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Above the Fold

SCOTUS Ruling An Unappreciated Win for the GOP

Jun 29, 2012• 17

By Al Lewis

The ruling upholding most of Obamacare was an as-yet-unappreciated boon for the GOP. A brilliant move by Roberts, he managed to preserve the remaining integrity of the court — and raise his own stature — while at the same time increasing the odds of a Romney win. How? By recasting the mandate as that third-rail of politics, a tax. Let’s dissect both these statements.

First, how can we be sure it wasn’t a major victory for Obama, pundits notwithstanding? There is a “market” in presidential election predictions, www.intrade.com. One may place bets on candidates and while, like the stock market, it is wrong sometimes, the “price” of each candidate does react to events. So, for instance, Rick Perry’s price fell 75% within seconds of his forgetting the name of the third cabinet department he was going to eliminate. And yet, a full day after Obama’s “victory” the “price” his re-election chances still has not budged. It bumped briefly and has since fallen back to the same $5.40 (to win $10 if he wins—a 54% probability) that it’s been hovering at for weeks.

Second, was Roberts accurate, or just politically astute, in re-casting the mandate as a tax? Answer: The latter.

The Beginning of the Next Healthcare

Jun 29, 2012• 10

By Joe Flower

What a cliffhanger! It is an historic decision, found on the narrowest possible grounds, with a majority agreeing on the result, but not broadly on the reasoning.

Effects: The principal effects of the finding, from the point of view of the system: They have just avoided enormous chaos over the coming years. The system is chaotic enough already, at a tipping point into an unclear future, with the huge shift in underlying economic factors. These factors include especially the various ways of shifting some economic risk from the payers and employers to the providers and the patients/customers.

Stabilizing: The Supreme Court finding stabilizes the future of the system. The affirmation, combined with the fact that a gridlocked polity in Washington is unlikely to come up with any major change or repeal of the law, and that the major parts of the law are self-funding, means that everyone now knows at least the general outline of what the rules are for the foreseeable future.

Permanent: The law is now likely permanent. To overturn it, you would need President Romney with a filibuster-proof majority in the Senate and a majority in the House. The major parts of the law are self-funding and not dependent on Congressional outlays. By 2016, most people will have experienced the results of the law, and found its benefits far outweigh its costs. Business owners will find that it is not as burdensome as some have feared. It will have become obvious that the experience of the actual law is far different and more benign than the fears that have been drummed up about it politically. Once people experience its benefits for themselves, it will be very hard to gin up a campaign to take it away from them.

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Where’s the Outrage? Government Proposes (Food) Rationing!!!

Jun 28, 2012• 2

By Merrill Goozner

The U.S. Preventive Services Task Force is at it again. This time, the government-appointed panel is on fat patrol. Its review of the medical literature found that diet and exercise combined with group counseling beat popping a pill when it comes to controlling weight.

For those with short memories, USPSTF is the government panel that in the midst of the health care reform debate had the temerity to suggest the evidence was iffy on the wisdom of mammography for women under 50. Check with your doctor before deciding if an early start to routine breast cancer screening was right for you, they said.

Conservatives had a field day. “We don’t know how far government will go in this bureaucracy,” cried Rep. Michele Bachmann, R-Minn., who a few months later launched her presidential campaign. “This is how rationing begins,” intoned Rep. Marsha Blackburn, R-Tenn.

When it comes to obesity, though, a little food rationing is just what the doctor ordered, according to the latest from the USPSTF. How one rations matters, however.

“With drugs, when people stop, they gain the weight back,” said David Grossman, a senior investigator at Group Health Research Institute in Seattle and chairman of the 16-member panel that issued the updated guidelines on obesity prevention on Tuesday. “This is a lifestyle problem. If you don’t change your lifestyle, drugs are not likely to provide a long-term solution.”

Michelle Obama wasn’t taking the easy path when she chose the obesity epidemic and childhood obesity in particular as her main cause. Since the late 1970s, the number of people considered obese grew by half and now totals 32 percent of men and 36 percent of women. One in 20 Americans are now considered morbidly obese. By 2030, if nothing is done, those numbers are expected to grow to over 40 percent obese with over 10 percent morbidly so.
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Supreme Court Upholds Affordable Care Act

Jun 28, 2012• 34

By THCB STAFF

Defying predictions that the Obama administration would suffer a landmark political defeat, the US Supreme Court upheld the Affordable Care Act this morning. The implications for healthcare for the 2012 election are obviously nothing less than staggering.

What will the landmark legislation mean for the healthcare industry? For heath IT companies? For hospitals and health insurers?

We’ll be posting reactions from THCB analysts over the course of the day and in the days to come. In the meantime, if you have an opinion on the ruling, post your comments in the thread below.

If you can’t wait, you can download the ruling here in pdf format.

SCOTUS Surprise

Jun 28, 2012

By Robert Reich

Today a majority of the Court upheld the constitutionality of the Affordable Care Act, otherwise known as Obamacare in recognition of its importance as a key initiative of the Obama administration. The big surprise, for many, was the vote by the Chief Justice of the Court, John Roberts, to join with the Court’s four liberals.

Roberts’ decision is not without precedent. Seventy-five years ago, another Justice Roberts – no relation to the current Chief Justice – made a similar switch. Justice Owen Roberts had voted with the Court’s conservative majority in a host of 5-4 decisions invalidating New Deal legislation, but in March of 1937 he suddenly switched sides and began joining with the Court’s four liberals. In popular lore, Roberts’ switch saved the Court – not only from Franklin D. Roosevelt’s threat to pack it with justices more amenable to the New Deal but, more importantly, from the public’s increasing perception of the Court as a partisan, political branch of government.

Chief Justice John Roberts isn’t related to his namesake but the current Roberts’ move today marks a close parallel. By joining with the Court’s four liberals who have been in the minority in many important cases – including the 2010 decision, Citizen’s United vs. Federal Election Commission, which struck down constraints on corporate political spending as being in violation of the Constitution’s First Amendment guaranteeing freedom of speech – the current Justice Roberts may have, like his earlier namesake, saved the Court from a growing reputation for political partisanship.

The Supremes Rule: Why You Have to Love Lawyers and Politicians

Jun 28, 2012• 2

By Michael Millenson

Like the hero in an old-time movie, Chief Justice John Roberts metaphorically untied Obamacare from the railroad tracks and, with four of his colleagues, pulled it away from the onrushing destructive force of his right-wing colleagues in the nick of time. In doing so he also saved President Obama from political disaster.

Alas, just like in the movies, the villains will soon be back.

While the next five months will determine whether the Court ruling upholding health reform was a victory or just a reprieve, the president has been plucked from the perils of a politically ruinous headline: “Signature achievement of constitutional lawyer president declared unconstitutional.”

In doing so, the Court showed why Americans hate the other guy’s lawyer and love theirs. Roberts embraced his inner reactionary by ruling that the individual mandate did not meet the requirements of the Commerce Clause — even though virtually all respected conservative jurists believe it does, and the conservative Heritage Foundation clearly believed it did when proposing the idea under a Republican president.

However, the Court avoided what would look like a political decision overturning the entire law by ruling that the penalty for not buying health insurance was a constitutionally permitted tax. Which made the law constitutional. Game. Set. Match. (Well, unless you were a poor person counting on an expansion of Medicaid. But if you’re poor, you should be used to losing.)

Don’t you love clever lawyers? At least when they’re on your side?

What The SCOTUS Ruling Means For Healthcare

Jun 28, 2012• 3

By Douglas Holtz-Eakin

The Supreme Court has upheld the Affordable Care Act (ACA), a frustrating situation in which conservatives won the policy battle, but lost the war over the Act. In particular, the Court held that Congress cannot use the Commerce clause to compel commerce. The individual mandate qua mandate is unconstitutional. However, the Congress has the right to impose taxes (if not punitive and excessive), which permits the Obama administration to add a tax on millions of uninsured Americans in addition to the ACA’s already-massive tax burden on the middle class.

The Court ruled that a Medicaid expansion could be an unconstitutional federal coercion of the states, but this expansion does not have a penalty large enough to pass that threshold. Interestingly, the Court opened up the possibility that governors could refuse the Medicaid expansion. Those same individuals would then be eligible for subsidies in the exchanges. If all the governors refused the expansion, and if individuals take up subsidized insurance the federal cost heads even farther north.

In a bit of a pyrrhic victory, the Forum’s amicus briefs, signed by over 200 economists, were cited twice in the Court’s dissenting opinion. (See my amicus brief.)

The field of play now shifts from a legal battle to a policy debate. In addition to the Court’s endorsement of the policy foundations of the challenge to the ACA, the fundamental policy flaws remain.

The ACA remains a damaging, anti-growth vehicle for taxation. The so-called Medicare surtax increases marginal tax rates on the return to saving, investment, and innovation. The medical device tax will hurt innovation and cost jobs. A bill to repeal it is gathering dust in the Senate. Also, the insurers fee – the “premium tax” – will roil insurance markets, disrupt patient-provider relationships, and the vast majority of the burden will fall on the middle class.

Heritage & Roberts decree, all the world be taxed

Jun 28, 2012• 6

By Matthew Holt

The Supreme Court’s decision upholding the ACA is deliciously ironic. The “individual mandate”–an idea promoted for everyone in the 90s and for Massachusettians (?) in the 2000s by the arm of the Republican party known as the Heritage Foundation–was found to be legal. But not as a mandate, instead as a tax.

Put aside for a minute the dreadful political contortions required to get this quasi-universal health insurance bill past Congress in the first place. Put aside the fact that the supposedly non-political Supreme Court hands down decisions time after time that are a pure reflection of the exceedingly public extreme political views of its justices. Put aside for a minute the fact that the ACA has undeniably kickstarted a round of changes in the health care delivery and insurance system that at least has the potential to lower costs and improve care, and that the luncay of politics meant we nearly lost that momentum.

Instead focus on what the Supremes have done. They’ve cut through decades of rhetoric about how we pay for health insurance and clarified it thus: we pay for health care via taxes–whether they are private taxes on employers and employees (and now individuals) or public ones on citizens.

Want to Revolutionize Healthcare? Enable Physicians, Don’t Replace Them

Jun 27, 2012• 13

By David Shaywitz, MD

The reality of today’s funding environment for digital health entrepreneurs is that it’s traditional tech investors who have the lion’s share of the money, while most long-time healthcare investors are on the ropes, contending with fleeing LPs and at least the perception of disappointing returns.

While it’s great news that some tech funds seem interested in dipping their toes into the healthcare space, it’s concerning that the investors with the most resources are not necessarily the ones who understand healthcare the best.

Tech investors, in general, are not always comfortable with physicians, and seem much more at home with engineers and developers. These investors also tend to gravitate to businesses selling directly to consumers rather than dealing with the sordid complexities of our current healthcare system.

Many tech investors are also — understandably — drawn to the power of data, and the possibility of analytics, a sensible affinity but one that at times can translate into an excessively reductive view of medicine that fails to capture the maddening but very real ambiguity of medical science, and especially of clinical practice.

Finally, Quality We Really Care About

Jun 27, 2012• 15

By FARAZ AHMAD and THOMAS TSANG

Patient-centered care and patient engagement have become central to the vision of a high value health delivery system. The delivery system is evolving from a fee-for-service transactional payment model to a value-based purchasing model using outcome data and quality improvement and attainment. The Centers of Medicare and Medicaid Services (CMS) and private payers have spurred delivery redesign of networks that focuses on a set of clinical quality measures and patient care experiences along with efficiency measures.

However, the questions we ultimately really care are: “Did I get better? Am I healthier?”

With the advent of Facebook, PatientsLikeMe® and Avado, consumers and patients are sharing their healthcare experiences openly with their support system and strangers with similar illnesses. Our delivery system has yet to leverage the power of patient/consumer reported data in feeding back to care deliverers in the quality improvement cycle.

Clinical quality measures have traditionally consisted of process or surrogate measures and centered on providers and hospitals. As we move toward a system based on value, the measurement system must shift as well. Part of this movement will be utilizing outcomes directly reported from patients and their caretakers and incorporating these outcomes into quality improvement initiatives and payment models. The widespread adoption of standardized and validated patient-reported outcomes measures (PROMs) would accelerate the development of a patient-centered health system. However, new standards; patient-friendly, digitally-enabled instruments; secure portals; and more research will be required to facilitate adoption.