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Connector Update

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By PAUL LEVY

This report of recent activity in Massachusetts may be of special interest to my out-of-state readers. The insurance exchange set up by the Legislature when the MA health care access bill was passed has gotten very good grades. The folks there have had many things to balance, and they have done it thoughtfully. This report was posted on April 22 by Glen Shor, the current Executive Director. He succeeded Jon Kingsdale last April.

April showered us with reasons to be optimistic about the state of health care reform in Massachusetts.

Faced with projected 11% membership growth in the Commonwealth Care program next year as people lose unemployment benefits – and no additional resources to cover that growth – we encouraged our Medicaid managed care organizations to deliver high-quality, cost-effective coverage for less. They came through for the taxpayers with savings of $80 million, meaning that our members will not have to face the prospect of benefit reductions or unaffordable co-payments.

There was also good news for small business owners looking for an easy way to find affordable health insurance for their employees. Starting in July, we are eliminating all up-front fees for purchasing coverage through the Health Connector and will be launching a wellness program and premium discounts for qualifying small businesses. Within a few months, we will also be expanding the choice of health insurance carriers available to small businesses through our easy-to-use, online shopping experience – and even adding an additional carrier for individual purchasers. Our unsubsidized Commonwealth Choice program has doubled in membership over the past year-and-a-half, and these upgrades should make it an even more appealing tool for comparing options and choosing coverage that best suits one’s needs.

And, of course, the fifth anniversary of Massachusetts health care reform was officially marked by Governor Patrick and others at the Dorchester House this month. While we are proud of the fact that 98.1 percent of our residents and 99.8 percent of our children have coverage, the event poignantly showcased that reform isn’t just about numbers. It’s about helping people. We’re succeeding on both fronts.

On the national scene, the Massachusetts experience continues to be closely examined as other states begin to develop their health insurance Exchanges. Partnering with MassHealth and the University of Massachusetts Medical School, we were successful in obtaining a $35.6 million three-year federal grant that will not only help us share our technological knowledge and practices with other New England states but also improve our web-based shopping experience for Massachusetts consumers and small businesses.

Medicare Announces Rules For Quality Bonuses To Hospitals

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By JORDAN RAU

Medicare took its broadest step yet in moving away from its traditional hospital payment method, finalizing a plan to alter reimbursements based on the quality of care hospitals provide and patients’ satisfaction during their stays.

The initiative is the beginning of a transition from paying hospitals on the basis of the amount of care they provide. Many health care researchers believe this fee-for-service system has encouraged unnecessary care, driving up costs and giving hospitals no incentive to economize.

Medicare’s new “value-based purchasing” program was mandated in last year’s health care law. It has sparked less discussion than has another experiment to change Medicare’s payment system through accountable care organizations, where a select group of doctors and hospitals get bonuses if they find ways to save money.

But this latest payment change affects twenty times more hospitals than would ACOs. More than 3,000 acute care hospitals will have their payments adjusted starting in October 2012.Continue reading…

How Many Diseases Does It Take?

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By MARYA ZILBERBERG, MD

It is not a secret that I dislike tobacco companies. Intensely. I do not see the point of allowing them to sell a product whose value is all in the negative. I am appalled that we are looking for expensive ways to diminish lung cancer mortality before considering a complete ban on this disease promotion apparatus. Yet this story in the LA Times got my goat. Briefly, a woman who has smoked for years and has had smoking-related obstructive lung disease since 1989 decided to sue tobacco companies after developing lung cancer in 2003. The suit has been making the rounds in various levels of courts, since the defendants asserted that she had exceeded the 2-year statute of limitations following the onset of her smoking-caused disease, referring to the 1989 COPD diagnosis. However, the California State Supreme Court has ruled that she can still sue the manufacturers, since she filed her suit within two years of the lung cancer diagnosis. So, why am I bothered?

Well, here is the thing: once you develop lung disease, followed by periodontal disease, as this woman did, had she really remained unaware that cigarettes are bad? That they cause problems? Is it really possible to live in our world and NOT be aware that tobacco kills? And if she was aware and continued to smoke, whose responsibility is it that she developed lung cancer, hers or the manufacturer’s? Well, you say, but the tobacco companies are unethical and lied about making cigarettes more addictive by adding undisclosed ingredients. So, how are we, the consumers, to know? Well, this is pretty simple: We have free will, don’t we? And if you have the free will, you have to exercise some will power, no? Is this not what the human condition is all about? Continue reading…

Vermont Chooses Single-Payer: Who Else Has an Appetite for Experimentation?

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By JONATHAN HALVORSON

This past Monday, the Vermont Senate passed a Single-Payer bill. The House had already passed a similar bill and the governor is friendly to the legislation, so all that stands between Vermont and a single-payer law are a few formalities. At the moment, though, Vermont is alone in taking advantage of the Affordable Care Act to achieve universal coverage without private insurers. In fact, it isn’t clear that any other states are taking serious steps even toward a public option.

Massachusetts isn’t going there: it is doubling-down on its eponymous model that relies on private health plans, and seems hell bent on showing the nation that this model can work. The state just boasted that capitation rates will actually go down in 2012, allowing the program to grow enrollment without additional funding. It’s not difficult to imagine the feeling of responsibility weighing on administrators and Democratic officials there as they work to pull the levers of payment reform to reign in Partners HealthCare and other misbehavers.Continue reading…

Some Employers Already Sending Workers To Exchanges to Buy Health Insurance

By JULIE APPLEBY

Fed up with the unpredictable cost of health insurance for his small business, Mike Sarafolean last year made a dramatic change: Instead of picking a plan to offer workers, he now sends them to a “private exchange” or marketplace where they compare and choose their own insurance. And the amount his company pays toward coverage is capped.

Mike Sarafolean, CEO of Orion Corporation of Minnesota, last year joined a growing number of employers embracing a dramatic change in the way they offer health benefits (Photo by Andy King).

The move puts his St. Paul, Minn.-based company on the leading edge of a nascent trend that could shape how more employers offer and pay for their health benefits in the coming years. It is part of an ongoing evolution in job-based health benefits that is gradually shifting cost and responsibility to workers.

The private exchanges, mainly run by former insurance executives and employee benefit consulting firms, operate in more than 20 states.Continue reading…

Are We Entering an Era of Political Cooperation on Medicare?

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By DAVID E. WILLIAMS

There’s a chance that we’re starting to see a convergence of opinion on Medicare among Democrats and Republicans on Capitol Hill. I know the recent bickering makes this seem like an odd contention, but consider the following:

  • In recent decades Republicans have done a great job of tarring Democrats with the “tax and spend” label while being fiscally irresponsible themselves. Republicans criticized Carter era deficits, and then proceeded to run up much more startling deficits under President Reagan. Bill Clinton had us looking at surpluses(!) as far as the eye could see until W came in and sent the red ink soaring –partly through tax cuts but largely by boosting spending. When Republicans continued brandishing the “tax and spend” cudgel, Democrats figured they were suckers to go the Clinton route of fiscal responsibility and get no credit for it
  • We’re now at the point where the size of the national debt actually matters. The only way to bring it under control is to bring deficits down. This is something on which Republicans and Democrats can agree. So now you’ve got both parties committed to the idea of deficit reduction; that just hasn’t been the case before.
  • There are still big differences on how to do it, but approaches –at least on Medicare– are likely to converge once the challenge is faced in a serious way, i.e., with an eye toward solving the problem rather than pandering to one group or another. In the case of Medicare, Republicans are likely to move toward the Democrats’ position over time.Continue reading…

Rethinking IMS Health v. Sorrell: Privacy as a First Amendment Value

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By FRANK PASQUALE

Today the Supreme Court will hear oral arguments in IMS Health v. Sorrell. The case pits medical data giant IMS Health (and some other plaintiffs) against the state of Vermont, which restricted the distribution of certain “physician-identified” medical data if the doctors who generated the data failed to affirmatively permit its distribution.* I have contributed to an amicus brief submitted on behalf of the New England Journal of Medicine regarding the case, and I agree with the views expressed by brief co-author David Orentlicher in his excellent article Prescription Data Mining and the Protection of Patients’ Interests. I think he, Sean Flynn, and Kevin Outterson have, in various venues, made a compelling case for Vermont’s restrictions. But I think it is easy to “miss the forest for the trees” in this complex case, and want to make some points below about its stakes.**

Privacy Promotes Freedom of Expression

Privacy has repeatedly been subordinated to other, competing values. Priscilla Regan chronicles how efficiency has trumped privacy in U.S. legislative contexts. In campaign finance and citizen petition cases, democracy has trumped the right of donors and signers to keep their identities secret. Numerous tech law commentators chronicle a tension between privacy and innovation. And now Sorrell is billed as a case pitting privacy against the First Amendment.

There is an old tension between privacy and the First Amendment, best crystallized in Eugene Volokh’s effort to characterize privacy protections as the troubling right to stop others from speaking about you. Neil Richards has dissected the flaws in Volokh’s Lochneresque effort to reduce the complex societal dynamics of fair data practices to Hohfeldian trump cards held by individuals and corporations. Societies reasonably conclude that certain types of data shouldn’t influence certain types of decisions all the time. And courts have acquiesced, allowing much “of the vast universe of speech [to] remain[] untouched (and thus unprotected) by the First Amendment.”Continue reading…

Can Berwick Be Saved? Here’s One Possible Scenario

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By BOB WACHTER, MD

We’ve all had the experience of hearing someone we know well say or write something totally out of character, and wondering, “what was that about?”

Don Berwick said such a thing last week, all-but-contradicting President Obama’s support for a strengthened, independent Medicare payment board. After a little head scratching, I began to wonder whether this might have been a harbinger of some good news regarding his tenure as Medicare czar.

This is one complicated political dance, so let me explain.

Berwick, as you know, received a recess appointment to lead the Centers for Medicare & Medicaid Services (CMS) last July, after his nomination had become hopelessly entangled in a web of partisan politics. I applauded President Obama for the appointment, and predicted that Don would do a great job in this crucial role, perhaps even wooing some of the Republican legislators who hijacked his nomination process to re-litigate the fracas over healthcare reform.

Then, in early March, Senate Republicans made it clear that they would not support Berwick’s continued tenure when his recess appointment expires later this year. The reasons include lingering concerns about Berwick’s politics (particularly his embrace of the British system of universal healthcare coverage), continued anger over the Affordable Care Act (ACA), and some peevishness over the recess appointment itself. In this space last month, I promoted a letter-writing campaign to try to save the Berwick appointment, though insiders told me it was “hopeless.”Continue reading…

Fixing The Failure At Physician Compare

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By MICHAEL MILLENSON

The launch of Medicare’s Physician Compare website at year-end should have been a watershed event in the long campaign for health care transparency and patient empowerment. Instead – and it pains me to write this – Physician Compare is a case study in how the interests of the average citizen can be shunted aside by indifferent government, lazy journalists and solipsistic special interests. That remains true despite all of those involved being Good People Trying To Do The Right Thing.

In reality, the site is confusing and unfriendly to consumers, painfully slow and, worst of all, factually unreliable. Put bluntly, the agency, whose leader famously called himself a “patient-centered … extremist” in a 2009 Health Affairs article, has produced a consumer tool that practically shouts, “We couldn’t care less whether any consumer ever uses this.”

Fortunately for CMS, most of the journalists writing about the site apparently did little more than cut and paste the government press release description of it into their own stories. If I were a federal flack, I’d drink a toast to that famous Marx Brothers movie line: “Who are you going to believe, me or your own eyes?”

Continue reading…

The Rashomon of Health Care: Why the Government is Promoting and Hindering ACOs at the Same Time

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By DAVID DRANOVE

As I have previously blogged, a centerpiece of the Affordable Care Act (ACA) is the promotion of Accountable Care Organizations (ACOs). The Center for Medicare and Medicaid Services is banking on the financial incentives of ACOs (through “shared savings”), combined with over 60 pay for performance quality metrics, to promote efficient, high quality medical care. Providers are certainly taking notice. Hospitals are acquiring physician practices in numbers not seen since the 1990s and many physicians are thinking of starting their own ACOs. For the federal government to so aggressively promote the reorganization of health care delivery is unprecedented. (I am willing to debate those of you who remember the HMO Act of 1973.)

It must have quite a shock to CMS when the Federal Trade Commission announced its antitrust guidelines for ACOs. (These can be found here, especially pp. 21896-21899). I won’t dwell on the details but suffice it to say that the proposed test is likely to have a high false positive rate (challenging many ACOs that are not anticompetitive). And while the FTC lacks the resources to investigate every new ACO, the new rules certainly pose an obstacle to integration. So why is the FTC standing in the way of CMS? The answer may be found in one the masterworks of the great film director Akira Kurosawa.

In the movie Rashomon, four men witness different moments of what might or might not have been a heinous crime. Testifying at trial just three days later, the men attempt to describe the entire terrible episode from their own limited perspectives. The healthcare event whose details are in dispute occurred not three days ago, or even three years ago. And it wasn’t just one event, it was the entire decade of the 1990s. I believe that support or opposition to ACOs depends critically on how one views that lost decade.

Those who adamantly support ACOs – that includes most of my health services research colleagues, especially those still working in Washington to implement the ACA – view the 1990s as a lost opportunity. During the 1990s, hospitals merged with each other and with their medical staffs to create integrated delivery systems. IDSs were the forerunners of ACOs. They were supposed to coordinate care, accept shared financial risk, and give us greater efficiency and quality. Leading health policy analysts at the time could not wax more enthusiastic about how IDSs would change the system. And health providers were eager to jump on the bandwagon; IDS were hailed as “a new wave becoming a tidal wave.” (There were a few naysayers, including this blogger and my friends on the faculty at the Wharton school.) Unfortunately, the IDS wave crashed. Few IDSs saved money or raised quality; many lost their shirts.Continue reading…

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