Friday, January 28, 2011

State of the Union, Part 2

Is it possible to find bipartisan common ground on improving the Affordable Care Act?

And can the United States have a serious conversion on how to conserve and allocate limited health care resources?

Conventional wisdom says no. Instead of working together to improve the ACA, both parties seem to be locked into a no-win battle over repeal. Discussion of conserving resources and controlling costs seems always to lead to unproductive charges and counter-charges about rationing.

But yesterday, in its annual State of the Nation’s Health Care report, the American College of Physicians challenged conventional wisdom.

ACP argued that common ground is possible on sustaining and improving the Affordable Care Act, including incorporating improvements usually associated with Republicans. ACP also expressed its belief that the country must confront the necessity of making hard decisions on conserving and allocating limited health care resources, but in a way that is in accord with distinctly American values.

I had the honor of joining ACP President Fred Ralston, MD, FACP, to present ACP’s recommendations at a press conference in Washington, D.C.

We made the case that the United States is facing an unprecedented health care crisis: more uninsured than ever before, the erosion of private employer-based coverage, more people on under-funded public safety net programs, a growing shortage of physicians in critical specialties including primary care, and rising costs that will bankrupt the country. We presented ACP’s firm belief that the Affordable Care Act has policies that are essential to addressing these challenges, and should not be repealed.

But we also argued that the law could be improved by giving states more options, earlier, to design their own systems to cover as many people and/or to enter into agreements to sell insurance across state lines; to replace the Medicare SGR formula with one that provides higher updates to all physicians and improved payment for primary care; and to reform the broken medical liability system—an issue traditionally associated with the GOP that President Obama said on Tuesday he is open to addressing. In addition to advocating for caps on non-economic damages, ACP urged Congress to fund a national pilot of health courts, a “no fault” model where claims would be heard by a judge with special training and access to independent medical advice.

We also released a major new ACP position paper, How Can Our Nation Conserve and Distribute Health Care Resources Effectively and Efficiently, which argues that the United States, like all countries, must address the fact of rising health care costs that threaten the economic health of the nation.

ACP believes that decisions on conserving and allocating resources, at the patient-physician level and societal level, should be informed by evidence of clinical effectiveness with consideration of cost. The paper makes a distinction between explicit medical rationing (as exists in many other countries) and making rational allocations decisions informed by evidence:

"We recognize that discussion of the most effective and appropriate ways to make such decisions, to the benefit of individual patients and the broader population, are undermined when the debate becomes polarized over whether or how care in the United States should be “rationed”—a term that is poorly understood, emotionally driven, and not conducive to reaching consensus. Achieving a national consensus on how best to use health care resources effectively, efficiently, and rationally should instead seek to distinguish between medical rationing, in which decision-makers determine which scarce medical resources are provided and who receives them, and rational medical decision-making, by which judicious choices are made among clinically effective alternatives. We emphasize that choosing among clinically effective alternatives based on medical evidence to provide clinically appropriate and effective care that maximizes value is not the same as rationing, which results in denial of care."

I am a realist, and I don’t expect that ACP’s recommendations will magically overcome the partisan divide on repeal of the ACA. Nor do I expect that everyone suddenly will join hands, sing kumbaya, and reach agreement on how to allocate limited health care resources, fairly and judiciously.

At some point, though, I hope it will become apparent to all sides that the ACA won’t be repealed, but that it can be improved. ACP’s recommendations can contribute to finding such bipartisan common ground.

And I hope that responsible people across the ideological spectrum will soon realize that the best way to avoid explicit medical rationing, as exists in many other countries, is to confront the issue now on what the United States can afford. But such decisions must be done through an open, transparent, and participatory process that empowers people to make decisions based on evidence, instead of imposing limits on them.

Today’s questions: What is your reaction to ACP’s efforts to urge the political parties to seek common ground on improving the ACA? And to our proposal to start a conversation on conserving and allocating resources based on evidence?

Wednesday, January 26, 2011

State of the Union, Part 1

Last night’s State of the Union didn’t have much to say about health care reform. But what was said by President Obama and the GOP response(s) spoke volumes about how far apart the Democrats and Republicans are.

President Obama extended an olive branch – sort of. He defended the Affordable Care Act and made it clear that he would not go along with efforts to roll back its key protections, citing the examples of specific patients that would lose out from repeal. But he did offer to consider “ideas about how to improve this law by making care better or more affordable.” He mentioned one issue in particular, saying he will “look at other ideas to bring down costs, including one that Republicans suggested last year – medical malpractice reform to rein in frivolous lawsuits.”

Physicians would welcome a serious, bipartisan effort to reform the medical liability system, although the proof is in the pudding.

The official GOP response from Rep. Paul Ryan (R-WI), didn’t show any give – he insisted that the Affordable Care Act had to go “it is driving the explosive growth of our debt.” The “unofficial” Tea Party response from Rep. Michelle Bachmann (R-MN) was a caustic attack on “Obamacare” and pretty much all things Obama.

We will find out over the next few months if there is any room for the parties to find common ground on improving the Affordable Care Act, or will remain dug into a no-win fight over repeal. (Repeal won’t happen, but the law could be undermined and weakened.)

Tomorrow, ACP will be releasing its own State of the Nation’s Health Care report, which will include our recommendations on preserving, sustaining, building and improving on the key elements of the Affordable Care Act. We will describe specific changes in the law that we believe would improve its effectiveness and could attract bipartisan common ground—including a new approach to medical liability reform.

But progress on improving the Affordable Care Act will require that the GOP back off on its insistence that repeal is the only acceptable option, and for President Obama and congressional Democrats to really be willing to consider some GOP ideas, including medical liability reform.

Today’s question: If you could change only three things in the Affordable Care Act, what would they be? (Other than outright repeal.)

Tuesday, January 18, 2011

After tomorrow’s vote, what then?

The House of Representatives began debate today on its bill to repeal the Affordable Care Act. The GOP has the votes it needs to get it passed, but it will go nowhere in the Senate.

But the vote is more than symbolic, as some press reports have labeled it. There is more than symbolism at work when the House of Representatives decides, as its first order of business, to vote to dismantle the work of its immediate predecessor. Rather, it signals that the Republican-controlled House is serious about mounting a sustained effort to use every tool at its disposal to repeal, halt and defund the law, in pieces if not all at once. Interestingly, the House is taking on this fight at time when the level of strong opposition to the ACA is near an all-time low according to a new AP poll.

Instead of a fight that will be won or lost on a single battlefield, think of it as series of guerilla actions by the GOP to weaken the law, in the hopes of ultimately bringing it down.

Readers of this blog know where I stand on repeal: the Affordable Care Act isn’t perfect and can and should be improved, but turning away from its promise of (near) universal health insurance coverage would be a terrible mistake. Repeal would result in at least 32 million more Americans going without health insurance, the continued erosion of private employer-based health insurance coverage, more people ending up in under-funded safety net programs, and elimination of some of the most promising initiatives to begin to bend the cost curve.

Coincidental to tomorrow’s vote (since the publication schedule was set months ago), health reform is a major focus of today’s edition of the Annals of Internal Medicine. It includes my article (originally published in December as an early web release) on the consequences if the United States allows universal coverage to slip away, and several letters to the editor taking issue with the August 23 article by White House staffers Zeke Emanuel, Bob Kocher, and Nancy-Ann Deparle. The letters, and the authors’ response, makes for interesting reading.

Also today, ACP released a statement to urge Congress to "preserve and – as necessary – improve on [the] important reforms created by the Affordable Care Act, not repeal them.” The statement lists “essential” policies that need to be preserved, including provisions to provide coverage to nearly all Americans.

But ACP also advocates that “Congress and the White House . . . work together to find effective ways to restrain cost growth and ensure effective implementation of the law [including] . . . enacting more effective medical liability reforms, ensuring that states are granted the flexibility and resources they need to effectively expand coverage, giving Congress more decision-making authority over recommendations from an independent payment advisory board, and replacing the cycle of Medicare physician payment cuts caused by the Sustainable Growth Rate (SGR) with a permanent solution. Other improvements should include removing or modifying the burdensome 1099 reporting requirement for small businesses and the requirement that physicians provide written authorization for over-the-counter medications reimbursed by a flexible spending account. Such improvements, though, should not compromise necessary funding for other essential policies in the ACA.”

My fervent hope is that Congress will move away from framing the issue as being a yes or no choice between repeal or keeping the law unchanged. The GOP might listen to the sage advice of one of its own, former Senate majority leader Dr. Bill Frist, a heat surgeon from Tennessee:

“The reality is that the law will remain largely intact. . . That being the case, is it is important that it be made to work as effectively as possible . . . there are lots of things that can be fixed or modified by working together.”

This would be good advice as well for President Obama and the Democrats. Wouldn’t making the law “work as effectively as possible” by “working together” to fix or modify it be much more constructive, and unifying for the country, than a no-win fight over repeal and replace?

Today’s question: What is your reaction: after tomorrow’s “symbolic” vote on repeal, should the 112th Congress heed Dr. Frist’s advice to take the next two years to work as effectively as possible, or continue to fight to repeal or weaken it?

Thursday, January 13, 2011

Should physicians be allowed to self-refer?

Federal law generally prohibits physicians from referring their own patients to a diagnostic facility in which they have an ownership issue - a practice called “self-referral” - unless the facility is located in their own practice. This exemption exists to allow patients with access to a laboratory test, x-ray, or other imaging test at the same time and place as when patients are seeing their physician for an office visit. Less inconvenience and speeder diagnosis and treatment - what could be wrong with that?

Much, say the critics, if it leads to over-utilization and higher costs and doesn’t really represent a convenience to patients. This is the gist of two studies by staff employed by the American College of Radiology, published in the December issue of Health Affairs.

One study analyzes Medicare claims data and concludes that patients aren’t really getting “one-stop-shopping” convenience when their physician refers them to an imaging facility that qualifies for the “in-office” exemption.

“Specifically, same-day imaging was the exception, other than for the most straightforward types of x-rays. Overall, less than one-fourth of imaging other than these types of x-rays was accompanied by a same-day office visit. The fraction for high-tech imaging was even lower—approximately 15 percent.”

The authors say that “a likely explanation is that the equipment required for high-tech imaging is expensive, typically costing $0.5–$2.0 million per machine, and it is inefficient for such equipment to be idle and available to patients on an essentially walk-in basis. Rather, the norm is to schedule appointments ahead of time, to maximize use of the equipment. It is ironic that a major justification for self-referrers’ acquiring this expensive equipment is to provide same-day convenience to their patients—but, presumably to keep their costs down, the physicians inconvenience the vast majority of their imaging patients by scheduling scans for a later date.”

The second study, also from employees of the American College of Radiology, found that with the exception of office X-rays, self-referral provides no health benefit to patients but substantially higher costs:

“Our study provides broad evidence that physician self-referral for imaging typically is not associated with substantial benefits in treatment duration or costs. We found that self-referral for imaging is associated with significantly and substantially higher total care costs in the majority of medical conditions and imaging types we examined. Additionally, we found that self-referral is not associated with shorter illnesses, except in the case of self-referred x-rays for some conditions.”

The authors of both studies conclude that Congress should narrow the “in-office” ancillary services exemption to federal ban on self-referral only to office x-rays.

It should be noted that the American College of Radiology has had a long-standing agenda of wanting to ban physician self-referral, going back to 2003, if not longer. This doesn’t mean that the research done by the ACR’s staff is invalid or biased - it evidently met Health Affairs’ peer review standards - but the fact that they work for an organization that has a political agenda to ban self-referral is relevant.

The American College of Cardiology is fighting back against efforts to eliminate the in-office exemption, maintain that “patients are best served by having a physician who is familiar with a patient's medical history. In the ideal case, a qualified physician selects the optimal study to perform, interprets the image, and is able to integrate the results with the full knowledge of the patient's clinical condition before communicating with the patient and establishing a treatment plan. This is inherently the most efficient and comprehensive approach to care. In the case of heart disease, a cardiologist is the most appropriate physician to perform and interpret cardiac imaging studies.”

The American College of Physicians supports a ban on “any financial arrangement that links income generation explicitly or implicitly to the volume or revenues generated by the investor-physicians; referrals if there is no valid medical need for the referral; any arrangement that involves an explicit or implicit inducement or encouragement of physicians by the management of the entity to increase the volume of referrals to the facility; and referrals to any entity (except those specifically exempted by law) unless disclosure has been made to patients of the physician's financial interest in the facility and, to the extent practicable, a list of alternative facilities from which the goods or services can be obtained.” But ACP also argues that “certain arrangements … should be exempt from regulation … including: such services as those provided by physicians (or physicians in the same group) principally to their own patients (e.g. in-office laboratories and x-ray facilities); other professional and incidental services provided by physicians and their employees in the same group practice as the referring physician.”

There is a risk that the public could view the inter-specialty fights over self-referral as an unseemly fight among doctors in different specialties over who controls the huge amounts of money that can result from referrals to imaging facilities. But the issue, though, really is finding the right balance - of cost, convenience, and the competence of given physicians to perform and interpret a particular imaging test.

Today’s questions: What is your reaction to the Health Affairs studies? Do you think the exemption for in-office imaging should be kept as is or limited only to in-office X-rays and labs?

Thursday, January 6, 2011

How would repeal affect coverage and cost of health care?

Next week, the new GOP-controlled House of Representatives will be voting on and is expected to pass a bill to repeal the Affordable Care Act (ACA), lock, stock, and barrel.

There is virtually no chance the repeal bill will get through the Senate, though, which maintains a narrow Democratic majority, and President Obama would veto it if it did.

But let’s say that the seemingly impossible happened, and the ACA was repealed. What would the impact be on coverage, costs, and the federal deficit?

In a letter to Speaker John Boehner (R-OH), the Congressional Budget Office today released its preliminary estimates of the impact of repeal on the deficit, uninsured, and costs of care, and found that it would make the deficit worse, result in more uninsured persons, and higher premiums for many:

- Deficit: repeal of the ACA would increase the deficit by $145 billion from 2012-2019, by another $80 to $90 billion over the 2020-21 period, and by an amount “that is in the broad range of one-half percent of the GDP” in the decade after 2019*--or about a trillion dollars.

[*Ordinarily, the House of Representatives would have to find “offsets” to pay for such increased deficit spending from legislation, but it exempted the ACA repeal bill from this requirement. Republican leaders have justified this on the grounds that they disagree with the CBO’s estimates. But under Congress’ own, long-standing budget rules, accepted by both political parties, the CBO is the referee, and the referee decides how much a bill will increase or decrease the deficit, not the party that is in control of Congress at a given time. The result is that the increased deficit spending from repeal would show up in future CBO “baseline” deficit spending estimates, making it much harder for Congress to balance the budget.]

- Federal budgetary commitment to health care: repeal would lower the federal budgetary commitment to health care over the next decade but increase it in subsequent years. In other words, if the ACA is repealed, the federal government would pay less now, but more later for health care.

- Coverage: repeal would result in 32 million fewer non-elderly persons having health insurance, leaving about 54 million uninsured. The share of legal non-elderly residents with insurance in 2019 would be 83 percent compared to 94% under the ACA.

- Premiums: premiums for individual insurance would be “somewhat lower” but “on average . . . many people would end up paying more for health insurance coverage -because under [the ACA], the majority of enrollees purchasing coverage in that market would receive subsidies via the insurance exchanges, and [repeal] would eliminate those subsidies.” Premiums for employment-based coverage from large employers would be “slightly higher” under repeal than under the ACA. Premiums for employer-based coverage through small employers might be “slightly higher or lower” reflecting uncertainty about the impact of the ACA on premiums in that market.

Repeal, of course, would also eliminate all of the provisions of the ACA, including rules to end discriminatory practices against people with pre-existing condition exclusions, coverage of adult children on their parents’ plans, the new 10% increase in Medicare payments to primary care physicians, the new Medicare wellness examination preventive and other screening procedures now available free of charge to beneficiaries, the phase-out of the Medicare Part D doughnut hole, the requirement that insurers spend more on patient care and less on administration, and much, much more.

There is something to be said for politicians trying to deliver on campaign pledges. The GOP promised voters that it would try to repeal the ACA, so it is no surprise and maybe even a bit refreshing that repeal is one of the first things out of the starting gate.

But the evidence is that if the ACA is repealed, the country would have a bigger deficit, more uninsured people, higher out-of-pockets costs and premiums, reduced Medicare benefits, reduced pay to primary care doctors, and elimination of many other popular and beneficial programs created by the ACA. Is this really what the people want?

Today’s question: What is your reaction to the CBO’s finding that repeal of the ACA will increase the deficit, lead to more uninsured persons, and higher premiums and out-of-pockets costs for many?

Tuesday, January 4, 2011

New Year begins with a (baby) boom!

On January 1, Kathleen Casey-Kirschling became the first of the baby-boom generation to qualify for Medicare. She’s hardly alone: the baby-boom generation will cause enrollment in Medicare to soar. According to the Kaiser Family Foundation, Medicare enrollment will increase from 47 million today to 64 million in 2020 to 80 million people by 2030. At the same time, the ratio of workers paying into the program to support each Medicare enrollee will drop from 3.4 (2010) to 2.8 (2020) and then to 2.3 workers per beneficiary in 2030, denying the program the tax revenue needed to sustain it.

What happens then? Well, the President and Congress would have a dismal menu of political and policy choices. They could impose huge tax increases, inflicting great harm on working families and the economy, and they probably couldn’t raise enough money anyway from taxes without other changes in the program.

They could slash benefits for everyone enrolled in Medicare, impose means-testing so only low-income elderly would qualify, increase beneficiaries’ out-of-pocket contributions, limit access to beneficial services (rationing, anyone?), cut how much Medicare pays doctors and hospitals, and/or privatize the program (but if you are over 65 and have chronic health conditions, good luck finding affordable private health insurance).

They could try to duck such tough choices by borrowing more money to pay for the program, further driving up the federal deficit and debt, crowding out spending for other national priorities, increasing interest rates, slowing or even reversing economic growth and reducing national and household wealth.

One could imagine such a draconian set of policy choices creating unprecedented intergenerational conflict, as baby-boomers resist giving up the benefits they’ve “earned” and are “entitled” to while their children and grandchildren resist seeing their standards of living cut to pay for their parents and grandparents benefits.

It’s enough to give you a headache, just like recovering the day after a New Year’s Eve binge.

It doesn’t have to be this way, though. There isn’t much that can be done about the demographic fact that there will be more old people (let’s hope not, at least!) and fewer younger ones. There isn’t much to be done about the fact that as people age, they will need health care that costs more than most can afford on their own, so someone else younger and healthier will have to help pay for their care.

But there is a lot that could be done now to put Medicare on a more sustainable path, starting with ending the myth that the amount each of us pays into Medicare over our lifetimes covers the cost of our benefits. It doesn’t: Medicare has, and always will be, an income transfer program from working people to non-working (retired) people receiving benefits. Yet a new poll shows that 60% of us believe that “they paid into the system so they deserve their full benefits -- no cuts” according to the Associated Press. But the same AP story notes that new research by the Urban Institute shows that the cost of the benefits that most receive from Medicare greatly exceeds how much they paid into it: “Consider an average-wage, two-earner couple together earning $89,000 a year. Upon retiring in 2011, they would have paid $114,000 in Medicare payroll taxes during their careers. But they can expect to receive medical services -- from prescriptions to hospital care -- worth $355,000, or about three times what they put in.”

As long as people believe (and are told by politicians) that they “paid” for their own Medicare benefits, they will understandably resist having “their” benefits reduced.

Congress and President Obama could begin changing such perceptions by explaining the demographic facts of life about Medicare. They could also begin proposing ways so that Medicare is restructured more gradually and less painfully, rather than waiting 10 or 20 years when all of the options will be bad ones, politically and substantively. They might even find that the public is willing to listen.

The AP’s poll shows some ideas for changing Medicare could potentially have support if the alternative is to slash benefits: “59% of [boomers] said raise the age and keep the benefits . . 61 percent of [all] Americans favored raising Medicare taxes to avoid a cut in benefits. . . Among adults in their 20s, who'd face a whole career paying higher taxes, 61 percent said they would be willing to pay more to preserve benefits [and] 62 percent . . . said they'd be willing to pay more so that doctors' fees don't have to be cut and more doctors keep accepting Medicare payments.”

For the country to make any progress on sustaining Medicare, though, both political parties need to set aside ideological and partisan arguments that don’t hold water. For Republicans, this means being willing to accept that some gradual and broad-based tax increases are going to be part of the solution, that government is going to continue to have the principal role in financing health coverage to the elderly because for-profit private insurance has no economic incentive to cover older and sicker people, and by accepting that it makes no fiscal or budget sense to repeal the provisions of the Affordable Care Act that offer the greatest potential of slowing spending on Medicare (like funding on comparative effectiveness research, investments in primary care, and pilot-testing new ways to pay physicians and hospitals). For congressional Democrats and President Obama, it means accepting that reform is going to involve changes in benefits, cost-sharing, and eligibility, and a willingness to be open to Republican ideas for reducing costs, like medical liability reforms to reduce the costs of defensive medicine, health savings accounts, and pilot-testing a voluntary premium support (voucher) alternative to traditional Medicare.

Having such a bipartisan discussion about the future of Medicare seems unlikely, but wouldn’t it be a terrific new year’s resolution for the politicians to give it a try?

Today’s question: Do you think that the country is ready for a bipartisan (or better yet, non-partisan) discussion over how to sustain Medicare for the baby-boomers, and their children and grand-children?