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
30

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

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?

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
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.

 


Jun
19

Roads to stability

After eight days with family in Tuscany, it’s back to work.

Before we dive into the mundane, an observation from my travels.

This is a road built by the Romans about 2000 years ago. It’s still pretty functional, as were most of the ones we rode on in the hills and valleys of Tuscany. Sure, it could be smoother and a bit less steep (or a LOT less steep) in places, but it’s still there.

The Romans built these by hand, with nothing but human and animal power, with no electronics or computers or drones or satellite or engineering apps, no internal combustion or hydraulics or steam- or coal- powered machines. And they’re still here.

The Romans built these roads to speed communications, trade, and security. The labor that built these roads was drawn from the poor in the cities, local farms and landowners.

Somehow, that bumpy, narrow road of stones buried in the dirt eons ago felt a lot more…reliable.

All those opioid bills in Congress

Now we know why Congress can’t get anything done – At last count there were about 30 opioid-related bills in various stages in the House or Senate – over 20 have actually been passed by the House. One of the bills that addresses the Institutions for Mental Diseases is pretty contentious.

According to the Washington Post, the “IMD exclusion”  prohibits federal Medicaid reimbursements for inpatient treatment centers with more than 16 beds whose patients are mainly suffering from severe mental illness. The House bill would lift the exclusion for treatment of opioid addiction- but ONLY opioid addiction.

This ignores the very real and pervasive nature of other-substance addiction that has long plagued poor rural, minority and inner-city populations – crystal meth is just one example.

Why we’d pass a bill that doesn’t address crystal meth, which is a disaster in many rural communities from Maine to Arizona, is beyond me.

But there’s another issue here that’s even more troubling; this bill ignores the real problem; community-based treatment has always been starved for funds, unable to help millions of people who endlessly wait their turn for treatment.

Experts believe we need north of $10 billion per year to make a real impact on substance abuse disorder

Fact is, many with substance abuse disorder want to get treatment – there just isn’t any available. And allowing Medicaid to spend billions on care delivered in large institutions sounds a lot like a hand-out of taxpayer dollars to big business-owned “treatment” centers.

The IMD exclusion repeal is just window-dressing, a way for politicians to claim they’re doing something while handing billions to an industry with really good lobbying.

What does this mean for you?

The Romans built very expensive and very solid, stable, and durable roads that led to the long-term survival and success of the Empire.

We give truckloads of taxpayer dollars to big business while ignoring the devastation of the rural and inner-city poor.

Where will our decision lead us?

 


Apr
13

When are you going to sue the opioid industry?

States, cities, counties, school districts, and individuals all have sued the opioid industry.  A lot of these have been consolidated in one suit in Federal District Court in Cleveland under what is known as Multidistrict Litigation or MDL. The judge in that case has ordered trials to begin in 2019.

Courts and law enforcement go after penny-ante street dealers, narcos, and their supply chain, and now they are going after guys like this…

This is Arthur Sackler MD of Purdue Pharma, courtesy Wikipedia.

In Cleveland, Judge Polster has ordered the DEA to turn over voluminous records of opioid transactions next week. The records, for a handful of states for 2006 – 2014, will be used to identify what drugs were shipped where by whom.

While hundreds of cases have been consolidated into this one, the Judge, Dan Aaron Polster, has no jurisdiction over many more suits that have been filed independently by individuals, employers, providers, estates, and others.

But the MDL case overseen by Judge Polster is instructive, as he is focused on not only resolving the case, but finding long-term answers to what will certainly be a decades-long struggle to deal with the harm caused by the opioid industry. His intent appears to be to help identify financial resources to help pay for that work.

From the LaCrosse Tribune:

The judge’s ultimate goal is to “dramatically reduce the number of the pills that are out there and make sure that the pills that are out there are being used properly.

“The court observes that the vast oversupply of opioid drugs in the United States has caused a plague on its citizens and their local and State governments. Plaintiffs’ request for the … data, which will allow Plaintiffs to discover how and where the virus grew, is a reasonable step toward defeating the disease,” the judge wrote in an order.

Estimates of the harm already caused and the bills that will come due are in the hundred billion dollar plus range, this for an industry that sold almost $10 billion in opioids in one year, 2015.

So, back to my question.

When is the workers’ compensation industry, a group that buys way more than 10% of the opioids sold every year, going to sue the opioid manufacturers and marketers? 

We are waiting…


Dec
14

It’s not a tax bill, it’s a healthcare bill

OK, a bit of hyperbole – but only a bit.

Here’s how the Trump Tax Bill will affect healthcare…

  1. Immediate $25 billion cut in Medicare spending followed by a total of $400 million over the next nine years
    This has to happen under “PAYGO” rules which require offsets in spending when revenues are cut (as will happen under the Trump Tax).  Medicare is NOT AN ENTITLEMENT, it is an EARNED benefit. Starting January 1, 2018, doctors, hospitals, and pharma are going to take the hit as Medicare will stop paying for some care delivered by doctors.
  2. 13 million (+/-) more people will lose health insurance
    If you can sign up AFTER you get sick, why would you pay premiums until you need insurance? The bill ends enforcement of the mandate, but insurers are still REQUIRED to take all comers. So, many younger and healthier people will not sign up, and when they don’t the “pool” of insured people will get older, less healthier, and therefore more expensive to insure.
  3. Individual health insurance premiums will go up about 10%
    So, Insurance companies will raise premiums by about 10% as healthcare costs for the older, less healthy population will go up.
  4. Drive insurers out of the individual and small group markets
    See above…
  5. Reduce drug development for “orphan” diseases
    Today pharma gets a major tax break for developing treatments for orphan diseases, such as cystic fibrosis, epilepsy, muscular dystrophy and Angelman syndrome. It appears that tax break goes away – and this will greatly reduce R&D. The tax credit has been cited as responsible for treatments for about 350 diseases; there are around 7000 in total.  Here’s one pretty amazing success story that will likely not be repeated due to the end of the tax credit.

With fewer people covered by insurance, and higher rates for those that are, we’re likely to see more insurers drop out of more markets.

The greatest impact will be seen several years down the road, when the overly-optimistic growth projections prove to be just that. Already, experts predict the Trump Tax Bill will add over a trillion dollars to our national debt. When that happens, there are going to be calls for massive cuts to ALL services – including Social Security, Medicare, and Medicaid.

What does this mean for you?

I’m thinking Medicaid for all by 2027.

 


Jul
10

Medicaid’s really important – even/especially to you.

Welcome back to MCM; I took a few days off posting to hit the campaign trail, where I heard a LOT of concern about possible changes to Medicaid.
Most of us probably don’t think much about Medicaid. Here’s why we should.
First, Medicaid covers the poor elderly, those who are totally disabled, and depending on the state, poor kids and families.
Second, many are really sick people or frail elderly with no other way to get healthcare.

 

Medicaid reimbursement is generally low compared to private insurance or Medicare, but that doesn’t mean access is severely limited. In fact, (about 70% of physicians do accept new Medicaid patients versus about 85% who accept new privately insured and Medicare patients) (ESI is employer insurance)


Dec
21

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.