Year: 2018

Sep
4

The case for Medicaid for All

Posted by Joe Paduda on Tuesday, September 4th, 2018 | Comments

When Single Payer becomes the law of the land, Medicaid will be the foundation.

We’ve looked at the current push for Medicare for All, the factors that I believe will drive us to some form of single payer, and posted a primer on Medicaid.

Here’s why it’s going to be Medicaid for All.

  1. Medicaid for All will spread the cost of universal coverage across states, reducing federal financing requirements.
    Medicaid is a state AND federal program; States provide a lot of the funding for Medicaid; on average the Feds contribute 63% and states 37%. This is critical, as Congress will want to spread the cost of a Single Payer solution and there’s no better way to do this than require states to pony up big dollars [State contributions vary based on a state’s average personal income relative to the national average; states with lower average personal incomes get more federal dollars.]
  2. Medicaid is already built to cover everyone.
    Medicare covers people of all ages, Medicare is very much elder-care focused.
    Adapting Medicare to handle everyone from newborns to elderly, maternity care to pediatrics will be difficult, time-consuming, and expensive. Medicaid does all this and more – today.
  3. Generally, Medicaid is less expensive than other “systems”.
    This is due to much lower provider payment and significantly lower administrative costs. Yes, this means providers are going to be paid less.
  4. Medicaid member satisfaction is pretty good; access to care is not much of an issue.
  5. Medicaid-based Exchange programs are much more successful in the Exchanges than commercially-based plans.
    The Centenes et al [Medicaid-based plans] understand the demographics of the uninsured, have lower medical costs, and already have provider networks, customer relations operations, workflows and processes set up and operational. At the end of the day, lower cost wins – and their costs are lower.
  6. Medicaid is a simple, fully-integrated healthplan.
    Medicare’s alphabet-soup of Parts A B C and D is confusing and convoluted, with different payers often covering the same individual. This increases administrative costs, member hassles, and decreases quality of care (co-ordinating pharmacy and medical care between different payers is problematic at best.
  7. Managed Medicaid plans are working.
    These plans currently exist in most states, and many have been able to deliver excellent care at lower costs through innovation and very tight focus on outcomes. One example is using paramedics to deliver care. [disclosure – I sit on the board of Commonwealth Care Alliance, a Massachusetts healthplan that serves dual-eligible members]

Tomorrow I speculate on how Medicaid for All will integrate with Medicare and employer-based coverage.

What does this mean for you?

Better care, lower costs, while a big impact on pharma, device companies, healthcare systems, and healthcare providers.

Aug
30

Medicare for All – explaining what it means and what it would cost

Posted by Joe Paduda on Thursday, August 30th, 2018 | Comments

Yesterday we gave a brief overview of Medicare – the various parts and pieces.

Today – what exactly is the plan, who would pay for it, and how much would it cost?

Sen. Bernie Sanders, (I VT) is the original MFA (Medicare for All) advocate, and most other candidates echo his plan – which is pretty simple:

  • Everyone is enrolled in MFA
  • No one pays copays or deductibles
  • You can choose any healthcare provider
  • It isn’t really “Medicare” for all, but rather a simple “everything is covered” plan
  • Funding would come from:
    • higher taxes on high-income earners
    • re-instatement of the estate tax
    • payroll tax of 6.2% for employers
    • 2.2% income based premium for individuals and families
    • taxing capital gains as ordinary income
    • repealing tax exemption for premiums etc.

There’s been a lot of press about this, with claims and counterclaims muddying the waters  – but the net is this:

Sanders’ plan would enroll pretty much everyone.

The plan would save costs by:

  • reducing total provider compensation by 11% – 13% (physicians make a lot more money here than they do in most other countries)
  • it would do this by setting flat reimbursement rates – today employer plans pay about 40% more than Medicare, and much more than Medicaid (generally speaking).
  • However, reimbursement would be higher than today’s Medicaid rates.
  • MFA advocates note that administrative costs would be a LOT lower, as doctors and hospitals wouldn’t need the big IT operations and personnel required to track down payers and get reimbursed

MFA would be phased in over four years.

What would it cost?

That’s a tough one – the CBO won’t score it.

One Koch-funded research center came out with a report that said it would A) cost $32 trillion over ten years, and B) reduce total US healthcare costs by some $2 trillion while covering 30 million more folks. (yes, this was Mercatus’ higher estimate, but they fudged other numbers to make costs look higher, so I’m going with that figure)

Bernie and other advocates, claim savings would be higher – so the total cost would be lower.

However you slice it, you have to remember that employers and individuals would no longer be paying over a trillion dollars for healthcare every year via payroll taxes and premiums and deductibles and copays.

And yes, you’d save a lot of money by reducing provider reimbursement to Medicare rates.

Who and what gets disrupted?

Insurance companies. It isn’t clear who would administer this program, perhaps the current companies that handle much of Medicare. However, many or most commercial health plans, Medicare Advantage plans, Managed Medicaid plans (disclosure I am on the Board of one – Commonwealth Care Alliance) would shrink or disappear entirely.

Revenue Cycle Management – this huge industry would become obsolete overnight.

Millions of workers – no longer needed to handle the morass of regulations and insurer requirements

Pharma – Bernie would negotiate with pharma and medical device companies – as every other country does – to get the lowest possible prices.

Brokers and consultants. Ouch.

Remember – the US healthcare system is enormously inefficient, overall delivers mediocre-at-best results, and is not sustainable.

What does this mean for you?

Opponents of MFA would be well served to come up with a better answer than MFA, because that MFA is getting traction.

 

Aug
29

Medicare for All means…what?

Posted by Joe Paduda on Wednesday, August 29th, 2018 | Comments

After last night’s gubernatorial primary elections, no one can claim “those politicians are all the same.”

Gillum v DeSantis in Florida, Ducey v Garcia in Arizona, Abrams v Kent in Georgia, Evers v Walker in Wisconsin…the contrast between candidates in these and other states could not be more stark.

Many of the Democratic candidates for Governor – and some Congressional candidates as well – are pushing Medicare for All as a solution to the health care mess, while their Republican opponents are blasting the idea.

Why?

Before we dig into the details to understand the pros, cons, and challenges of “single payer”, let’s understand what Medicare is – and isn’t…

  • Medicare is a federal program, funded (mostly) by payroll taxes and member “premiums”. Unlike Medicaid, there is no variation between states, nor do states contribute financially.
  • Medicare is NOT simple – it is not a straight-forward healthplan, but rather several different plans covering hospital care (Medicare Part A), physician/provider care (Medicare Part B), and drugs (Medicare Part D).
  • Medicare Part C is the term for “Medicare Advantage” programs typically managed by commercial insurers. These plans include both A and B, and sometimes D coverage.
  • If you were setting out to design the most confusing health coverage possible, you could use A, B, and D as a great template. Medicare’s A, B, and D coverages include complicated deductibles, coverage limits (for stuff like rehab hospitals and nursing home care), qualifying periods, copays etc. It’s kind of like a camel, which is a horse designed by committee.
  • Medicare Advantage (MA) programs are a lot less complicated and sometimes have additional benefits, but often have restrictions on which providers members can see.
  • “Old style” medicare (not Medicare Advantage) pays providers on a fee for service basis, with reimbursement rates set by CMMS (Centers for Medicare and Medicaid Services).

So, Medicare is a federal program mostly for folks over 65 that covers most health care needs. Members can often choose between the “old style” Medicare, which allows access to pretty much any provider but has lots of cost-sharing provisions, and MA plans that restrict provider choice but have fewer complexities.

What’s often missing from the candidates’ calls for “Medicare for All” is any detail on:

  • what exactly they mean – Medicare Advantage? old style Medicare? Would patients be able to choose?
  • how would this be paid for?
  • would employers still be able to/required to provide health insurance?

We will delve into these issues tomorrow.

 

 

 

Aug
28

Asbestos is back!!?

Posted by Joe Paduda on Tuesday, August 28th, 2018 | Comments

The Trump Administration has loosened rules that will allow broader use of asbestos in manufacturing.  

Here’s how Fast Company put it:

A lengthy report of EPA’s new “framework” for evaluating risk, placed into effect this month, detailed how it would no longer consider the effect or presence of substances in the air, ground, or water in its risk assessments—effectively turning a blind eye to improper disposal, contamination, emissions, and other long-term environmental and health risks associated with chemical products, including those derived from asbestos.

No one knew how dangerous asbestos was until people started dying from exposure to it. How many thousands of dads, brothers, friends, moms and sisters would have been saved if researchers had studied exposure risks and informed the public?  How many tens of billions of dollars would have been saved, not spent on medical care, remediation, lawyers fees?

I don’t think we’ll see any big increase in the use of asbestos – the litigation risk is just astronomical and no insurance company would allow it – so no business will use it (wait, there are unscrupulous business owners that will do anything for profit, so there is some risk…)

But that’s not the point.

The point is that the health risks of any number of substances, compounds, fibers, chemicals will NOT be evaluated before we are exposed to them.

I’m thinking liability insurers are going to be quite concerned by this.

With the EPA abdicating its responsibility to protect the environment and us, the risk of lawsuits and huge awards increases dramatically.

While no insurance company will accept the liability for increased use of asbestos, they may well start re-writing coverage to ensure they aren’t on the hook for tomorrow’s asbestos suits.

What does this mean for you?

Increased health risks over the long term, and increased insurance costs over the near term.

Aug
27

Asbestos, short term health plans, and drug price wars

Posted by Joe Paduda on Monday, August 27th, 2018 | Comments

Thanks to Julie Ferguson of Workers’ Comp Insider for hosting this month’s Health Wonk Review…

If you want to learn a bit about:

  • those short term health plans touted by the Trump Administration,
  • what’s up with the drug price wars (in a great video, no less),
  • how asbestos is working its way back into US manufacturing,
  • and a bunch of other “wow, I didn’t know that!”

read on!

 

Aug
24

King v CompPartners – good news, but another shoe to drop?

Posted by Joe Paduda on Friday, August 24th, 2018 | Comments

Yesterday California’s Supreme Court fully supported the State’s workers’ comp UR/IMR process.

That is excellent news.

First, here’s the key takeaway – the Court ruled that workers’ comp remains the “exclusive remedy” for resolving disputes related to treatment approvals/UR/IMR.

Second, the California Legislature may well take up the issue and require payers to take into consideration the potential medical effects of a treatment decision, perhaps including weaning off medications that are no longer approved.

The Ruling

UR/IMR is an inherent part of the workers’ comp process, and therefore falls under the exclusive remedy provision of work comp. So, the plaintiff could not sue the IMR reviewer for an allegedly adverse treatment decision.

(Any treatment arising from the plaintiff’s medical care – which in this case was allegedly due to the suddenly stopping a medication – is part of the work comp claim.)

Here’s how CWCI General Counsel Ellen Sims Langille put it:

We have long contended that exclusive remedy was the beginning and end of the discussion in this case, inasmuch as the URO was acting in the capacity of the employer, and as a statutorily required part of the claims process, and now the Supreme Court has agreed.  The URO was acting as the “alter ego” of the employer, and the utilization review itself is a statutorily required part of the claims process.  That is the very definition of exclusive remedy.

The Court of Appeal had made an obvious error in finding that the seizures suffered by Mr. King were compensable outside of the workers’ compensation system because there were no allegations that he was working at the time he suffered the seizures.  That is a fundamental misunderstanding of how compensable consequences work.  As our Amicus brief argued, the injuries alleged by Mr. King were derivative of a compensable workplace injury, and the new compensable consequences injuries fall within the scope of the workers’ compensation bargain — and within exclusive remedy.

But there’s more, which may lead to additional legislative action to address the underlying event behind King…again from Langille:

Concurring Opinions were filed by two justices, and may prove to be the enduring legacy of the decision.  Justice Liu frankly invites the Legislature to examine whether existing safeguards provide sufficient incentive for competent and careful utilization review, pointedly noting his skepticism that “a care plan… appropriate for the medical needs of the employee” was established before the Klonopin was discontinued.  Even the Majority Opinion referenced the same language from §4610(i)(4)(C).  Unfortunately, it does not appear that any of the justices understood that this subsection applies only to cases of concurrent review, which is defined under Reg.  §9792.6(d) as “utilization review conducted during an inpatient stay” and thus inapplicable to the facts of this case.  Be that as it may, it is likely that the next legislative session will include some effort to expand the safeguards for the injured worker under utilization review.

What does this mean for you?

Consider the impact of medical treatment decisions on the patient’s future condition. 

Aug
21

This makes zero sense.

Posted by Joe Paduda on Tuesday, August 21st, 2018 | Comments

A totally unqualified person has been appointed to California’s Workers’ Compensation Appeals Board. The person in question is not a work comp person, legal scholar, labor advocate, or claims expert, but an 80 year old retired music teacher whose sole regulatory experience is a brief stint on the Alcoholic Beverage Control Appeals Board.

Mr Gaffney, undated photo from facebook

Mr Gaffney has no apparent experience, education, or training that in any way qualifies him for any role in the workers’ comp system, much less a role as significant as an Appeals Court Judge. He is a high school classmate of retiring Gov Jerry Brown, who reportedly ran into Mr Gaffney at an event, and after a discussion decided to help him out by appointing him to a very lucrative position.

The California Applicant Attorneys Association seems to think this is a good idea, citing Mr Gaffney’s “heart”:

Getting beyond legalisms and into the heart and humanity of the workers we represent could be music to our ears.

I don’t see the logic behind the CAAA’s statement that Mr Gaffney’s decades of involvement in choral music mean he is a “person who has dedicated himself to the hearts of ordinary people – working class immigrants.” Sounds like he has dedicated himself to their ears, not their hearts…

If intrinsic goodness, love, dedication to the downtrodden, and pureness of heart are key criteria, the sainted Mother Teresa would be a perfect candidate.

Further, this is an Appeals Board – one where Mr Gaffney will be involved in decisions that will set precedent. Where he will have to adjudicate complicated issues around causation, apportionment (!), penalties for unreasonableness, assignment of liability, exclusive remedy and the like.

This is really complicated stuff that attorneys with decades of experience struggle with.

No matter how wonderful one’s heart is, it is no substitute for knowledge and experience.

If you are hurt on the job and have a disagreement with your employer about your claim, you very much want the arbiter of that disagreement to:

  1. Know a lot about workers’ compensation
  2. Have a lot of experience dealing with cases like your’s
  3. Understand the laws so they can give a final ruling that won’t keep you in limbo

If the arbiter isn’t all of the above, you may well be treated unfairly, have your case appealed to an even higher court, and not get things resolved for years.

What does this mean for you?

The appointment will be reviewed by the California State Senate Rules Committee.  Encourage this body to reject the appointment. 

 

Aug
17

The Opioid Update

Posted by Joe Paduda on Friday, August 17th, 2018 | Comments

72,000 kids, moms, dads, brothers, sisters, best friends died last year from opioid overdoses.

Things are so bad that despite the ever-climbing death toll, news reports announcing the butcher’s bill manage to sound somewhat positive, citing reductions in deaths in a handful of states. Meanwhile, between 2.1 and 4 million Americans suffer from Opioid Abuse Disorder. 

Fentanyl is now the biggest driver, accelerating a years-long upward trend begun by rampant over-prescribing of prescription opioids.

Researchers cite some reasons for optimism; death rates in the west remain pretty flat – likely because the heroin used there is hard to mix with fentanyl…however there’s evidence that the black tar folks are figuring out how to do just that.

Meanwhile, Congress dithers; debating, pontificating, speechifying – and doing precious little.

To date, they’ve allocated a mere billion dollars to the biggest health crisis we’ve seen in decades.

Here in workers’ comp land, CWCI just released an analysis of polypharmacy among work comp patients in California. (Polypharmcy refers to patients getting multiple drugs.)

Two key takeaways:

  • A combination of  opioids, muscle relaxants, and anti-inflammatories was the most common drug cocktail. (opioids combined with muscle relaxants are very, very dangerous)
  • Shockingly, fully one-fifth of patients prescribed 3 or more drugs have back strains without skeletal involvement. Another tenth have various other sprains.  Yup, strains and sprains account for about a third of these patients.

What does this mean for you?

The next time someone protests the UR/IMR process, ask them how many more patients have to die from opioids before they accept that doctors need oversight.

 

Aug
16

U.S. healthcare vs the world in one chart

Posted by Joe Paduda on Thursday, August 16th, 2018 | Comments

How does our healthcare stack up against the rest of the world?

As we think about the possibility of moving to some version of Single Payer, we have to look at all sides of the question – what do we pay, what do we get, and how is that working for us.

Let’s start with a quick snapshot – we pay twice as much as the average country, to get results that are generally worse than average.

Would your business survive if you delivered these results at this cost?

Briefly – we are paying twice as much as the average industrialized country, yet our life expectancy is lower, more of us die from heart disease, far fewer of us have insurance coverage, and too many of us are admitted with breathing problems.

Want more?

It won’t surprise you to see more Americans skipped taking medications because they couldn’t afford them.

Add that to the fact that the US has a higher percentage of adults with diabetes than all but two countries, and we know that the prognosis for many of those diabetics is poor.

Oh, and more American babies die than in most other countries; fortunately we are just a tad better than Russia, land of alcoholism and awful medical care.

That may be because we have a higher rate of obstetric trauma than most other countries…

Our surgical infection rates are also average – although we pay way more than they do in other countries.

 

What does this mean for you?

The US healthcare system is delivering crappy results for way too much of our money. Given what we pay, we should have the fewest infant deaths, lowest surgical infection rates, highest medication adherence, and longest and healthiest lives.

And that’s exactly why Amazon, Berkshire Hathaway, and JPMOrganChase are taking it on.

*Source for all charts is http://dx.doi.org/10.1787/health_glance-2017-en

Aug
15

What exactly is “Single Payer”?

Posted by Joe Paduda on Wednesday, August 15th, 2018 | Comments

At some point we’ll have some version of “single payer” healthcare – I predict this will happen within a decade (yes, I know I’m usually wrong on the timing of my predictions, but I’m mostly right on the result).

Whether you’re a rabid libertarian or a totally committed Democratic Socialist, you’ll need to know what Single Payer is.

Single Payer is a catch-all term for universal health insurance coverage. In some cases there isn’t a “single payer” in an entire nation – our neighbor to the north being one example, Switzerland and Germany are two others. In Canada, each Province is it’s own single payer; in the two European countries there are a variety of independent companies that provide health coverage.

That’s how the insurance end of things works. Healthcare providers; hospitals, physicians, therapists are the other side.

The UK may be the best-known example of a “true” single payer system; the government runs the health insurance program and employs most of the healthcare providers.

Between the UK system on one end of the spectrum, and the US “system” on the other, there are a lot of variations.

Here are three examples (borrowed from Dr Lynn Blewett of the University of Minnesota):

In Canada, there are some variations among provinces in terms of financing and benefits, but these are pretty minor. People can freely choose their providers, there are no deductibles or other cost-sharing provisions, providers are private (not employed by the government), and hospitals operate under a universal budget.

Funding comes from taxes and provincial lottery profits, and about 2/3rds of Canadians buy supplemental private insurance for non-covered services.

Germany funds its system via general taxes and payroll taxes. There are over a hundred “sickness funds” which are generally equivalent to our health insurers; some charge additional premiums. About a tenth of the population opts out of the national system and buys private insurance coverage. Patients have full choice of the providers they use.

The UK is often held up as the only “pure” single payer system as both providers and the payer are government-based. Funding is via payroll and general taxes. Choice of primary care provider is up to the patient, however PCPs act as gatekeepers to specialty care. Similar to Germany, about a tenth of the population buys supplemental coverage.

California is likely to consider Single Payer after the Democratic candidate for Governor wins the election this fall.  Advocates have described their vision for a state-based “single payer” system this way.

While every system has it’s problems, what is notable is they all deliver better outcomes at significantly lower cost than we have here in the US.

So, when you hear people decrying the ACA, “Obamacare”, or single payer, ask yourself how their “solution” would lower your costs while improving the healthcare you get.

Better yet, ask them…But be prepared for silence.

What does this mean for you?

This will be one of the two most important issues facing us over the next decade. Inform yourself.