The ACP Advocate Blog
by Bob Doherty
Monday, October 31, 2011
What if eliminating the mandate doesn’t drive a stake in “ObamaCare”?
A new study upends the argument that the Affordable Care Act (ACA) can’t work without an individual insurance mandate—which, strangely enough, could end up being the ACA’s salvation.
The study examined the potential impact on the affordability of health insurance premiums should the Supreme Court declare that the insurance mandate is unconstitutional without overturning the rest of the ACA. The study didn’t address the constitutional issues, only the pragmatic argument that without a requirement that people buy coverage, the young and healthy will choose to go without health insurance until they are sick, knowing that the ACA prohibits insurers from turning them down or charging them more for pre-existing conditions. This could drive up premiums for everyone else—forcing more people to drop coverage until the whole insurance market collapses.
But this study found that removing the mandate will have a far more modest impact, assuming that “all other features of the act—including the Medicaid expansion, premium subsidies, employer tax credits, and employer penalty provisions—were unchanged”:
“Neither our simulations nor the available research demonstrates that the mandate is necessarily a ‘linchpin’ of the Affordable Care Act, as one federal judge concluded. Our study suggests that although the mandate has important effects on premiums and coverage, it might not be essential to the act’s successful implementation. The premium increase and the loss of coverage might be judged acceptable if that meant preserving the remainder of the act. We believe that there is good reason to expect that the act would still cover 21–24 million of those who would have been uninsured otherwise, even if the mandate is removed.”
The “primary reason” why removing the mandate would have less of an impact than others have predicted is that the ACA’s tax credit subsidies would insulate most people from the costs associated with premium increases, making it unlikely that people would drop coverage in droves. Other features of the law, like open enrollment periods, would also mitigate the impact on premiums and loss of coverage associated with removing the mandate, the authors concluded.
Now, I have to say that there is a lot of uncertainty here, because the Congressional Budget Office and many other independent analysts predict that removing the mandate would have a much bigger impact on premium increases, dramatically reducing the number of people who would get coverage. Even this study found that some 8 million fewer people would have health insurance if the mandate is eliminated.
But consider this oh-so-sweet irony: if the Obama administration loses the argument in the Supreme Court that the individual insurance mandate is constitutional, and it is removed by the justices without overturning the rest of the law, it could end up being the ACA’s political salvation. Polls have consistently shown that the mandate is the least popular part of the ACA, dragging down support for the overall law. But most of the rest of it—including the subsidies and the prohibition against turning people down or charging them more because they are sick—is supported by an overwhelming majority of Americans. It will be much, much harder to repeal the ACA if the unpopular mandate goes and the popular stuff remains, in which case conservative critics may lose by winning, and the ACA’s supporters may win by losing. Instead of driving a stake in the heart of “ObamaCare,” as the critics had hoped, it could help keep the law alive. How is that for a neat trick or treat on this Halloween night?
Today’s question: Do you think the Affordable Care Act will be more or less likely to work and survive if the individual insurance mandate is eliminated?
Thursday, October 27, 2011
What Washington Might Learn from Dr. Seuss
With reports that the debt reduction “Super Committee” may deadlock, it’s time to bring in the spirit of Dr. Seuss to administer some emergency medicine! All 12 Super Committee members should be required to read the tale of the North-going and South-going Zax, from Dr. Seuss’s 1961 “Sneetches and Other Stories,” a modern day parable story for children about what happens when two stubborn individuals refuse to compromise. Excerpts:
"I say! You are blocking my path. You are right in my way. I’m a North-Going Zax and I always go north. Get out of my way, now, and let me go forth!"
"Who’s in whose way?" snapped the South-Going Zax. "I always go south, making south-going tracks. So you’re in MY way! And I ask you to move and let me go south in my south-going groove."
Then the North-Going Zax puffed his chest up with pride. "I never," he said, "take a step to one side. And I’ll prove to you that I won’t change my ways if I have to keep standing here fifty-nine days!"
"And I’ll prove to YOU," yelled the South-Going Zax, "That I can stand here in the prairie of Prax for fifty-nine years! For I live by a rule that I learned as a boy back in South-Going School. Never budge! That’s my rule. Never budge in the least! Not an inch to the west! Not an inch to the east! I’ll stay here, not budging! I can and I will if it makes you and me and the whole world stand still!"
But the World Didn’t Stand Still . . .
(Now, just replace the North-going and South-going Zax with John Boehner, or Mitch McConnell, or Barack Obama, or Harry Reid, and you’ve got today’s Washington described to a T!)
But it’s not just the politicians who need a counseling session with Dr. Seuss, it’s all of us.
It is we who in 2008 elected a president who pledged to reform health care, which he did, and it is we who in 2010 elected a House of Representatives that pledged to overturn it, which they are trying to do, and it is we who also voted last year to keep Democrats in charge of the Senate, which they are, virtually ensuring deadlock, which is what we have gotten.
It is we, the public, who “have become more doctrinaire at both ends of the ideological spectrum, a polarization that reflects the current atmosphere in Washington” reports the well-respected Pew Research Center for the People and the Press. Pew also found that “Core GOP groups largely prefer elected officials who stick to their positions rather than those who compromise. Solid Liberals overwhelmingly prefer officials who compromise, but the other two Democratic groups do not.”
The dangerous reality is that we don’t have 59 days or 59 years to make progress on the deficit, on health care reform, on jobs, on so much more. But how can we expect politicians to make the necessary compromises if we, the voters, insist that they act like the Zax, refusing to budge, not an inch to the west, not an inch to the east, even if it causes the whole country to stand still?
Today’s question: What do you think Congress, and all of us, can learn from the Zax?
Thursday, October 20, 2011
American Exceptionalism and Health Care
Most Americans accept the concept of American exceptionalism, described as “the belief that the United States is an extraordinary nation with a special role to play in human history; a nation that is not only unique but also superior.”
Being exceptional, though, can have a less positive meaning, as in “The Boston Red Sox had an exceptionally bad September!”
So how exceptional is American health care? Exceptionally good in some respects, but exceptionally bad (and getting worse) in many others.
On Tuesday, the Commonwealth Fund released the results from its 2011 scorecard on the performance of the U.S. health care system, and for the most part it isn't good.
My colleague, Anna Stoto, was present when the report was released by the Commonwealth Fund, and this is her account:
“Unfortunately, the results of the latest scorecard were grim – though the US demonstrated some improvement in quality indicators, the health care system fell short of achievable goals overall. While the US continues to lead in per-capita spending, overall performance failed to improve between 2006 and 2011. The scorecard examined five dimensions of health system performance, measured across 42 indicators: Healthy Lives, Quality, Access, Efficiency and Equity. Scores are simple ratios of the US average to benchmarks, which are levels achieved by other countries or top US states, regions, health plans, or providers.
Several troubling findings emerged from the report:
· There were steep declines in access and affordability between 2006 and 2011, particularly as health care costs have risen higher in relation to incomes. The 2011 report demonstrated that the United States is losing states where premiums were relatively more affordable – employer premiums now represent 18% or more of median household income in half of the country.
· The system demonstrated a lack of equity overall – there is considerable variation in care across the US, and there are now 15 states where 1 in 4 adults do not have insurance.
· Many costs are going toward inefficient care, resulting in numerous preventable deaths and a constant churning of patients in and out of hospitals. Incentives must be aligned so that it makes good business sense to improve hospital readmissions.
Access proved to be the keystone of the report’s findings, as it is related to quality, costs, and efficiency. The Commission on a High Performance Health System, which produced the report, focused on better primary care and primary care coordination as the tools to improve and identified the need to work across teams that span the health care system. Reforms created by the Affordable Care Act are also expected to help improve access, reduce variations, emphasize primary care, and create greater accountability for health and cost outcomes. Notably, the 2011 report was based on 2009 data” (so it does not reflect changes made by the Affordable Care Act, which became law in March, 2010, and has only been partially implemented).
The Commonwealth Fund has prepared a sobering set of slides that show how the United States did on key indicators.
Some of the areas where the United States doesn’t do so well may reflect cultural and socioeconomic characteristics that may be at least partially outside the control of the health care system itself—like infant mortality, for instance—or that have been exacerbated by the prolonged economic downturn (like increases in the percentage of insured persons).
But these explanations don’t change the fact that the United States is “exceptional”—not in a good way—on many dimensions that are largely due to the health care system itself.
We spend far more than any other industrialized country, but we are second to last in visits to emergency rooms that could have been treated by a regular doctor, dead last on test results and medical records being available at the time of an appointment, worst on duplicate testing, worst on access problems relating to cost, third to last out of eight countries on getting access to care after hours, second to last on getting same day doctor appointments, worst on medical errors—and we spend the most on insurance administration!
The report card doesn’t just compare us to other countries, but presents benchmarks on variations in care within the United States compared to generally accepted measures of best outcomes—and for the most part we don’t measure up well here either.
I expect that some readers of this blog will respond by saying that they provide excellent care to their patients—and I have no doubt about that. They will point out that rich people in other countries sometimes come to the United States for care because we have the best to offer—and I have no doubt about that either.
But the evidence shows that although the United States provides the best of all possible care to some of the people, some of the time, for many of the people, much of the time, the care falls far short of what is needed. This isn’t the fault of American physicians, who struggle to provide their patients with the best care possible, but with a system that costs too much and yet too often fails to deliver.
It doesn’t do any good for us to sweep these problems under the rug. Saying that we have the best health care system in the world doesn’t make it true. And if you believe, as I do, in American Exceptionalism, wouldn’t you want our health care system to be exceptionally superior to everywhere else in the world, and to fight for reforms to make it so?
Today’s question: What is your reaction to the evidence that the American health care system is exceptional—but often not in a good way?
Monday, October 17, 2011
Is paying for seniors’ long-term care more important than their medical care?
“HERE is the dirty little secret of health care in America for the elderly, the one group we all assume has universal coverage thanks to the 1965 Medicare law: what Medicare paid for then is no longer what recipients need or want today.”
So argues New York Times reporter Jane Gross in a provocative op-ed in yesterday’s New York Times. She makes the case that too much of Medicare is going to medical treatments and drugs of little value to the elderly, and nearly nothing on long-term care, citing the case of her own family’s experience:
“In the case of my mother, who died at 88 in 2003, room and board in various assisted living communities, at $2,000 to $3,500 a month for seven years, was not paid for by Medicare. Yet neurosurgery, I later learned was not expected to be effective in her case, was fully reimbursed, along with two weeks of in-patient care. Her stay of two years at a nursing home, at $14,000 a month (yes, $14,000) was also not paid for by Medicare. Nor were the additional home health aides she needed because of staffing issues. Or the electric wheelchair after strokes had paralyzed all but the finger that operated the joy stick. Or the gizmo with voice commands so she could tell the staff what she needed after her speech was gone.”
Ironically, two days before publication of Ms. Gross’s editorial decrying the lack of coverage for long-term care, the Obama administration announced that it had pulled the plug on the CLASS long-term care insurance program included in Affordable Care Act. This program would have provided small monthly payments to eligible persons to cover some of the costs of long-term care. ACA’s critics were gleeful about what they saw as “unraveling” of a “central” tenet of “ObamaCare.”
But these critics are missing the real lesson: unlike the other coverage expansions that are mandated by ACA, the CLASS program depended solely on voluntary, self-funded contributions by young people, for a small benefit (minimum of $50 a day) decades later. Voluntary, self-funded programs are usually favored by conservatives, but it was the voluntary nature of the CLASS program, and its very modest benefits, which led to the administration to determine that it was not fiscally sustainable. The rest of the ACA relies on a combination of individual insurance mandates, employer penalties, and expansion of government programs to make sure that everyone participates.
The CLASS program then is the exception that proves the rule underlying the rest of the ACA: if you want to expand health insurance coverage, you have to require that everyone participate, or the numbers just won’t add up. Robert Reich, former Secretary of Labor under President Clinton, puts it this way: “The lesson [from cancellation of the CLASS program]: If a public insurance system has minimum benefits and must pay for itself, it can’t be voluntary. Everyone has to sign up.”
The CLASS program’s demise doesn’t change the fact that there is an overwhelming need to find a better way to finance long-term care. Millions of adult children will soon find, if they haven’t already, that the costs of long-term care for their elderly parents is more than they can afford at the same time that they are providing for their own children. Millions of seniors in need of long-term care will find themselves having to dispose of all of their assets in order to qualify for Medicaid nursing home benefits, as Ms. Gross’s mother was forced to do “before winding up what she considered, with shame, ‘a welfare queen.’”
Ms. Gross’s plea for a better way to finance long-term care is right on the mark, but in a time of severe budget constraints, it seems like an impossible task. Ms. Gross suggests taking it out of unnecessary medical care routinely paid for by Medicare, which she says mainly benefits fee-for-service doctors and drug companies. While there is undoubtedly wasteful and inefficient care in the system, I don’t think most seniors (or their adult children, for that matter) view it as a choice between Medicare paying for medical care recommended by their doctor or having help in paying for their long-term care expenses. I don’t know what the answer is to financing long-term care, but at least we know that depending on voluntary premium contributions when people are young, for a very small long-term benefit many decades later in life, is not the solution. But neither is requiring families to bankrupt themselves or for seniors to have to give up everything they have earned over a lifetime to be poor enough to have their nursing home paid by Medicaid.
Today’s questions: Do you agree with Ms. Gross’s premise that Medicare should pay for long-term care by eliminating payments for much of the care provided by doctors and hospitals? And what does the CLASS program’s demise tell us about the effectiveness of programs that rely on voluntary contributions instead of mandated participation?
Tuesday, October 11, 2011
Free market health care is the answer? Then show me.
Critics of the Affordable Care Act argue that it involves too much government, and have vowed to repeal and replace it. For the most part, though, they haven’t gotten much past the part about repeal of “ObamaCare”—the replacement piece usually involves some vague promises to use market-based reforms, not an actual plan that could be contrasted against the ACA. As the country heads into a presidential election year, it will be important for conservative critics of the ACA to more clearly explain how market-based reforms would actually do a better job than the ACA in expanding access to care, controlling costs and improving outcomes. Then let the voters decide.
I understand the philosophical argument for market –based reforms: that given the ability to make free choices among competing health plans, providers, and treatments, patients will make wise and prudent choices, better choices than the government would make on their behalf. That if patients have to pay more out-of-pocket instead of being insulated from the cost of care by low or no deductible plans, they will have an incentive to use care more judiciously. That removing price controls—and allowing patients and their physicians to contract freely for services rendered—will introduce price competition and sensitivity, lowering overall costs. That without price controls, there will be more physicians to take care of patients, because physicians will be able to charge what the market will bear and stay in business, while discounting charges for patients who can’t afford to pay the full freight and charging more to those who can.
I actually agree with much of this line of reasoning. I think patients should have more choices—of physicians, hospitals, and insurance companies. Price controls do distort markets and create shortages. Patients should have more skin in the game.
But . . . and it is a big but . . . I haven’t seen any evidence that such market-based reforms can solve the two biggest challenges facing our health care system: out-of-control costs and almost 50 million Americans without health insurance, without the government being involved to subsidize care to those who can’t afford it and using its purchasing power to drive down spending. In other words, I’d like to see a conservative plan that shows me how and where market-based reforms would work—absent a major role for government:
Show me: Is there any country in the industrialized world where market-based reforms have ensured access to care for all of their residents, without a major role for government? When I co-authored a paper for ACP comparing U.S. health care with 12 other industrialized countries, we didn’t find a single one that had a system that relied on markets without substantial government subsidies and regulation.
Show me: Is there a state within the United States that has a developed a viable plan to ensure access to all of their legal residents, without a major role for government in subsidizing coverage? If states can do it better, then why is it that states that are most hostile to government tend to lead the pack in the percentage of their residents without health insurance? Massachusetts is the one state that has near-universal access to health coverage, and as we all know, it does it by government regulating insurance underwriting practices, spreading risk, subsidizing coverage for people who can’t afford it, and requiring people to buy it.
Show me: how eliminating price controls, moving to high deductible health plans, and offering more choices of insurance companies will by themselves reduce health care spending? For price competition in health care to work, several elements would have to be present. Patients (let’s call them “consumers” for this exercise) would need information to compare the quality and cost of the “providers” and health plans offered to them, just like they do when buying a car or washing machine. Yet we patients know almost nothing about the qualifications of the physicians and hospitals we supposedly can choose from, other than some basic information like whether a physician is board-certified or where he or she went to school. Many of the physicians who argue for free market reforms resist mandates that they “report” to the public on the quality and efficiency of their care.
We patients would also have to know in advance what physicians or hospitals charge for services so we could shop around, but there is no equivalent to Expedia for comparing physicians’ and hospitals’ charges. And even if I as a patient know what a doctor charges for a “typical” office visit or procedure, this tells me almost nothing about the actual cost of my care, because I may not be typical, and my cost of care has as much to do with how many procedures and visits I will need, what specialists I will be referred to (and what they charge), diagnostic tests I will need (and what they will cost me) and hospital trips I’ll have to make. Except maybe for a few elective procedures, much of this will remain unknowable and unpredictable, making true price completion unworkable.
Even the idea that we have a choice is a bit of an illusion. We don’t get any choice when it is an emergency room doctor, or when an anesthesiologist is assigned to us for surgery. And in many markets, there may be only one or two insurance companies to choose from. And even if we had more insurance companies to choose from, how do we patients know which ones offer better service and benefits at a price we can afford?
Finally, the argument that price competition and high deductible plans will substantially lower health care spending overlooks that fact that most health care spending is concentrated in a small percentage of the population, with half of the population spending little or nothing on health care, while 5 percent of the population spends almost half of the total amount. The high spenders tend to be older, sicker, and with multiple chronic diseases—the kind of people who would quickly use up a high deductible HSA account. The same study shows that they already have high out-of-pocket expenses relative to Income (so much for the argument that requiring them to pay even more out-of-pocket will lower spending). Much of health care spending occurs in the last six months of life, a time when seriously ill (dying) people aren’t likely to be shopping around for the least expensive doctor or hospital.
This isn’t to say that markets aren’t important, but markets work best when people have a real choice and the information to go with it to make informed decisions, and when government regulates things that markets don’t do well on their own, like providing public subsidies to people who can’t afford to buy health insurance on their own, requiring insurance companies to compete based on quality instead of cherry-picking the healthiest enrollees, mandating public reporting of quality and outcomes data, and providing patients and their physicians with information on the comparative effectiveness of different treatments. Oh but that is precisely what the Affordable Care Act tries to do, and conservatives say that is too much government and not enough markets. Fine, but I have to then ask: show me how free market health care would work in ensuring access and driving down costs (supported by evidence, not vague statements of philosophy) in the absence of government regulation and subsidies.
Today’s question: Is there any example or evidence, within the U.S. or abroad, that shows that free market health care can work in driving down expenses and ensuring access without government regulation and subsidies?
Tuesday, October 4, 2011
Primary care physicians don’t have to be treated like Rodney Dangerfield
Like Rodney Dangerfield, primary care physicians say that they can’t get no respect.
As evidence, they note that they get paid little or nothing for all of the work they do outside an office visit. They complain that Medicare and other payers dangle a small amount of “token” money in poorly-constructed pay-for-performance schemes, that different payers use different measures to judge their performance, that they are being asked—and sometimes required—to invest in “practice transformation” and expensive health information technologies with little or no financial support from payers. They complain that they can’t afford to spend more time with their patients, because they have to see as many patients as they can per hour just to make ends meet. And many believe that government agencies don’t listen to their ideas to improve payments and delivery systems.
And they desperately want someone to step up and say that what they do has great value-- and to pay them appropriately for it.
As I have blogged many times before, their complaints have merit: primary care physicians are over-worked, under-appreciated, over-managed, and under-paid (at least relative to other specialists).
But why then, when someone offers to do just what asked for—recognize that what they do has great value, and pay them appropriately more for it--the first reaction of some primary care doctors is to say no? Especially if it involves them doing things differently in return for higher pay?
You could see this reaction in some of the comments to last week’s post about Medicare’s Comprehensive Primary Care Initiative. Predictions that it would “fail” or that physicians were being “lied to” or that “if you think that Comprehensive Primary Care Initiative will result in greater pay to the Internist I have a nice bridge in Brooklyn you might like to buy.” I am not picking on those of you who made those comments—as always I am glad that you expressed your opinions, and there is no doubt in my mind that many of your colleagues would agree with your comments. And you deserve a response—the reason for this post.
But in this case, I think the cynics are wrong, and I hope that most primary care physicians keep an open mind about the Comprehensive Primary Initiative. Mainly because it addresses just about every one of the complaints from primary care physicians about lack of respect that I described in the second paragraph.
Pay primary care doctors for the work they do outside the office visit? Yep, it does this, through a risk-adjusted average of $20 per patient per month from Medicare, in addition to their usual Medicare fee-for-service payments. (And their FFS payments will continue to include the Medicare 10% primary care incentive payment that already is law because of the Affordable Care Act.) And no, their FFS payments will not be discounted or lowered to offset the PPPM payments.
Stop paying “token” amounts for poorly-constructed P4P schemes? $20 PPPM is hardly “token” money, and it could be much more if private payers and Medicaid join with Medicare to participate in the Comprehensive Primary Care Initiative. And this isn’t the kind of P4P program that pays practices after the fact for reporting successfully on an a la carte basis for a bunch of process and outcomes measure. Instead, it is a prospective payment program—the practices get the money upfront, on a monthly basis, and can get even more from shared savings.
Different measures from different payers? The program will require that participating payers agree to use standardized and established measures.
Being required to invest in health information technology and practice transformation with no financial support from payers? The Comprehensive Primary Care Initiative is unique in that it is predicated on the idea that all payers have to help pay for practice transformation and information technology systems. This is how CMS describes it:
“Without a significant enough investment across multiple payers, independent health plans-- covering only their own members and offering support only for their segment of the total practice population—cannot provide enough resources to transform entire primary care practices.”
Not having enough time to spend with patients? By providing a substantial revenue stream in addition to fee-for-service, physicians would have the option of spending more time with patients who really need it, rather than just seeing more patients to generate enough volume to keep the doors open.
Government agencies don’t listen to physicians’ ideas to improve payments and delivery systems? Well, in this case, this is not a top-down government program, but one that came up from the physician community. The Patient-Centered Medical Homes concept was designed by physicians, for physicians and their patients. It was ACP, the American Academy of Family Physicians, American Academy of Pediatrics, and American Osteopathic Association that in 2007 developed the guiding joint principles on PCMHs that CMS is now offering to support with real money. The payment model that CMS decided to use is the same as that recommended by ACP: risk-adjusted care coordination plus fee-for-service plus shared savings. ACP, not the government, developed the PCMH-Neighborhood concept that is a key part of the new CMS program.
And as I said earlier, primary care physicians desperately want someone to step up and say that what they do has value and to pay them appropriately for it. My admittedly back-of-the-envelope calculation is that Medicare’s Comprehensive Primary Care Initiative would pay a participating practice with 800 Medicare patients $192,000 more in the first year (800 patients x $20 average PPPM x 12 months), the same in the second year, and $144,000 per year in the third and fourth years, when the average PPPM drops to $15—but they can potentially earn more than that in the third and fourth years when the shared savings component kicks. But they will also get more revenue from non-Medicare payers, because in order for the program to be launched in a particular locality, other payers will have to join with Medicare to pay more for the participating primary care practices. One expert I know who has hands-on knowledge of the Comprehensive Primary Care Initiative estimates that practices could see a 30 to 50% increase in total practice revenue.
Sure, it is not a free ride for practices. To be selected and qualify for the higher payments, they will have to have a plan to manage high risk patients effectively, ensure access to care through such things as open scheduling, deliver preventive care, engage patients and caregivers, coordinate care with other specialists, have a certified EHR, and be able to report on measures on each of these domains. But aren’t these exactly the kinds of things that good primary care physicians and practices should be doing anyway? But instead of doing it for today’s low payment rates, the Comprehensive Primary Care Initiative recognizes that what they do for patients (patient-centered care) has value and will pay them appropriately more for it.
None of this guarantees that the program will succeed, of course. But it has enormous potential to provide very substantial revenue support from multiple payers to the 500 or so primary care practices nationwide serving over 300,000 Medicare patients that will lucky enough to be in one of the 5-7 regions selected by CMS. It could become the way forward for primary care physicians, at least those that are willing to embrace change themselves. And maybe, just maybe, they will stop seeing themselves as the Rodney Dangerfield’s of American medicine.
Today’s question: Will primary care practices seize the opportunity offered to them by the Comprehensive Primary Care Initiative to be paid appropriately more for their services if they can demonstrate that they provide patient-centered care—or cynically reject it?
About the Author
Bob Doherty is Senior Vice President, American College of Physicians Government Affairs and Public Policy; Author of the ACP Advocate Blog
Email Bob Doherty: TheACPAdvocateblog@acponline.org.Follow @BobDohertyACP
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