Three-legged horses can’t run

If you cut a leg off your horse, it’s not going to run far or fast.  If you cut two legs off, it’s going to fall over.  And if someone else cut your horse’s legs off, you wouldn’t help them fix their horse.

Common sense, right?

So why is Paul Ryan et al complaining about ACA?

He and his fellow Republicans chopped not one, but two legs off that horse, and now they scream loud and long that that horse won’t run, so they need to shoot it and replace it with…what?

I bring this to your attention because it explains why there’s so much reluctance on the part of Democrats to work with their Republican colleagues on an ACA replacement. Put bluntly, Congressional Dems believe they got screwed and are really pissed off about that. So pissed off that they are more than happy to let the Republicans shoot themselves in the head all by themselves.

Here’s a quick summary of steps Republicans took that harmed ACA. (more here; a LOT more here)

  • Removed funding for risk corridors which kept co-ops and other plans alive
  • Didn’t expand Medicaid in 17 states
  • Hobbled ACA marketing efforts in multiple states
  • Sued the Obama Administration to block premium supports

I’ll leave aside the things the GOP could have done to help fix ACA, common sense stuff such as:

  • increasing the penalty for not carrying insurance to levels originally recommended by the Heritage Foundation,
  • fixing the “family glitch”
  • require insurers to operate in broad areas so they don’t cherry-pick only the most profitable locations, and
  • requiring full transparency from all medical providers.

If they had, ACA would be operating a lot better today, but Sen McConnell, Speaker Ryan et al weren’t interested in fixing ACA.  (In contrast, Democrats helped fix G W Bush and the GOP’s Medicare Part D plan when it was cratering)

The result of the Republicans’ successful efforts to hamstring ACA were made public earlier this week when President Trump did a photo op with several “Obamacare victims” including a Colorado woman who claimed her health insurance costs had tripled under ACA (note there’s no independent corroboration of her claim). Ms Couey said she’d had to switch insurers multiple times – while there’s no detail on this, it is likely more than one of her previous insurers went belly-up for one of several reasons.

(Warning, this gets pretty wonky) A big reason for Ms Couey’s issues – ACA had provisions specifically designed to help new insurers develop, grow, and become viable competitors – in local markets – in an industry dominated by behemoths. These provisions included “risk corridors”; financial vehicles designed to help health insurers entering markets by offsetting initial losses by transferring profits from their wealthier competitors.

The idea was to force competition into and help sustain that competition in a market where size is all that matters, where it is all but impossible for new, entrepreneurial competitors to start, much less succeed.

Those provisions disappeared, killed off by a Congress ostensibly interested in the competition and the free market.  Specifically, Sen Marco Rubio inserted the clause in the Cromnibus bill that prevented the Feds from moving money around to cover the Co-Ops’ losses in 2014.

Let’s remember that the risk corridor payments were to be budget neutral over the three year lifespan of the program.  The Rubio amendment (Section 227) forced CMS to shift that to a “pay as you go” model.

What does this mean for you?

If someone had chopped the legs off your horse, would you be eager to help them fix their’s? 

 

It’s about healthcare costs, NOT insurance premiums

What’s missing from the debate about AHCA and ACA is any discussion about what’s making premiums so damn expensive.  We are arguing over what we pay, not what we’re paying for.

That makes zero sense.

AHCA makes older folks pay more, and lets younger people pay less for health insurance. But it’s a zero-sum game; all of us are going to pay, we’re just arguing over who pays how much.

That’s not to say ACA was much better at “bending the cost curve”. Most real efforts (excepting Medicare physician reimbursement changes) were taken off the table during the negotiation process, so we were left with ACOs, medical homes, outcomes research, and “death panels” instead of:

  • federal drug price negotiation,
  • re-importation of meds from Canada,
  • requirements that new procedures demonstrate higher efficacy and lower cost,
  • stringent controls on medical devices, and
  • publication of prices and outcomes by provider.

ACA was – and is – an attempt to get insurers to compete for customers by lowering the cost of care. Some – Centene, Molina, Fidelis, and a few others – are succeeding, but the big commercial plans are mostly failing, resorting to hoary old “cost containment” techniques such as higher deductibles and copays instead of real innovation and effective branding and marketing.

This is especially striking as healthcare outcomes in the US are pretty awful, and research clearly proves spending more on physician care does NOT produce better outcomes. In fact, all credible research indicates the US lags well behind other developed countries in terms of health outcomes.

Link between health spending and life expectancy_ US is an outlier – Our World In Data

We pay more – a lot more – for health care than other countries.

So, here’s the solution – but one our politicians won’t pursue because they can’t afford to piss off the healthcare lobbying industry.

Cut what we pay for medical care, drugs, facilities and other services, and reduce the volume of services we pay for.

What does this mean for you?

Medical care drives premiums, and if we don’t deal with medical care, we’ll never control what you and I pay for insurance and taxes.

 

 

ACA Deathwatch – (some) Republicans reveal their bill

Good morning all – it’s going to be a busy day in health reform land – so here’s the latest.

Republicans have released their long-secret healthcare plans; don’t get all excited as it’s going nowhere, mostly because Congressional Republicans aren’t all behind it.

This legislation will have to pass the House and Senate.  It will not pass the Senate as is, because four Republican Senators have publicly stated they will not vote for the bill due to concerns over Medicaid coverage.  Three other Republican Senators have expressed concern with the cost of the bill, and appear reluctant to vote in favor.

For the bill to pass, at least 7 Democrats would have to get behind it- which is highly unlikely.

Republicans will not ask CBO to score the bill – thus we don’t know what the impact on federal deficits would be.  There’s also no estimate of how many would gain or lose insurance.

And, Freedom Caucus members in the House are denigrating the bill as “Obamacare Lite”, demanding a “clean repeal” instead of a replacement.

So, this is mostly an academic exercise, but does provide a starting point for the GOP.  Here are the key points from the bills, with my quick take appended:

  • Eliminates subsidies, replacing them with age-based tax credits ranging from $2000 to $4000
    MCM – this does little to help lower-income Americans; the current subsidies haven’t been enough to drive participation, so these lower amounts won’t do much.  Also, these aren’t income-based, so it amounts to a giveaway to wealthier Americans who don’t need the subsidy. UPDATElate change to the bill adds income levels that would change credits.
  • Eliminates premium-support and deductible/copay funding 
    MCM – these subsidies help poorer Americans pay for deductibles; eliminating them is a major concern of insurers, and several insurers have said they will immediately move to end coverage without the subsidies
  • Roll back Medicaid expansion, capping payments to states
    MCM – Anathema to many GOP Governors and several Senators from expansion states.
  • Delays the Cadillac Tax
    MCM – this would reduce tax receipts, leading to higher deficits
  • Ends most of tax provisions of ACA, reducing taxes to wealthiest Americans
    MCM – this will result in higher federal deficits, a key issue with at least three R Senators
  • Eliminates the individual mandate requirement and tax penalties for failure to maintain coverage
    MCM – this would likely reduce the number of young members who subsidize older and sicker people, leading to higher costs for older members.
  • Requires people to maintain coverage or be subject to a 30 percent penalty.
    MCM – Many would likely face this penalty as 24%+ of people 26-64 have a pre-existing condition, and those who lose employer-based coverage would have a tough time paying the entire premium themselves without a job
  • Ends all federal funds to Planned Parenthood
    This troubles some Republicans as PP provides a lot of healthcare to lower-income women.

The legislation is exposing splits among and between Republicans on ACA and health reform.  Republicans opposed ACA, but for diverse reasons; costs too high, mandate, tax provisions, Planned Parenthood.

But there is no unity around a solution.  It’s easy to rally opposition to a complex issue; many Democrats have been pointing out problems with ACA for years. It’s far harder to come up with a new solution because everyone has different priorities and ideologies.

What does this mean for you?

The ACA Deathwatch clock moved forward a bit – but not much…

Improving healthcare will hurt the economy

Healthcare employs 15.5 million full time workers – more than 1 out of every 9 jobs. That’s more workers than the manufacturing industry. By 2019, healthcare employment will surpass retail.

Over the next decade, 9 of the 12 fastest-growing occupations will be in healthcare – fully a quarter of total job growth.

While that’s good news for folks working in the healthcare industry, those jobs are funded by employers and taxpayers  – and those funds are not available to buy other goods or services. Some argue healthcare is “crowding out” economic expansion in other sectors thereby hurting overall economic growth.  Moreover, much of healthcare is inherently inefficient; extra cost does NOT equal extra benefit. The US’ healthcare efficiency rating by the Commonwealth Fund was a miserable 11th out of 11 countries.

That isn’t exactly “exceptional”.

This from “The Health Care Jobs Fallacy” authors Katherine Baicker, Ph.D., and Amitabh Chandra, Ph.D.:

Salaries for health care jobs are not manufactured out of thin air — they are produced by someone paying higher taxes, a patient paying more for health care, or an employee taking home lower wages because higher health insurance premiums are deducted from his or her paycheck. Additional health care jobs leave Americans with less money to devote to groceries, college tuition, and mortgage payments, and the U.S. government with less money to perform all other governmental functions — including paying teachers, scientists, and social workers.

By the same token, “controlling” health care costs will cut employment, and pharma stock prices, and margins for medical device firms, and bonuses at healthplans.

This is where things get interesting.

If efforts to control healthcare costs and increase efficiency actually bear fruit, those lost jobs, reduced profits and lower margins will hurt the economy. At some point, the entities that pay those costs are going to may put the dollars to work elsewhere, but that’s going to take some time.  And, the money saved may just be parked in cash accounts where it won’t do anyone much good.

So, if the healthcare sector of our economy gets more efficient, the US economy will suffer.

What does this mean for you?

Healthcare is a huge employment generator, and a very inefficient industry.  Fixing that inefficiency will reduce employment and economic growth.

One wonders how this will affect politics and politicians.

ACA Deathwatch: The real reason the GOP can’t – and won’t – “Repeal” ACA

For the GOP, the problem with repealing ACA is not practical, legislative, or financial.

It’s psychological.

Humans are hard-wired to hate losing stuff, a principle known as loss aversion. We humans strongly prefer avoiding losses to acquiring gains: We get much more upset if we lose a five dollar bill than happy if we find $5.  

With over 20 million more Americans insured now due to ACA and record enrollment going on now, there are millions of voters who will be enormously upset if they lose their health insurance.

The five states with the most people enrolling for coverage on Healthcare.gov through Monday were ones Trump won: Florida – 1.3 million plan selections, Texas (776,000), North Carolina (369,000), Georgia (352,000) and Pennsylvania (291,000). (thanks to NYT).

The GOP has boxed itself in, and has an impossible task ahead – how to

Not surprisingly, many Trump backers who gained health insurance under ACA are now scared he’s going to deliver on his promise to kill ACA. And not nervous scared – really, really scared.

This adds a whole new dimension to loss aversion – this isn’t a five dollar bill, this is a new liver, diabetes medications, knee replacement surgery.

There’s no way any ACA “replacement” that doesn’t require coverage of pre-existing conditions, have significant subsidies for the poor and near-poor, and mandate insurance is going to prevent these people from losing coverage. Oh, and do that while reducing medical costs and not increasing the national debt.

That’s why the GOP isn’t going to repeal ACA.

For a very thorough discussion of just how many – and who – stand to lose coverage if the GOP does repeal ACA, there’s no better source than Charles Gaba.

ACA Deathwatch: Hospitals, bankruptcy, and chicken-killing dogs

For those wondering why the GOP appears to be walking back its promise to “rip out Obamacare root and branch”, here’s why this is a whole lot harder than one might think.

And why the political realities make this picture far too real for the incoming Congress.

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The GOP has long prided itself as the party of fiscal responsibility; Speaker Ryan and Majority Leader McConnell have assailed ACA as unaffordable and a budget-breaker. However, among the myriad issues inherent in healthcare reform is this – repealing ACA would bankrupt Medicare’s hospital insurance fund next year.

(It would also alienate many who voted for Trump...but that’s another story.)

When ACA was passed, there were financial trade-offs put in place to address winners and loses in an attempt to make the law as budget neutral as possible.

Insurance companies, drug companies, device manufacturers, and hospitals paid higher taxes or got lower reimbursement because they were going to get a whole lot more business as millions more people got insurance. Specifically, hospitals’ Medicare reimbursement has been changed – in part to eliminate payment for medical mistakes and re-admissions, and in part by altering reimbursement mechanisms and formulas.

ACA also included a 0.9 percent payroll tax on the wealthy individuals earning more than $200k or couples making more than $250k.  This raised $63 billion, which went to fund Medicare’s Hospital Trust Fund.

The combination of lower total reimbursement and more revenue extended Medicare’s solvency by 11 years. Without ACA, the Trust Fund is bankrupt next year.

If the GOP repeals the ACA or eliminates the 0.9 percent tax on the very wealthy, Medicare Part A is technically bankrupt.

The incoming President, Congress, and HHS Secretary are facing the very same tradeoffs and complexities their predecessors faced in 2010 – health care is horrendously complex and inter-related.  There are no simple, easy answers.

What does the GOP do?

From here, it looks like they have a couple options.

  1. Repeal it, pass their own health care reform legislation that makes major changes, and claim success.  
    As noted above, and as we’ve seen over the last five years, changing the US healthcare system is brutally hard, there are way more unintended consequences than anyone could predict, and there are no simple answers. There is just no way they can cobble together legislation anytime soon that will address ACA’s issues and not result in a gigantic clustermess.
  2. Repeal ACA in two or three years, with the promise they’ll come up with a replacement in a year or two.
    Without a credible replacement, insurers and healthcare providers are going to panic. Expect insurers to exit the individual and small group health insurance markets in droves. Democrats will use Medicare’s pending insolvency to bludgeon Republicans in the mid-term elections.
  3. Rebrand ACA as TrumpCare, make a couple tweaks around the edges, declare victory, and go home.
    This gets my vote as most likely, primarily for the reasons noted above. Now that the GOP owns health reform and Medicare solvency, Democrats are going to tie the issue around their necks like a dead chicken.

For a more detailed discussion of the issue, here’s a good synopsis from Politico.

Later – Hospitals and Medicaid – it’s pretty scary. 

What does this mean for you?

Don’t be lazy. Healthcare reform is hugely complicated, and for those of us – that means you – invested in the industry, what’s about to happen is far too important for you to ignore it or pay it little heed.

Friday catch-up

Holy bejeezus this has been a crazy week.

Labor Secretary Nominee

First up, the nominee for Labor Secretary is fast food executive and avowed billionaire Adam Puzder. Puzder’s likely to face tough questioning from Democrats for his stance on the minimum wage, automation, mandatory sick leave, and ACA. He’s also been a vocal critic of the overtime rule.

His restaurants paid a $9 million fine re class action lawsuits involving overtime pay in 2004.

For those in the workers’ comp world concerned about a new Commission on work comp, your concerns are gone.

Puzder’s points on automation aren’t crazy – in point of fact there’s a lot of research on the impact of automation on jobs, with one very credible group estimating 47% of jobs will be automated within 25 years.

Drug prices

Adam Fein has an excellent post on drug pricing, diving into the list v actual price.  Adam uses the EpiPen and insulin products as examples.  For those involved in pharma, this is a must read.

Heroin deaths just surpassed deaths by gunshot.  Congratulations, opioid-shilling pharma companies! 

screen-shot-2016-12-09-at-7-47-51-am

Medicaid

For those looking for more insights into Medicaid, I highly recommend a few articles that provide perspective on post-election changes, hospital payments from Medicaid.

ACA repeal

Billy Wynne has a really thoughtful piece on why ACA will not be repealed.  Certainly made me think differently about a few issues. FWIW, I’ve heard from a colleague who is Chair of a large health plan that the repeal language is already written.

These perspectives may both be right; I expect a re-branding of ACA and not a total repeal. The impact on the health system, hospital finances, the individual insurance market, and the number of insureds of a complete and sudden repeal would be disastrous.

Rather, the GOP will pass a bill ostensibly “repealing” ACA while in fact keeping many of its changes in place for at least three years.

How will Democrats handle this?  Here’s one perspective.

Enjoy the weekend.  Gonna get a load of snow up here in upstate New York – can’t wait.

Healthcare in 2018

2017 will be a very misleading year.

There will be no changes to health reform, markets, Exchanges, Medicaid, or Medicare. More people will be insured, hospitals and health systems will enjoy financial stability, and while losses in the individual market for the big five insurers will increase somewhat, work comp will prosper.

This will lead some to think everything’s fine, there’s nothing to worry about, it’s all good, I and others worrying about health care’s future are hysterical Chicken Littles.

Let’s summarize.  There are two general scenarios; GOP repeals ACA’s main components without addressing system-wide fallout, or GOP essentially re-brands ACA (TrumpCare, anyone?) leaving much of the current ACA in place.

If the GOP repeals ACA via reconciliation and/or without:

  • replacing it with an enforceable mandate,
  • maintaining changes to Medicare fee schedules and reimbursement,
  • maintaining the Medicaid expansion,
  • maintaining cost-sharing subsidies for the near-poor, and
  • restoring DSH and other supplemental hospital/health system funding.

This is what we’ll get.

Implications are obvious;

  • cost-shifting to private insurance, workers’ comp, and other property and casualty insurance increases
  • claim shifting increases
  • job lock increases as people don’t leave their employer for fear they won’t be able to get or afford health insurance
  • individual bankruptcy rates increase

I must admit to a morbid fascination with the game that’s playing out.  I’m both embarrassed to admit that fascination and appalled by the damage that will be done to people, businesses, cities and states by the combined ideology and ignorance of our newly-elected House, Senate, and President.

As friends and colleagues keep telling me, we don’t KNOW what these worthies will do.

True, but we can read policy papers, previous proposed legislation, and statements of incoming officials, all of which point to dramatic changes to healthcare. This may well not happen, as those now in positions of power may decide ACA isn’t so bad after all. 

Their constituents have certainly changed their tune, with barely half of the Republicans surveyed looking to repeal “Obamacare”.  Then again, many didn’t know that “Obamacare” and ACA are one and the same.

I don’t think the “repeal and destroy” scenario indicated by those papers and statements will happen, because the real-world impacts would be so damaging.  It appears most on the Hill are leaning towards leaving much of ACA alone, tweaking around the edges, declaring victory and moving on.

Then again, I didn’t think Donald Trump would be President.

If the “tweak and rebrand” strategy wins out, there’s still an awful lot of uncertainty.  The healthcare “system” is a Rube Goldberg contraption like the one where you hit one button and out pops a dollar bill, but if you hit that button while holding down the shift key, you get punched in the face.

a-punch-in-the-face

What does this mean for you?

Yes, this is really complicated and sometimes hard to unpack.  Don’t fall into the trap of willfully ignoring what’s going on in healthcare, as the implications for you and your business are huge indeed.

Pain and pain meds are keeping men out of the workforce

The opioid industry’s insidious tentacles are choking the life out of individuals, families, and communities. Now we learn that nearly 44 percent of men aged 24-54 who aren’t in the workforce are on pain meds.

2/3rds of those men are taking prescription pain killers. Yet many are still in pain – a finding that surprises no one remotely familiar with opioids’ poor record with chronic pain.

Only about 2 percent of these men received work comp benefits in the prior year; it is certainly possible that many more were injured at work, settled their claim, reached maximum medical improvement, or otherwise are no longer receiving WC benefits. Fully a quarter are receiving Social Security disability income.

This is a critically important issue for all of us. Research by Alan Krueger PhD of Princeton University gives us much-needed clarity on why labor force participation is near a 40-year low; it’s about

  • poor health status; 43 percent of  men aged 24-54 not in the workforce report their health as fair or poor
  • 34% of these men report at least one functional disability
  • as a group, these workers report “feeling pain during about half of their time.”
  • average pain rating is 88 percent higher for these men than men who are employed

Of course, Dr Krueger’s research is not just about opioids, but it’s abundantly clear that opioids aren’t helping these men deal with their pain, and pain is keeping many out of the workforce.

This comes on the heels of reports that the death rate for middle-aged whites has been increasing of late – and at least part of the problem is, once again, opioids

What does this mean to you?

STOP approving opioids for chronic pain unless nothing else works. 

 

What its like fighting the opioid industry

I’m struggling to find an analogy that fits how one-sided this fight is.

it’s not a knife-to-a-gunfight thing; at least you could throw a knife and have a chance of injuring your adversary – then run away.

it’s not a David v Goliath thing, because big pharma is VERY aware of “David’s” capabilities and vulnerabilities.

The best I could come up with is an ant vs. a boot.

ant

A couple recent articles highlight how bad our collective butt is getting kicked (thanks to Steve Feinberg, MD – a colleague and pain management doc in CA).

While publicly vowing to help roll back opioid usage, the opioid industry is spending millions to convince state legislators to slow-walk efforts to reduce opioid prescribing, weaken PDMP usage requirements.  One telling datapoint; Pharma spent $880 million on lobbying and contributions from 2006 – 2015, anti-opioid groups spent $4 million on contributions to state political campaigns AND lobbying from 2006 – 2015.

In New Mexico, efforts to curb opioid prescribing have been defeated, thanks to an overwhelming push by big pharma.  The opioid pushers hired 15 lobbyists, contributed to most members of the key Committee working on the bill, and got what they paid for.

And it’s not just overt lobbying by pharma; these bastards are funding “patient advocacy” groups like the Cancer Network, creating their own “astro-turf” patient groups, even stuffing wikipedia with opioid advocacy crap and changing entries to delete negative information about opioids.

What does this mean for you?

This…

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