Fall Conference Demo Submission Deadline EXTENDED to 7/7/17

Have an innovative product or solution you want to showcase to the entire health care community?
Show us what you got! Live demos are standalone, but they’re often interspersed into larger panel sessions with commentators reflecting on the demo and how they believe it fits into health care. The 3.5-minutetechnology demos are a major hallmark at the Health 2.0 conferences. We do mean LIVE – no PowerPoint or video allowed!
We review submissions on a first-come, first-serve basis. If you’re uncertain that your product will be completely ready at the time of the conference, let us know of your interest anyway – we like to know what’s going on in the community, and it’s not unusual for us to show products in early stages, too!
To learn more and apply, click here! 

Check out a demo video from last year’s Fall Conference:DUE Friday July 7, 2017 11:59 PM PST

Jill Merrigan is the Marketing Manager of Health 2.0.

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Time to Start Over!


The CBO’s analysis of the House and Senate health bills should kill them both—permanently.

Republicans should go back to the drawing board and work with Democrats in both the House and Senate to achieve bipartisan fixes to the ACA/Obamacare marketplaces for 2018 and 2019.

That is the far and away the best thing to do from a policy and political perspective.   The vast majority of Americans would stand up and cheer. Two polls out this week, for example, add to previous surveys showing deeply low public support for the Republican bills.

A USA TODAY/Suffolk University poll found that just 12 percent of Americans overall support the Senate Republican plan, including only 26 percent of Republicans. Similarly, an NPR/PBS NewsHour/Marist poll found 17 percent in favor overall, with Republican support at 35 percent.

Just 25 percent of respondents in the latter poll say the want Congress to repeal the ACA completely—consistent with other polls since late 2016.

Trump has suggested a bipartisan path several times in recent months, although there’s no evidence he ever reached out to Democrats and he just as frequently demonized them as “obstructionists.”

That Trump does not now see that he’d likely be hailed a hero if he brought the two sides together on this issue is a failure of judgment and leadership, in my view.

Recognizing the importance of optics to this President, even Obama has said Trump and Congress can call whatever emerges a “repeal” of Obamacare if they want.

Working together, Republicans and Democrats should first and foremost stabilize the exchanges by means of these and other measures:

(1) Increase premium subsidies/tax credits for low-income people

(2) Enact some hybrid of the exchange market stabilization funds in the House and Senate bills. Those earmarked between $10 and $20 billion a year to reduce premiums where needed, subsidize insurers for very expensive claims, attract new insurers in poorly served areas, and expand enrollment of healthy young and middle aged people.

(3) Fund the cost saving reduction (CSR) payments—deductible and co-pay help—in full for two to three years—at $7 to $10 billion per year.

(4) Bring back the reinsurance fund for insurers. This operated from 2014 to 2016, helping to defray insurers costs for outlier claims and thereby reducing premiums by 5% to 10% a year. The temporary program’s termination was one factor in the average 22 percent increase in premiums across the country in 2017.

(5) Provide additional funding to states to allocate to insurers to ramp up opioid addiction and substance abuse/mental health treatment. The Senate bill provided $2 billion for this over 10 years. Much more is needed—on the order of $1 to $3 billion per year.

(6) Provide more funding to the nationwide network of community health centers. With a history of bipartisan support, the 1,300 centers serve the medical needs of about 25 million low-income people. Since the ACA was enacted, the centers have steered millions of people to sign-up for exchange coverage or Medicaid. Under current law, they will receive about $4 billion in federal funds in 2017. The Senate bill increases that by $422 million.   The centers should get an additional $1 billion or so for 2017 and 2018.

(7) Expand section 1332 of the ACA to make it easier for states to experiment with their insurance systems as long as those experiments obey the ACA’s insurance rules on consumer protections and do not increase the number of people without coverage nor cost the federal government more money.   (Hey, if California, Vermont or Massachusetts want to enact a single payer system with their own money, let them do it. The current effort in Calif. appears to be dead in the water for this year.)

The House and Senate bill’s Medicaid overhaul should be abandoned and the Medicaid expansion component of the ACA retained. Long-term fixes to that program are needed but should not be taken up now.

Lost their way

The CBO verdicts on both bills show us that Republicans lost their way. Many commentators have said the process was purely political—with little attention to the actual policies they were proposing.

I don’t buy that.  Yes, Republicans are guilty of political hubris, legislative overreach, and an exclusionary process that ignored congressional norms. But they are also guilty—with full awareness of the impact—of trying to undo 52 years of a delicately balanced federal-state partnership (Medicaid) to serve the health needs of low-income Americans, including millions of seniors and children. And they are guilty, most cynically, of proposing to dramatically reduce the growth in Medicaid spending to deliver a tax cut to the wealthy and to corporations.

This is a disturbing place to be for our nation. For the second time in a decade, we are debating whether social insurance and guaranteed universal health coverage are good ideas. Every other modern, industrialized democracy—and most other non-democratic wealthy nations—long ago resolved this issue. That includes the conservative parties in those countries.

Other nation’s leaders and their people embrace both concepts because no matter what your political views or values, both concepts (in tandem in health care) deliver multiple benefits.

Broad social insurance and a universal coverage system don’t just assure people access to health care. They create social equality and stability, and enhance employment, productivity and economic growth by keeping larger portions of the population healthy and working.

Absolutely alone, the Republican party in the United States is the only political entity in the western developed world that does not concur that an egalitarian social insurance approach to health care is the most efficient one.

Also, shamefully, Republicans propose their alternative “free-market” path even as research reveals a USA where: (a) racism remains a poisonous force that still divides us (Black and Hispanic Americans are much more likely to lack coverage and die younger); (b) the premature death rate among low-income white Americans is increasing for the first time in decades; (c) as many people are dying of drug overdoses and related afflictions as traffic accidents; and (d) mental health problems such as depression, anxiety and PTSD are on the rise and more prevalent than in other OECD countries.

The House and Senate bills are mean. The impulse and philosophy behind them pretends to be mostly about reining in long-term federal spending, creating more competition in health care, giving consumers more choice, removing government mandates on businesses and people, and giving states more flexibility (although mostly to spend their own tax dollars.)

To be fair, some of that agenda should be in play. More competition among insurers and in doctor’s fees, health products, and prescription drug prices—would be welcome. And the growth in health costs and spending will have to be constrained; it’s unsustainable after about 2024.

But neither the House nor Senate repeal bills lift a finger to reduce underlying health care costs. Instead, they shift the burden of rising costs to states, businesses, and consumers/families.

Sadly, the more foundational Republican philosophy in this legislation is social Darwinism: The fittest survive and thrive. The poor are that way, and usually sicker, because—well, they just are. People are ultimately responsible for their health; government is not responsible.   We spend too much money on the poor. We are not a European welfare state. This is not a socialist country. You make your own way here. No handouts. You gotta earn your insurance, and have “skin in the game.” Medicaid is just a welfare program.

It’s all right there in Kellyanne Conway’s telling comment on a talk show this past Sunday: “People who lose Medicaid should just get a job with benefits.”

You can read the CBO report or the handy summary on CBO’s web page.        It’s a straightforward 49-page document.

I concur with Vox’s terrific health policy reporter Sarah Kliff that Table 5 on page 48 is especially worth checking out.   It shows, for example, that a 64 year-old single person with an income of $56,000 who opts for a silver plan would pay an estimated net annual premium (after subsidies) of $6,800 in 2026 if current law (the ACA) is maintained. Under the Senate bill, this person would pay a net premium of $20,500.

In contrast, a 21 year-old buying the same silver plan would see their net premium decline by $1,000, from $5,100 to $4,100 by 2026 under the Senate bill, compared to the ACA.

From the CBO’s summary:

“Under the Senate bill, average premiums for benchmark plans for single individuals would be about 20 percent higher in 2018 than under current law, mainly because the penalty for not having insurance would be eliminated, inducing fewer comparatively healthy people to sign up.”

By 2020, average premiums for single individuals would decline by about 30 percent compared to current law, however, CBO predicts. Hmmm, that sounds good.   It’s not. Why? Because the decline is due in large part to, in CBO’s words, “the smaller share of benefits paid for by the benchmark plans.”

Translation: Premiums would decline because people would be buying policies that had a significantly lower actuarial value (close to 55%), much higher deductibles ($6,000 and up) and co-pays, and possibly fewer benefits as a dozen or more states opt out of the ACA mandated essential health benefits.

The CBO’s predicted loss of insurance by 22 million people by 2026 (15 million in 2018) stems from six key provisions in the Senate bill, according to a nice summary from the Commonwealth Fund:

  • Smaller premium tax credits compared to the ACA that make coverage less affordable for low-income people
  • The ability of insurers to charge older people premiums up to five times more than they charge young people, making coverage much more expensive for older people
  • Higher deductibles and copayments that make coverage less valuable for everyone
  • A phase-out of the Medicaid expansion starting in 2020 that reduces coverage for low-income people
  • A $772 billion reduction in federal funds over 2017–2026 for state Medicaid programs that could leave children, disabled people, and the elderly with fewer or no benefits


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Did “Medicus economicus” kill Medicare Part B Reform?

When doctors complain about proposed changes to health care reimbursement, do they speak for patients or their pocketbooks? As the recent debate over Medicare Part B shows, even with access to publicly available billing data, it’s hard to disentangle financial motivations from more altruistic ones.

Since 2005, Medicare Part B has paid for physician-administered drugs like infused chemotherapeutics by reimbursing 106% of the average selling price (ASP) – a formula commonly referred to as “ASP+6”. In order to reduce overall spending and the program’s apparent incentive for physicians to preferentially use high-priced drugs, CMS proposed a pilot program last year to test a new payment formula that would have reduced the 6% markup to 2.5%, but added a flat per-infusion payment – effectively rewarding doctors more for choosing cheaper drugs, and reducing their profit from expensive ones.

The plan to revamp Part B reimbursement was scrapped after many groups – including professional organizations representing cancer doctors – vigorously objected. Oncologists argued that there are few cases in which a cheap anti-cancer drug is therapeutically equivalent to a more expensive one, and that the proposed change would mainly harm oncologists’ ability to provide high-quality care.

These may be valid arguments, but it’s hard to disentangle oncologists’ clinical interests from their financial ones. Many economists might reasonably view cancer doctors who object to Part B reform as the physician manifestation of “Homo economicus,”<> acting solely to maximize their personal gain. Neeraj Sood at the University of Southern California summed up many observers’ knee-jerk response: “Doctors are human. The fact is, this [new proposed] model changes how much money they’ll make.”

But that raises a key question: how much do oncologists make from “ASP+6,” anyway? If cancer doctors rely on Part B profits for much of their income, then it’s more plausible to think that economic self-interest played a big role in their opposition to the pilot program – but if the proposed change to Part B would have had a minor impact on doctors’ take-home pay, then this trivial explanation is less compelling. Prior analyses have measured the relative decrease in profit the new formula would have engendered across all oncologists and for individual drugs, but they haven’t converted this percentage into actual dollars per doctor.

At first blush, it appears that Part B profits could account for a sizable fraction of take-home pay. We estimate that the median oncologist who billed for drugs under Part B in 2014 earned $29,900 of profit (interquartile range, $13,586-$49,954) from the Medicare fee-for-service population, which is just under 10% of the median oncologist’s income – but this is likely the low end of the range. (See footnote for methods.) The CMS database doesn’t include drug-related income from older adults covered by Medicare Advantage or private payers, or from the almost 50% of cancer patients who are younger than Medicare age. (Although other payers besides traditional Medicare typically pay more than a 6% mark-up, it’s likely they would at least somewhat follow Medicare’s lead if “ASP+6” were changed.) Although it’s hard to calculate precise numbers without knowing the exact payer splits and mark-ups in the typical oncologist’s practice, our analysis and a recent benchmarking study together suggest that Part B income is a fairly substantial chunk of the net profit generated by each doctor.

But this back-of-the-envelope calculation may mask a high degree of skewness in the distribution of these data. Of the almost 12,000 U.S. cancer doctors engaged in patient care, fewer than 5,000 reported any Part B drug billing in the CMS data set, of whom we estimate just 108 reaped 10 percent of total drug profits. It’s hard to understand the shape of the income distribution curve across all of these doctors – some may be the “biller of record” for colleagues in their practice, and others may infuse some or all of their Medicare fee-for-service patients at academic or hospital-based centers instead of in their offices– without more granular patient- and practice-level data across a wider set of payers.

Adding to the complexity, it’s also likely that only a minority of oncologists personally realize the profits they generate from Part B. Similar to other specialties, only about 40 percent of oncologists reported working in physician-owned practices in 2015. The rest, who work in academia or practices owned by hospitals or health systems, are typically paid a base salary and a bonus based mainly on patient care volume, with strictly financial factors (like drug mark-ups) contributing relatively little to their variable compensation. So in many practices, Part B profits are earned by corporate and institutional owners, and their impact on individual physicians is minimal and indirect.

On balance, it’s impossible to assess from public data how much oncologists’ opposition to Part B reimbursement changes is motivated by economic self-interest versus clinical factors. Doctors and professional groups could boost their credibility in this debate by helping collect, analyze, and disclose far more complete and granular data on practice volumes, patient demographics, payer mix, compensation models, and net profits from Part B than they have to this point. Until then, cancer doctors who object to reimbursement reform may continue, rightly or wrongly, to be viewed as “Medicus economicus” until proven otherwise.

Methods: We downloaded the Physician and Other Supplier Public Use File (PUF) for calendar year 2014 from the CMS website, which contains Part B data for fee-for-service Medicare beneficiaries. We identified doctors classified as “Hematology/Oncology”, “Medical Oncology”, or “Gynecological/Oncology” (N=7,765), and analyzed the 4,658 who billed drug services under Part B. For each physician, we calculated Part B profit (i.e., excluding ASP) by multiplying total Part B drug billing by (0.043/1.043). (Although the current formula defines the mark-up as 6% above ASP, the effective percentage under the budget sequester is 4.3%.) Descriptive statistics were calculated in Excel.

About the authors: Frank S. David, MD, PhD, is the founder and managing director of Pharmagellan, a biotech consultancy. He tweets about the drug and device industries, health care policy, and related issues at @Frank_S_David<>, and blogs at the Pharmagellan website and at Forbes.com. Andrew Matthews, MD, and Keshia Maughn, MPH, are an associate consultant and data scientist, respectively, at Pharmagellan

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A Real (Living, Breathing) Health Care Reform Plan

Dear Washington,

Congratulations! You have listened to the AMA and practicing physicians and made it a little easier to comply (at first) with the Medicare Quality Payment Program, part of the massive MACRA “pay for value” law. 

But CMS’ announcements in The Federal Register and “fact sheet” are incomprehensible gobbledygook that will be understood by neither doctors, patients, nor the rest of society. The language personifies the complexity, unwieldiness and confused thinking in this huge national policy. 

MACRA is a $15 billion boondoggle that the best research shows will neither improve quality nor control costs. Paying doctors for quality (e.g., doing a blood pressure exam) or efficiency may make sense theoretically, but it doesn’t work. Rather than making a dent in the continuing upward spiral of healthcare costs in America, it can even result in some doctors avoiding sicker patients because it affects their quality scores and income.

Early, poorly designed research suggested that paying for health or cost savings was effective, but these research designs did not account for already occurring improvements in medical practice that the policymakers took credit for. Decades of stronger, well-controlled research debunked these early findings and conclusively showed no effects of these economic policies.

So why does the Congress and administration continue to press ahead with this same tired and impotent policy?

Most importantly, a large cadre of influential economists have convinced the government that money is the only driver of quality and efficiency. Nothing could be further from the truth. Many factors affect measures of quality and cost savings. These include:

Social problems and lack of supports are root causes of poor health outcomes. These include poverty, language barriers, spousal abuse, drug abuse, rurality, early manifestations of dementia and many more. These factors are usually not measured by Medicare. 

Further, doctors do not prescribe antibiotic medications to patients who are allergic to them even if they are promoted in a quality measure. Similarly, after the ACA required CMS to penalize hospitals for hospital-acquired infections, studies showed that some doctors were simply altering codes to make it appear that the patient was admitted with the infection. When a better CDC dataset was used instead of “doctored” Medicare claims, this study showed no effect of the penalties on infection rates. 

In addition, as Uwe Reinhardt said, “the idea that everyone’s professionalism and goodwill has to be bought with tips is bizarre.” Why should Doctors only respond to financial incentives when thousands of studies have shown that opinion leaders, knowledge, clinical skills, patient demands and many other non-monetary factors all influence quality of care?

Perhaps the biggest reason for this giant boondoggle is the unflinching confidence in economic theories and models that lack a shred of evidence. Even pay-for-value and alternative quality contract policies lack any evidence that support programs like MACRA. In fact, we now have several large studies of accountable care organizations (ACOs) published in top medical journals that celebrate an inconsequential savings of about 1% without even considering (or measuring) that healthcare delivery systems spend much more than this in ACO operational costs; thus, the MACRA-Like ACOs actually lose money on a societal basis.

Currently, we are abusing primary care doctors on the front line with dozens of bureaucratic penalties and regulatory policies aimed at improving their performance.  

It is time to confront the reality of our abysmal, incomprehensible and inefficient healthcare system that charges far too much to our patients and society at large. It is time to move towards a simpler system that nevertheless embraces certain free-market principles because a single payer plan (“Communist medicine”) is not in the political cards. But we can reduce our healthcare expenditures by almost half by adopting any one of several European health plans that retain an insurance industry, guarantees access to all citizens to see any physician (e.g., in Germany), and totally eliminates high deductible health plans (e.g., those in the ACA) that can delay essential care and cause adverse health effects among low income diabetic patients. The savings are due to fair, negotiated price schedules that are more ethical than widely varying prices in the United States that are sometimes the result of large medical systems with market power determining higher prices than those of smaller institutions. 

We spend about one-fifth of our gross domestic product on medical care. If anything, this cost is accelerating since 2000. It is time to stop the nitpicking, band-aid regulatory policies that are driving doctors crazy without reducing costs or improving quality. It is essential to work towards the achievement of a new system of care that covers the entire population and costs less. Neither The ACA nor any Republican plan can accomplish this worthwhile goal.

Stephen Soumerai is Professor of Population Medicine and teaches research methods at Harvard Medical School.

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Death and Medicaid




I remember 7 South at the Children’s hospital very well. I remember the distinctive smell, the large rooms, the friendly nurses, and Shantel. For a brief period of time, Shantel and her little boy – a too skinny child named James – were there every time I was there with my little girl. 7 South was the GI floor – Shantel and I were there because our children had the same dastardly liver disease that, for the time being, was winning. And that was it. We had nothing else in common.

She grew up in North Philadelphia, not far from where I was finishing a residency program in Internal Medicine. She had three other children, was a single mother, and in the year that I spent shuttling to the hospital I never saw the father of her child. Shantel did not work, and relied almost exclusively on the welfare programs to make life work.

I was a medical resident, our family had a combined income north of $150,000/ year, and our health insurance was through my employer. My wife and I worked, which meant that we had the flexibility for one of us to stop working, and still maintain our benefits.

Shantel, I am sure, did not have such luxuries. Regardless, it is one of the beautiful things about America that James had the same opportunity at life as my child – their hospital room was no different than mine, their doctors were my doctors, the medications prescribed were the same, and access to a liver transplant list was determined by medical need, not the size of one’s bank account. Walking through the hospital doors in America is like going through a magic portal – contrast this to the resource limited developing world, where families frequently need to bring the medications their family needs to the hospital to be administered.

Much of the debate now about Medicaid cuts is ostensibly about James and Shantel. The debate as it is carried out, (by serious people!), is more Hulk Hogan vs the Machoman Randy Savage than it is Ali/Frazier. The analysts on television and social media would seem more interesting in marshaling outrage than actually discussing how best to care for those who have not. At the moment, the left finds itself under siege from the right, hungry to roll back the federal expansion of the last 8 years, and in their defense have rolled out the really big gun – science. The experts from the most hallowed sites in the land now claim that any attempt to reform medicaid amounts to a death sentence for Americans.

It is important to note that none of the experts speaking out against Medicaid reform identify themselves as partisans.  They  cloak themselves in evidence, and speak not about theories or possibilities, but the certainty of what they know based on science.  In this case, in order to argue for an expanded role for government in delivering healthcare, the left finds its most powerful argument to center around the lives saved by health insurance and the lives lost without a mechanism to deliver health insurance.

Does health insurance save lives?

A timely editorial summarizing the evidence related to health insurance recently appeared in the widely acknowledged bible of medicine – the New England Journal of Medicine – to ‘inform’ the debate on public policy.  The authors are distinguished, well- recognized names from the Harvard community that go on to discuss a large body of research that they have largely helpfully, and impressively generated.

The problem with connecting insurance and mortality is that it is incredibly hard to prove causation.  The vast majority of studies on this topic and all topics are observational studies because that comprises the vast amount of data that currently exists.  The problem, of course, is that the uninsured patient population is a very distinct population from insured patients.  Any analyses require accounting for confounding variables using self reported behavior, health status, and socioeconomic variables.  This still leaves omitted variables that are either unknown or unmeasurable, and perhaps hardest of all remains susceptible to reverse causality.  It is entirely possible, that underlying health status drives the choice to have health insurance.  Thus, it is entirely possibly that the claim that good health results from insurance may be like saying wind results from windmills.  This is an incredibly vexing problem for those shaping to move public policy with evidence which has the approximate value of adulterated bullshit.  A level up from parsing large observational trials is what’s called quasi-experimental studies, where health insurance status is unrelated to the choices patients make.  Medicare came into being in 1965 and bestowed insurance on Americans once they were 65.  If health insurance results in lives saved, one would expect mortality rates in the Medicare covered over 65 population to go down relative to the under 65 population.  It doesn’t. As seen in this visually compelling figure from Finkelstein & Mcknight in 2005, the institution of Medicare in 1965 had no impact on mortality.

If only we had data in this space where uninsured patients were randomly assigned via a lottery to receive insurance.  Remarkably, this happened in Oregon in 2008 when Medicaid expansion was decided based on a random lottery.  Oregonians who were able bodied, and uninsured and whose household income was less than 100% of the Federal Poverty level had to enroll in a lottery if they wanted health insurance.  A study of 12,000 patients over 2 years demonstrated no difference in multiple surrogate measures of health such as blood pressure, cholesterol or diabetes control.  Predictably, the expert analysis of the data had much to do with your prior belief in the role government should play in health insurance.  Those that believe health care is a right to be insured by the government focused on the limitations of the study, while conservative analysts accepted the natural conclusion that health insurance had little to do with positive health outcomes.  Undeterred by this data, and seeking to go beyond the limitations of the small size of the Oregon study, Sommers and Co. (author of the NEJM review) proceeded to do a quasi-experimental study of three Medicaid expansion states.  Sommers et al., use a difference in difference analysis – a statistical tool used to mimic a randomized control trial and account for comparing populations that don’t have the same starting point.  I can’t pretend to understand the various methods used in the analysis, but the results of this larger quasi-experimental study suggests medicaid expansion in the 3 states resulted in lower mortality.  As a way to provide plausibility for the reduction in mortality, a helpful graph is provided that looks at one of the conditions ‘amenable’ to medical care – HIV mortality.

HIV mortality does seem to decrease markedly in expansion states, ostensibly due to the expanded availability of antiretrovirals – but interestingly, the mortality reduction in this case seems to be decreasing significantly prior to medicaid expansion.  So the only hard conclusion to come to about Medicaid and mortality is that nothing is certain.  This doesn’t keep Dr. Sommers from taking to the pages of USA Today to use his ‘iron clad’ evidence to balance the ‘political rhetoric’ that insurance may not save lives.  And so it is that the randomized control trial evidence is dismissed, and minimized by the proponents of Medicaid.  The summary of evidence provided by Dr. Sommers in the NEJM refers to the only randomized control trial data as ‘highly imprecise data unable to rule out a mortality increase or decrease’.  It is ironic that the a high priests of evidence takes a position with this level of evidence – I can’t imagine Sommers and company would be willing to approve a drug that was unable to show a mortality difference in a 12,000 patient randomized control trial, and had conflicted observational/quasi-experimental data.  The casualty in this speculative endeavor where overreach reigns is is the credibility of the science of health care policy and its practitioners.

The funny thing is that I frequently take a stand with experts against what I find to be a selective interpretation of data.  I find it dangerous to ignore experts in their field solely because their expertise creates implicit bias.  I would be willing, and have been in the past, to give the coterie of experts in public health their due if it wasn’t for the fact that their expertise is applying statistics to big data, and not actually taking care of patients.  The onus is not on me to find the fundamental flaw in their work – it is for them to convince clinicians whose charge it is to actually manage health conditions that Medicaid as it is currently designed would improve hard patient outcomes.  From my vantage point, I have a difficult time understanding how Medicaid in its current form improves hard outcomes with chronic care management as has been suggested.  Mr. Garfinkel has refused to stop smoking for the four years I have known him, takes his aspirin when he feels like it, and does not like how his blood pressure medication makes him feel.  His only visits to me relate to acute illnesses, and he sees me because my wait time for urgent appointment is same day rather than the 3 weeks his primary care physician gives him.  Mr. Ramos is currently in the hospital with a bleed in his brain from uncontrolled hypertension.  I counted ten no-shows over the course of the last year.  It is true I could have done more, it is possible I could have tried to remotely manage Mr. Ramos’s blood pressure.  With a Medicaid plan that pays between $30 – $40, even non-profit medical centers that charge $1000 for a bag of saline shy away from Medicaid patients – how could physician practices do better?

Thus, it comes as no surprise to me that mortality is a heavy lift that is probably too heavy for insurance to bear, and I need a lot more than quasi-experimental data to change my mind.  There is some value to health insurance – patients are happier, and have protection from medical bankruptcies- but is that worth the $550 billion dollars we spent on Medicaid in 2015?

Medicaid can and should be better, but at the moment I see no plans to reform Medicaid that would help the physicians charged with taking care of this population.  If public health policy experts are actually concerned about chronic care that may work to avoid some of the 40% of Medicaid dollars spent in hospitals, and give doctors a shot at improving outcomes that matter, it may help to resource physicians on the front lines better.  The Healthy Indiana Plan, set up by the current CMS administrator, Seema Verma, used tobacco tax dollars to raise medicaid rates to equal medicare rates.  While this is a promising start that at least tries to solve the challenge Medicaid patients face when trying to access elective care, it could go much further.  Allow Medicaid patients to use federally funded HSA’s to pay physicians a monthly subscription of as little as $50-$100/month, which would make actual major strides towards the ambulatory care of medicaid patients.

The truth is that I’m an optimist when it comes to Medicaid.  At the moment, the federal government matches 51% for every dollar spent by the states on Medicaid patients with no cap.  Driven primarily by Medicaid expansion, national health expenditures that had been flat relative to GDP prior to 2014, started to rise again.  This is an unsustainable path.

Medicaid can and should be better, but at the moment I see no plans to reform Medicaid that would help the physicians charged with taking care of this population.  If public health policy experts are actually concerned about chronic care that may work to avoid some of the 40% of Medicaid dollars spent in hospitals, and give doctors a shot at improving outcomes that matter, it may help to resource physicians on the front lines better.  The Healthy Indiana Plan, set up by the current CMS administrator, Seema Verma, used tobacco tax dollars to raise medicaid rates to equal medicare rates.  While this is a promising start that at least tries to solve the challenge Medicaid patients face when trying to access elective care, it could go much further.  Allow Medicaid patients to use federally funded HSA’s to pay physicians a monthly subscription of as little as $50-$100/month, which would make actual major strides towards the ambulatory care of medicaid patients.

The truth is that I’m an optimist when it comes to Medicaid.  At the moment, the federal government matches 51% for every dollar spent by the states on Medicaid patients with no cap.  Driven primarily by Medicaid expansion, national health expenditures that had been flat relative to GDP prior to 2014, started to rise again.  This is an unsustainable path.

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If Your Premiums Go Down but Coverage Gets Worse, Does Your Healthcare Matter?


Picture this. Amy becomes pregnant while working as a high school teacher. Her employer’s health insurance plan pays bill was covers the maternity bills and she happily raises her twins.

Fast-forward a few years. She’s decided to become an entrepreneur and runs a small business. She becomes pregnant again but, this time, finds that her $400 a month individual health insurance policy won’t cover the expenses. In fine print, she discovers that she needed to purchase a special rider to activate maternity care benefits. She’ll have to pay $10,000+ out of pocket now, putting her burgeoning business at risk.

Angry at this, Amy decides to switch insurers but, to her dismay, she finds that the four largest insurers in her area don’t cover most expenses associated with a normal delivery. Amy has nowhere to go. Also, since pregnancy is a pre-existing condition, Amy is advised by her doctor to “not become pregnant again” if she wants to get quote reasonable health insurance rates during her search.

This is not an exaggerated or dystopian situation, it’s a real example from 2010.

It highlights the Russian roulette-style approach to healthcare coverage which existed prior to the introduction of Essential Health Benefits (EHBs) mandated by the Affordable Care Act (ACA).

Contrary to many hyperbolic, and tacky, bill titles in Washington like “The Reducing Barack Obama’s Unsustainable Deficit Act” or the “Big Oil Welfare Repeal Act”, EHB is a relatively subdued term describing what many Americans would consider to be crucial in a healthcare plan. The ACA’s EHBs ensure that all Marketplace plans and coverage via the ACA’s Medicaid expansion includes the following services:

  • Ambulatory patient services
  • Emergency services
  • Hospitalization
  • Pregnancy, maternity, and newborn care
  • Mental health and substance use disorder services
  • Prescription drugs
  • Rehabilitative and habilitative services and devices
  • Laboratory services
  • Preventive and wellness services and chronic disease management
  • Pediatric services, including oral and vision care
  • It also ensures that key benefits for women including birth control and breastfeeding are included.

With the proposed elimination of EHBs in Medicaid in their draft healthcare bill, Senate Republicans have joined their House counterparts in creating a likely “tree falling in the woods” philosophical conundrum – if health coverage covers little, do low premiums actually mean anything?

Cost vs. Quality

The establishment of EHBs represents not only a signature achievement of the ACA but it offers a window into the entire philosophical debate currently raging regarding what health care coverage should mean in the United States. Namely, what is more important – cutting costs for individuals or promoting the proliferation of quality services?

By bundling EHB services, healthcare premiums generally do go up in the aggregate. A recent Milliman actuarial study took the example of mandated coverage for prenatal/delivery benefits and found that there would be an across-the-board increase of $8 to $14 in health insurance premiums in a single risk pool. EHBs are partially why the general trend has been that premiums and deductibles have been going up for many American families.

Yet, it is also true that Americans get much more for their premiums and deductibles. EHBs represent a significant and robust floor for the breadth and quality of services that Americans can expect with their health insurance. Healthcare consumers also get a measure of predictability in what and how much their coverage plans will cover and bans on annual and lifetime limits on EHBs further help prevent the most catastrophic economic outcome – medical debt leading to personal bankruptcy filings. After all, as Lois Lupica of the University of Maine School of Law notes, “[i]f you’re uninsured or underinsured, you can run up a huge debt in a short period of time.

House vs. Senate Republicans

The rhetoric of House Republicans suggests that their primary motivation rests in lowering premiums and their plan of slashing EHBs for all – outlined by s. 121(c) of H.R. 1275 (hyperbolically titled “World’s Greatest Healthcare Plan of 2017”) – would likely do that. But it would do so by returning to a system where many insurance plans are “skimpy” and leave Americans on the hook for services not covered. Certain services would also become more expensive simply due to the contraction of pools from which to distribute costs. The segmenting of pools means that certain groups could simply choose not to help pay for services affecting other groups – such as men opting out of plans that cover maternity care.

Eliminating EHBs would have knock-on effects for everyone. Millions of Americans could suddenly find that their individual or small group plans no longer cover critical services such as prescription drugs or emergency room visits. Even Americans working for larger employers wouldn’t be immune from pressures as employers could once again cap reimbursements for current EHB services.

Based on their respective draft bills, Senate Republicans seem to have a better handle on the problems that this might cause – which is why they left the potential ability to weaken EHB definitions and protections to the states. Having a blanket provision explicitly repealing EHB federally would likely adversely impact many, many groups of Americans and, to quote the President, be unnecessarily mean. This is likely why Senate Republicans have chosen to restrict the explicit rollback of EHBs to those on Medicaid (per s. 126(b)) as they realize that low premiums may mean that Americans have difficulty accessing a decent range of services for their premiums – and they don’t want to be blamed for it.

Impact on the Poor

But where both House and Senate Republicans seem to agree is that the poor accessing Medicaid do not and should not have a right to quality coverage. Senate Republicans may have been slightly more parsimonious when it came time to repeal EHBs but their “Sunset” of required EHBs in Medicaid plans represents a public and cutthroat view of healthcare – that it is a privilege only for those capable of paying.

Ultimately, this is a value judgment – albeit an unforgiving one that may be out of touch with Americans based on recent polling. It may also lead to self-defeating spirals as poverty already may have negative, and socially expensive, long-term health impacts. With EHBs cut, access to a range of preventive, pediatric and managed care services critical to the welfare of lower-income Americans is jeopardized.

In light of such potential outcomes, Senate Republicans should recognize they will have difficulty in selling their healthcare bill as a pragmatic and principled plan – especially as long as “new entitlements” in the form of stabilization funding or repeals on taxes for already highly profitable (and unfairly legally protected) pharmaceutical and medical device companies continue to be pushed.

With income inequality already a hot button issue, Senate Republicans should be aware of the droves of American voters who find such handouts distasteful. If they survive in the final bill even as EHBs in Medicaid are clawed back, Republicans may find that distaste with their values and priorities to be a political – and generational – problem. After all, 2020 looms as the first general election where Millenials will outnumber Baby Boomers.

Jason Chung is currently senior researcher and attorney at NYU SPS Sports and Society, in New York. He tweets at @ChungSports.

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Healthcare’s Fake News Epidemic


Fake news has replaced responsible journalism. It’s hard to know what to believe. It wasn’t long ago that supermarket tabloids like National Enquirer were considered fake news. Now it seems the Enquirer and TMZ may be more reliable sources of accurate news than the New York Times or Washington Post.

Government agencies aren’t immune from the fake news trend either. The Congressional Budget Office describes itself as, “Strictly nonpartisan; conducts objective, impartial analysis; and hires its employees solely on the basis of professional competence without regard to political affiliation.”

I’ll bet most newspapers and television news networks say the same about their own objectivity.

The CBO analyzed the American Health Care Act of 2017, a lame effort by Republicans to repeal and replace Obamacare.  Passed by the House, it’s now on to “the greatest deliberative body in the world.”

Here the Senate will dither and dawdle, and likely not pass anything. What about the election? What about Trump’s campaign promise to repeal and replace? Campaign promises are for chumps, after all. Congress has had years to repeal and replace Obamacare and has done nothing. Ditto on tax cuts, immigration reform, building a wall, and other campaign promises easily made but not kept.

Even Senate Majority Leader Mitch McConnell has thrown in the towel, saying, “I don’t know how we get to 50 votes at the moment.” He has 52 votes in his caucus, but perhaps it’s Common Core math leading him to conclude that 52 is less than 50. Senator Lindsay Graham joined the chorus of naysayers also saying no Obamacare repeal this year. Does the GOP establishment even want to repeal Obamacare? I wonder.

The CBO threw cold water on the House repeal effort claiming 23 million more would be uninsured by 2026 under AHCA compared to the status quo of Obamacare. This assumes that when the individual mandate disappears, the law requiring everyone to purchase health insurance whether or not they want or need it, no one will purchase insurance of any kind. Really?

If inexpensive catastrophic plans became available as an alternative to Obamacare, no one would buy them? That’s like saying if BMW went out of business, sales of other car brands would remain the same, not increase with BMW customers choosing Fords or Toyotas instead. Inexpensive catastrophic plans are ideal for many young healthy adults but are not available under the rules of Obamacare. They would, however, be purchased if priced reasonably. Just like with expensive cars.

A bit of positive news too from the ACHA which has not been reported. The CBO also predicted a $120 billion savings from the ACHA over the next 10 years, but this wasn’t deemed newsworthy by the media, burying this fact in the 18th paragraph of their stories.

Those wanting to maintain the status quo of Obamacare, such as California Senator Kamala Harris, doubled down on CBO projections saying “129 million people with preexisting conditions could be denied coverage.” How real is that number?

The Kaiser Family Foundation notes that 49 percent of Americans receive employer-based insurance, which covers preexisting conditions. Ditto for 20 percent on Medicaid and 14 percent on Medicare. Leaving only 16 percent on individual plans (Obamacare) or uninsured. The uninsured constitute 9 percent and preexisting conditions are moot as these individuals don’t have insurance anyway. Leaving 7 percent on Obamacare plans.

As an interesting aside, why are 9 percent of Americans still uninsured? I thought Obamacare was supposed to fix this?

Of the 7 percent on Obamacare plans, the good news for them is that the ACHA does require coverage for preexisting conditions. Even CNN concedes that point.

The devil, however, is in the details. Covering a condition doesn’t mean coverage for each and every available treatment option. Those with Obamacare policies already know this. Limited formularies. Many top hospitals and physicians out of network. Unaffordable copays and deductibles.

Your heart problem may be covered but the only hospitals and surgeons able to treat your particular problem are not in your insurance network.  Or the out-of-pocket portion is unaffordable. So you are technically covered for your preexisting condition but may not like or be able to afford the treatment options available to you. In other words, if you like your doctor you may not be able to keep your doctor.

The reality is that only 500,000 individuals are in potential danger of losing their preexisting coverage if Obamacare is repealed, according to a detailed analysis by Betsy McCaughey. All told, a drop in the bucket, but for the media, the sky is falling.

These half million individuals could easily be placed on Medicaid, covering their preexisting conditions with little out-of-pocket expense. Much smarter to attend to this small group rather than make a mess of the system for the remaining 99-plus percent.

Right now we only have a House bill. One of many small steps before grand pronouncements can be made about what replaces Obamacare. It’s not law, simply a bill. The Senate needs to pass their own bill, a long shot at this point. Then back to a House-Senate conference to reconcile the two different bills. Followed by another vote in both the House and Senate before it even gets to President Trump for signature and passage into law.

The media, by throwing out fake or exaggerated news as the legislative process has just gotten underway, undermines any realistic chance of dismantling Obamacare. Despite the fact that it is unaffordable for many and in its own death spiral.

It seems preserving Obama’s legacy is the media’s priority over thoughtful reporting and analysis. Expect the media to double down after Trump threw away one of the other Obama legacies, the Paris Climate Agreement. If the media continues to throw cold water on every repeal and replace effort from Congress, via fake news and fear-mongering, Congress will cower and eventually do nothing. Leading to the irony of Obama’s legacy being the ashes of Obamacare once it finally implodes.

Brian Joondeph is a writer and ophthalmologist based in Denver.

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Whether or Not Republicans Are Able to Replace Obamacare …

… There is a far more fundamental issue affecting the overall success of our healthcare system.  Doctors and patients need more transparency when it comes to health care costs.

Healthcare is becoming more expensive by the year. In 1960, healthcare costs accounted for 5% of the gross domestic product. In 2015, they made up 17.8 percent. Although the rates of spending growth actually decreased since 2010 when the Affordable Care Act was enacted, a recent study demonstrated that for employees under 65 with employer sponsored health insurance, the proportion of income consumed by health insurance premiums has increased from 6.5% in 2006 to 10.1% in 2015.

Why does this matter? Health care costs, often from an unexpected medical emergency are the #1 cause of personal bankruptcy in the US. There are 1.7 million Americans live in households that declared bankruptcy due to unpaid medical bills. Also, while more subtle, the rising incremental costs of routine medical care are wearing on the financial stability of many families leaving less funds for essentials such as housing and food, let alone other needs and hobbies.

So what can be done? Doctors could help patients understand the costs of their healthcare options. This type of shared-decision making already exists to help patients weigh the potential risks and benefits of various treatment options. However, these discussions do not typically include cost as a factor.  They should. The same service can be dramatically more expensive depending on where it is done.  Take for instance the differences in surgical costs at an independent direct pay surgery center, the Surgery Center of Oklahoma, which offers common surgeries at a quarter to one fifth the cost of the large hospitals in Oklahoma City.  The same is true when choosing between medications.  For example, when choosing between blood thinners, generic warfarin runs around $20 for a one month supply, while opting for the identical medication in its brand name version Coumadin ups the price to $90.  Newer options such as Xarelto, Eliquis or Pradaxa come with a price tag of over $500.

Unfortunately, cost data is not always easy to come by even for doctors. In truth the answer to “how much is this going to cost the patient?” often is “it depends”.  There are some significant barriers to getting a straight answer.  The reasons are multiple, complex and interwoven.  To begin with, a majority of Americans pay for their healthcare, including routine primary care, lab work and medications through their insurance.  The rate paid by the insurance company depends on their negotiated contract discount rate which varies for one insurer to another.  Effectively, Medicare pays a different rate than Blue Cross or Aetna for the same service and each may pay different providers in the same area a different rate.  Insured individuals benefit from these discounted rates, however, out of pocket costs also depend on deductible and co-insurance in addition to these discounts.

As a result of varied reimbursement rates for one insurer to another, and because for some the discounts are so steep hospitals and healthcare providers struggle to cover basic expenses, billing prices are raised further.  For instance, say insurer A gets a 35% discount, then for every $100 billed they (or the patient) pay $65.  If that $65 is not enough to cover the hospital’s expenses, the hospital may resort to charging $154 for the same service in order to recoup the $100 of expenses.  The result is price inflation and prices that do not reflect value of services provided.  This sort of price inflation has been able to continue because, until recently, patients were not footing a significant portion of the bill.  A patient with a 20% copay would pay $20 on that $100 discounted rate, a solid 87% savings on the total bill of $154.  After paying clearance prices for healthcare for years, shifting to a high deductible plan and being strapped with the full bill feels like a major rip off.  And yet here we are.

To make matters worse, the increasing trend of physicians becoming employees rather than owners of independent practices, enlarging health care organizations and billing outsourced to other companies, make the process of anticipating charges all the more challenging.  More than 75% of physicians are now employed by larger organizations and employed physicians do not set their own charges or contract directly with billers, these all become centralized decisions.  The ties of charges to expenses and to the value of the service provided become murkier with increasing distance and bureaucratic complexity.

Certainly, there are other reasons besides lack of price transparency for health care costs to rise. Factors such as inflated prescription drug prices, ballooning administrative costs, overuse of costly testing and redundancy from fragmented care also need to be addressed. But unlike other causes, increasing transparency can empower health care consumers to take control of their health expenses.

The American Hospital Association has a policy statement in support of pricing transparency and calls for the provision of pricing information that is “easy to access, understand and use”.  HealthPartners in Minnesota offers a website and mobile app to help consumers estimate costs of clinic visits, labs and imaging tests upfront.  These efforts are steps in the right direction but more can and needs to be done to offer clear, comprehensive, accurate and timely information.

Megan Adamson MD is a primary care physician at Dartmouth-Hitchcock Medical Center.

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A Primer For Conservatives: Health Insurance is not Really Insurance

Is health insurance a plan to help healthy people mitigate against an unexpected illness, or an income subsidy to help the sick pay for medical care?

Conservatives ought to have a clear answer to that question. Not long ago Congressman Morris Brooks from Alabama did not and found himself on the receiving end of liberal ridicule.

By suggesting that those who take better care of themselves should pay lower health insurance premiums, Brooks implied that health insurance is indeed a type of insurance arrangement. After all, the risk adjustment of premiums is a practice proper to all other kinds of insurance services. A prudent driver pays less for auto insurance than one with a negative driving record. A homeowner pays more for home insurance if the property is on muddy terrain rather than on sturdy ground. A smoker pays more for life insurance than a non-smoker, as does anyone whose risk of dying prematurely is high, even if that predisposition is inherited genetically.

Brooks’s conception of health insurance, however, intuitive as it may be, is wrong. Health insurance is not insurance even if, on the surface, health insurance policies meet the dictionary definition of insurance as contractual arrangements “in which one party agrees to indemnify or reimburse another for loss that occurs under the terms of the contract.”

Health insurance cannot really be insurance because human health is un-insurable: human beings are not machines or buildings whose function or condition can be ascertained objectively. Yet, an objective assessment of damages and costs is essential for any contractual arrangement to function in a sustainable manner.

Consider, for example, that medical care is based on the legal principle of “medical necessity.” Medical necessity is invoked when, presumably, there is an impairment in the patient’s health that could be remedied by a medical intervention. But medical necessity is a perniciously elastic concept that cannot possibly satisfy the precise contractual requirements of insurance.

Take Joe, an overweight truck driver, who suffers from back pain and whose MRI shows a slipped disk at the location corresponding to his symptoms. He and his doctor wish to proceed with surgery. Is surgery medically necessary?

To answer that question, the insurer would need to know several other things. To what degree is Joe incapacitated by his back pain? Did he give physical therapy a fair try? Could he improve his condition by losing weight? If so, how willing is he to try to lose weight? In other words, did he do his very best to avoid expensive medical care? And, similarly, for the doctor. Did he carefully advise Joe on all his options? Is his advice disinterested? How confident is he that the surgery will help?

These are all legitimate questions, the answers to which are completely inaccessible to the insurer, for they reside in Joe’s mind and his doctor’s—and possibly below their level of consciousness.

No amount of utilization review can overcome this insurmountable “information asymmetry,” yet medical care is replete with situations that are just like Joe’s: doctors and patients who wish to pursue a plan of care, without objective evidence to show—one way or another—that the care is necessary, let alone effective.

This consideration is not meant to cast doubt on the integrity of doctors and patients, but to point out that medicine is an occupation that frequently deals with intangibles. And even for conditions which, on the surface, seem objectively determinable, like heart attacks or cancer, the tentative way in which medical care necessarily proceeds is antagonistic to the aims of insurance.

Take Laura, who has sudden severe chest pain in the middle of the night. Concerned, she calls an ambulance and is taken to an emergency department staffed by competent and cost-conscious doctors. For a variety of reasons (the character of the pain, the fact that Laura has a family history of heart disease, the equivocal finding on the electrocardiogram, etc.), expensive tests and scans must be performed before the doctors can reassure themselves—and Laura—that she is fine, and that her chest pain was simply a bad case of acid reflux, or perhaps a panic attack.

Should the insurance cover the expensive work-up for this false alarm? A “no” answer seems absurd: people cannot be penalized for misjudging the severity of their condition. If the answer is “yes,” on the other hand, the program is no longer insuring against objective health impairments, but against any concern that can cross someone’s mind—be he a stoic or a hypochondriac.

In short, it’s in the uncertain nature of medical care to conspire against insurance plans that, by nature, must necessarily deal with objectively verifiable claims to remain viable.

So, health insurance is definitely not insurance in the proper sense of the term. Instead, health insurance is—and always was—an income subsidy, ostensibly designed to help the sick pay for medical care.

Such an understanding of the essence of health insurance should not be controversial if we consider government health insurance programs. After all, the first health insurance program was plainly designed by Bismarck as an income subsidy, if only to gain for the Prussian state the loyalty of the working class.

In the United States, the Medicare and Medicaid programs were also enacted as income subsidies to help the elderly and the poor pay for medical care. The subsidies seemed justified by the sharp increase in the cost of medical care that followed the widespread adoption of private health insurance after World War II.

As it turns out, however, even American private health insurance plans were conceived as income subsidy programs. In the 1930s, the early Blue Cross and Blue Shield experiments were carried out not to actually provide insurance against illness, but to alleviate the surge in hospital bed vacancies that occurred when the Great Depression corrected the hospital construction boom of the 1920s.

A decade or two later, employer-based private health insurance emerged as a means for businesses to circumvent wartime wage controls and recruit employees whose salaries could not be raised. After the war ended, the government made that form of income subsidy permanent by specifically exempting health insurance from payroll and income taxes.

In short, be it a public initiative or privately provided service, health insurance is an income subsidy program and can only be considered as such.

As far as income subsidy programs go, however, health insurance has its own peculiarities.

First, health insurance essentially operates as an unlimited voucher program for medical care, since neither the government nor private insurers can set limits to the amount of allowable coverage. As such, then, health insurance is one of the most generous income subsidy programs conceivable. It is no wonder, then, that the healthcare industry has grown to command nearly one fifth of the gross domestic product.

Second, the income subsidy conveyed by health insurance is not allocated based on a person’s income or wealth. After all, it is the wealthy and securely employed who have historically benefited from “Cadillac plans,” while those uninsured tend to come primarily from the lower middle class.

By forcing health insurance on everyone, the Affordable Care Act is admittedly trying to close the gap separating those who do from those who do not currently benefit from health insurance. The plain result of that policy is to ensure that, in principle, no one is left un-subsidized.

Are income subsidy programs that make unlimited amounts of health care funds available to anyone and everyone sustainable? Conservatives had better answer that question correctly.

Michel Accad, MD, practices cardiology and internal medicine in San Francisco, offering individualized care in a free-market setting. He is the author of Moving Mountains: A Socratic Challenge to the Theory and Practice of Population Medicine. His blog about health-care and medicine is AlertandOriented.com.

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Will Senate Republicans Get 50 Votes to Repeal the ACA?

THCB readers are well aware this coming week Senate Republicans plan to begin debate on passing their amended version of the House-passed American Health Care Act (AHCA), titled the Better Care Reconciliation Act.   As of today, June 23rd, immediate reactions by Republican senators to the June 22nd released discussion draft have been limited largely because members immediately left town after the draft’s release. The Congressional Budget Office’s (CBO’s) score, that will again be influential, is expected this Monday or Tuesday. Senate debate on the legislation will likely begin next Wednesday with a vote expected late Friday or early Saturday morning, or just prior to their week-long July 4th recess.   Here is an assessment of the legislation’s prospects.

What’s at Stake or Our Health Status

One of the best or most thorough assessments of US population health is the 2013 National Academies report titled, Shorter Lives, Poorer Health. As the title plainly indicates the report found that compared to residents in 16 peer countries Americans experience higher mortality and comparative inferior health status. Americans live shorter lives and suffer pervasive health disadvantages throughout their life course. For example, the report found the US experiences higher rates of infant mortality, injuries, particularly automotive, and homicides, higher rates of teenage pregnancy and STDs, higher rates of HIV/AIDs, higher drug and alcohol-related mortality and morbidity, higher rates of diabetes and obesity, more heart and chronic lung disease and more disabilities including arthritis, and all without any compression of disease.

Senate Republican Motivations

Congressional Republicans have of course been promising, or attempting, to repeal the Affordable Care Act (ACA) since it became law in 2010. They believe they need to keep this promise. If not, they fear, particularly House Republicans, getting primaried, as former House Majority Leader, Eric Cantor, was in 2014 (though his defeat was due largely to his immigration reform position). Their other primary motivation is tax reform. The House bill cuts $834 billion in Medicaid spending over the ten year budget window largely pay for less generous individual tax credits. The Senate bill largely does the same. With a massive reduction in Medicaid spending Republicans are also able to repeal ACA taxes on corporations and on higher income earners. For example, under the House AHCA, those earning over $1 million annually would see $144 billion in tax relief and those earning $200,000 to $900,000 would see $274 billion in tax abatements over the next 10 years. Cutting ACA taxes also lowers the government’s tax revenue baseline. This sets up Republicans to pass a tax reform bill that would allow for approximately $1 trillion in less revenue while still being defined as revenue neutral.

Congressional Budget Office (CBO) Scoring

The CBO concluded the House-passed AHCA would reduced the number of covered lives by 14 million in 2018 and by 23 million in 2026. The bill would cut Medicaid spending, as noted, by $834 million. By 2020, state marketplaces would become unstable for about one-sixth of the population. This is because AHCA waivers would allow states to drop the essential health benefit requirement and would allow insurance underwriting for those that had not demonstrated continuous coverage. For example, the CBO estimated for a single individual age 64 with an income of $26,500, or 175 percent of the Federal Poverty Level (FPL), their premium would increase from $1,700 to upwards of $16,100. A similar score of the Senate’s proposed legislation is likely.

Stakeholder or Lobbying Efforts

In sum, stakeholder opposition to the AHCA has been limited if not anemic. This is explained in part by fear of retaliation, for example, the administration would cut off cost saving reduction repayments. Repealing the ACA means health care companies, including pharmaceuticals and medical device manufacturers, would receive a tax cut estimated at $200 billion. The industry is also hoping for further favorable tax treatment when the Republicans move on to rewriting the tax code. Others believe Republican efforts will collapse under its own weight. Medicaid managed care organizations including Molina and Blue Shield of California, have been obviously vocal. The hospital industry has as well in part over concerns fewer covered lives means more bad debt and how Republicans have structured Disproportionate Share Hospital (DSH) funding. The AARP, the American Academy of Pediatrics, the American College of Physicians, the Association of American Medical Colleges (AAMC), the American Medical Association (AMA), disease groups like the American Cancer Society and patient advocacy groups like Families USA and related others have also expressed opposition.

Among those on the sidelines, the American Health Insurance Plans (AHIP) has not weighed in. Association criticism is though muted or offset by their continued funding of Republican leadership re-election campaigns. Republican governors in Medicaid expanded states, for example, Ohio’s John Kasich and Maryland’s Larry Hogan have stated respectively “deep concerns,” or argued legislators “should go back to the drawing board.” Despite the fact Arkansas has added 300,000 Medicaid under ACA expansion, Governor Asa Hutchinson stated “there are significant positive changes in the Senate bill.”

The Senate Parliamentarian, Reconciliation and the Byrd Rule

Since Senate Republican efforts fall under budget reconciliation rules, that allow them to pass their health bill with a simple majority vote, provisions within the bill must conform to the so called Byrd rule. Simply explained, this means provisions that are considered extraneous, i.e., generally do not increase spending or decrease revenues, the Senate Parliamentarian, Ms. Elizabeth MacDonough, must strike from the legislation. There are provisions that may not meet Byrd rule requirements. These include the cost sharing reduction payments, state stabilization funds (moneys to stabilize state marketplaces) and the House ban on the use of federal tax credits for abortion. If these provisions are struck, Republicans will move these to Medicaid CHIP legislation in September and/or likely find other ways to address.

Timing and Process

Majority Leader McConnell is pushing for a vote before the July 4th recess for at least three reasons. The Senate needs to move on to other matters including raising the debt ceiling, the desire for a legislative win before the August recess and, leaving aside the potential for extraneous variables and crowd out, there’s no guarantee McConnell would be successful should he work the bill through the latter half of the year. Also of note, Republicans cannot move on to tax reform legislation, that they’ll forward under a 2018 reconciliation resolution such that again they can pass with a simple Senate majority vote, until they dispense with the ACA repeal-related 2017 budget resolution.

As has been widely reported McConnell drafted the Senate bill in secret. All Republican meetings were closed to the press. There were no committee hearings and will be no committee markups. This has enabled his members to credibly say when asked about the bill, that they have no comment because they’ve seen no language. Legislating in the dark subverts media coverage or criticism. Media Matters reported the three major networks ran a total of three related segments between June 1 and June 14.

Since the Senate bill is again being considered under reconciliation, Senate floor debate is limited to 20 hours. The time is equally divided between the majority and minority. There is no limit to the number of amendments members can offer during consideration of the bill. Once the 20 hours have expired, amendments not withdrawn are voted on with no debate via what’s termed a “vote-a-rama.”

Senate Republican Votes

(None of the 48 Democratic Senators are expected to vote for the Republican bill. No House Democrat voted for the AHCA.)

With a 52 member caucus, McConnell can only lose two votes. If he loses two, Vice President Pence will vote to break the tie. Republican votes in play are on the extremes. On the far right is Ted Cruz (TX), Mike Lee (UT) and Rand Paul (KT). Cruz, representing the state with the highest percent of uninsured, is up for re-election next year with current polling showing Texas voters only “leaning” Republican. This is offset by the fact Cruz already has a substantial campaign war chest and is not expecting a primary challenge. The moderates likely in play are seven: Shelly Moore Capito (WV); Bill Cassidy (LA); Susan Collins (ME); Jeff Flake (AZ); Dean Heller (NV); Lisa Murkowski (AK); and, Rob Portman (OH).

Despite a June 22 press release stating “we are not yet ready to vote for this bill” by Cruz, Lee, Paul and Ron Johnson (WI), it appears Cruz, Johnson and Lee will ultimately vote for the bill. Paul will likely vote against. He has consistently stated he does not want to end up with “Obamacare lite.” He wants full repeal. Nebraska’s Senator Ben Sasse may also be a no vote. This means McConnell can only lose one or two more votes.

Among the moderates Flake and Heller are particularly on the bubble. Both Arizona and Nevada expanded Medicaid coverage under the ACA. Both are up for re-election next year and current polling shows voters in both states are also only “leaning” Republican. Heller is more hard pressed. Hillary Clinton easily won Nevada in 2016 by eight points, the popular Nevada Governor, Brian Sandoval, has been a strong supporter of ACA Medicaid expansion that has enabled the state to increase coverage by 33 percent. He has warned Nevada would lose $100s of millions of federal Medicaid funding if Congressional Republicans were to succeed. Heller is presently polling at 39 percent versus 46 percent for any Democratic opponent. Not surprisingly late today, June 23rd, Heller announced he cannot support the Senate bill. Also not surprising immediately after Heller made his announcement a Republican super PAC announced it would spend seven figures on advertising to “influence” the freshman senator.

Concerning the three female senators, West Virginia expanded its Medicaid program under the ACA largely because the state has the seventh highest percent of Medicaid residents, or three in ten. Also, unlike most states West Virginia’s Medicaid beneficiaries tend to remain Medicaid beneficiaries over time. For Senator Murkowski, Alaska is one of the most expensive cost-of-living states due in part to high health insurance premiums. The state has 14,000 enrolled in its marketplace with currently one insurance plan participating. Of those enrolled 90 percent receive subsidies. The Center for Budget and Policy Priorities (CBPP) estimated under the AHCA, Alaskans would pay an average of $12,599 more per year of out-of-pocket for health care costs. For Senator Collins, Republican policy is to decrease premiums for young adults while substantially increasing costs for older Americans presents a problem because Maine has the oldest residents in the US with a median age 44. For Murkowski and Collins, the only two pro choice Republicans, Planned Parenthood funding matters. Ohio’s Senator Portman, who saw an over 20 percent increase in drug overdose deaths between 2014 and 2015, has similar or related concerns.

What to Watch

Medicaid: Compared to the House, the Senate’s bill delays the ACA’s Medicaid expansion by three years. However, the Senate’s annual Medicaid update factor beginning in 2025 is less generous than the House. This latter issue is inherently problematic under either update formula because a fixed update percent, particularly the Senate’s that will track less accurately with actual medical spending growth, does not account for varying patterns of spending due to epidemics or other public health realities, for example weather extremes caused by the climate penalty. In an effort to mitigate the effect of lost lives, or to specifically to win Senator Murkowski’s vote, the Senate bill includes a provision whereby the government will redistribute two percent of Medicaid funds by reducing reimbursements from states that spend more generously on Medicaid beneficiaries to states than spend less generously except for high spending states with low population densities, like Alaska. To win Senator Portman’s vote the Senate bill also excludes the Medicaid ACE (Advancing Care for Exceptional Kids) demonstration program. By intention, because of the phase out is delayed (as well as a less realistic update factor) the number of lives lost under Medicaid may likely be scored somewhat lower than the House bill which CBO determined would drop 14 million lives by 2026. Since the Senate bill succeeds of fails largely on its Medicaid provision, the CBO’s score is particularly relevant to the moderates since all but Maine expanded their Medicaid programs under the ACA. Whether CBO’s score meets whatever lost lives tolerance level the moderates have set for themselves is the begged question.

Tax Credits: From a CBO scoring prospective, tax credits could prove to be as contentious as cuts to Medicaid. Per the CBPP, compared to ACA subsidies, in 2020 the House AHCA’s plan would reduce tax credits for Alaskans by over $10,000, for West Virginians by over $4,200 and in Louisiana and Maine by over $2,600. For those over 60, premium costs would almost triple. Under the Senate bill, beginning in 2020 tax credits would be bench marked at 58 percent of actuarial value (AV) of the median premium marketplace plan. This is substantially less generous than current ACA subsidies at 70 percent of AV. This effect may mitigated by the Senate’s lowering the availability of credits from 400 percent to 350 percent of the FPL and the fact that the Senate bill also allows states to use, ironically, the ACA’s 1332 waiver process to drop the essential health benefit requirement and the requirement that plans meeting certain actuarial values. Under a far more liberal 1332 wavier, states could also close down their ACA marketplaces. Not surprisngly, Senate Republicans incent states to submit 1332 waivers via $2 billion in grants. Like the House bill, the Senate includes a 5:1 age rating band and drops the individual and employer mandates. It appears these provisions, in sum, would, as CBO concluded in scoring the AHCA, cause the non-group market to become unstable for a significant percent of the population, or leave individuals and families unable to purchase insurance at premiums comparable to those under current law.


Cost Sharing Reduction (CSR) Payments: The Senate bill is more generous than the House in that it extends CSR payments through calendar 2019. (It’s at least ironic Republicans have generally termed these payments “bail outs” and challenged them in court since 2003 Republican-led Medicare Part D legislation made these programs permanent.) The combination of a changing 2020 individual market rules with no guard rails for insurer participation may cause moderate senators to pause particularly if the CBO validates their concern. The Senate bill does propose two “stabilization” funds but these moneys are modest, between $5 and $15 billion per year, and expire in 2021.


Opioid Funding: The seven moderate senators identified represent states that have the highest drug related deaths in 2015. West Virginia had the nation’s highest age adjusted drug related death rate. The Senate bill appropriates $2 billion in 2018 for grants to states to support substance abuse disorder treatment and recovery. Considering the fact opioid abuse fatalities in 2015 numbers over 33,000, a 16 percent increase over 2014, both the amount and duration of funding appears to be far from inadequate. The $2 billion may be purposeful since McConnell could likely raise the amount substantially to win particularly Capito’s vote.

Planned Parenthood: Like the House bill, the Senate will also cut Planned Parenthood funding, approximately $550 million or 30 percent of the organization’s budget, for one year. This, despite the fact Planned Parenthood, which operates 700 clinics nation-wide, and other abortion providers are already banned from billing taxpayer-funded programs for the procedure. The 2015 ACA repeal bill that President Obama vetoed in early 2016, included defunding Planned Parenthood. Collins and Murkowski supported an amendment to strike the provision. This may also be an issue for Senator Heller since Nevada has the 5th highest percentage of births to unwed mothers.


Amendments: The fate of the Senate bill may come down to amendments during the floor debate (and,/or McConnell offering a substitute bills prior to and/or during floor debate). Look for Republican offered amendments, along with Democratic offered amendments, related to these issues and others that in sum will illustrated or attempt to reinforce each faction’s position or in the Democrats case further divide the two.


McConnell: Unlike House members, Senators are far more independent or less willing to bend to caucus leadership and/or White House pressure. Nevertheless, McConnell can and does exert considerable influence over his members. To what extent the Majority Leader pressures or provides his moderates with life boat provisions will substantially determine the outcome. It has been reported over and again McConnell is “agnostic” concerning the outcome, in part, because, again, he’d prefer to move on to tax reform. Many suspect or believe he actually would have preferred the House to have quit after they initially failed on March 24th. He also knows well Senate Republicans will lose by winning since they’ll own every inevitable adverse consequence that can reasonably tied to his legislation.


House and White House Response

Should the Senate Republicans prevail, despite posturing this past week by the House Freedom Caucus and the Republican Study Committee, it is difficult if not impossible to believe the House will attempt to rewrite the Senate bill, nor will House and Senate leaders appoint conferees to a conference committee to resolve their differences, or draft a third bill both House and Senate Republicans can accept. (One problem with the ACA was there was no conferencing the Senate and House versions.) This is to say the House will pass the Senate’s version or in DC parlance the Senate will jam the House. President Trump will sign the legislation before the Congress takes its scheduled five-week summer recess.


What Does Failure or Success Mean

Failure means a few Senate Republicans were willing to believe the CBO and not dramatically cut Medicaid, a program that provides health care services to nearly one-quarter of Americans, or approximately 70 million poor perinatal, pregnant women, disabled children and adults and the frail elderly. That they were sensitive to public opinion polling that shows less than 20 percent, and not a single state, supports the House AHCA. That they at least defacto believe the ACA’s individual market is not in a “death spiral” or that per Standard and Poor’s analysis, last year most plans found a stable and profitable price points and/or per Oliver Wyman, two-thirds of higher premiums are due to political uncertainty. Perhaps more importantly they were neither interested in disguising the legislation’s intent by delaying its implementation by a few years nor ultimately in discounting the future.


Success constitutes a lifetime win for the ideological right. Success means the vast majority if not the entirety of Republican Senators repealed, or more accurately partially repealed, the ACA in order redistribute wealth from the poor and middle class to the nation’s wealthiest. Though too infrequently defined in this way, the ACA is, or was, essentially wealth transfer bill. Although it took him seven years to say it, in his recent Facebook post former President Obama wrote the Senate Republican bill is ‘not a health care bill” but instead “a massive transfer of wealth . . . to the richest people in America.” Success means Republican Senators view access to and coverage for health care as simply a product or commodity and that providing all Americans with health care services is not a priority. Success in the face of certain public disapproval means as Gilens and Page concluded in a 2014 study that the “American public actually have little influence over the policies our government adopts,” or phrased another way, “when a majority of citizens disagrees with economic elites or with organized interests,” Gilens and Page concluded, “they generally lose.”

from THCB http://ift.tt/2u0IoaQ