The Health Care Blog – Page 656 – Everything you always wanted to know about the Health Care system. But were afraid to ask.

Above the Fold

Better Health Care at Half the Cost

Mar 28, 2012• 6

By Joe Flower

Why “half the cost?” How? Most important, what does it mean for hospitals and health systems? Here’s the argument, and some of the implications.

In 1980, health care in the United States took no more of a bite out of the economy than it did in any other developed country. Then we instituted cost controls. By 2000, U.S. health care cost twice as much as everyone else’s. By 2020 or 2025, we may be back to costing the same as any other country — half the current cost in GDP.

Historical charts of the comparative cost of health care in different countries show a startling and obvious pattern. The trend lines of the leading economies form a fairly tight pack, drifting slowly upward from around 5 percent of GDP in 1960 to 8 percent to 10 percent in recent years — except for one. Around 1980, the U.S. trend line sharply breaks from the pack, and quickly establishes itself at half again as much as most other leading economies, then twice as much.

This happened over the very period that Medicare, followed by private health plans, instituted increasingly stringent and widespread unit cost controls.

I draw two conclusions from this: The notion that U.S. health care must cost twice as much as everyone else’s is not exactly the law of gravity. And there is no evidence that unit cost controls actually control system costs. In fact, through a series of complex feedback mechanisms, it may well be that controlling unit costs pushes up system costs, as members of the system find ways to increase their prices and the numbers and acuity of their utilization patterns despite the caps on reimbursements for individual items.

If the Supreme Court Overturns the Individual Mandate

Mar 28, 2012• 37

By Robert Laszweski

First, trying to predict how the Court will rule is at best just speculation. I know what Justice Kennedy said both today and yesterday and it certainly doesn’t look good for the Obama administration and upholding at least the mandate.

But I will remind everyone, based upon oral arguments, most Court watchers expected a ruling in favor of the biotech industry on a recent case involving health care patents. “Surprisingly,” the Court ruled against the industry.

Whatever the justices are now thinking, there isn’t a lot anyone could do differently until we actually get a ruling and know exactly what gets thrown out, if anything, in the 2,800-page law.

But if the mandate is overthrown, then what?

First, exactly how the Court rules on severability will be critical. What could go out with the mandate?

The Obama administration has smartly tried to build a firewall around the rest of the Affordable Care Act (ACA) by arguing before the Court that only the insurance reform elements of the bill should fall if the mandate goes down—that the mandate is only the quid pro quo for the insurance industry in exchange for taking all comers. That looks to me like the most logical outcome of overturning the mandate—but my perspective is one of an insurance veteran not a Court expert.

Health Insurance Exchanges: What to Do During the Waiting Game?

Mar 28, 2012• 1

By Kevin Walsh

Being in limbo is never a good feeling – it’s in our nature to make decisions, feel comfortable, and find solid ground. So many state leaders may be feeling uncertainty and hesitancy now, as they weigh the pressure to move forward with building a health insurance exchange with the knowledge that the Supreme Court will soon weigh in on the future of the regulations. As my peers have pointed out recently, states are taking different approaches to handling being in limbo. Some are moving forward with confidence, some are testing the waters, and others are doing nothing – determined to wait and see.

One thing is certain, however – there is an opportunity for states to examine how to best use technology and solutions to serve people, regardless of how the regulations play out. As the researchers at Urban Institute point out in this New York Times article by Robert Pear, the states currently making the least progress toward an exchange are actually the ones that could benefit the most from an Exchange, because they have large numbers of uninsured residents.

States can move forward now with the following considerations, which will be helpful in either the event that the health insurance exchange mandate is upheld and they are asked to move forward, or in the event that they have more flexibility, but still need to use technology to best serve their citizens.

That’s Not a Limiting Principle, Noah Feldman Edition

Mar 28, 2012• 2

By Michael F. Cannon

Harvard law professor Noah Feldman opines that U.S. Solicitor General Don Verrilli ”faltered” yesterday when Supreme Court justices asked whether the Obama administration’s claim that the Constitution empowers Congress to force people to purchase health insurance contains any limiting principle. Put differently, if the power “To regulate commerce…among the several States” allows the government to force you to buy health insurance, can the government also force you to buy broccoli?

Feldman laments that Verrilli’s “failure to offer a sharp distinction could be disastrous for the government’s case,” but assures us, “There is a good, sharp answer to this wholly reasonable question.” Here is the preface to Feldman’s answer:

[W]hen it comes to the strange and unusual case of health insurance, inaction causes the whole market to break down. By not buying health insurance, the healthiest person is depriving everyone of a public good. By sitting on their hands — and acting rationally — people who do not purchase insurance are unintentionally causing the market to fail.

One problem here is that if Congress can compel you to buy something whenever not buying it would deprive someone else of a public good, then Congress can also force you to purchase — not just tax and provide to you, but force you to purchase — tanks, fighter jets, and military bases; lighthouses; software; fireworks displays; e-books; comparative-effectiveness research (or really any type of research); a subscription to Consumer Reports; landscaping services; parks; rare and endangered species; street lights; et cetera ad nauseam. That isn’t much of a limiting principle.

Another problem is that economists use the term ”market failure” to describe a situation where one or more features of a free market cause that market to fall short of the efficiency-maximizing outcome. Feldman misuses it to mean, “This market isn’t doing what I want.” That is not market failure. Nor is it much of a limiting principle. If the Commerce Clause empowered Congress to force people to buy things to correct every perceived shortcoming in every market, Congress’ powers would be without limit. Even worse, Feldman doesn’t even bother identify whether the outcome he deplores is caused by some feature of a free market or government intervention (see below).

Justice Kennedy Swings Again

Mar 28, 2012• 4

By Michael Ricciardelli

More than a few prognosticators have posited a 5-4 split (either way) after reading the tea leaves of oral argument before the Supreme Court on the Individual Mandate yesterday. I don’t disagree. I won’t venture a guess, up or down, but I will say that it is likely, as usual, that Justice Kennedy (surprise, surprise) will be the swing vote. As such, you can find below three Justice Kennedy quotes that may be indicative of which way he’ll swing. (page numbers refer to the page number of the transcript, linked here.) And for those of you swallowed by sorrow at the prospect of the Individual Mandate going down in flames, pay particular attention to the last quote and Justice Kennedy’s consideration of “degrees” of uniqueness as a cabining principle. It is, I believe, as I heard a particularly astute health law professor say today, indicative that “Justice Kennedy is in play.”

JUSTICE KENNEDY–Could you help — help me with this. Assume for the moment — you may disagree. Assume for the moment that this is unprecedented, this is a step beyond what our cases have allowed, the affirmative duty to act to go into commerce. If that is so, do you not have a heavy burden of justification?

I understand that we must presume laws are constitutional, but, even so, when you are changing the relation of the individual to the government in this, what we can stipulate is, I think, a unique way, do you not have a heavy burden of justification to show authorization under the Constitution? (p.11-12)

Can’t We Do Better Than State-Sponsored Broccoli?

Mar 28, 2012

By Nathan Cortez

Legal arguments often rely on analogies. Indeed, during the first year of law school, students learn to analogize and distinguish cases. “This case is like this one, not that one.” Good lawyers can always conjure up and deploy a good analogy.

So why was it so hard yesterday for some of the most skilled lawyers and judges in the country to identify a good analogy for the individual mandate – the Affordable Care Act’s requirement that almost everyone buy minimum essential health insurance coverage or pay a penalty?

After listening to Tuesday’s historic two-hour oral argument and reading the transcripts, I counted roughly 17 different analogies to the insurance mandate – none of which seem particularly apt.

Here’s a brief rundown of the analogies invoked yesterday (by both the justices and the advocates), and then some thoughts on why they fall flat:

1. Is mandating health insurance like mandating that people buy cell phones to call 911? (Chief Justice Roberts).

2. Is the mandate like a requirement that we buy insurance to pay for our own burial services? (A macabre Justice Alito, who’s right: we’re all going to die).

3. Is the mandate like forcing us to buy broccoli? (Justice Scalia, invoking the dreaded broccoli analogy, which is apparently one of the parade of horribles that logically flows from the health insurance mandate, a canard that David Orentlicher has exposed).

The Individual Mandate and Severability

Mar 27, 2012• 5

By Michael Cannon

[youtube width=”560″ height=”275″]http://www.youtube.com/watch?v=bCzJgHMH5pQ[/youtube]

THCB contributor and Cato Institute Director of Health Policy Studies Michael Cannon on the severability clause, which looms large after Tuesday’s Supreme Court hearing.

The THCB Reader — the SCOTUS Oral Arguments

Mar 27, 2012

What if the Supreme Court Strikes Down the Individual Mandate?
By D. BRAD WRIGHT

The first scenario is easy: If the Court upholds the mandate, the ACA goes forward as planned to the continued objections of many conservative Americans and politicians. The second scenario is less clear.

The Broccoli Mandate
By AVIK ROY

If you’ve been paying attention to the debate over the constitutionality of the health reform law, you’ve probably heard mention of the hypothetical “broccoli mandate.”

Sizing Up the Obama Administration’s Defense of the Health Reform Law
By HENRY J. AARON

Back in 2009, when the Affordable Care Act was being written, few doubted that Congress can constitutionally impose a tax penalty on people who refuse to carry adequate insurance.

Health Care Jujitsu
By ROBERT REICH

Not surprisingly, the Supreme Court argument over the so-called “individual mandate” requiring everyone to buy health insurance revolved around epistemological niceties such as the meaning of a “tax,” and the question of whether the issue is ripe for review.

Why Healthcare Is Different (No, Really)

Mar 27, 2012

By Andrew Oram

Working in the health care space has forced me to give up many hopes and expectations that I had a few years ago. Forgive me for being cynical (it’s an easy feeling to have following the country’s largest health IT conference, as I reported a month ago), and indeed some positive trends do step in to shore up hope. I’ll go over the redeeming factors after listing the five tough lessons.

1. The health care field will not adopt a Silicon Valley mentality

Wild, willful, ego-driven experimentation–a zeal for throwing money after intriguing ideas with minimal business plans–has seemed work for the computer field, and much of the world is trying to adopt a “California optimism.” A lot of venture capitalists and technology fans deem this attitude the way to redeem health care from its morass of expensive solutions that don’t lead to cures. But it won’t happen, at least not the way they paint it.

Health care is one of the most regulated fields in public life, and we want it that way. From the moment we walk into a health facility, we expect the staff to be following rigorous policies to avoid infections. (They don’t, but we expect them to.) And not just anybody can set up a shield outside the door and call themselves a doctor. In the nineteenth century it was easier, but we don’t consider that a golden age of medicine.

Instead, doctors go through some of the longest and most demanding training that exists in the world today. And even after they’re licensed, they have to regularly sign up for continuing education to keep practicing. Other fields in medicine are similar. The whole industry is constrained by endless requirements that make sure the insiders remain in their seats and no “disruptive technologies” raise surprises. Just ask a legal expert about the complex mesh of Federal and state regulations that a health care provider has to navigate to protect patient privacy–and you do want your medical records to be private, don’t you?–before you rave about the Silicon Valley mentality. Also read the O’Reilly book by Fred Trotter and David Uhlman about the health care system as it really is.

The Great Game

Mar 27, 2012

By Richard Hoey

Last week, the British Government’s Health and Social Care Bill finally completed what has been one of the most tortuous passages through Parliament of any piece of legislation in recent memory.

The bill has been the subject of 15 months of intense political wrangling and more than a thousand amendments – many focused on its provisions for greater competition in the National Health Service (NHS).

Competition is a fact of life in most areas of UK society, but as soon as it is proposed within the sphere of the state-funded NHS, many people here start to get very jittery about it.

The key concern among critics is that competition between multiple providers will fragment the NHS and remove one of its big potential advantages – its ability to get different elements of healthcare working together within a single, integrated system.

On the other hand, proponents of competition argue that state monopolies like the NHS can become sluggish and unproductive, and that an injection of competition is just what is needed to drive efficiency and push up quality.