Healthcare Strategy in the Year of Uncertainty; Even amid significant legislative ambiguity, reform remains a market-driven issue.

By Aamer Mumtaz, Alan London, MD, and David Fairchild, MD
Healthcare Financial Management Association, May 2017

Among the dozen C-suite leaders from leading health systems and AMCs in nine states who we interviewed over the past two months, most believe that the healthcare market has many of the same characteristics and challenges as it did in 2011: Cost growth is an issue, quality and value are ongoing concerns, and breaking even on government programs is a challenge. With some critical caveats, the appropriate short-term provider response thus will not be fundamentally different from the past seven years:

• The search for value will continue, with clinical integration, care coordination, and high-quality care still the paths to get there.

• Scale will become even more important as systems look for ways to reduce the per unit cost of care.

• Commercial insurance will remain the main engine of growth for providers, with Medicare Advantage the most attractive government program financially.

• Medicaid and the ACA marketplaces are wild cards. What happens in those spaces will be felt disproportionately by systems serving high numbers of underprivileged patients, including systems operating in rural areas.

• The move toward quality will continue despite the potential waning of government support for innovation.

• Speed to market for new initiatives in the pipeline will be important.

• Cost reduction and asset redeployment will be essential in an increasingly cash-strapped environment.

“No regret” moves

Providers are focused on moves that transcend the ongoing legislative and regulatory uncertainty and instead address more fundamental economic forces. Such moves include:

• Achieving scale through partnerships and alliances

• Commercial market growth (e.g., through targeted ambulatory expansion)

• Continued focus on Medicare Advantage

• Aggressive cost control

• Partnerships with health plans to share more risk

• Building the clinical network

• Slowdown or halt on long-term investments

Economics overshadows politics

Our preliminary discussions with leaders from major health systems around the country have cofirmed that healthcare reform remains driven primarily by market forces as opposed to legislative initiatives. As one West Coast executive told us, “The challenges facing health care are more economic than political.”

Just as in 2011, imperatives to reduce costs and to achieve profitable growth through the delivery of value remain key. In fact, cutting costs, improving clinical integration, and addressing quality and customer service needs — all while focusing on profitable markets for growth — arguably will be even more important strategies in 2017 and going forward than they were in 2011.

http://www.bdcadvisors.com…

***

Comment:

By Don McCanne, M.D.

So who really determines the nature and scope of the health care delivery system? Is it the doctors and nurses? They are busy trying to make the system we have work for their patients, and they are having difficulties with that. Is it the politicians? They continue to feed the largest share of money into the system (taxes – often opaque – to pay for health care) while turning much of it over to the medical-industrial complex.

The medical-industrial complex is composed of interwoven, overlapping organizations and their executives that make spending decisions through various financing vehicles such as commercial insurance, managed care organizations, accountable care organizations, health plan administrators for public and private programs, and the like. According to this survey of C-suite leaders, they want more of it – more integration (anti-competitive consolidation), more care coordination (care management prioritizing executive business decisions), shifting care to where the money is (outpatient services now epitomized by the most expensive of all – free-standing emergency departments), more programs to promote “quality” (think MACRA and MIPS), more government financing of private insurance (prominent examples being Medicare Advantage and Medicaid managed care), while achieving scale in all of this (more and more of it), and they want it right now (before the social movement for health care as a right – single payer – can gain traction).

Many of the measures are touted as methods of controlling costs when the real cost containment efforts are directed to reducing volume and price as a method of ratcheting down the growth of spending on the actual health care delivery system. Although excessive prices and over-utilization are problems, so are under-utilization and inadequate pricing. Establishing barriers to care and not compensating the delivery system adequately do a disservice to patients and their health care professionals, especially when there are far more patient-friendly methods of containing spending, which also reduce the abuses.

Our current bearing will leave these people in charge, with more of the same. So what should we do? What should be our strategy and tactics? Is sticking placards in the faces of politicians and shouting “single payer” enough? Can we truly organize and coordinate with the greater social justice movement? Can we convince the medical-industrial complex that they need to be active participants and even leaders in a sincere movement for health care justice for all? They are going to be there whether or not we want them involved, though we should be able to cull those who really care for patients from those who are simply after acquisition of substantial personal wealth.

Regardless, take another look at what these C-suite executives have in store for us. It is terrible for health care professionals who really do care and even worse for patients. We can do far better with the $3.2 trillion we are already spending on health care (it’s our money!) than to turn it over to the medical-industrial complex and let them do with it what they will. As these authors state, “reform remains a market-driven issue” when we know that markets are anathema to health care justice.

No more feeble organizing. Let’s have the real thing.

First-ever global study finds massive health care inequity

By the Institute for Health Metrics and Evaluation (IHME)
EurekAlert, May 18, 2017

A first-ever global study finds massive inequity of access to and quality of health care among and within countries, and concludes people are dying from causes with well-known treatments.

“What we have found about health care access and quality is disturbing,” said Dr. Christopher Murray, senior author of the study and Director of the Institute for Health Metrics and Evaluation (IHME) at the University of Washington. “Having a strong economy does not guarantee good health care. Having great medical technology doesn’t either. We know this because people are not getting the care that should be expected for diseases with established treatments.”

Professor Martin McKee, from the London School of Hygiene & Tropical Medicine, who participated in the study, commented: “Using deaths that could be avoided as a measure of the quality of a health system is not new but what makes this study so important is its scope, drawing on the vast data resources assembled by the Global Burden of Disease team to go beyond earlier work in rich countries to cover the entire world in great detail, as well as the development of a means to assess what a country should be able to achieve, recognizing that not all are at the same level of development. As the world’s governments move ahead to implement the goal of universal health coverage, to which they committed in the Sustainable Development Goals, these data will provide a necessary baseline from which they can track progress.”

The United States had an overall score of 81, tied with Estonia and Montenegro. As with many other nations, the US scored 100 in treating common vaccine-preventable diseases, such as diphtheria, tetanus, and measles. But the US had nine treatment categories in which it scored in the 60s: lower respiratory infections (60), neonatal disorders (69), non-melanoma skin cancer (68), Hodgkin’s lymphoma (67), ischemic heart disease (62), hypertensive heart disease (64), diabetes (67), chronic kidney disease (62), and the adverse effects of medical treatment itself (68).

“America’s ranking is an embarrassment, especially considering the US spends more than $9,000 per person on health care annually, more than any other country,” Dr. Murray said. “Anyone with a stake in the current health care debate, including elected officials at the federal, state, and local levels, should take a look at where the US is falling short.”

The study was published today in the international medical journal The Lancet, and represents the first effort to assess access and quality of services in 195 countries from 1990 to 2015. Researchers used a Healthcare Access and Quality (HAQ) Index, based on death rates from 32 causes that could be avoided by timely and effective medical care, known as “amenable mortality.”

https://www.eurekalert.org…

***

Healthcare Access and Quality Index based on mortality from causes amenable to personal health care in 195 countries and territories, 1990–2015: a novel analysis from the Global Burden of Disease Study 2015

The Lancet, May 18, 2017

Drawing from GBD 2015 (Global Burden of Diseases, Injuries, and Risk Factors Study), we constructed a novel measure of personal health-care access and quality — the HAQ Index (Healthcare Quality and Access Index) — by using highly standardised estimates of 32 different causes that are amenable to personal health care. Compared with previous efforts, the HAQ Index provides a clearer signal on personal health-care access and quality over time and place because GBD provides enhanced comparability of cause of death data, helps to account for variation due to behavioural and environmental risk factors, and includes 195 countries and territories over time. Our analysis showed large differences in personal health-care access and quality, spanning from a low of 23·1 in Ethiopia in 1990 to higher than 90 in Andorra, Iceland, Switzerland, Norway, and Sweden in 2015. The global HAQ Index improved from 40·7 in 1990 to 53·7 in 2015, and 167 of 195 countries and territories significantly increased their HAQ Index during this time. Although the HAQ Index and SDI (Socio-demographic Index) were highly correlated, we noted substantial heterogeneity for geographies at similar SDI.

The Healthcare Access and Quality Index (HAQ Index) for the highest quartile of the Socio-demographic Index (SDI):

95  Andorra
94  Iceland
92  Switzerland
90  Sweden
90  Norway
90  Australia
90  Finland
90  Spain
90  Netherlands
89  Luxembourg
89  Japan
89  Italy
88  Ireland
88  Austria
88  France
88  Belgium
88  Canada
87  Slovenia
87  Greece
86  Germany
86  Singapore
86  New Zealand
86  South Korea
86  Denmark
86  Israel
85  Cyprus
85  Qatar
85  Malta
85  Czech Republic
85  United Kingdom
85  Portugal
82  Kuwait
82  Croatia
81  Estonia
81  United States
81  Montenegro
80  Lebanon
80  Hungary
80  Poland
79  Saudi Arabia
79  Bermuda
79  Bahrain
79  Slovakia
78  Latvia
78  Taiwan
77  Puerto Rico
77  Lithuania
76  Macedonia
76  Chile
75  Serbia
74  Romania
74  Belarus
74  Cuba
73  Ukraine
72  United Arab Emirates
72  North Mariana Islands
72  Russia
71  Bulgaria
71  Greenland
70  Virgin Islands
70  Brunei
68  Argentina
68  Armenia
67  Barbados
67  Antigua and Barbuda
67  Malaysia
66  Seychelles
64  Azerbaijan
64  The Bahamas
63  Guam
62  Georgia
62  Trinidad and Tobago
61  Kazakhstan
58  Grenada
58  Turkmenistan

The full PDF of this Lancet article (36 pages) can be downloaded for free at this link:
http://www.thelancet.com…

***

Comment:

By Don McCanne, M.D.

This study establishes a new landmark in health policy research. It provides a basis of determining how all nations are doing in reducing premature deaths by providing timely and effective health care, that is, in improving their “amenable mortality” rates.

To no surprise for those who follow health policy, the Healthcare Access and Quality Index (HAQ Index) for the United States falls about in the middle of nations in the highest quartile of the Socio-demographic Index (SDI). Although our per capita spending on health care is about twice the average of these nations, our access and quality are only average. We do not have the best health care system in the world, in spite of what reform opponents say.

As Christopher Murray, a senior author of this study, states, “America’s ranking is an embarrassment.” Look at the countries that rank above us. If, like them, we used our public resources more effectively we would no longer have to be ashamed of our performance. Just through the tax system alone we are already spending more per capita than almost all of the other nations do in both public and private spending combined.

It’s not that we need to make a decision to finance health care through our taxes; we already largely do that. Instead we need to improve the allocation of our tax funds plus our private spending. We can do that best by enacting and implementing a well-designed single payer national health program – an improved Medicare for all. With all that we are spending, we should be at the top of the list.

By Chris Girod, Sue Hart, Scott Waltz
May 2017

In 2017, the cost of healthcare for a typical American family of four covered by an average employer-sponsored preferred provider organization (PPO) plan is $26,944, according to the Milliman Medical Index (MMI).

Key findings of the 2017 MMI include:

1. The MMI’s annual rate of increase is 4.3%. This is the lowest rate since we began tracking the MMI in 2001. Yet the total dollar amount is still bracingly high. Of the $26,944 spent by the MMI’s family of four, $11,685 is paid by the employee, through a combination of $7,151 in payroll deductions for premium, and $4,534 in out-of-pocket costs incurred at time of care.

2. Prescription drug trends are lower, but still high. For the first time since 2013 and 2014, the family of four’s prescription drug trends have decreased in two consecutive years. Still, the 2017 prescription drug cost increase of 8% is more than double the medical increase of 3.6%.

3. Employees pay a bigger piece of the healthcare cost pie. Through their payroll deductions and through out-of-pocket expenses incurred when care is received, employees now pay for about 43% of expenses and employers pay the other 57%. The difference between these two shares has gradually narrowed since 2001, when employees contributed 39% and employers contributed 61%. High growth in per-employee healthcare expenditures have pushed employers to limit their contribution increases to amounts below the rate of healthcare inflation.

Some stakeholders have held out hope that federal healthcare reform efforts would help control healthcare cost growth. So far, those efforts have had relatively little direct impact on the MMI, because the MMI represents healthcare costs in an employer-sponsored health plan, while the primary focus of healthcare reform has been on the individual insurance marketplace and Medicaid. The employer market tends to be one of the most stable markets for health insurance companies, and one of the most financially important for healthcare providers such as hospitals and physicians. As discussed in a later section of this report, providers receive higher payment for patients in employer-sponsored plans, for the exact same basket of services, than they do for other insured patients. Employers and employees have been subsidizing other markets for many years.

Footnote 1: The Milliman Medical Index is an actuarial analysis of the projected total cost of healthcare for a hypothetical family of four covered by an employer-sponsored preferred provider organization (PPO) plan. Unlike many other healthcare cost reports, the MMI measures the total cost of healthcare benefits, not just the employer’s share of the costs, and not just premiums. The MMI only includes healthcare costs. It does not include health plan administrative expenses or insurance company profit loads.

http://us.milliman.com…

***

Comment:

By Don McCanne, M.D.

Much attention is paid to premiums and deductibles of insurance plans in the United States. A much more important number is what we are actually paying for health care. The Milliman Medical Index (MMI) represents the total average cost of actual health care for a hypothetical family of four with an employer-sponsored PPO. For 2017, that cost is $26,944 ($27,000 rounded – the number to remember).

Although not comparing identical population sectors, nevertheless the burden of health care costs can be approximated by contrasting the MMI with the median household income, which is $56,516 for 2015 – thus health care costs for a typical family of four are close to one-half of the median household income.

Of interest is the fact that the MMI does not include plan administrative expenses nor insurance company profits – just health care costs (the portion of the premium nominally paid by the employer, the portion of the premium paid by the employee through payroll deductions, and the out-of-pocket medical expenses paid by the employee). Also the percentage that families nominally pay has been increasing – now 43 percent – though they also actually pay for the employers’ contributions as well through forgone wage increases. Also, though the increase in the MMI from last year was only 4.3 percent, in dollars it is an $1118 increase – an amount that would add an additional significant burden to most household budgets.

Although current negotiations for replacement health care legislation are taking place behind closed doors, numerous sources have indicated that the most important goal stated by the negotiators is to reduce the premiums paid for insurance. Very little attention is being paid to actual health care costs (except for rhetoric about markets and competition, which has very little application to health care spending).

Why this emphasis on premiums? Frankly, when people need to buy health insurance, they want to know what it is going to cost them. For the 80 percent of people who remain relatively healthy, that means that they want to know what the premium, or their share of the premium, will be. Studies have shown that the healthy will accept higher deductibles and narrower networks in order to get lower premiums.

So how do you keep premiums low? You shift the costs from the insurer to the patient, and there are several methods of doing that, all of which are currently under consideration.  As mentioned, the most obvious is to increase the deductibles, and that is why we are now seeing deductibles in the thousands of dollars. Other cost sharing such as copayments and coinsurance also shift costs to the patients. The negotiators are also considering reducing the essential health benefits that the plans are required to cover so that individuals can “buy only the insurance that they need.” Not only does this defeat the purpose of pooling risk, but nobody can predict their own health care requirements for the following year, so benefits omitted again would have to be covered out-of-pocket by the patient. Also insurers can reduce spending by establishing narrow networks and contracting with the cheapest providers, but sometimes care must be obtained out-of-network, and, again, that shifts costs to the patients. Tiering of benefits is used to place more expensive benefits in a higher tier level for which the patient must bear a much greater out-of-pocket cost (not to mention that it discourages individuals who will need the expensive services or products from purchasing those plans, saving the insurer money, thus lowering premiums). In essence, you lower the price of insurance premiums by destroying the insurance function of sharing risk equitably. Is this really what Americans want?

Making health care less affordable for patients has two adverse consequences: it creates financial hardships for patients who cannot avoid expensive health care, and it causes patients to forgo beneficial health care services that they really should have, thus impairing health outcomes.

A well designed single payer national health program avoids both of these consequences while using policies that are even more effective in slowing the increases in actual health care spending (substantial reduction in administrative waste, global budgeting of national health expenditures, separate, more effective budgeting of capital improvements and system capacity, negotiated and administered budgets for hospitals and other institutions, and negotiated rates for health care professionals, pharmaceuticals, and medical supplies).

When they talk about premiums and say it’s about “access” (but remain silent on paying for health care), challenge them. It’s about health care reform that works for all of us – an improved Medicare for all.

Secret Republican Senate Talks Are Shaping Health Care Legislation

By Susan Davis
NPR, May 15, 2017

The Senate is negotiating its own legislation to repeal and replace much of the Affordable Care Act in secret talks with senators hand-picked by party leaders and with no plans for committee hearings to publicly vet the bill.

Most Republicans see no political advantage to attempting to craft bipartisan legislation that could aid vulnerable Red State Senate Democrats heading in to the midterm elections. In other words, there is mutual disinterest in bipartisanship when it comes to the fundamentals of Obamacare.

The GOP health care talks are expected to roll through the summer months in the Senate. The long-term strategy — according to senior GOP aides in both the House and Senate — is to pass a Senate bill and send it back to the House for an up-or-down vote.

http://www.npr.org…

***

Hope You Don’t Expect The Senate GOP To Be Transparent About Obamacare Repeal

By Jonathan Cohn
HuffPost, May 13, 2017

House leaders wrote legislation privately and then pushed it through the two committees of jurisdiction with markup sessions that lasted just one day each. Leaders had to pull the bill from the House floor at the last minute, because it lacked enough support to pass, but their response was to return to private negotiations, hash out the additional amendments, and then proceed quickly with the final vote.

Of course that was precisely what House Speaker Paul Ryan (R-Wis.) and his allies were trying to accomplish ― to avoid public scrutiny, to get legislation through the House before either the media or the public could recognize and seize on its shortcomings. Now it looks like Senate Republicans are intent upon doing the same thing.

Democrats are furious, in part because most of them were around in 2009 and 2010 when they spent more than a year writing and debating what eventually became the Affordable Care Act. For all of the discussion that took place behind closed doors back then, quite a lot took place in public ― over the course of more than 130 hearings, spanning five committees, according to a Democratic tally that didn’t even include administration events like the daylong, bipartisan session at Blair House that President Barack Obama presided over personally.

The deciding factor could be public reaction, but the public can’t react to a bill unless it gets a good look at it. It appears Republican leaders are trying not to let that happen.

http://www.huffingtonpost.com…

***

Comment:

By Don McCanne, M.D.

Health policy is difficult enough for the public to understand without our politicians going behind closed doors to hash it out. As Jonathan Cohn states, “The deciding factor could be public reaction, but the public can’t react to a bill unless it gets a good look at it.”

Polls do show that the public is reacting favorably to the policy features of single payer. They understand that an improved Medicare for all would bring each of them essential health care that is affordable and that allows free choice of health care professionals and hospitals. Many even believe that health care should be a right, but they don’t have to believe that as long as they themselves can be assured of life-long affordable access to essential health care services.

Maybe someone should slip under the Senators’ door the Physicians’ Proposal, so that they can take a good look at it in privacy.

A Physicians’ Proposal for Single-Payer Health Care Reform:
https://www.pnhp.org/nhi

Trump to Expand Funding Ban Tied to Abortion Overseas

By Gardiner Harris and Somini Sengupta
The New York Times, May 15, 2017

The Trump administration said on Monday it would vastly expand the so-called global gag rule that withholds American aid from health organizations worldwide that provide or even discuss abortion in family planning. The new policy could disrupt hundreds of clinics in Africa and around the world that fight AIDS and malaria.

It affects about $8.8 billion in global health funding, up from about $600 million during the administration of President George W. Bush.

The rules, issued by the State Department, mean that any foreign nongovernmental group that wants American money for any of its health activities — from AIDS treatment to malaria prevention to safe childbirth practices — must promise not to “promote abortion as a method of family planning.” Already, American taxpayer dollars cannot be used for abortion services abroad.

The global gag rule was introduced by President Ronald Reagan in 1984 at the International Conference on Population in Mexico City, and is also known as the Mexico City Policy. Since then, Republican administrations have kept or reimposed it, while Democratic ones have rescinded it.

Mr. Bush visited Botswana and Namibia only last month to highlight the need for aid under the President’s Emergency Plan for AIDS Relief, or Pepfar, to treat cervical cancer. He also argued that care for cervical cancer should be provided right along with care for H.I.V.

But under the policy announced Monday, that could be impossible.

The policy “risks undoing years of progress on women’s health in Pepfar countries,” said Asia Russell, executive director of the Health Global Access Project, a public health group.

https://www.nytimes.com…

***

Background Briefing: Senior Administration Officials on Protecting Life in Global Health Assistance

U.S. Department of State, May 15, 2017

MODERATOR: Thank you very much, and thanks to all those who have joined us for this afternoon’s call. This will be an on-background conference call on Protecting Life in Global Health Assistance. I’ll introduce our participants this afternoon, but as a reminder, for attribution they will be senior administration officials, and the rules for this call will be on background.

Today we are joined by [Senior Administration Official One]. We are also joined by [Senior Administration Official Two], and finally, by [Senior Administration Official Three].

SENIOR ADMINISTRATION OFFICIAL ONE: Thank you, [Moderator], and good afternoon.

On January 23rd, 2017, President Trump issued a presidential memorandum reinstating the 2001 presidential memorandum on the Mexico City policy, and directed the Secretary of State to implement a plan to extend to the extent allowable by law the Mexico City policy to global health assistance furnished by all departments or agencies.

Secretary Tillerson has approved a plan to implement the manner in which U.S. Government departments and agencies will apply the provisions of the Mexico City policy to foreign nongovernmental organizations that receive U.S. funding for global health assistance. The policy, now known as Protecting Life in Global Health Assistance, implements what the President has made very clear: U.S. taxpayer money should not be used to support foreign organizations that perform or actively promote abortion as a method of family planning in other nations.

Under this policy, global health assistance includes funding for international health programs, such as those for HIV/AIDS, maternal and child health, malaria, global health security, family planning, and reproductive health. Protecting Life in Global Health Assistance applies to global health assistance to or implemented by foreign NGOs, including those to which a U.S. NGO makes a sub-award with such assistance funds.

Once all appropriate steps have been taken, the policy will apply to all new funding agreements, grants, cooperative agreements, and contracts, and gradually to existing agreements when they are amended to add funding.

Protecting Life in Global Health Assistance applies to approximately $8.8 billion in funds appropriated to the Department of State, the U.S. Agency for International Development, and the Department of Defense. Previously, the policy applied only to family planning assistance provided by USAID and the Department of State.

Given the expansive nature of the new policy, the department will undertake a thorough and comprehensive review of the effectiveness and impact of the policy’s application over the next six months, which could include identifying implementation issues and any other new information affecting implementation going forward. Newly covered programs, including PEPFAR, the President’s Malaria Initiative, and other global health programs, will be given special attention under this review.

MODERATOR: And with that, we’ll open this up for questions. Thank you.

OPERATOR: Ladies and gentlemen, once again, it’s *1 for questions. And our first question will come from the line of Yeganeh Torbati of Reuters. Please, go ahead.

QUESTION: Thanks so much. A couple quick questions: Can you – you said that now it applies to $8.8 billion in funding. Other – some critics have said and I’ve seen the wording that previously it applied to $600 million in funding. Can you confirm that? And also, you mentioned that PEPFAR and the malaria – the President’s Malaria Initiative are new programs that will be added to this or newly covered under this. Can you name a few other specific programs that weren’t covered before and now will be? Thank you.

SENIOR ADMINISTRATION OFFICIAL ONE: Okay, thank you very much. Yes, the $8.8 billion includes primarily the PEPFAR program, which is approximately $6 billion. Additional funding included in this $8.8 billion is USAID family planning, reproductive health, maternal health, and other types of programs.

The $600 million figure that you mentioned was approximately the amount of money that was covered under the previous Mexico City policy that only affected USAID’s and State Department’s family planning program.

SENIOR ADMINISTRATION OFFICIAL THREE: Just to add on, the other programs affected also would include exactly as [Senior Administration Official One] said – the maternal child health programs, malaria, PEPFAR, as well as other infectious disease programs and the full array of global health assistance provided through USAID.

OPERATOR: Okay. Next, we’ll go to the line of Jina Moore of BuzzFeed.

QUESTION: And just a quick follow-up. I know this came up a little earlier, but can you talk a little bit more specifically about how you will measure compliance?

SENIOR ADMINISTRATION OFFICIAL THREE: So compliance is measured by the ongoing monitoring of programs, right. We do – typically we do visits to our partners on a regular basis, and [Senior Administration Official Two] can talk about this more specifically with regard to PEPFAR. But it is certainly routine visits, if you will, routine monitoring of what the programs are doing, paying attention to what kinds of information they – the partners put out in the general press and those kinds of things. So it really is part of the routine monitoring.

SENIOR ADMINISTRATION OFFICIAL TWO: Just to pick up on that, and this is talking from the PEPFAR standpoint, we’ve extended our monitoring very much down to the site of where we deliver services. We think that’s absolutely critical. So our – both our U.S. Government personnel who are in country as well as our large implementing partners and host governments actually go to the sites. And we require quarterly reporting from the sites so we know exactly what’s being provided at the site, the gender of the person receiving those services, and the age band that they’re in so that we can monitor the quality of our services. So this would be one more element of monitoring. So I just want to really make it clear that this is not new to us about ensuring quality global health assistance services provisions, whether it’s for TB, HIV, malaria, or immunizations. So that’s a standard component of our program, to ensure high quality of services that the U.S. Government funds.

OPERATOR: Thank you. And now we have Rachel Oswald of the Congressional Quarter.

QUESTION: Okay, great. What, if any, outreach was had with PEPFAR receiver countries, the governments there, like Uganda, about the expansion of the Mexico City policy? And what feedback did those foreign governments give to you about any concerns they may have about the new policy?

SENIOR ADMINISTRATION OFFICIAL TWO: Yeah, thank you. So we’re in dialogue with our countries all along about implementation of PEPFAR, because obviously this is done in cooperation with host governments but also civil society. So I think we were waiting for the guidance from the Secretary; so now that we have guidance on the implementation, we will circle back to all of our countries.

And we have, of course, people in all of our countries well-represented by the ambassadors that are in that country from the U.S. State Department, who are poised to talk immediately to our host countries but also to our communities and civil society, because we implement all of our programs in conjunction both with the host government but also the communities that we’re serving.

MODERATOR: All right. If there are no further questions, as one final reminder, attribution for today’s call is on background to senior administration officials. And now that this call has concluded, the embargo is lifted. Thanks very much, everyone. Have a nice day.

U.S. Department of State Background Briefing:
https://www.state.gov…

U.S. Department of State Fact Sheet:
https://www.state.gov…

PEPFAR – The U.S. President’s Emergency Plan for AIDS Relief (PEPFAR) is the U.S. Government initiative to help save the lives of those suffering from HIV/AIDS around the world:
https://www.pepfar.gov…

***

Comment:

By Don McCanne, M.D.

Today’s topic is not on abortion per se, but rather it is on Donald Trump’s expansion of Ronald Reagan’s Mexico City Policy, which pertains to abortion, and the impact this will have on George W. Bush’s Emergency Plan for AIDS Relief (PEPFAR). So what are these programs?

The global gag rule introduced by President Reagan in 1984 at the International Conference on Population in Mexico City prohibited foreign nongovernmental organizations that receive U.S. aid funds from promoting abortion as a method of family planning.

PEPFAR is an important public health program initiated by President Bush which has helped to stem the world-wide epidemic of HIV/AIDS.

President Trump has expanded the Mexico City Policy to apply to PEPFAR. Since it is virtually impossible to eliminate all references to termination of pregnancy from the PEPFAR program, this means that about $6 billion of U.S. aid will be denied to this program. That can have only tragic results in turning back some of the progress we have made in countering the scourge of HIV/AIDS.

This is highly nefarious, and the Trump administration seems to understand that. Look at the excerpts from the State Department teleconference announcing the expansion of the Mexico City Policy. Although they introduced three senior officials to explain the expansion, they established rules for attribution in which these administrators would be referred to only as SENIOR ADMINISTRATION OFFICIAL ONE, SENIOR ADMINISTRATION OFFICIAL TWO, and SENIOR ADMINISTRATION OFFICIAL THREE. That’s bizarre. Is this to protect these administrators from potential personal attacks? If so, they seem to understand that there must be considerable passionate opposition to this policy change. Or is this simply more evidence of this dysfunctional administration simply moving forward with the implementation of obviously detrimental policies while  trying to hide in order to avoid blame? Clearly they are not attempting to invite accolades.

This is really sad. As we try to advocate for health care for all in America, how can we expect to make any progress when we have a Congress and an Administration that are tearing down our fortresses of health care justice – here, and throughout the world.

CMS Checklist For State 1332 Waivers Focuses On High-Risk Pools, Reinsurance

By Timothy Jost
Health Affairs Blog, May 12, 2017

On May 11, 2017, the Centers for Medicare and Medicaid Services and the Department of the Treasury released a checklist for state 1332 innovation waiver applications. Following up on Health and Human Services Secretary Price’s letter to state governors of March 13, 2017, the checklist specifically focuses on state 1332 proposals to support high-risk pools or reinsurance programs.

The checklist restates the procedural requirements that states must meet under the current 1332 rules, such as posting a notice of the waiver proposal and accepting comments for at least 30 days, holding two public hearings, and consulting with Indian tribes where relevant.

Most elements in the checklist, however, describe specifically what information states must submit with applications for a 1332 waiver involving a reinsurance or high-risk pool program. While states must generally document state legislative authority to operate a 1332 waiver program, a state seeking a waiver to operate a high-risk pool or reinsurance program must establish that the legislation makes the program contingent on 1332 waiver approval or that the program will only become operational if the waiver is approved.

In sum, the checklist provides a roadmap for states that want to pursue high-risk pool or reinsurance 1332 waiver proposals, indicating again the priority that the Trump administration places on this approach for increasing the affordability of health insurance coverage.

http://healthaffairs.org…

CMS Checklist for Section 1332 State Innovation Waiver Applications, including specific items applicable to High-Risk Pool/State-Operated Reinsurance Program Applications:
https://www.cms.gov…

***

Comment:

By Don McCanne, M.D.

One of the prime drivers of the Affordable Care Act was the inherent flaws in the individual insurance market. As more people with expensive health care problems enrolled in the individual plans, premiums went up and the healthy dropped out, resulting in the “death spiral” of skyrocketing premiums. Insurers countered by limiting benefits, by excluding individuals with preexisting disorders, or by pulling out of markets with higher-cost beneficiaries.

To cover those who had a greater need for care, many states established high-risk insurance pools, but these pools were very expensive. The benefits were quite limited, and the premiums were very high, but they also required large contributions from the states. Think about the fact that the 20 percent of people who had major health problems consumed 80 percent of the health care (the 80/20 rule). Moving 80 percent of the costs for these patient populations into separate pools proved to be far too much for the states, so the pools were severely underfunded. Benefits were spartan, many could not afford the premiums, and intolerable waiting lists were established due to enrollment caps. They were a policy failure.

Yet what does the current Congress and administration want to do about this problem? They have emphasized repeatedly that the leading priority is to make premiums affordable. To do this they would go back to the dysfunctional individual market in which only the healthy were insured, with one technical modification. They would reestablish separate high-risk pools to insure the costly patients, or they would leave everyone in the same risk pool but provide reinsurance to cover the excessive losses resulting from caring for the more expensive patients. In either case, the costs of the pools and/or reinsurance would be very high. Since they want to keep the premiums low these extra costs would have to be paid by the state or by “federal pass-through payments.”

The CMS checklist states, “State-operated reinsurance programs have a demonstrated ability to help lower premiums, and if the state shows a reduction in federal spending on premium tax credits a state could receive Federal pass-through funding to help fund the state’s reinsurance program.” In other words, the federal contribution would be only the amount that they would otherwise be contributing in the form of premium tax credits – a budget neutral solution. This could not possibly fund either a high-risk pool or a reinsurance program for the the most expensive patients. The prior experience with the state high-risk pools has already confirmed that the states, for both political and fiscal reasons, are not capable of funding these pools either.

So all of this talk about federal authorization of high-risk pools and reinsurance programs through Section 1332 waivers is garbage. The current federal government has no intention of funding these programs, but they will authorize them and then sit back and blame the states for failing to implement them properly. Who is harmed by all of this? The patients, of course.

We would not have to worry about the 80/20 rule if everyone were in the same universal risk pool as they would be in a single payer, improved Medicare for all program. Unless our current political leaders suddenly have a miraculous communal epiphany, we need to replace them.