The Health Policy Heat Wave

It’s August. Things are supposed to be slowing down, as record heat waves hit the south central part of the nation, vacations thin out offices and shorten commuting times, and parents rejoice that their beloved offspring – and their detritus – will soon be somewhere else most of the time.

(photo from illinois.edu)
But in health policy world, the pace just picked up – a lot. Far from the summer doldrums, activity related to the debt limit, IPAB, Medicare reform and Health Exchanges is at a late-September pace.
To start us off, here are four posts focused on the recent stupidity around the debt limit expansion, and the impact of that stupidity, that merit top-of-the-fold placement.
WARNING
here’s a picture of a health care exec before reading the following two posts….

First, let’s ruin your day with the scariest post of the summer (if not the year) from Bob Laszewski. Bob’s view of the debt limit deal will ruin the vacation of any provider:
“Physicians, facing a 29.5% Medicare Sustainable Growth Rate (SGR) fee schedule cut on January 1, 2012, need to be really worried. That 29.5% cut is part of the existing budget baseline from which the super-committee needs to cut hundreds of billions more–much less find tens of billions of dollars to put these doc cuts off again. Hospitals … have to be in the bull’s eye this time. Drug companies are a particularly juicy target for liberals who don’t like them and conservatives who wish the Part D program had never been passed. Medicare Advantage insurers have recently been reporting record profits–not something you want to be doing when the Congress is looking for lots of cash.
While there is a 2% cap on any cuts that could occur to Medicare in the $1.2 trillion default trigger, there are no limits to what the super-committee can cut.” [emphasis added]
My view is there are going to be big cuts in provider reimbursement, which will inevitably lead to cost-shifting to private payers. That means insurers, healthplans, self-insured employers, and workers comp payers can expect higher pricing and utilization, and soon.
And here they are after reading those posts…

The prolific Maggie Mahar has posted a thorough and well-documented piece on the whole debacle, citing Paul Volcker among others to note this should have been a routine process – after all, ” George W. Bush raised the debt ceiling seven times for a total increase of 90 percent. Ronald Reagan raised the debt ceiling 18 times for a total increase of 199 percent, which is the highest ever percentage increase in U.S. history. So far President Obama has raised the debt ceiling three times for a total increase of 26 percent.”
Maggie quotes the AP on the potential (I think highly likely) that “payments to doctors, nursing homes and other Medicare providers could be trimmed, as could subsidies to insurance companies that offer an alternative to government-run Medicare.”
Finally, Jaan Sidorov educates us on the relationship between US Treasury ratings and health insurers, noting “With an announcement of a downgrade, millions of dollars of insurer money in reserves and surplus could evaporate.”
Gotta love David Williams’ post Health care reform in 2 short sentences. Read it.
Absent any game-changer along the lines of David’s, we’re going to have to rely on science and smart policy – which means the Independent Payment Advisory Board. Jonathan Cohn’s post at Care and Cost makes a compelling argument to not repeal, but rather retain, if not strengthen, IPAB. Jonathan notes “there’s a ton of data to suggest it [Medicare] doesn’t do a very effective job of fostering good quality”.
Which leads us to Avik Roy who contributes a post citing Cato’s Michael Cannon’s research to make the point that politicians don’t care about waste fraud and abuse in Medicare and Medicaid because it’s other people’s money. He must be talking about the GOP, as much of the ‘waste and fraud’ could have been eliminated if the GOP-led Congress and Republican President hadn’t: a) passed and signed the Medicare Modernization Act which prohibited CMS from varying payment based on efficacy of drugs and devices; b) continued the gutting of Federal outcomes research; c) passed Medicare Part D while prohibiting CMS from negotiating drug prices with pharma; and d) suspended Pay-as-You-Go rules that would have required cuts in other programs to offset the huge cost increases from these programs.
Oh, and many are now looking to kill IPAB, which promises to reduce unnecessary and wasteful spending…
Sticking with cost control, our buddy Hank Stern thinks the Institute of Medicine’s support for coverage of birth control pills at no cost to women may lead us down a slippery slope – if birth control pills are “medically necessary’, what about Rogaine?
Health Affairs contributed a thoughtful and compelling piece on the impact of ACA on employer health insurance, focusing on the McKinsey study’s conclusion that lots of employers will drop health insurance. Authored by the redoubtable Jeff Goldsmith, the post makes compelling reading. Among the more thought-provoking passages are these:
– “the large employer’s influence on benefit design has been a major enabler of escalating premiums. The main influence hasn’t been first dollar coverage, but rather their preference for open access, point-of-service plans…”
– “A surprisingly large percentage of the survey’s respondents were not aware of many specific features of the legislation that will directly affect them.”
– “it doesn’t make sense, for small employers or their workers, for small employers to continue offering coverage given these incentives.”
Health Access California’s Anthony Wright digs deep into the Exchange issue. If Jeff Goldsmith’s prognostications are right – and they may well be – the Exchanges will soon be the dominant channel for insurance distribution. Anthony’s point that “health reform cannot fulfill its promise if the Exchange is not successful” is the core of his contribution, which provides a thorough and succinct summary of what Exchanges should be.
The ever-insightful Louise at Colorado Health Insurance Insider’s got a great piece on her state’s efforts to create an unbiased Health Exchange. As an independent insurance broker, her views are reality-based and observations are keen.
John Goodman’s contribution is entitled “Everything We Are Doing in Health Policy May Be Completely Wrong”. Goodman comes to this from his review of a study focused on a change in the maximum one-time supply of drugs in North Carolina’s Medicaid program from 100 days to 34 days. Goodman posits this: “Suppose that for most poor people and most health care, time is a bigger deterrent than money.” The study isn’t available without purchase, so I wasn’t able to find out what it actually said.
WorkCompInsider’s Julie Ferguson, the progenitor of many work comp-related blogs and social media initiatives, gives comp folks a solid background on the use of social media to investigate work comp fraud, along with a treasure trove of links to sources, views, and legal advice.
Long-term contributor Roy Poses never relents in his pursuit of ethical issues in health care; his contribution for this edition is a two-part series on the for-profit hospice industry.
Roy cites a Bloomberg report suggesting that (here and here) for-profit hospices may increase revenue by aggressively recruiting patients, sometimes using deception, and sometimes including those who are not really terminally ill. However, they may then deny the latter group potentially life-saving care (because hospices are supposed to only provide palliation and improve quality of life for dying patients.) This suggests that hospices may function like real “death panels.” Yet those who have ranted about the dangers of government “death panels” have not yet shown any concern with this.
That’s not to say that health care professionals shouldn’t pay close attention to the financials – a point Brad Flansbaum makes quite compellingly in his post on the impact of medicare rates, private payers, and their impact on hospitalists.
Kirstin Siemering sends us news of a company in Nebraska that’s really, truly, totally committed to improving their employees health and wellbeing – and seeing huge returns in lower health costs, increased productivity, and higher quality.
From Amy Berman comes a cold blast of reality – she’s been diagnosed with Stage IV breast cancer which has metastasized to her spine. Amy discusses a real and ongoing problem, one that greatly affects people and costs – the inability of many care givers to frankly discuss the reality of terminal illness with patients, and the resulting heroic efforts that cost billions while providing little, if any, benefit to the vast majority of patients.
Jessie Gruman’s post gets the award for best title – Our Preference in Health News: Uncertainty or Naked Ladies? Jessie identifies the issue – we want quick, we want certain, we want easy – and no, we don’t want to think. Err, I mean the folks who DON”T read HWR!
Jessie and Gary Schwitzer must’ve been experiencing the same frustration: Gary’s contribution is a video summary of his experience reporting on health journalism, the first of his five-part series that should be must-watch for any health care journalist.
The post from Glenn Laffel’s Pizaazz focuses on the impact health news/journalism can have on the patient, along with many patients’ lack of basic computer, internet, and interpretive skills – skills many of us take for granted.
Kinda/sorta related is the post from Shahid Shah; who explains what the FDA’s new draft guidance on mobile apps means to health IT vendors. It’s a great summary of what kinds of apps may or may not be considered medical devices from a regulatory perspective and is worth reading if you’re in the mHealth space.”
And now, for something completely different, we offer Jason Shafrin’s post on Brazil’s health care system.
That’s it. I’m off for a few days to Oklahoma City (what, that’s not a common vacation spot?) next week, then a family vacation to Block Island. Hope your August is good – although I’m likely partially to blame if it isn’t!