Above the Fold

It’s Up to Clinicians, Not the Government or Payers, to Control Health Care Costs

Jan 24, 2017• 25

By ANDY ORAM

Behind many of the economic and political tensions of our time lurks the growing burden of health care costs. Does that claim sound inflated? Consider: when the public complains of stagnating wages, we can put our finger on health care costs as the monster that gobbles up employee compensation. When economists fret over the future burden of Social Security and Medicare (a cry echoed across the world as populations age), we have to recognize the scourge of increased health care costs. Most of the current debates over the Affordable Care Act–a recurring issue during the presidential campaign–touch explicity or implicity on health care costs.

The upward curve in costs became less of a run-away trend during the recession. Although the ACA might take a bit of the credit, most observers attribute the softening of the cost rises to belt-tightening by patients, and perhaps also to lower inflation. Inexorably, though, costs do rise. Small businesses and people on individual plans suffer most–a burden for which the ACA is not responsible, but that it brought to public attention–and the rest of us are bedeviled by rising premiums and deductibles as well. A study found spending increases across the board in 2015 by individual households, businesses, and governments alike. A number of people give up on health insurance because it’s still too expensive and does not end up covering their needs.

Insurers are suffering too, which is why even major companies such as Blue Cross and UnitedHealth are abandoning some markets.

ACA Repeal and the Ethics of Belief

Jan 23, 2017• 4

By DAVID INTROCASO

An elderly patient presents to a physician with symptoms of pneumonia. The physician ignores accepted medical standards of care and chooses to believe the patient suffers from a cold or flu. The patient dies of pneumonia. What evidence informs our beliefs, or how we arrive at our beliefs, is as important as what they are.

In 1877 a Cambridge mathematician and philosopher, William Kingdon Clifford, published an essay titled, “The Ethics of Belief.” 1 In it, Clifford imagined a ship owner “about to send to sea an emigrant ship” that he knew “was old, and not overwell built at the first.” Knowing the ship had possibly become unseaworthy, he realized he ought he to have “her thoroughly overhauled and refitted.” Despite this knowledge, the ship owner succeeds in convincing himself that since the ship had “gone safely through so many voyages and weathered so many storms” it would do so again. If the ship goes “down in mid-ocean and told no tales” what, Clifford asked, shall we say of the owner? “Surely this, that he was verily guilty of the death of those men.” Though the ship owner may have come to believe in the soundness of his ship, “the sincerity of his conviction can in no wise help him,” because the owner, “had no right to believe on such evidence was before him.” “He had acquired his belief not by honestly earning it in patient investigation,” but by “stifling his doubts.”

Mylan Fiasco May Be “The Shot Heard Round the World”

Jan 23, 2017• 30

By NIRAN AL-AGBA, MD

The Mylan EpiPen debacle may have inadvertently weakened the grip Big Pharma on U.S. lawmakers. Last week, a bill proposed by Senator Bernie Sanders was narrowly rejected by a vote of 52-46. Unexpectedly, 12 Republicans and 1 Independent voted with Senator Sanders in favor of allowing pharmacists and distributors to import cheaper prescription drugs from Canada and other foreign countries (something typically favored by Democrats.) The winds of change are starting to blow in the bipartisan direction when it comes to the pharmaceutical industry.

U.S. Healthcare needs a revolution ; ‘the shot heard round the world’ often refers to the opening shots of the American Revolution in 1775. The Big Pharma lobby is holding the American people hostage with their exorbitant ransom demands. Last summer, Mylan Pharmaceuticals, led by CEO Heather Bresch, overplayed their hand. Mylan came under fire for a 400% price increase in the EpiPen two-pack. This device is considered life-saving for children and adults with anaphylactic reactions to various food, insect, or environmental insults. Ms. Bresch insisted the significant price increase ($600-$700 for a medication which costs pennies) was justified due to the more ergonomic appearance of the delivery device and improved safety profile. Her miscalculation seems to have indirectly incited the war on Big Pharma by angering the public, the media, and the government simultaneously.

Is Trump Headed Into His Own “If You Like Your Health Plan You Can Keep It” Quagmire??

Jan 22, 2017• 6

By ROBERT LASZEWSKI

On Friday night the administration issued an executive order giving Trump administration appointees enormous flexibility in modifying how the Obamacare individual health insurance market works.

Specifically, President Trump has given his administration the power “to waive, defer, grant exemptions from or delay the implementation of any provision or requirement of [Obamacare].”

The administration has not been clear about just exactly what it is they now want to do.

Their action raises a basic question: Why grant this flexibility if it is not their intent to materially change the way Obamacare works in the individual health insurance market?

Every Republican I know of thinks that Obamacare is failing and unstable––particularly because the plans it offers consumers are especially unattractive to working class and middle class people who can only buy individual health insurance that complies with Obamacare rules. Maybe some of these Republicans know this because that is what I have been saying for three years.

Resist the Evil Fiction That Is Health Insurance

Jan 22, 2017• 38

By MARGALIT GUR-ARIE

It has come to pass. President Donald J. Trump. Are you scared? Are you planning to “resist” the policies you imagine President Trump will pursue by tweeting furiously with clever hashtags galore? Would you prefer to move my fastidious quotation marks from “resist” to “President”? This is after all, the first President in a very long time to take office without the blessings and financial support of established “world order” leaders. It must be rather disconcerting to proceed without clear guidance from our betters, especially seeing how well they served us over the last decades, and particularly when it comes to affordability of health care in America.

Are you binge-watching the Obamacare drama playing on America’s center stage these days? Are you tweeting and retweeting every shred of information that proves Obamacare is a huge success, and its repeal will mean certain death for millions? Or are you busy proclaiming your faith in free markets, the (undemocratic) government of Singapore, or the charitable nature of Americans in general and doctors in particular? Is President Obama your tragic hero, or your shifty villain? Is President Trump your great liberator (although he promised not to do anything you really want), or the Grinch who will steal health care (although he promised to preserve everything you really like)? Are you not entertained? Pass the bread, please.

Interview with Mark Pauly: Part 2

Jan 21, 2017• 9

President Trump and Obamacare

By SAURABH JHA, MD

Healthcare reformers, like the wives of King Henry the 8th, have a thankless job. In a curious inversion of the Tudors, President Trump, who has promised to make healthcare great again, finds himself in the same predicament as the King’s sixth wife who knew what she had to do, just didn’t know how she could do it any differently. Dr. Mark V. Pauly (MVP), Professor of Economics at the University of Pennsylvania, believes President Trump’s options are neither exhaustive, nor exhausted.

The Interview

SJ: I’m quoting from your book Healthcare Reform without side effects “with community rating…doors are open for political and special interests to lobby…Imagination will be stifled…political rent seeking will be rampant.” When I read this paragraph I checked the publication date of your book. It was not 2016. It was 2008 – before the passage of the ACA.

MVP: Unfortunately, the book wasn’t published soon enough before the ACA.

SJ: What, in a nutshell, is the problem with the ACA?

Trump Executive Order: Minimizing the Economic Burden of the Affordable Care Act Pending Repeal

Jan 21, 2017• 2

By JONATHAN HALVORSON

My quick take [edited to be slightly less quick]:

Section 1 is warming up the idea that administrative actions will be taken without waiting for any new legislation to reduce the application of ACA penalties and take the teeth out of regulations. This could include freely offering “hardship” exemptions from the individual mandate, though that would frighten insurers and would tend to reduce the number participating on the Exchanges.

Section 2 further sets the stage for the non-enforcement or the creatively flexible enforcement of the individual mandate, employer mandate, and any other requirement/tax/penalty in the ACA.

Section 3 appears to be about making it easier for states to get 1332 and 1115 waivers. Or, probably more accurately, the standards for granting waivers will change dramatically. States will be given more ability to attach strings to Medicaid, and some QHP requirements will also likely change to fit the Republican philosophy that having more “skin in the game” is in the public interest. How a waiver would fare if it reduced cost sharing and instead sought to save money by setting lower provider and pharma fees is another matter entirely.

Section 4 sets the stage for selling insurance across state lines, weakening the power of state insurance regulators. If a major player like Anthem or United decides to embrace this idea, it could set off a race to the bottom on benefits. (If that happens, which state will be the health insurance version of South Dakota or Delaware?) This would be both a public health and public relations nightmare, so I don’t think that cross-state insurance regulation and sales will ultimately spread widely.

Section 5 acknowledges that when changing regulations is needed to do what the administration wants to do, they will need to follow proper procedure (which means it will take more time).

More to come.

Jonathan Halvorson edits the New Economy section for THCB and is a senior consultant with Sachs Policy Group. FD: As a consultant Jonathan works with startups, providers and health plans, advising clients on policy issues, strategic direction and related topics.

Interview with Mark Pauly: Part 1

Jan 20, 2017• 18

Community Rating – The Worst Possible Way To Do a Good Thing

By SAURABH JHA, MD

I have a grudging respect for health economists, “grudging” because, like many doctors, I want my pieties unchecked. Health economists check our pieties with quantitative truths. They describe the way the healthcare world is – a view from 29, 000 feet, pour cold water on the way we think the world should be, and guide, with abundant disclaimers, the way we can make things better. It’s unwise climbing Everest without a Sherpa, nor is it wise reforming healthcare without listening to health economists from across the political spectrum.

President Trump, along with the Republican House and Senate, will be dismantling the Affordable Care Act (ACA). In a sense, President Trump is not just descending Everest, a treacherous feat in its own right, but scaling a peak arguably more dangerous than Everest. Despite their differences, Mr. Obama and Mr. Trump share one commonality – an implicit distrust of the health insurance industry.

How did the American health insurance industry become so vilified? This is, in part, because necessity is the father of all vilification. Insurers are a necessary evil in a country where there’s still deep mistrust of the government. Partly, this is because we transfer our angst about the uncertainty of our future, the dice which plays with our lives, to insurers who are in the business of rolling the dice. But mostly it’s because the misdeeds of the insurance market have been grossly exaggerated, and the benefits of the market have been attenuated by a few damning anecdotes. This is what Mark V. Pauly (MVP), Professor of Health Economics at the University of Pennsylvania, and one of the most eminent health economists of his generation, believes.

Online Rankings For Hospital Executives?

Jan 20, 2017• 2

By BRADLEY FLANSBAUM, MD

Mayo Clinic CEO John Noseworthy, Credit: Mayo Clinic

This week’s NEJM features an article on hospital-sponsored online rating sites for docs. The author, Vivian S. Lee, M.D., Ph.D., MBA, a prominent health services researcher discusses the adoption and success of her program at the University of Utah and how the system uses a portal open to patients to evaluate staff.

In the piece, she covers familiar ground. Early renunciation and eventual acceptance by faculty in a manner you can predict: initial fears of reputation and prestige loss give way to a stable system allowing docs to obtain feedback in real time to improve their game. It is not all wine and roses in her telling, but like all things, the apocalypse never materializes, and the once unthinkable becomes business as usual. Docs adjust. Life moves on.

Also in her viewpoint, she cites a recent study of interest that continues to get a lot of attention whenever inquiring minds consider provider ratings. The research assesses Yelp’s ability to match the job of HCAHPS—which it not only does well but adds a thing or two where CMS assessment falls short. Have a look here. The uniqueness of the study helps buttress the case for what is to follow, i.e., a divergent approach to individual appraisal at odds with the status quo.

Which gets me to my (serious) question. Hospital leadership of all stripes endorses ratings as a form of performance assessment–not just as a means to better patient-physician interaction, but also as a potential salary conditioner. So why not for executives? The intervention has a lot of desirable attributes in that it’s quantifiable, easily measured, and goal directed. And using survey tools to boost job achievement has a proven track record as Dr. Lee and others have demonstrated.

Bringing the “Art of the Deal” to Healthcare

Jan 20, 2017• 8

BY MICHAEL MILLENSON

Obamacare, at least in its original incarnation, is on its way out. The pressing question now is whether “art of the deal” health care will remain.

“The Art of the Deal” is the title of the 1987 best-seller that catapulted real estate developer Donald Trump to national prominence. Although Trump has denounced Obamacare as a “disaster,” and Republicans have voted for its repeal, their attacks have focused mostly on sections of the Affordable Care Act that expanded access to health insurance.

At least as important, however, are the lesser-known parts of the law that have let Medicare use its financial clout to push for better, safer, and less expensive medical care. In Trump’s terminology, it’s been a “terrific deal” for anyone who’s seen a doctor or gone into the hospital, saving a staggering 125,000 lives and $28 billion in just four years, according to the Department of Health and Human Services.

Unfortunately, Trump’s pick as HHS secretary, orthopedic surgeon and Georgia Republican Representative Tom Price, appears at best a lukewarm supporter of this approach. Will Trump protect Americans’ great health care deal? Or might Price be the first cabinet secretary to hear, “You’re fired!”?