Tuesday, November 26, 2013

Guess what! Obamacare is working . . .

…quite well, in some places, for quite a large number of people.  But you wouldn’t know that from the constant media drumbeat about the problems with the www.healthcare.gov enrollment portal and the relatively small percentage (fewer than 6%) of the population whose individual insurance policies have to be replaced because they don’t meet the law’s benefits and ratings standards.

Now, before I get a rash of comments about how I can be so na├»ve about the problems with the Obamacare launch (I know, I will probably get them anyway), let me state from the outset that it is inexcusable that the administration launched an enrollment website, www.healthcare.gov, that clearly was not ready.   It is completely inexcusable that a toxic combination of poor management, politics, under-performing contractors, and an apparent complete lack of transparency and accountability resulted in such a chaotic launch.  It is also clear that the President’s promise—“if you like your health plan, you can keep it”—was false.

The website problems, the cancellations, and Obama’s broken promise have led to weeks of negative news stories about Obamacare.  Support for Obamacare has fallen as result, although most Americans do not want it repealed.

Some have pointed to the roll-out problems as evidence that Obamacare is fundamentally doomed because, as Bill O’Reilly claims, “the federal government is not capable of running the health care system.”

But the fact is that Obamacare already is working as it is supposed to in many states.  Just look at California and Kentucky.  California is a “blue” (reliably Democratic) state that is so large that it often is a national trendsetter, although it also is the state with the biggest numbers of uninsured behind Texas.  Kentucky is a small, poor, southern state that votes “red” (reliably Republican) in presidential elections, although it has a conservative Democratic governor and legislature.  They couldn’t be more different, except when it comes to the ACA: both states are fully on board with Obamacare, and both are having very promising initial success in signing people up.

Kaiser Health News reports that as of November 19, 80,000 people had signed up for coverage in California’s ACA marketplace, and nearly 23% were between the ages of 18 and 34, which “more or less matches their makeup statewide.”

Kentucky’s rollout also is going smoothly.  The Washington Post published a striking account of the poor, rural Kentuckians who are signing up in droves for ACA coverage, and what it means for them and their families. “If the health-care law is having a troubled rollout across the country, Kentucky — and Breathitt County in particular — shows what can happen in a place where things are working as the law’s supporters envisioned,” writes Post reporter Stephanie McCrummen.  She tells us about Courtney Lively, “who has been signing people up since the exchanges opened in early October.” Lively told her that, “people have been ‘pouring into’ her office” and “one woman cried when she was told she qualified for Medicaid under the new law.”

But it isn’t just California and Kentucky where Obamacare enrollment is picking up.  The fourteen states running their own marketplaces are reporting an “enrollment surge,” doubling enrollment to about 150,000 from 79,000, according to state and federal statistics.

So if Obamacare is fundamentally unworkable, as it critics claim, then how can it be working in California, Kentucky and most of the other 12 states that are running their own ACA marketplaces?  And if it isn’t working so well, so far, in the remainder that are being funneled through the troubled www.healthcare.gov website, isn’t that at least partly the fault of the governors of those states that chose not to set up their own marketplaces, leaving it to the feds to do the job for them?  And if the federal government fundamentally is incapable of running a health care system, then how do we account for the fact that it has been successfully running Medicare for 48 years now, and very few Americans (even die-hard conservatives) are in favor of ending government-run Medicare as we know it?

It would take Rose-colored glasses to not see that the federal government’s  incompetence in rolling out the www.healthcare.gov web portal has been nothing short of disastrous.  But one would have to be blinded by ideology to not see that Obamacare is working the way it is supposed to in California, Kentucky and many other states, signing up tens of thousands of people who otherwise would be without affordable health insurance coverage.

With apologies to New York City and Frank Sinatra, if Obamacare can make it there (in California and Kentucky), it can make it anywhere.  Once the feds get that darn www.healthcare.gov website fixed, that is.

Today’s question: What do you think the promising rollout of the ACA in California, Kentucky and most of the other states that are running their own marketplaces bodes for Obamacare?

Friday, November 8, 2013

Is it “paternalistic” to set minimum standards for health insurance?

Dr. Bob Centor, author of the always provocative and thoughtful DB’s Medical Rants, suggests that the deep divide over the Affordable Care Act is based on “a major philosophic disagreement” over the respective roles of government and of individuals in choosing what is best for them:

“The administration and their supporters believe that government’s job is to protect citizens from their bad choices. They want to decide what the people need and thus impose regulations. The opposition wants the right to make their own decisions about what defines good insurance.”

(Disclosure: Dr. Centor is chair-elect of the ACP Board of Regents, although his blog posts are his own personal opinions, not ACP policy.  I, of course, work for ACP, as its senior staff advocate on public policy.)

He goes on to cite a New York Times editorial supporting the cancellation of substandard policies, and suggests that, “This editorial, and the law in general, take a paternalistic view of health insurance. This is the philosophical position that defines the problem. The response to policy cancellations and marked increased insurance costs is typified (in the New York Times editorial]..This represents the current talking point – bad insurance. But who should determine what defines bad insurance?”

Is it really paternalistic for the government to set minimum standards for health insurance?  Paternalism means that someone—in this case—the government, is second-guessing the choices that I might make for myself and my family, because it believes that it knows better than me.  But is that what is really going on with Obamacare’s minimum standards for health insurance?

Of course, taking bad products off the market does limit my individual choices.  But the real purpose of Obamacare’s essential benefits and consumer protection standards is to regulate practices by the insurance industry that can cause direct and indirect harm, both to insured persons who is stuck with a bad plan, but also to the rest of us.  The regulations are designed to ensure that insurance companies no longer profit by selling insurance on the individual market that is deceptive and often unsafe and harmful.  The regulations are designed to end the insurance industry’s systematic cherry-picking of who they choose to insure, pitting the healthy against the unhealthy.

How is this any different than the government imposing product safety standards in so many other areas, and appropriately so?   Automobiles that don’t meet federal safety standards—seat belts, air bags, and protection from front end collisions—can’t be sold by auto manufacturers.  Sure, there are “grandfathered” used cars available that don’t meet such standards—fewer and fewer of them as time goes by—but cars sold after such federal standards were mandated have to comply.  Is reducing the number of Americans killed because manufacturers sold them unsafe cars—remember Ralph Nader’s Unsafe at Any Speed book, which started the modern consumer protection movement in the United States—motivated by paternalism?  Perhaps in the sense that the federal safety experts understand that drivers will make mistakes.   The federal safety standards, though, make it far less likely that we will pay for our driving mistakes (and the mistakes of other drivers on the road with us) with our lives.

And yes, by requiring that cars have mandatory safety features, the federal government is forcing us to pay more for them—even features we might think we will never need.  I have been fortunate in my almost forty years of driving to have never had a collision with another vehicle, other than being rear-ended twice by another car (both at low speeds when my car was stopped, and neither seat belts or air bags come into play with rear end collisions).  But I am sure glad that because of government regulation all of my cars have seat belts and airbags, because you never know, they might save my life, or my wife’s or children’s lives.  

Is it paternalistic for the government to regulate the safety of our food?    Henry Aaron, a highly respected expert on health care policy, compares Obamacare’s health insurance standards with the federal government setting food safety standards:

“Imagine a new law enacted to promote food purity. As it is being debated, you are told: ‘If you like what you eat, you can keep on eating it.’ The new law takes effect, and one day, you find that the market no longer carries certain foods you have been buying. As it happens, those products included elements found to be bad for your health. The pure food act barred their use. Obamacare is analogous to the pure food law. It bars certain common practices of insurance companies that most people find unacceptable at best, outrageous at worst.”

Or take today’s announcement that the FDA proposes to ban Trans Fats in food because of the evidence that they cause deaths and disability from preventable heart disease.   Is this paternalism?  It does involve the government inserting its judgment into what foods can be sold to us, limiting the choices of what we can eat.  (Although I suppose we could “grandfather” our favorite prepared pastries made with Trans Fats by stocking up on them before they are banned.)  Or is this just another case of necessary and appropriate regulation to protect lives?

There certainly are other government policies that come closer to paternalism, because they limit our choices directly, not just what can be sold to us.  Take cigarettes—they can be legally sold to adults, but the government mandates warning labels because, well, they and we know that some of us will choose to inhale carcinogens that might sicken or kills us, and when we do, we impose costs on everyone else.  Or take state laws that require that motorcycle riders wear helmets—a direct mandate on individual riders that requires that they spend money on something they might not want or feel they need, but that will help keep them alive (and keep them from shifting their health care costs to everyone else if they end up hospitalized from an accident).  But most of us, physicians especially, would agree that these mandates are a reasonable exercise of government regulation.

This brings me back to Obamacare’s regulation of health insurance.  The standards prohibit the sale of health insurance policies that can cause great harm because they deceptively leave people exposed to bills that can bankrupt them.  They prohibit insurance companies from turning down or canceling coverage because they get sick.  They prohibit cherry picking, signing up healthy people at a discounted premium at the cost of charging more or denying coverage to the less healthy. They require that insurers cover ten essential health care categories, not exotic or unnecessary things, but the basics--like prescription drugs, hospitalizations, doctor visits and preventive services, not because the government thinks it knows better than me, but because these are the benefits that evidence shows are effective in improving outcomes.  Because if your insurer doesn’t cover them, and you get sick, hospitals and doctors will treat you anyway, but your “uncompensated” care costs will be shifted to the rest of us. And you will probably go bankrupt in the process.

They mandate that the benefits be pegged to “benchmark” plans in each state offered by large employers or to state government employees, ending the benefit discrimination that now exists against people in the individual insurance market.  They end discrimination against women, by requiring all plans to offer maternity coverage, instead of excluding it from coverage (as is often the case now) or requiring women pay more to get it.  (As far as the argument against requiring men to pay for maternity coverage, well, it isn’t as if women get pregnant on their own, as one women physician tweeted to me a couple of days ago.) 

Washington Post columnist Ruth Marcus reminds us that Obamacare is trying to remedy a marketplace for insurance that was doing great harm to patients and society.  She recounts the story of Patrick Tumulty, a late middle age man (and brother of one of her colleagues) with Asperger’s who tried to do the right thing by buying himself coverage on the individual insurance market.

“That is where insurance came in — theoretically” Marcus writes. ‘Unexpected illnesses and accidents happen every day, and the resulting medical bills can be disastrous,’ warned the Web site of Assurant Health, which sold Patrick his policy. Its policy, Assurant promised, “provides the peace of mind and health care access you need at a price you can afford.’ Except it didn’t. Assurant balked at paying Patrick’s claims. In just four weeks, he had racked up more than $14,000 in bills. ‘And that was just to figure out what was wrong with him,” wrote Patrick’s younger sister, now my Post colleague. ‘Actually treating his disease was going to be unimaginably more expensive.”

As I blogged last week, I sympathize with the people whose insurance is getting canceled now because it doesn’t meet the new federal standards.  I agree that the President’s promises that people could keep their insurance plans was misleading, something he apologized for today.  I understand that some of the people who had an affordable plan on the individual insurance market liked it and didn’t want to see it canceled.  A small number of them may have had “good” plans that offered most but not all of the benefits now required by Obamacare—but they were plans offered by insurers who were allowed to pick and choose who they wanted to cover and what benefits they would offer to the exclusion of someone else. And for every one of the “winners”  who came out ahead in the pre-Obamacare individual insurance market, there are many, many more who couldn’t get good insurance at any price, or who found that their insurance didn’t really protect them from bankruptcy when they got sick, like Patrick. 

I don’t think it is an unduly paternalistic to set safety and consumer protection standards on the sale of  products that can have a direct impact on our health and safety—think cars, tobacco, food, motorcycle helmets, and yes, health insurance.  All such regulation limits our individual choices to some degree, but only to the extent that they prohibit manufacturers from selling something to us that is harmful, unsafe, and deceptive, all of which describes the products that typically were available in the individual insurance market, albeit with some exceptions, before Obamacare. The goal isn’t to paternalistically second-guess our own choices, but to ensure that the products we can choose from are safe, effective and do what they promise, health insurance included.  

Today’s questions: Do you think it is paternalistic for the federal government to set consumer protection and benefit standards for all health insurance sold in the United States?  Or necessary and appropriate regulation to end the sale and marketing of health insurance products “ that most people find unacceptable at best, outrageous at worst.”

Friday, November 1, 2013

Goodbye SGR! Hello PCMH and P4P!

Yesterday, the chairs and ranking members of the Senate Finance and House Ways and Means committees released a bipartisan, bicameral plan to repeal the Medicare SGR and reform physician payments.  And this time, it looks like the effort could actually succeed: never before has there been agreement between the House and Senate, Republicans and Democrats, on a plan to repeal the SGR, never mind on what they would replace it with.  Their goal is to get the bill enacted and signed into law before the end of this year, and before the scheduled SGR cut of almost 25% would go into effect on January 1.

There are still a lot of details to be worked out and questions to be answered--including the toughest one, which is how they propose to pay for it--but physician should start thinking now, about how the proposal will change the way that they are paid, and the changes that they will need to make to be ready.  Because this proposal creates a very ambitious timetable and powerful incentives that will link escalating amounts of Medicare payments to physicians' performance on quality, efficiency and effectiveness measures--starting with their performance in calendar year 2016.  It also creates strong incentives for physicians to convert their practices into Patient-Centered Medical Homes, and even bigger incentives to enter into risk-sharing practice arrangements such as Accountable Care Organizations. 

Will they be ready?  Will you be ready?

But before physicians have another  "why are they doing this to us" reaction of exasperation, keep in mind that there are many good things in this proposal--a lot of them, and it is not just that it gets rid of the SGR.  So many good things that ACP issued a very positive statement about it yesterday, even as we will work to improve it.

Here are the top things you need to know about it:

1.  It repeals the SGR, permanently, and with it, prevents the almost 25% scheduled cut on January 1.

2.  Although annual baseline annual FFS updates for the next ten years would be flat (zero percent), there will be opportunities for physicians to earn substantially greater payments for (a) participating in a new budget neutral incentive payment program (described below) or (b) participating in an alternative payment model that has financial risk.  In addition, as described below, Medicare would begin paying for complex chronic care management services in PCMHs or PCMH-neighborhood (specialty) practices.

3.  Starting in 2017, it replaces the existing Medicare PQRS, Value-based Modifier, and Meaningful Use reporting and incentive programs with a single budget neutral incentive payment program.  The existing penalties for the current reporting programs would be sunsetted, which would restore $10 billion to the physician payment pool over ten years.  (These are the existing penalties that it gets rid of: 2 percent reduction for failure to successfully report on PQRS; budget neutral adjustment based on quality and resource use (VBM), and failure to demonstrate Meaningful Use--3 percent penalty in 2016 that can increase up to five percent in 2019). 

4.  The new Value Based Payment Program (VBP) that replaces these programs would assess eligible professionals’ performance in the following categories: quality, resource use, clinical performance improvement activities, and EHR meaningful use. Professionals would be assessed and receive payment adjustments based on a composite score that encompasses all of the applicable composite categories and measures.

       A.  The Clinical Practice Improvement Activities category creates strong incentives for PCMHs: "Because many of [the listed] criteria are components of Medical Homes, a primary care or specialist physician practicing in a certified medical home would receive the highest possible score for this category.  A professional participating in any Medicare Alternative Payment Model would automatically receive half of the highest possible score and could achieve the higher possible score by engaging in other clinical performance activities."

       B.  The VBP incentive program is budget neutral, meaning that the incentive payments to physicians who receive higher composite scores would be offset by lower payments to those with lower composite scores.  However, the proposal would allocate increasing amounts of money to the VBP incentive payments; in 2017, the funding would be equal to 8 percent of the total estimated spending for eligible professionals (the amount tied to current reporting incentive programs); funding would increase to 9 percent in 2018, 10 percent in 2019, and starting in 2020, the Secretary would have the authority to increase, but not lower, the funding pool.  What this means is that each year, from 2017 to 2019, an increasing portion of Medicare FFS payments to physicians will be linked to performance in the new incentive program, but the available total amount of incentive payments to physicians and other health professionals will also increase.

5.  Physicians that participate in "advanced" Alternative Payment Models that involve financial risk and a quality measurement component would receive a 5 percent bonus payment each year from 2016-21. 

6.  The proposal establishes payment for complex chronic care management services, beginning in 2015, for eligible professionals in patient-centered medical home or comparable specialty practice certified by an organization recognized by the Secretary.

7.  The proposal mandates a GAO study of the RUC, allows HHS to survey physician directly to improve the accuracy of relative values, and sets an annual target to reduce misvalued RVUs of one percent of the estimated amount of expenditures in the physician fee schedule in 2016, 2017 and 2018.  If the target is met, the amount would be redistributed back within the physician Medicare fee schedule (as ACP urged).  If it is not met, the fee schedule payments would be reduced by the difference between the target and the amount of misvalued services identified that year, which allows approximately $3 billion in reduced expenditures to remain in the physician payment system.

Over the past year, ACP worked diligently to ensure that any plan to repeal the SGR also results in new payment system that also crea1tes opportunities to better recognize the value of care provided by internal medicine specialists.  This new proposal goes a long way to achieving those objectives: by rewarding internists who in are in Patient-Centered Medical Homes with higher pay for performance bonuses and payment for chronic care management; by eliminating the existing penalties and payment reductions from the Meaningful Use, PQRS and the Medicare Value Modifier, replacing them with a single and more harmonized reporting and incentive program; by reducing over-priced relative value units and redistributing the savings back to physicians; and by creating very substantial incentive payments for physicians in ACOs and other risk-sharing arrangements. 

By doing so, internists who are willing and able to report on the quality and effectiveness of care they provide, and/or are willing and able to become a PCMH, ACO, or other alternative model, will have multiple pathways and opportunities to earn higher pay that is aligned with the value of care that they provide.

But will they be ready? Will you be ready?

Today's question: What is your reaction to this proposed new bipartisan, bicameral plan to repeal the SGR and reform physician payments?