 50% of our nation’s health bill, and if everything stays the same these programs will go belly up (bankrupt) in 8 years. Big problem.

Health and Human Services (HHS) has defined comparative effectiveness research as conducting and synthesizing research comparing the benefits and harms of different interventions and strategies to prevent, diagnose, treat, and monitor health conditions in “real world” settings. In other words, CER is figuring out what treatments, tests, and drugs work and which ones don’t work.

John E. Wennberg spent a whole career at Dartmouth studying American medicine, and he comes to the startling conclusion that 60% of Medicare is spent on supply sensitive care (physician visits, consultations, imaging exams, and hospital and ICU admissions) and 25% on preference sensitive care (PSA tests, mammography, and elective surgery). Although we assume that this care is based on solid scientific evidence, Wennberg states that “medical science is virtually silent on such matters” as how often to see a patient, what test to order, and whether to admit a patient to the hospital or ICU. Some evidence based medicine experts state that only about 20% of what physicians do is based on sound science.

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How Reform Law Funds Itself, Strengthens Medicare, and Cuts the Deficit: Part 1

The Mainstream Media Rarely Tries to Explain the Congressional Budget Office’s nearly unbelievable claims that the Patient Protect and Affordable Care Act can:

1)  Pay for itself

2)  Provide coverage for 32 million uninsured Americans

3) Trim this nation’s deficit by some $143 billion over the next ten years

And, that’s not all. Medicare’s Trustees say that the reform legislation puts Medicare on the road to financial solvency–while limiting co-pays and beefing up benefits.

You might well ask: How can this be? How can we provide insurance for an additional 32 million people, improve Medicare, and simultaneously save money?

The media has not been a great help in answering these questions. This is, in large part, because the good news lies in the details—dozens and dozens of details. Fleshing out the myriad ways that the ACA generates new revenues while reining in health care spending would take up far too much time on a cable television show—and way too much space in most newspapers.

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Medicare Costs Rise, Health Outcomes Suffer When Seniors Are Over-Medicated

The problem of elderly people taking too many medications is not new, but continues to pose a serious risk to health as well as contribute significantly to rising Medicare costs. The fact is that nearly 20% of adults aged 65 years and older who are not hospitalized take 10 or more medications daily. This number is not the result of shoddy care, but rather achieved when doctors simply follow practice guidelines for several common, co-existing conditions like diabetes, high blood pressure and depression, for example. If you look at all seniors (those both in and out of the hospital) the American Society of Consultant Pharmacists reports that the average 65-69 year old takes nearly 14 prescriptions per year; by ages 80-84 that number averages an astounding 18 prescription drugs per year.

What’s troubling is that instead of improving the health of seniors, evidence is growing that the more medications an elderly person takes, the more likely he is to experience falls, cognitive decline, loss of mobility, depression and even cardiac problems. These adverse drug effects may be mistaken for Alzheimer’s disease or other dementias too. The bottom line: Experts estimate that up to one-third of the elderly in our communities may be over-medicated and some 20% of their hospital admissions are due to adverse drug events. The costs related to over-medication in the elderly are thought to exceed $80 billion each year.

Although the problem of so-called “polypharmacy” among seniors results in significant economic and public health costs, little has been done to remedy the problem. In fact, in a recent commentary in the Journal of the American Medical Association, Jerry Avorn, associate professor of medicine at Harvard Medical School and author of the book “Powerful Medicines,” says that “many aspects of the US health care system act to discourage optimal prescribing” for the elderly.

For example, elderly Americans are highly underrepresented in the clinical trials for many of the drugs that doctors commonly prescribe for them. Seniors may metabolize these medications differently and they are often more sensitive to side effects and counter-indications with other drugs than younger people. They also take many more drugs (often all at the same time) than any subjects who take part in controlled clinical trials. Disturbingly, doctors sometimes end up prescribing a new medication to treat the adverse effects of a pill the elderly patient has been taking for years.

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The True Health 2.0 Unmentionables

At the recent Health 2.0 Conference, an unusual session highlighted the health importance of such “unmentionables” as job stress, marital worries and sexual dysfunction. However, despite the moderator’s inexplicable pride in a panelist’s mention of “vagina” – a topic certainly not lacking for Internet attention, albeit under more colloquial synonyms – the truly unmentionable subject was not sex, but the link between social class and health.

Unlike sex, talking openly about age and class distinctions makes most Americans squirm uncomfortably. Still, a number of speakers showed they understood that one of Health 2.0’s biggest challenges is proving itself useful to the population most in need of its help.

To start with, that means the elderly. Age brings an increased susceptibility to disease: half of Medicare beneficiaries are receiving care for one of six chronic conditions. Similarly, income is one of the most powerful predictors of health status. Those in the bottom 80 percent of adult income earners have an adjusted life expectancy almost 6 years shorter than those in the top 20 percent.

From that population perspective, two presentations stood out. The first was the partnership between Geisinger Health System and dLife. The second, for very different reasons, was the unveiling of Sharecare.

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Five Big Ideas that Shaped Health Reform

During the Great Health Reform Debate of 2009-10, much of the public discussion and media analysis focused on the political battles, the legislative process and specific elements of the health reform bill.  We talked a lot about daily public opinion polls, the futile search for bipartisanship, the political implications of the Massachusetts special election and the impact on the upcoming mid-term elections.  We also learned more than we probably wanted to about filibuster rules, reconciliation bills and CBO scores.  And we were inundated by detailed descriptions and analyses of the public option, abortion, payment reductions to Medicare Advantage plans, excise taxes on “Cadillac” health plans, and many other specific policy issues.

Future historians, however, will want to look more deeply for the policy frameworks and political forces that shaped the health reform bill.  From a high level vantage point, there are Five Big Ideas that established the fundamental framework for the bill.  With some exceptions, these ideas were not the subject of much public discussion or formal debate in Congress, but each of them shaped the reform bill in fundamental ways. As Ezra Klein and others have observed, much of the form of the health reform bill was established long ago.

1. Managed competition

Why didn’t we go down the path of a single-payer health system?

For many years, a single-payer system was the holy grail of the liberals, and it was the driving force behind the campaigns of many of the current reform advocates.  To the disappointment and frustration of those advocates, however, the battle had already been fought and lost long before the 2009-10 debate.  In 1978, Alain Enthoven published a two-part article in the New England Journal of Medicine entitled “Consumer Choice Health Plan: A National Health Insurance Proposal Based on Regulated Competition in the Private Sector.” The title said it all.  It was a proposal for national health insurance (i.e., providing coverage to everyone) through a structured marketplace of private insurers and providers.  As Enthoven described it in a 1993 Health Affairs article, “The History and Principles of Managed Competition,” his concept built on earlier work by Paul Ellwood, Walter McClure and Scott Fleming, as well as the experience of the Federal Employees Health Benefits Plan (FEHBP). In the 1992 Presidential campaign, both of the candidates endorsed this approach to health reform, and it was one of the foundation elements of Bill Clinton’s reform proposal in 1993.  In the work of many policy experts since then, it became the de facto consensus approach.

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Building a Better Mousetrap

The story was front page and above the fold in The New York Times. Six teachers in Newark are leaving the traditional school system to start a public school of their own.

If the product was something other than education, this would have been no news at all. I would guess that the vast majority of businesses in this country were started by people who walked away from an employer, convinced that they could make a better product on their own. Teachers rarely have the opportunity to do the same, however. They are usually trapped in a system that does not allow innovation or experimentation and is ordinarily hostile to entrepreneurship.

What does all this have to do with health care? A lot. Doctors are just as trapped as teachers. And that is the most important defect in the health care system.

This, of course, is not the conventional view. The received wisdom in the health policy community is that doctors have too much freedom, not too little. Witness the wide variation in medical practice patterns — from city to city and region to region — all seemingly unrelated to medical outcomes. How can anyone defend that? Certainly not me. Where I part company with so many of my colleagues is that they blame the doctors for this problem — I blame the third-party payers.

Were we to look into the matter, I’m sure we would find wide variations in the practice of teaching from school to school, district to district and state to state. Yet I still maintain the teachers are essentially trapped. This may appear to be an oxymoron, but it’s really not. Both in education and in health care, the practitioners have a great deal of freedom to waste resources. But they have virtually no freedom to profit by discovering innovative ways of lowering costs and raising quality.

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Consumers to Pay More Under Reform

The latest analysis of health care reform – out this week from bean counters at Medicare – shows reform will raise health care spending slightly over the next 10 years, not reduce it as promised by President Obama. That won’t make selling it on the stump any easier. Yet there’s a glimmer of hope in the out years of the 10-year projection that the plan will begin to “bend the cost curve.”

Here’s the real bad news for reform supporters. The private insurance market will absorb most of the increase, and most of that will fall on individuals. Employer contributions for their workers’ private insurance will actually fall $120 billion in 2019 from previous projections because of reform.

Individuals will get hit two ways. First, the actuaries at CMS are projecting a huge 9 percent increase in out-of-pocket expenses in 2018 and 2019, after the so-called “Cadillac tax” goes into effect. This is a steep excise tax on high-cost insurance plans. To avoid tax penalties, experts expect employers with such plans – which may only be high-cost because they are filled with sicker and older beneficiaries – will reduce coverage by increasing co-pays and deductibles.

A second factor driving out-of-pocket expenses higher for individuals under reform will be the insurance mandate, which will drive many people to seek coverage through the new state exchanges. CMS predicts over 30 million people will be getting insurance through the exchanges in 2019, substantially more than the 24 million projected by the Congressional Budget Office last March, when reform passed.

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