Sep
10

Hypocrisy hits new heights.

The same folks who want to cut $537 billion from Medicare are now claiming only they can “protect” Medicare.

Out on the campaign trail, President Trump and Gov Rick Scott (R FL) are claiming “Medicare for All” would somehow harm Medicare, and seniors need to vote for them to preserve Medicare as it is.

In an obvious attempt to scare seniors, Trump et al are asserting that expanding Medicare – the most-liked health coverage in the nation – will somehow result in seniors losing Medicare benefits. They support this assertion with no logic, no coherent argument, no evidence or data, yet there it is.

This from the same folks who, just a couple months ago, wanted to cut seniors’ Medicare benefits. What’s changed?

Elections are coming, that’s what’s changed.

According to Forbes, the GOP is looking for:

$900 million in cuts to rein in Medicare prescription abuses. Another $5 billion is cuts are specified to address high drug prices, while $286 billion in funding will be pared to reduce excessive hospital payments.

Now, there’s an argument to be made that Medicare is not financially sustainable – especially given the huge tax cuts passed by the GOP.  And yes, we need to figure out how we can keep Medicare viable given the drop in federal tax revenue due to the tax cut.

But to turn around and claim that expanding Medicare for All is somehow damaging to a program you’d like to cut by a half-trillion dollars is, well, the height of hypocrisy.

What does this mean for you?

Medicare for All isn’t a threat to Medicare. 


Sep
5

Making “Medicaid for All” work

The US healthcare “system” is headed towards a cliff, and when it hits the edge, Medicaid may well be the replacement.

Briefly:

  • Managed Medicaid plans would be offered in every state
  • people would sign up for the plan they want, with the option of enrolling in regular fee for service Medicaid
  • funding would be from payroll taxes, individual service-based fees, and federal funds
  • provider reimbursement would be pegged to Medicare for ALL payers, eliminating payer-shopping by providers and increasing Medicaid FFS reimbursement

The details…

There are two ways this would work – Medicaid for All (MFA) becomes the way all of us get coverage, or Medicare remains in place for elderly folks and Medicaid covers everyone else.

It’s entirely possible employers continue providing basic healthcare coverage, but really, do they want to? It’s expensive and a pain in the neck. Instead, employers will be able to offer supplemental insurance (similar to what happens in Canada, the UK, and other countries) as an employment benefit.

Today, Medicaid comes in two general flavors – “classic” and Managed Medicaid.

Classic is fee-for-service Medicaid, where members can go to any provider that accepts Medicaid. Providers are paid on a fee for service basis, at rates that vary greatly between states (states set reimbursement).

Managed Medicaid is an option in almost every state. The states contract with healthplans to provide integrated Medicare and Medicaid in what are called “dual eligible” programs (members are eligible for both Medicare and Medicaid).

The Managed Medicaid (MM) plans are paid on a capitated basis – that is, a flat fee per member. That fee is based on the health status and health risks of the members; the sicker the member is, the higher the capitation amount.

This arrangement incentivizes MM plans to figure out the optimal ways to keep members healthy and keep costs down – keep them out of the ER, avoid inpatient hospital stays, and encourage healthy behaviors. If costs come in under budget, the plans make money (usually a couple percent at most). If not, the plan loses money – not the taxpayer. (MFA will be based on Managed Medicaid)

(a detailed explanation is here.)

Today, states with these plans in place enroll members in different ways. Some randomly assign members to plans, others allow more assertive competition among the plans for members. I’d expect this to continue under Medicaid for All; existing enrollment processes would be expanded, systems upgraded, and communications refined to address the broader market. Every fall, MM plans would compete for members, enrolling them before the end of the calendar year.

Individual contributions to premiums would be income-based (as under ACA today); there could be low copays for certain services but paperwork for members would be almost non-existent. (All Medicaid members today have ID cards that enable electronic record sharing, billing, and claims submission.)

Funding would be a combination of service-based fees (copays and co-insurance), payroll taxes, federal funds, and perhaps general state funds.

Remember, as employers would no longer have to deliver health insurance, those dollars could be spent on higher wages, to offset payroll taxes, or for other purposes. Similarly, individual payments for premiums, high deductibles and the like would be eliminated, altho some of those “savings” would go to higher payroll taxes to cover Medicaid for All.

Provider reimbursement would be up to the MM plans negotiating with providers – who would remain independent (unless they are employed in a health system that is also a MM plan provider). However, FFS Medicaid reimbursement would be increased to mirror Medicare’s rates.

Why this is the future

US healthcare is not sustainable. Period.

Family health insurance premiums are nearing $20,000, the number one cause for bankruptcy is medical debt, Medicare and Medicaid are the largest chunks of the federal budget, and industrial competitiveness is hampered by healthcare costs which are double the average costs in other countries.

And, 74% of Americans are worried about losing their insurance.

So, we can either keep driving off the cliff, or take an alternate route. One that will be very rocky, cause a lot of headaches and heartache, disrupt businesses and families and providers, but one that sooner or later, we’ll have to choose.

What does this mean for you?

It’s not a matter of if, but when.

Note – happy to engage in fact-based, citation-supported conversation. “I heard this” and “everyone knows” arguments are not helpful.

 


Sep
4

The case for Medicaid for All

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
29

Medicare for All means…what?

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
16

U.S. healthcare vs the world in one chart

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”?

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.

 

 


Aug
10

Friday attempt-to-catch-up

This summer has been busier than any I can recall  – new clients, new projects, new work has me waaaay behind on posting to MCM – my apologies.

Here’s stuff that happened this week…

Way too many opioid-related deaths occur in construction, farming, and fishing

According to the Boston GLobe, “nearly a quarter of overdose deaths in a five-year period occurred among people, mostly men, who work in construction…”

Construction workers may well take the dangerous painkillers so they can keep working.

Thanks to Mike Mullen for the tip on this.

Good piece by Louise Esola in Business Insurance about predictive analytics – Friend and colleague Jeff White of Gallagher Bassett draws an interesting parallel with hurricane tracking graphics – the tools can help adjusters figure out where claims are headed – and therefore what to do to prepare/prevent bad outcomes.

Those short-term health plans Trump is pushing – be careful before you sign up. These “association health plans” often don’t cover drugs or pregnancy or out of network care.

That’s why they are cheap.

From the “these people are awful” file comes this – Mississippi’s governor is seeking to force Medicaid recipients to fill out all kinds of forms on line to demonstrate their efforts to find work.

This in the state where almost no one is on Medicaid because you don’t qualify if you make more than $6000.

You won’t be surprised to learn most Mississippi Medicaid recipients are very poor African American mothers in rural areas.

This smacks of racism.

When did it become OK for politicians to do this?

Hope you have a good weekend – it will certainly be better than those poor moms’…


Aug
6

Medicaid – what you need to know

You need to know basic stuff about Medicaid because:

  • Medicaid may well become the model for your health insurance
  • It covers more working-age people than any other payment type
  • Your state and federal tax dollars pay for Medicaid.

So, here are the basics.

  • Medicaid covers one out of five Americans.
  • Most Medicaid dollars go to the blind and disabled.
  • Medical care for poor adults accounts for a third of Medicaid spend
  • Poor kids use a fifth of Medicaid dollars
  • The rest is mostly for nursing home care for folks with very limited income or assets – in fact, Medicaid is the major payer for nursing home and similar medical care.
  • Medicaid expansion (covering people just above the poverty line) is now in place in 34 states (plus D.C.); 2 are implementing, and 3 more are considering expansion.

Lastly, my bet is we’ll have some form of Single Payer within the decade – and Medicaid will be the model.


Jul
13

Friday catch-up – Hospitals and a BS alert

Glorious week here in New York’s Finger Lakes – high 70s, lots of sun, nice breeze.  I know, Florida friends, you’ll be gloating in February when it’s 10 below and snowing sideways…

Hospitals

NCCI’s just-released research indicates facility costs are rising, driven at least in part by less competition among hospitals. Key takeaway:

Reductions in hospital operating costs do not translate into price decreases. Research to date shows that hospital mergers increase the average price of hospital services by 6%−18%.

Kudos to NCCI for this research and the piece itself. The article is very well-written, concise, and understandable for us laypersons. NCCI has upped its game considerably of late, producing excellent work and explaining what their findings and implications thereof.

I’m going to focus on this in a post next week – there’s a ton of insights here that demand careful consideration from payers and employers.

For those looking to better understand how hospitals set prices, determine what their actual costs are, and how they use data to reduce costs while improving care, read this piece in HealthAffairs.

And there’s this – a hospital in the Cayman Islands is delivering excellent care at a fraction of the cost of US facilities. The facility is fully accredited, provides a simple, bundled price for each procedure (instead of bills for each doctor, facility fee, procedure, implant…) and will be a very attractive option for many Americans with specific health needs.

Medicaid

My bullshit detector went nuts when a press release hit the inbox this week.

In what has to be one of the crappiest, most distorted, unscientific and biased pieces of “research” ever done, a so-called “non-partisan” entity calling itself one of the nation’s “leading public policy organizations” claims:

in some states, up to 70% of able-bodied adults enrolled in Obamacare expansion earned $0 in income

I’m going to dig into this steaming pile of nonsense next week, but for now, know that this is flat out wrong.  There are so many errors, distortions, flat-out wrong statements, conflations, and unsupported conclusions in this “research” it just boggles the mind.

It’s one thing to have principled disagreements on policy. It’s entirely another thing to lie your ass off.

For those interested in real research by unbiased experts, the Kaiser Family Foundation’s recent report on Medicaid Work Requirements is required reading.

OK, rant over – till next week.

 


Jul
9

High deductible health plans don’t work

High deductible health plans do not work.

These plans, also known as HDHPs are the bluntest of instruments, intended to make patients more cost conscious and better consumers by making them pay the first few thousand dollars of their healthcare bills.

Instead, patients avoid care they should get, go bankrupt trying to pay sky-high deductibles, and even worse, don’t do a damn thing to get high utilizers to modify their lifestyle or care decisions.

Lazy benefits managers and employers looking for a quick fix to rising premiums continue to tout HDHPs despite the warning signs. Now, over a decade after these plans first became widely popular, some employers are finally getting the message.

I’d go so far as to argue that HDHPs help drive health care costs up; sick folks get sicker because they can’t afford preventive and routine care, while the 20% of members who incur 80% of the healthcare costs blow thru their deductible in March and then have no financial inhibitions.

Research shows most of those high utilizers don’t shop for care. I don’t see this as dumb behavior, rather a result of dumb plan design. If you’ve already paid your annual out-of-pocket maximum, you have no incentive to ask what something costs or even if you need that care.

I’ve been railing about this for years…alas, with the same effectiveness as Cassandra

So, if you’re looking to benefit design to control costs, what’s a better alternative?

Simple.  Replace deductibles and copays with co-insurance.  That is, have consumers share in the actual cost.  If treatment costs $100, then the consumer pays $20; if it is $4000, then the consumer pays $800.  This will make the consumer cost conscious without breaking their bank.

I understand that this will require the consumer, provider, and health plan to know what the cost of care is, ideally before treatment.  That is another major benefit of a co-insurance based program; it will speed adoption of transparent pricing and make consumers much more discerning buyers.

Yes, keep an out of pocket limit to protect consumers.  High utilizers will feel the pain of paying co-insurance far longer than they do today.  As a result, they will be better consumers overall.

What does this mean for you?

This isn’t that complicated, nor is it difficult.  Health plans that do this will gain a competitive advantage.