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! 

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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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REAL innovation in healthcare

What do these have in common?

Duexisis.

Valent.

Martin Shkreli

Mylan.

Answer – they are all on the leading edge of healthcare innovation.

More precisely, these examples show there’s no need to create really new products, develop new medicines, figure out how to keep people healthier longer, when you can just raise prices on your current product.  A lot.

Duexisis is just ibuprofen combined with an acid reducer, creating a brand medication that sells for about 50 times what it should.  Yep, you can just buy Advil and Pepcid instead of breaking your bank enriching Horizon Pharmaceuticals.

Valeant has made a business out of buying generic manufacturers and other pharma companies and jacking up the price of their medications, a practice that has earned the company the attention of the Department of Justice, presidential candidate Hillary Clinton, and the US House of Representatives.  Oh, its stock price has gotten hammered of late due to some of these issues.

Shkreli is the brilliant and totally tone-deaf former hedge fund exec who discovered it’s a lot easier to make billions by buying little-used drugs made by one company than raising the price by, oh, say 6000 percent.

Mylan makes Epi-pens, the life-saving devices used to prevent deadly allergic reactions. Altho late to the “let’s just increase the price by a gazillion dollars for our poorly designed device cuz people who need it HAVE to buy it” game, they’re making up time quickly. Mylan raised the price by 6 to 9 times recently, causing problems for paramedics, families with kids with deadly allergies while jacking up their profits.

There are many, many more examples, but you get the point.

For anyone looking to assign blame for our ludicrously high cost of health insurance and pathetically poor outcomes, there are plenty of convenient culprits; HMO executive salaries, mandated benefits under ACA, specialty physician income, device manufacturers, hospital inefficiency, stupid and counterproductive HHS regulations, legislators who bow before the PHARMA lobby, physicians who refuse to wash their hands.

But it all gets back to this – the US health care “system” is based on a capitalist ethos, one where the shareholder and profits are God.

These companies and people do this stuff for a very simple reason – because they can, and they are rewarded for doing so.  There’s no reason to spend millions innovating when you can make billions just by raising prices for your product or service.

What does this mean for you?

Reality sucks.

Details matter.

Someone who doesn’t do what you do may think it looks pretty simple.

Carpenters look at a house and see detailed planning, careful material selection, precise measuring, and skilled craftsmanship because they know what it takes to build a strong, sturdy, attractive, functional home. They are experts due to years of experience and hard-earned lessons and mentoring by their elders.

Me? I see walls and a roof. Building looks simple to me; get some lumber, nails, and tools, plus some other building stuff like shingles and wire and concrete, and start slapping stuff together.

Which house would you want to live in?

The same is true for any profession – teaching, medical bill processing, hitting a golf ball…right? Professionals – and we are all professionals in our chosen vocations – understand the complexity in what they do, while outsiders tell us it looks simple to them.

I’m thinking about the Presidential candidates’ positions on health care and health care reform.  Trump wants to “rip out Obamacare root and branch” and replace it with something much “simpler”.

In general, Trump’s calling for:

  • allowing insurers to sell health insurance across state lines
  • repealing the individual mandate
  • requiring insurers to cover anyone regardless of their pre-existing condition.

Sounds great…you don’t have to buy health insurance until you really need it, but the insurance companies still have to sell it to you even if you need a heart transplant or new kidney or are having premature triplets.  (We discussed the across state lines thing here)

Here’s where those “details” matter.

What will insurance companies do if they are required to cover people who don’t need to buy insurance until they get sick?

They have two choices – go bankrupt or stop selling insurance to individual sand families.

What do you think they’ll do?

Of course they will stop selling health insurance to individuals.  When that happens, the Paduda family, and most of the other 11 million folks insured thru the Exchanges will find themselves with no health insurance and no one to buy it from.

Then what?

Here’s the point. We live in an amazingly complex world, one where there are NO simple solutions.   I know, simple solutions are really appealing, but “see the ball, hit the ball” only works until you step up to the plate, when it gets a whole lot more complicated.

If health care reform was easy, it would have been done decades ago. It’s messy, complex, and there are no simple solutions where everyone wins. It requires consideration of the “what then” issues. When you move one lever, it triggers a whole bunch of reactions that, if not anticipated, will create way more chaos.

Yes, the ACA is messy and needs fixing. Yes, we need our politicians to engage, debate, argue, and work it out. What you and I do NOT need is a sound-bite solution that is NO solution at all.

What does this mean for you?

If you think health care is a mess now, can you imagine what it would look like if people could wait to buy insurance till they were sick, and insurers had to either sell it to them or stop selling insurance altogether?

It would look like this

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You broke it, you own it.

A bill before the US House and Senate would have required physicians and pharmacists to check state databases before prescribing or dispensing opioids.

All available research shows this is the single most effective step to reduce opioid abuse and kill fewer people.

Now, thanks to “doctors and pharmacists groups”, that requirement has been stripped from the bill.  What’s left is some – but nowhere near enough – money for treatment and the hope that, against all evidence to the contrary, docs who are writing the scripts that are causing the opioid disaster will take the time to check the databases before they write the script.

Not going to happen.

I am sympathetic to the claim that mandatory Prescription Drug Monitoring Program (PDMP) checking can be time-consuming. States have to do a better job of figuring out how to streamline the process while protecting patient confidentiality – and many have done so.  Moreover, the four states with mandatory PDMPs have figured it out, and it is working pretty well.

I am a whole lot less sympathetic to the argument that somehow a moment or two of a doctor’s or pharmacist’s time is too much to ask, for the simple reason that these medical professionals’ failure to properly prescribe and dispense opioids is the proximal cause of the opioid public health disaster.

Pretty much every independent research organization studying the issue has recommended mandatory PDMP checking.  Here’s one.

More bluntly, that behavior is killing people, and the lobbying to strip mandatory use of PDMPs shows that’s not that big a deal.

Kentucky, New York, Ohio, and Tennessee all mandate prescribers access PDMPs – and all have seen dramatic reductions in doctor shopping and opioid script volume.

There’s a wealth of supporting data here.  Briefly, here’s what mandatory PDMP use does.

  • after Ohio ER docs checked the PDMP, they changed their treatment plan for 41% of patients; 61% had fewer or no opioids prescribed, 39% had more.  And doctor shopping dropped by over 2/3.
  • In Tennessee, doctor shopping dropped by 50% and the volume of opioid scripts decreased by almost half a million scripts.
  • Kentucky doctor shopping was cut in half, 30% fewer patients received the “holy trinity” drug cocktail, and benzo and opioid scripts dropped significantly.
  • in New York, doctor shopping was cut by 90%, and treatment admissions rose by 20%.

After spending a fruitless hour searching the web for an actual policy statement or testimony regarding mandatory PDMP use by the AMA, my conclusion is the giant medical society wants it both ways.

They don’t want their members to have to check PDMPs, but they don’t want to be public about that opposition.

What does this mean for you?

Refusing to support mandatory PDMP is unconscionable.  At some point an enterprising class-action firm is going to figure out how to make a shipload of money off the intransigence of “doctors and pharmacists groups.”

 

Clinton health plan 2.0, updated

Now that Hillary Clinton is the Democratic Presidential nominee, it’s time to delve into her health policy platform.  The quick recap is she is looking to expand and build on ACA, tweaking various parts and pieces to fix legislative errors, incent states to participate, and reduce out of pocket costs. (we discussed this in yesterday’s Blab; you can watch it here.)

Expand Medicaid

Clinton would offer 100% funding for any state that expands Medicaid for at least three years, then tapering down to 90%.  This would likely encourage more states to take the step; Florida and Nebraska are two where elected officials are under increasing pressure to make the move.

Remove the family glitch

A drafting error doesn’t allow taking an employee’s family into account when determining subsidies for insurance bought via the Exchanges.  Clinton would offer tax credits to offset those out of pocket costs for eligible families.  The tax credit proposal is a convoluted way to fix what should be done via correcting the original language.

Allow near-seniors to buy-in to Medicare

More an idea than an actual policy position, Clinton is talking about allowing “people 55 or 50 and up” to voluntarily pay the entire “premium” to join Medicare.  With much to be fleshed out, this looks to be a response to Sen Sanders’ call for free public insurance for all.

This could have some major downstream effects; by removing we older and more expensive people from the privately-insured pool, insurance costs for younger folks would decrease.  This “public” option would also inject competition into areas where there isn’t any due; rural markets in particular could benefit.

Address drug prices

Clinton has several ideas including eliminating the tax deductibility of marketing expenses, setting limits on consumers’ out of pocket costs for prescription drugs, and allowing Medicare to negotiate directly with drug companies.

Most striking is the mostly-unformed concept of forcing drug developers to spend a set amount on R&D, with any additional revenues handed back to the Feds for government research on new therapies. This is intended to address the industry’s argument that research costs demand high prices (an oft-criticized and rather doubtful argument).

Sounds good, but I doubt – very much – if it could be implemented without causing a lot of problems as drug companies quickly figure out ways to game the system.

At some point it may make sense to review Trump’s, but at this point the GOP nominee – as frightening as it is to write that – has yet to come forth with any coherent health reform plan other than “repeal Obamacare” and sell insurance across state lines – neither of which makes any more sense than anything else he says.

What does this mean for you?

If Trump continues to insult and antagonize big chunks of the voting public, he may well drag down his fellow Republicans, handing the Senate to the Democrats and significantly reducing the GOP’s House majority.

Then Clinton’s plans have a very good chance of becoming law.