Health Wonk Review: September 11, 2014

Nothing to be ashamed of

Nothing to be ashamed of

Welcome to the September 11, 2014 edition of the Health Wonk Review. We’ve got a hearty and healthy set of posts from our wonkish community, including submissions on Obamacare, Medicare, performance measurement and power plants.

Medicare anyone?

In The 125 percent solutionHealth Affairs  bloggers including Elliot Fisher suggest using Medicare as the benchmark for all payments to providers.

“If every patient and every insurance company always had the option of paying 125 percent of the Medicare price for any service, we would effectively cap the worst of the price spikes. No longer would the tourist checked out at the ER for heat stroke be clobbered with a sky-high bill. Nor would the uninsured single mother be charged 10 times the best price for her child’s asthma care.”

Meanwhile,Healthcare Lighthouse informs us that CMS is slowly integrating principles of bundled payment into the base fee-for service hospital reimbursement system. The Medicare Services per Beneficiary (MSPB) measure essentially creates a virtual bundled payment episode for every hospital admission.

Healthcare policy experts know that the Resource Based Relative Value Scale Update Committee (RUC) is a big reason why US specialist physicians are overpaid and procedures so richly rewarded. Medicare generally accepts the RUC’s recommendations and commercial payers blindly follow. Yet no journalists seem able to stir up sufficient attention to this secretive group, which has only gotten less independent over time. Health Care Renewal shares the lament with us.

Obamacare: Con and Pro

In a three-part video interview, Curbside Consult Host Harold Pollack talks with conservative health policy wonk and former Romney advisor Avik Roy about his “universal exchange” health reform plan, “Transcending Obamacare.”

InsureBlog never met an Obamacare-causes-new-problems story it didn’t like, and this week’s entry is no exception: Tax forms will be more complex thanks to Obamacare subsidy calculations.

Heading back to school so you can get a good job? Not so fast. John R. Graham says the Affordable Care Act is affecting your odds of getting full time employment.

While well-insured armchair Obamacare opponents talk of transcendence and throw a scare into schoolgoers, Healthbeat explains why 10 million more people will gain insurance coverage in 2015 and why those who have had direct experience with Obamacare are more likely to support it than those who have only read about it.

Medical cost inflation continues to decline, reports Managed Care Matters. That’s good news for those paying the bills and not as good for those raking in the cash (and for health reform opponents who have to work harder on their arguments against Obamacare).

Get fatty

Put down that donut! Workers Comp Insider posts about a recent report on the status of obesity in America from the Trust for America’s Health and The Robert Wood Johnson Foundation. More than a third of adults are obese and more than two-thirds when factoring in “overweight.” Insider also links to various reports on the relationship of obesity to workers comp.

What Would Cigna do?

Wright on Health examines Christian medical cost-sharing plans, which allow people to be exempted from the ACA’s individual mandate to purchase health insurance, but which are themselves not really health insurance—despite looking a lot like it.  How many people enroll in a plan like this without fully understanding what they’re buying, and how little protection they may actually have?

Does spanking work?

Wing of Zock addresses the often unintended consequences of carrot-and-stick performance measures, of which the recent VA scandal is a regrettable example. Performance measurement is especially difficult in pediatrics, but is essential to tracking outcomes. “Problems begin when performance measures cease to become a means to an end, and become an end unto themselves.”

Power to the people

Population Health Blog takes note of the many eerie parallels between the power-utility industry and health care.  Will there be a smokestack casting a shadow on your favorite integrated delivery system? (I’m not holding my breath, but maybe I should)

That’s it for this edition. Thanks for reading!

photo credit: @jbtaylor via photopin cc

By healthcare business consultant David E. Williams of the Health Business Group

China syndrome: Rich flee mainland for medical care abroad

Coming for radiation treatment in the US?

Coming for radiation treatment in the US?

I feel bad for the patients profiled in Desperate Chinese Seek Medical Care Abroad in the Wall Street Journal. I’ll note upfront that I’m no expert in the Chinese system. But from what I’ve read here and elsewhere it’s not uncommon for hospitals and physicians to push profitable, expensive services and products that are not in the patients’ best interests.

As a result, those with means are looking abroad for relief. Some are winging it to the US, and the article paints a flattering –albeit anecdotal portrait– of better diagnoses and effective treatments here.

In the comments section, several readers assert that the article provides proof about how great the US healthcare system is. That’s not the conclusion I draw.

The article mentions one patient who paid $70,000 out of pocket to UCSF, and another at MGH who’s out $270,000 so far after using up her savings, selling her apartment and borrowing money.

I’ll assume that the patients are getting first rate care, but I’ll also assume that they are being billed “charges,” the ridiculously high rack rates that are used to set fees for those who lack the protection of a big insurance company. Are patients really being treated better financially than in China? I doubt it.

And it’s not as though US providers always have their patients’ best interests in mind when recommending treatments. It might not be as overt or widespread as in China, but it’s still a problem.

On a separate point, the article mentions Chinese coming to the US to give birth, lumping that phenomenon into the same category as cancer patients. That’s a totally different situation. The typical reason for giving birth in the US is to gain US citizenship for the child.

photo credit: Profound Whatever via photopin cc

By healthcare business consultant David E. Williams of the Health Business Group

 

Massachusetts Governor’s race: Their views on healthcare

Election day tomorrow

Election day tomorrow

It’s primary election day in Massachusetts tomorrow, and the candidates for Governor are doing their best to attract the attention of voters. Earlier this year I interviewed all nine candidates for Governor –including all five who are on the ballot tomorrow– about healthcare. I compiled the results in a free ebook. (And you don’t need to provide any contact info to download it.)

Healthcare is an important topic, and if it’s a deciding factor for your vote I encourage you to read and/or listen to the podcasts. We covered healthcare cost containment, disparities in hospital pricing, the role of specific state agencies, electronic medical records, expensive drugs for Hepatitis C, and pediatric issues.

Here are a few key takeaways, with links to each candidate’s interview.

First among Democrats:

  • Don Berwick is a firm believer in a single payer system. He’d like to find a way to phase out private insurance and replace it with a government payer. That’s fairly radical even in Massachusetts, but not unprecedented. Vermont is undertaking something similar. Berwick also emphasizes his experience running CMS (Medicare and Medicaid) and ability to lead and motivate a large government workforce.
  • Steve Grossman also believes that the state should play a strong role in healthcare, but he doesn’t go as far as Berwick in advocating a single payer system. Much of Grossman’s experience in healthcare derives from his career in business, and he’s focused on making healthcare more affordable for small businesses, which is a worthy goal.  He wants to see more resources in the system generally, and wants to address healthcare disparities as well as income disparities.
  • Martha Coakley aligns herself with the current administration’s healthcare policies, not surprising since she’s been involved in their development and implementation. She’s a strong supporter of the healthcare cost containment law known as Chapter 224. She also stressed the need to address mental and behavioral health issues and to remove their stigma.

The Republican candidates differ reasonably sharply from Democrats and from each other:

  • Charlie Baker, who previously ran Harvard Pilgrim Healthcare, believes the state has enough existing authority to increase healthcare transparency and accountability. He’d address the issue of availability of Hepatitis C drugs by building on the vaccination strategy he developed in an earlier state government role. He’d also like Massachusetts to be able to opt out of the federal Affordable Care Act, since he believes that it’s messing up state reform in Massachusetts, which is something I’ve come to agree with.
  • Mark Fisher is refreshing for the bluntness of his stances: no to government involvement in general, whether in transparency, support of electronic medical records, or overall healthcare reform. He does make an exception on Hepatitis C, where he says the government has a role in prevention. At the same time, Fisher expresses the classic anti-big business attitude of a Tea Party candidate. In particular he opposes the way health insurers treated him as a small businessman.

The general election will also feature healthcare businessman Evan Falchuk from the United Independent Party and Jeff McCormick, an independent candidate whose investments include healthcare businesses.

photo credit: secretlondon123 via photopin cc

By healthcare business consultant David E. Williams of the Health Business Group

 

On Medicaid expansion poor states are subsidizing rich ones

Like many states, proud to be a sucker

Like many states, proud to be a sucker

State lotteries result in the voluntary transfer of wealth by the poor to the rich. It seems the Affordable Care Act is having a similar impact.

In Massachusetts, residents of lower income towns like Chelsea spend more than 10 times as much per capita on the lottery as their affluent neighbors in places like Weston. Lottery spending by the poor enables the rich to pay lower taxes.

It never really occurred to Congress that states would refuse to expand Medicaid under the Affordable Care Act. After all, expansion brings billions in new funding to states, benefiting residents and ultimately flowing into the pockets of local physicians and hospitals. But 23 states have rejected Medicaid expansion, stubbornly refusing federal largesse even though their residents continue to pay federal taxes that fund states that have expanded.

Suckers of the South?

Suckers of the South?

Take a look at the map of Medicaid expansion. States with high per capita income like Connecticut, New York, Massachusetts, Minnesota and California are expanding Medicaid. Lower income states like South Carolina, Alabama, Mississippi, Louisiana and Texas are not. Instead their taxpayers are sending billions upon billions of dollars to Washington for redistribution to the higher income states.

On the one hand, I benefit from the foolishness and stubbornness of the non-expanders. On the other, I do feel badly about those individuals –and provider organizations– who are suffering needlessly from lack of Medicaid coverage.

At least people who spend a big chunk of their incomes on the lottery can dream and maybe even win something. The same can’t be said for the suckers in non-expansion states who are foregoing the same federal benefit they are financing for others.

photo credit: DieselDemon via photopin cc

By healthcare business consultant David E. Williams of the Health Business Group

 

Cavalcade of Risk is up at iiabny

The latest Cavalcade of Risk blog carnival is up at iiabny, featuring an “eclectic collection of risky posts” including ones on stole kayaks, and my post on legalizing medial marijuana.

And as a special bonus, CavRisk founder Hank Stern and I finally met in person today –nearly 10 years after he started up InsureBlog and I started the Health Business Blog.

Paying for IVF

You paid how much for me?

You paid how much for me?

Advances in fertility treatment have greatly expanded the number of people who can become parents. But treatment is expensive and –in most states– is not covered by health insurance. Patients often pay tens of thousands of dollars out of pocket for in-vitro fertilization and surrogate pregnancies, and face tough decisions about whether to continue treatment when initial attempts fail.

Kaiser Health News (Infertility Patients Finding Creative Financing Help) documents the growing number of options available to fertility patients. Clinics and shared-risk programs provide full or partial refunds for customers who don’t end up with a baby, in exchange for paying somewhat more upfront. These programs look like a good way to hedge against the risk of multiple cycles or failure to conceive. Those offering the programs must like them, since they increase the addressable market and probably boost average revenues per patient.

So on balance I think these programs are good. But it’s worth stepping back to consider that a mediocre Reproductive Endocrinologist can easily make a seven figure income, especially in those states that don’t mandate coverage for fertility treatments. In the 15 states that do mandate coverage insurance companies use their negotiating power to pay more reasonable rates than what any individual could hope to negotiate, and there’s no need for the consumer to participate in shared-risk or similar programs. Insurers also get a break on the price of expensive fertility drugs.

The downside of the mandate is that it increases insurance premiums for everyone, although those increases may be partially offset by reduced costs for neo-natal intensive care (when self-pay patients push for more embryos and end up with twins and triplets).

I live in a mandate state and I’m glad that I do.

photo credit: Gonzalo Merat via photopin cc
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By healthcare business consultant David E. Williams of the Health Business Group