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Letting the Data Speak: Estimating County Health Care Costs In Washington State

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By Frank de Libero

Besides state and higher-level health care expenditures, county level HCE are useful, integral really. For example, to promote the Triple Aim (the best care for the whole population at the lowest cost) you need per capita HCE. And knowing those costs at the county level would help a lot. However, county estimates generally don’t exist. They didn’t in Washington State until a client needed cost estimates for our 39 counties. To supply those estimates I used a regression approach resulting in this model:

percaphce = +0.1*percapinc + 247*pctage65 + 0.71*percapmedaid + 10.5*pctrural – 1349

Washington State Context
Before discussing model rationale and county HCE estimation, here’s some context about Washington State and its counties. You might view Washington as a microcosm of the nation. It has mountains, forests, deserts, rivers and lakes, vast rural areas, major cities, diverse populations and industries, and a varied climate. It is distinguished by active volcanoes and a coastal border. There is a wide range of political, social and economic clusters. In 2010 King County, where Seattle is located, median annual household income was about $67 thousand (the U.S. median was roughly $50 thousand) yet there are state counties where one in three children live in poverty. The total population is approximately 7 million with half of those people living in just three of the 39 counties.1 At the other end about a third of the counties have populations of 30 thousand or less.

An Aside about Seattle Weather
You may have been told that it rains all the time in Seattle. I live in Seattle and can tell you that’s a myth. Seattle’s average annual rainfall is less than New York City’s. However, during a good part of the non-summer months Seattle, and Puget Sound generally, is grey and cloudy. I once heard a story about the original settlers who landed in November, 1851, at Alki near present-day Seattle. The story is they were there for months before the weather finally cleared and they saw Mt. Rainier for the first time. I don’t know if that story is historically true, but as a Seattleite it’s believable. Regardless, Seattle is a summer paradise. Seattle summers, like most of Puget Sound, are characterized by pleasant sunny days, cool nights and no mosquitoes.

Background for the County HCE Estimates
Last year Empire Health Foundation of Spokane, Washington, asked me to estimate HCE for the 39 counties in the state. The purpose was for an upcoming meeting of policy types such as county commissioners, members of various health organizations, and other stake holders. A theme would be Donald Berwick’s Triple Aim, so cost estimates were wanted for benchmarks and context. The CMS2 Office of the Actuary had recently developed state HCE.3 If I could build a reasonable regression model on state-level data to predict state HCE, and there were similar variables at the county level, I could use the state model to estimate county HCE. That’s the approach I took. A caveat is my understanding was that acceptance—believability and reasonableness of the estimates to a lay audience—were as important as accuracy.

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State Surveillance Endangers the Affordable Care Act: A Case Study

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By Adrian Gropper, MD

… and a call to action. This case study is based on my meeting with the Center for Health Information and Analysis (CHIA) in my home state. CHIA is an all payers claims database, a massive collection of diagnoses, locations, dates and prices for all of your health services across all of your providers and insurers. Whether it’s claims or health records, almost every state and many private clearing houses are setting up to monitor you.

Your information can be used by business to manipulate prices for maximum profit, or by you to inform your choice of health insurance plans and health care providers.

Unfortunately, business can get your information but you can’t. This reflects an industry strategy to obstruct the market-based features of the Affordable Care Act. I hope you will take this case study, edit it, and file it with the Attorney General and Governor in your state to ask for your data as a consumer protection issue. That’s what I’m about to do.

My state is #1! Go Massachusetts! My state is #1 in health care costs. It’s also #1 in implementing a health insurance exchange (Romneycare 2006) and a leader in state surveillance with the 2012 cost containment law known as Chapter 224. Chapter 224 mandates various state surveillance mechanisms including a health information exchange that monitors encounters and an all payer claims database called “the center”.

The cost containment law also includes some consumer protections. Line 1909 states:

“To the maximum extent feasible, the center shall also make data available to health care consumers, on a timely basis and in an easily readable and understandable format, data on health care services they have personally received.”

Although the state surveillance is in place, and the price fixing that keeps us #1 is ongoing, the consumer protection part of the law is not implemented. So, I took the opportunity to meet with the executive director of CHIA and their chief legal counsel and get the scoop on why the state is not following the law. To paraphrase their explanation: “It’s too hard.”

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What Covered California Got Right–And What Other States Did Better

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By Dan Diamond

On the day that Covered California went live — the very moment that Executive Director Peter Lee declared the exchange “open for business” — staff debuted a video celebrating the launch.

The video features photos of cheerful, ethnically diverse people — spliced between scenes of California — holding up signs written in English, Farsi, Korean and other languages that all translate to “open.” (You can watch Lee unveil the video, beginning at the 10:40 mark.)

One week later, Covered California brought the video back; once again, clips of grinning men and women toting signs that read “Ya abrimos” filled time before a webinar on Tuesday where officials shared updates on the exchange’s progress.

The smiling faces and multilingual message illustrate one of California’s major challenges in rolling out the ACA: The state is arguably the most geographically and demographically diverse in the union. Expanding health coverage to seven million uninsured residents will take time and a unique strategy.

But you can also forgive Covered California officials for wanting to remind the public that their exchange is live. During much of the first week, the site often sent a different message.

What Went Wrong
Covered California’s launch was supposed to be different. The state had spent years gearing up for the exchange’s rollout on Oct. 1. It had enlisted dozens of groups to help perform outreach. It had equipped some staffers with “Keep calm and go live” t-shirts.

But a triumphant debut turned out to be an oft-frustrating one. In California, like in most of the nation, most launch day stories didn’t center on the people signing up for coverage through the new exchanges, but on all the people who couldn’t.

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How Identity Verification Caused Chaos on the State and Federal Exchanges

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By Robert Laszewski

We may be getting a better idea why the federal exchange and so many state exchanges aren’t working.

An article in Saturday’s Baltimore Sun, regarding Maryland’s problems, provides insight I have not seen elsewhere:

Problems began immediately after the exchange launched Tuesday, as people tried to create accounts and log onto the site.

State officials blamed the account creation process, in which people were routed to a federal questionnaire to verify their identity. The system, they said, became overwhelmed when so many people tried to access it.

So, it appears all of the exchanges are facing the same bottleneck at the federal level–the identity verification software the feds are running for themselves and the state exchanges.

Then the Sun article provided more insight:

Requiring people to create accounts to access the system may be one of the problems, said Jonathan Wu, co-founder of consumer finance website ValuePenguin, who has a computer science background. Some states, including Kentucky [which as been about the only state running well], let people browse insurance plans without an account, which was only needed to purchase insurance. Kentucky did not have as big a backlog, he said.

“It’s kind of an architectural and software issue,” Wu said. “You are not accounting for how people want to use the system.”

With personal accounts, the computer system has to work harder, storing information about everyone who accesses the website, he said. It also has to repeatedly confirm the identity of the person, which also can bog down the system, Wu said. He noted that all the functions on the website that don’t require an account have run smoothly.

“It has to match your account every step you make,” Wu said. “This causes extra overhead.”

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Will Obamacare Survive? Nine Key Questions

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By ROBERT LASZEWSKI

How did it go? Unavoidably, that will be the big question come Tuesday.

But there will be much more to it than that.

A 180-Day Open Enrollment––Not a One-Day Open Enrollment

What happens on the first day, for good or bad, will constitute only a tiny percentage of the open enrollment period. Consumers will likely visit the new websites many times before they make any decisions, and that is exactly as it should be.

Many of the health plans touted as being low-cost plans are going to be very limited access plans. It won’t be easy for consumers to compare one plan’s provider network to the other. In the best of circumstances, consumers will be confused by what is being offered for some time and will have to make a major effort to make sense of it for themselves.

Let’s not forget, they will be buying something that will cost thousands of dollars––their money or the government’s––and that kind of purchase will never be as simple as going to Amazon and buying a book.

I will suggest that if the local press wants to be helpful they will waste less time asking how things went the first day and more time doing stories on the quality of the various health plans in their local communities––particularly over provider access, which will be the only major product differentiator between health insurance companies.

Will There Be Administrative Problems With the Exchanges?

There already are. And, there will be lots more.

During the last 24-hours I have been told that the information technology testing between insurance companies and the federal government, particularly around the government telling insurance companies who they will be covering, continues to be a real mess.

But whatever obvious problems there are at launch, there will likely be more problems and more serious problems behind the scenes in the lead-up to January 1, the initial problems will be worked out in a few days or a few weeks. Operational expectations are now so low for Obamacare’s health insurance exchanges a small disaster will be considered a political victory.

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Did We Get It Right? A Behind the Scenes Look at California’s Healthcare Strategy

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By Dan Diamond

Back in 2010 — before two elections, before the Supreme Court ruled, before the word “crisis” stopped following the words “California budget” — Kim Belshé settled on a guiding principle: “2014 is tomorrow.”

And now, it almost is.

The Affordable Care Act’s individual mandate takes effect in less than 100 days. The nation’s health insurance exchanges go live next week.

And for nearly a year, Belshé — secretary of the Health and Human Services Agency under former Gov. Arnold Schwarzenegger — was at the center of California’s efforts to begin implementing those Obamacare provisions and many others.

I interviewed Belshé, Schwarzenegger, and nearly a dozen other ex-officials and experts about whether California’s quest to lead the nation on ACA implementation actually paid off — and what it brought the state.

Why California? Why Not?

Every expert suggested that the ACA’s rapid implementation in California could be traced back to Schwarzenegger’s efforts in 2007 and 2008 to enact universal health care.

(And in some cases, even older efforts at reform. “We learned a lot from the 1990s,” says Belshé, noting that failed attempts to create purchasing cooperatives in California helped set the foundation for designing insurance exchanges more than a decade later.)

Although the Schwarzenegger plan ultimately failed, many of its components — from big elements like the exchanges to smaller pieces like guaranteed issue — ended up in the ACA. And because state leaders had already done much of the foundational work, they were better positioned to speedily roll out the national law.

Daniel Zingale, senior vice president of the California Endowment, says that Schwarzenegger’s efforts were a preview of the national ACA battle to come — which meant that many stakeholders in California had already made peace with the law’s key provisions by 2010.

“We’d had our big fights over the individual mandate here” in 2007 and 2008, says Zingale, a former health care aide to Schwarzenegger. “Democrats and labor groups had been through it [and] were ok with it.”

“But the nation hadn’t been through that yet.”

Still, California’s support for Obamacare was hardly assured. As late as January 2010, Schwarzenegger wavered on the ACA — but by April that year, he was the first Republican governor (and one of the first governors in the nation) to throw his support behind the law and begin crafting a framework for implementation.

“It gave us a bit of a head start,” Belshé acknowledges.

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State Insurance Exchange Blind Spots: Unknown Risks and Unintended Consequences

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By Seth Kneller

October 1st marks the first ever public exchange open enrollment season.  This means some of the speculation around consumer awareness and understanding, enrollment/uptake, premiums, and payer participation (not to mention the technical readiness of the exchanges) will finally subside and give way to a clearer picture of the PPACA’s initial success in mandating individual health coverage.

Despite this approaching level of clarity, however, several very significant “blind-spots” will continue to persist, principally for the health insurance carriers that choose to participate by offering PPACA compliant plans in the exchange.

This is due to the law’s guaranteed issue mandate prohibiting health carriers from denying coverage based on preexisting conditions.  As a result, the traditional enrollment process which consists of a comprehensive assessment of each applicant’s health status and risk cast against the backdrop of time-tested underwriting guidelines is completely thrown out.

What takes its place is an extremely limited data set (i.e., the member’s age, tobacco/smoking status, geographic region, and family size) from which carriers can determine pre-approved premiums and variability therein.  To use an analogy, health insurance companies no longer have a “bouncer at the door” turning people away, or a sign reading No shirt, No shoes, No service at the entrance.

In other words, everyone, regardless of their risk profile, must now be welcomed in with open arms and with very limited risk-adjusted rates.

This wouldn’t necessarily be a problem if the enrolling population comprised a well understood risk pool representing a true cross-section of the population.  The reality, however, is that a predominantly unknown and potentially unhealthy population will flood the individual health insurance marketplace in a two weeks just as most states quickly phase out their high-risk pre-existing condition pools and shift them into the exchanges.

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Five Reasons the Federal Insurance Exchange Glitch May Not Be That Big Of A Deal. Knock On Wood.

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By Dan Diamond

The Wall Street Journal broke the news Thursday night that a “pricing glitch” is plaguing the federal health insurance exchange software … with less than two weeks to go before the exchanges are supposed to launch.

Basically, the exchange’s calculator can’t do a pretty important piece of math: How much each consumer will need to pay for his or her specific coverage.

Glitches had been somewhat expected—there had been rumblings of technical problems, despite officials’ public vows of confidence—but it doesn’t make the Journal‘s scoop less of a story. Opponents of Obamacare will use any delay to raise fresh concerns about the law’s implementation, and even the most ardent supporters of the ACA acknowledge that having working software is crucial to a working rollout on Oct. 1.

And what happens to enrollment targets if the glitches aren’t quickly resolved and would-be customers get frustrated and turn away?

There are several potential interpretations and implications here, given that this story is bound up in both politics and policy. From my perch, I’d offer these five quick reactions to the Journal‘s scoop.

1. This news is not a surprise.
When reporting on the ACA’s rollout, especially since the Supreme Court’s ruling last June, officials and analysts kept raising the same question with me: Will the exchanges be ready in time?

  • Keep in mind, the exchanges are intended to combine an unprecedented mix of eligibility verification systems, subsidy calculations, and thousands of insurance products.
  • Add an additional factor—the pace of ACA implementation lagged between 2010 and 2012 because of the ongoing uncertainty over whether the law was even constitutional—and the level of complexity involved in getting the exchanges off the ground really is astounding.

There have been hints that these systems might not be ready. Federal officials announced over the summer that they would scale back the exchanges’ verification requirements until 2015. And the contractors charged with designing the systems might as well be working on the Siberian insurance exchange, given how they’ve ignored media requests.

2. The federal exchange isn’t the only one with glitchy software. State exchanges are having problems, too.
Oregon has already announced that it plans to delay the formal roll-out of Cover Oregon to continue beta-testing, and California (a state that has moved exceptionally quickly to implement health reform) was weighing contingency plans for Covered California, too.

As Caroline Pearson of Avalere Health told me a few weeks ago, “if California’s talking about contingency planning, then we need to acknowledge that any number of state-run exchanges may not be fully operational by Oct. 1.”

However, the federal exchange software takes on extra importance given the sheer number of states (36) and potential customers (32 million uninsured) that will be shopping through its exchange.

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Not Quite Ready For Prime Time: The State Health Insurance Marketplaces and Google

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By Elaine K. Swift and David McCormick

All of the state health insurance marketplaces (also known as exchanges) are online, but millions of expected users may have a hard time finding them.  Marketplaces will enable shopping and enrollment mainly through their websites. States are using a variety of promotional strategies, but most people will likely find marketplaces in the same way they find other websites—through common keyword searches on Google, by far the nation’s dominant search engine. Poor search engine results can create serious barriers to shopping and enrollment, the major measures of success for marketplaces and, by extension, the success of the Affordable Care Act (ACA).

We used standard methods to assess Google results for the 17 marketplaces operated by 16 states and Washington, DC that offer individuals, families, and small businesses a place to shop for health care coverage.  Over three days in mid-September, we looked at results for keywords that data from Google show people are commonly using to search for health insurance. We examined both unpaid (or “organic”) and paid (or “sponsored”) results. Although research shows that unpaid results get more attention, paid results can also lead to page views.

Our preliminary findings show that marketplaces for four states—Idaho, Maryland, New Mexico, and New York—and Washington, DC did not appear on the first page of Google results, which generates 92% of all page views.  In addition, both unpaid and paid search results for most of the remaining 12 states were frequently absent from page one.

With enrollment in the marketplaces opening October 1 for coverage beginning January 1, this would be a good time to focus on search engine optimization (SEO), the process of increasing the rankings of unpaid or “organic” search results. Once implemented, SEO results can be seen quickly, especially for a topic as popular and important as new health insurance options. However, it requires analysis, planning, and time to implement.

Methods for Conducting Search Engine Result Testing

To test search engine results for state-operated health insurance marketplaces, we used the five keywords most effective in producing page views of a prominent healthcare-related website produced by a federal client: Affordable Care Act, affordable health care, health care, health insurance, and Medicaid.

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The Exchanges Won’t Be Ready in Time. And it Probably Won’t Matter.

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By Dan Diamond

As states race to implement health reform, California doesn’t want to settle for second.

“We don’t want to be a pace car state” when it comes to implementing health reform, state HHS Secretary Diana Dooley told Politico back in January 2011. “We want to be the lead car.”

It’s a metaphor that California leaders have returned to time and again. And to their credit, they’ve often succeeded.

While other states waffled, Golden State officials quickly embraced key Obamacare provisions like expanding Medicaid and creating insurance pools for individuals with pre-existing conditions.

At the same time, lawmakers crafted legislation intended to conform California’s health insurance plans to new standards under the Affordable Care Act.

And Covered California, the state’s health insurance exchange, also has drawn national attention for its speedy implementation. Among the 17 states that opted to run their own exchanges, California has “certainly [been] in the lead on getting their health plan information out … and getting the contracts signed,” Rachel Dolan, who monitors exchange activity for State Refor(u)m, a project of the National Academy of State Health Policy, said.

But the driving metaphor only extends so far.

“I don’t think it’s a race,” Dolan added, cautioning that each state might take unique approaches to exchange implementation — and objectively judging those individual strategies is impossible.

And a more essential issue might be getting lost, amid the growing number of questions over which state exchanges will be open for business on Oct. 1.

“Lots of people are asking about readiness,” said Caroline Pearson, who leads Avalere Health’s efforts to track health reform implementation. “But no one is asking about whether it matters.”

Where the States Stand on Readiness
The sprint to get the exchanges off the ground — which for some states didn’t really begin in earnest until after the Supreme Court’s June 2012 decision to uphold the ACA — has led to repeated delays and ongoing concerns.

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