Transcript of the Democratic Presidential Debate

The New York Times, January 17, 2016

(The debate is sponsored by the Congressional Black Caucus Institute)

Brief excerpts

Hillary Clinton:  We finally have a path to universal health care. We have accomplished so much already. I do not to want see the Republicans repeal it, and I don’t to want see us start over again with a contentious debate. I want us to defend and build on the Affordable Care Act and improve it.

Bernie Sanders:  No one is tearing this up, we’re going to go forward. But with the secretary neglected to mention, not just the 29 million still have no health insurance, that even more are underinsured with huge copayments and deductibles. Tell me why we are spending almost three times more than the British, who guarantee health care to all of their people? Fifty percent more than the French, more than the Canadians. The vision from FDR and Harry Truman was health care for all people as a right in a cost-effective way.

Bernie Sanders:  What this is really about is not the rational way to go forward — it’s Medicare for all — it is whether we have the guts to stand up to the private insurance companies and all of their money, and the pharmaceutical industry. That’s what this debate should be about.

Hillary Clinton:  So, what I’m saying is really simple. This has been the fight of the Democratic Party for decades. We have the Affordable Care Act. Let’s make it work.

http://www.nytimes.com/2016/01/18/us/politics/transcript-of-the-democratic-presidential-debate.html

***

Health Reform Realities

By Paul Krugman
The New York Times, January 18, 2016

Obamacare is … what engineers would call a kludge: a somewhat awkward, clumsy device with lots of moving parts. This makes it more expensive than it should be, and will probably always cause a significant number of people to fall through the cracks.

The question for progressives — a question that is now central to the Democratic primary — is whether these failings mean that they should re-litigate their own biggest political success in almost half a century, and try for something better.

My answer, as you might guess, is that they shouldn’t, that they should seek incremental change on health care (Bring back the public option!) and focus their main efforts on other issues — that is, that Bernie Sanders is wrong about this and Hillary Clinton is right.

… as the health policy expert Harold Pollack points out, is that a simple, straightforward single-payer system just isn’t going to happen.

http://www.nytimes.com/2016/01/18/opinion/health-reform-realities.html

***

Here’s why creating single-payer health care in America is so hard

By Harold Pollack
Vox, January 16, 2016

The experience of peer industrial democracies suggests that a well-designed single-payer system would be more humane and markedly less expensive than what we have right now.

Passing a single-payer plan requires precisely the same interest-group bargaining and logrolling required to pass the ACA. The resulting policies will thus replicate some of the very same scars, defects, and kludge that bedevil the ACA.

Progressives should still push for basic reforms that improve our current system. I supported the public option in 2009. I still do. I hope it resurfaces in some form, particularly for older participants in the state marketplaces . It may open a pathway to a true single-payer. If it doesn’t — which I suspect it will not — it might still provide a valuable alternative and source of pricing discipline within our pathological health care market.

http://www.vox.com/2016/1/16/10779270/pollack-single-payer-in-america

***

Bernie Sanders’s single-payer plan isn’t a plan at all

By Ezra Klein
Vox, January 17, 2016

Sanders calls his plan Medicare-for-All. But it actually has nothing to do with Medicare. He’s not simply expanding Medicare coverage to the broader population — he makes that clear when he says his plan means “no more copays, no more deductibles”; Medicare includes copays and deductibles. The list of what Sanders’s plan would cover far exceeds what Medicare offers, suggesting, more or less, that pretty much everything will be covered, under all circumstances.

Behind Sanders’s calculations, both for how much his plan will cost and how much Americans will benefit, lurk extremely optimistic promises about how much money single-payer will save. And those promises can only come true if the government starts saying no quite a lot — in ways that will make people very, very angry.

This is what Republicans fear liberals truly believe: that they can deliver expansive, unlimited benefits to the vast majority of Americans by stacking increasingly implausible, and economically harmful, taxes on the rich. Sanders is proving them right.

http://www.vox.com/2016/1/17/10784528/bernie-sanders-single-payer-health-care

***

Why We Can’t Wait

By Martin Luther King, Jr.

“For years now, I have heard the word ‘Wait!’ It rings in the ear of every Negro with piercing familiarity. This ‘Wait’ has almost always meant ‘Never.’ We must come to see, with one of our distinguished jurists, that ‘justice too long delayed is justice denied.’”

http://thekinglegacy.org/books/why-we-cant-wait

***

Comment:

By Don McCanne, M.D.

Martin Luther King, Jr. already said it, and that was half a century ago.

[PNHP note: Physicians for a National Health Program is a nonpartisan educational organization. As a consequence, it neither supports nor opposes any candidate for public office.]

Transcript of the Democratic Presidential Debate

The New York Times, January 17, 2016

(The debate is sponsored by the Congressional Black Caucus Institute)

Brief excerpts

Hillary Clinton:  We finally have a path to universal health care. We have accomplished so much already. I do not to want see the Republicans repeal it, and I don’t to want see us start over again with a contentious debate. I want us to defend and build on the Affordable Care Act and improve it.

Bernie Sanders:  No one is tearing this up, we’re going to go forward. But with the secretary neglected to mention, not just the 29 million still have no health insurance, that even more are underinsured with huge copayments and deductibles. Tell me why we are spending almost three times more than the British, who guarantee health care to all of their people? Fifty percent more than the French, more than the Canadians. The vision from FDR and Harry Truman was health care for all people as a right in a cost-effective way.

Bernie Sanders:  What this is really about is not the rational way to go forward — it’s Medicare for all — it is whether we have the guts to stand up to the private insurance companies and all of their money, and the pharmaceutical industry. That’s what this debate should be about.

Hillary Clinton:  So, what I’m saying is really simple. This has been the fight of the Democratic Party for decades. We have the Affordable Care Act. Let’s make it work.

http://www.nytimes.com/2016/01/18/us/politics/transcript-of-the-democratic-presidential-debate.html

***

Health Reform Realities

By Paul Krugman
The New York Times, January 18, 2016

Obamacare is … what engineers would call a kludge: a somewhat awkward, clumsy device with lots of moving parts. This makes it more expensive than it should be, and will probably always cause a significant number of people to fall through the cracks.

The question for progressives — a question that is now central to the Democratic primary — is whether these failings mean that they should re-litigate their own biggest political success in almost half a century, and try for something better.

My answer, as you might guess, is that they shouldn’t, that they should seek incremental change on health care (Bring back the public option!) and focus their main efforts on other issues — that is, that Bernie Sanders is wrong about this and Hillary Clinton is right.

… as the health policy expert Harold Pollack points out, is that a simple, straightforward single-payer system just isn’t going to happen.

http://www.nytimes.com/2016/01/18/opinion/health-reform-realities.html

***

Here’s why creating single-payer health care in America is so hard

By Harold Pollack
Vox, January 16, 2016

The experience of peer industrial democracies suggests that a well-designed single-payer system would be more humane and markedly less expensive than what we have right now.

Passing a single-payer plan requires precisely the same interest-group bargaining and logrolling required to pass the ACA. The resulting policies will thus replicate some of the very same scars, defects, and kludge that bedevil the ACA.

Progressives should still push for basic reforms that improve our current system. I supported the public option in 2009. I still do. I hope it resurfaces in some form, particularly for older participants in the state marketplaces . It may open a pathway to a true single-payer. If it doesn’t — which I suspect it will not — it might still provide a valuable alternative and source of pricing discipline within our pathological health care market.

http://www.vox.com/2016/1/16/10779270/pollack-single-payer-in-america

***

Bernie Sanders’s single-payer plan isn’t a plan at all

By Ezra Klein
Vox, January 17, 2016

Sanders calls his plan Medicare-for-All. But it actually has nothing to do with Medicare. He’s not simply expanding Medicare coverage to the broader population — he makes that clear when he says his plan means “no more copays, no more deductibles”; Medicare includes copays and deductibles. The list of what Sanders’s plan would cover far exceeds what Medicare offers, suggesting, more or less, that pretty much everything will be covered, under all circumstances.

Behind Sanders’s calculations, both for how much his plan will cost and how much Americans will benefit, lurk extremely optimistic promises about how much money single-payer will save. And those promises can only come true if the government starts saying no quite a lot — in ways that will make people very, very angry.

This is what Republicans fear liberals truly believe: that they can deliver expansive, unlimited benefits to the vast majority of Americans by stacking increasingly implausible, and economically harmful, taxes on the rich. Sanders is proving them right.

http://www.vox.com/2016/1/17/10784528/bernie-sanders-single-payer-health-care

***

Why We Can’t Wait

By Martin Luther King, Jr.

“For years now, I have heard the word ‘Wait!’ It rings in the ear of every Negro with piercing familiarity. This ‘Wait’ has almost always meant ‘Never.’ We must come to see, with one of our distinguished jurists, that ‘justice too long delayed is justice denied.’”

http://thekinglegacy.org/books/why-we-cant-wait

Martin Luther King, Jr. already said it, and that was half a century ago.

[PNHP note: Physicians for a National Health Program is a nonpartisan educational organization. As a consequence, it neither supports nor opposes any candidate for public office.]

The single-payer debate we should be having

By Matthew Yglesias
Vox, January 15, 2016

Bernie Sanders’s argument in favor of single-payer health care is pretty simple.

“The United States is the only major nation in the industrialized world that does not guarantee health care as a right to its people,” Sanders said at a 2015 rally of the National Nurses Union, one of the leading advocacy groups in favor of moving to a Medicare-for-all approach. “Meanwhile, we spend far more per capita on health care with worse results than other countries. It is time that we bring about a fundamental transformation of the American health care system.”

Hillary Clinton’s campaign has sought to counter the appeal of this proposition with a questionable line of attack, arguing that the election of a Democratic president on a Medicare-for-all platform would somehow help Republicans unwind the existing Affordable Care Act and other aspects of insurance provision.

Alternately, she has (accurately) noted that a universal Medicare system would require higher taxes — only to be met with the counter that a universal Medicare system would involve less overall spending.

On this, too, Sanders is right. Medicare manages to finance patients’ health care at dramatically lower per-person rates — just as foreign countries do — so if Medicare covered everyone, total spending would decline even as some of it was shifted to the tax side of the ledger.

The real issue is something else entirely. Single-payer systems save money by squeezing health care providers — doctors, hospitals, and ultimately everyone who works for them — which would be very difficult to accomplish ex post facto. If the political consensus did exist for enacting large, across-the-board cuts in doctors’ fees and hospital charges, then there would be no need to shift to a single-payer system in order to accomplish the cuts. In the absence of such a consensus, the switch to single-payer actually wouldn’t save money, and the costs would become exorbitant.

Medicare works because it pays providers less

Why would a government-run system be more efficient?

Well, here’s the answer: Foreign single-payer systems pay doctors less. They also pay pharmaceutical companies less. They pay less for medical devices, too.

It turns out that Medicare uses this trick, too, offering doctors only about 80 percent of what private insurance plans pay them.

But to the average health care provider, the Medicare patient market is just too big to ditch. Doctors — and hospitals and everyone else — take what they get and are glad for it.

A single-payer structure is neither necessary nor sufficient

The thing about saving money by having a single health care payer squeeze providers on reimbursement rates is that adopting a single-payer structure is neither necessary nor sufficient to achieve the gains. In other words, if the American political system wanted to cut doctors’ payments, we could do that without moving to a single-payer system. Conversely, adopting a single-payer system does not on its own lead to low reimbursement rates — that’s a separate decision that the political system would have to make.

The truth is that there are two entirely separate questions: Who pays health insurance claims, and what prices does the government set? It’s true that shifting from a multi-payer to a single-payer system streamlines some elements of payment administration, but the overwhelming preponderance of the cost savings in a Medicare-for-all plan comes from the lower reimbursement rates.

To get single-payer, liberals have to be more honest with themselves

But if they ever want to get such a bill passed, liberals are going to have to start being more honest with themselves about what their vision entails — a sharp 20 percent cut in doctors’ pay rates, alongside comparable cuts for other kinds of health care providers.

Right now, Sanders and other single-payer proponents’ main strategy for dealing with this problem is to talk around it. Medicare is extremely popular, so “Medicare for all” is a popular slogan, and that’s what they talk about. But you can’t get major policy change enacted on this basis. At some point, to get the savings of their dreams liberals are going to need to win a straightforward argument over the merits of cutting doctors’ pay.

But in my experience, relatively few rank-and-file single-payer proponents are even aware that stingy reimbursements is how single-payer controls costs — in part because essentially none of the movement’s leaders ever say it publicly.

http://www.vox.com/2016/1/15/10775050/single-payer-debate

***

Comment:

By Don McCanne, M.D.

Matthew Yglesias tells us that “the overwhelming preponderance of the cost savings in a Medicare-for-all plan comes from the lower reimbursement rates,” thus “adopting a single-payer structure is neither necessary nor sufficient to achieve the gains.” He then criticizes single-payer proponents for not stating this publicly. What Matt does not seem to understand about PNHP is that we are meticulous with our facts, so we would never state something that is so misleading as to be untrue.

A well-designed single payer system includes multiple features that contain health care spending. The most important is the administrative efficiency. Under the Affordable Care Act, the private insurance industry is allowed to keep 15 to 20 percent of the premiums for administrative services and profits. The administrative costs for Medicare are about two percent, and that includes costs of other government programs that support Medicare. Adopting an improved Medicare for all would eliminate much of the excess administrative waste of the private insurers.

On the provider side, our highly inefficient multi-payer system also places a tremendous administrative burden on physicians, hospitals and other providers. In fact, administrative work consumes about one-sixth of U.S. physicians’ time (while eroding their morale, precipitating burnout). U.S. physician practices spend nearly four times as much money interacting with health plans and payers as do their Canadian counterparts.

Administrative costs consume about 31 percent of total U.S. health care spending. That is about twice that of Canada – 16.7 percent. Much of that difference is due to the financing systems – single payer in Canada and a dysfunctional multi-payer system in the U.S. – and thus most of that portion would be recoverable if we switched to single payer.

Yglesias says that we would have to reduce physician payments by 20 percent to achieve the spending goals of a single payer system. But when Canada changed to single payer, not only were physicians’ incomes not harmed, they remain among the top earners in the country.

There are several other policies of a single payer system that control spending. Hospitals are placed on global budgets – a process that works well as demonstrated by public services such as our fire departments. Excess capacity in the delivery system drives up spending, but that can be controlled by regional planning and capital budgets. The prices of pharmaceuticals and medical supplies can be negotiated just as the VA Health system already does so quite successfully. A single payer system incentivizes primary care which has been shown to spend health dollars more efficiently.

The United States and Canada followed the same trajectory in health care inflation until they adopted the Canada Health Act, providing a single payer system in each province. Since then health care inflation has been less in Canada than in the U.S. Likewise, adopting single payer in the U.S. would truly bend the cost curve, putting us on a more sustainable trajectory. Merely cutting prices 20 percent would continue us on a parallel inflationary trajectory.

Of course, there are some other advantages of single payer, besides the cost savings, which would not be achieved merely by cutting prices 20 percent – like truly universal coverage, free choice of physicians and hospitals, removal of financial barriers to care, and better access through capital planning.

We know what we know, but we don’t know what we don’t know. Although Hillary Clinton finds it politically expedient to leave out crucial facts in her critique of single payer, I would assume that Matt Yglesias, as a journalist of high integrity (and for whom I have great respect), would welcome a more thorough understanding of PNHP’s single payer model. We hope he reads this. Then we can have that debate that we should be having.

The single-payer debate we should be having

By Matthew Yglesias
Vox, January 15, 2016

Bernie Sanders’s argument in favor of single-payer health care is pretty simple.

“The United States is the only major nation in the industrialized world that does not guarantee health care as a right to its people,” Sanders said at a 2015 rally of the National Nurses Union, one of the leading advocacy groups in favor of moving to a Medicare-for-all approach. “Meanwhile, we spend far more per capita on health care with worse results than other countries. It is time that we bring about a fundamental transformation of the American health care system.”

Hillary Clinton’s campaign has sought to counter the appeal of this proposition with a questionable line of attack, arguing that the election of a Democratic president on a Medicare-for-all platform would somehow help Republicans unwind the existing Affordable Care Act and other aspects of insurance provision.

Alternately, she has (accurately) noted that a universal Medicare system would require higher taxes — only to be met with the counter that a universal Medicare system would involve less overall spending.

On this, too, Sanders is right. Medicare manages to finance patients’ health care at dramatically lower per-person rates — just as foreign countries do — so if Medicare covered everyone, total spending would decline even as some of it was shifted to the tax side of the ledger.

The real issue is something else entirely. Single-payer systems save money by squeezing health care providers — doctors, hospitals, and ultimately everyone who works for them — which would be very difficult to accomplish ex post facto. If the political consensus did exist for enacting large, across-the-board cuts in doctors’ fees and hospital charges, then there would be no need to shift to a single-payer system in order to accomplish the cuts. In the absence of such a consensus, the switch to single-payer actually wouldn’t save money, and the costs would become exorbitant.

Medicare works because it pays providers less

Why would a government-run system be more efficient?

Well, here’s the answer: Foreign single-payer systems pay doctors less. They also pay pharmaceutical companies less. They pay less for medical devices, too.

It turns out that Medicare uses this trick, too, offering doctors only about 80 percent of what private insurance plans pay them.

But to the average health care provider, the Medicare patient market is just too big to ditch. Doctors — and hospitals and everyone else — take what they get and are glad for it.

A single-payer structure is neither necessary nor sufficient

The thing about saving money by having a single health care payer squeeze providers on reimbursement rates is that adopting a single-payer structure is neither necessary nor sufficient to achieve the gains. In other words, if the American political system wanted to cut doctors’ payments, we could do that without moving to a single-payer system. Conversely, adopting a single-payer system does not on its own lead to low reimbursement rates — that’s a separate decision that the political system would have to make.

The truth is that there are two entirely separate questions: Who pays health insurance claims, and what prices does the government set? It’s true that shifting from a multi-payer to a single-payer system streamlines some elements of payment administration, but the overwhelming preponderance of the cost savings in a Medicare-for-all plan comes from the lower reimbursement rates.

To get single-payer, liberals have to be more honest with themselves

But if they ever want to get such a bill passed, liberals are going to have to start being more honest with themselves about what their vision entails — a sharp 20 percent cut in doctors’ pay rates, alongside comparable cuts for other kinds of health care providers.

Right now, Sanders and other single-payer proponents’ main strategy for dealing with this problem is to talk around it. Medicare is extremely popular, so “Medicare for all” is a popular slogan, and that’s what they talk about. But you can’t get major policy change enacted on this basis. At some point, to get the savings of their dreams liberals are going to need to win a straightforward argument over the merits of cutting doctors’ pay.

But in my experience, relatively few rank-and-file single-payer proponents are even aware that stingy reimbursements is how single-payer controls costs — in part because essentially none of the movement’s leaders ever say it publicly.

http://www.vox.com/2016/1/15/10775050/single-payer-debate

Matthew Yglesias tells us that “the overwhelming preponderance of the cost savings in a Medicare-for-all plan comes from the lower reimbursement rates,” thus “adopting a single-payer structure is neither necessary nor sufficient to achieve the gains.” He then criticizes single-payer proponents for not stating this publicly. What Matt does not seem to understand about PNHP is that we are meticulous with our facts, so we would never state something that is so misleading as to be untrue.

A well-designed single payer system includes multiple features that contain health care spending. The most important is the administrative efficiency. Under the Affordable Care Act, the private insurance industry is allowed to keep 15 to 20 percent of the premiums for administrative services and profits. The administrative costs for Medicare are about two percent, and that includes costs of other government programs that support Medicare. Adopting an improved Medicare for all would eliminate much of the excess administrative waste of the private insurers.

On the provider side, our highly inefficient multi-payer system also places a tremendous administrative burden on physicians, hospitals and other providers. In fact, administrative work consumes about one-sixth of U.S. physicians’ time (while eroding their morale, precipitating burnout). U.S. physician practices spend nearly four times as much money interacting with health plans and payers as do their Canadian counterparts.

Administrative costs consume about 31 percent of total U.S. health care spending. That is about twice that of Canada – 16.7 percent. Much of that difference is due to the financing systems – single payer in Canada and a dysfunctional multi-payer system in the U.S. – and thus most of that portion would be recoverable if we switched to single payer.

Yglesias says that we would have to reduce physician payments by 20 percent to achieve the spending goals of a single payer system. But when Canada changed to single payer, not only were physicians’ incomes not harmed, they remain among the top earners in the country.

There are several other policies of a single payer system that control spending. Hospitals are placed on global budgets – a process that works well as demonstrated by public services such as our fire departments. Excess capacity in the delivery system drives up spending, but that can be controlled by regional planning and capital budgets. The prices of pharmaceuticals and medical supplies can be negotiated just as the VA Health system already does so quite successfully. A single payer system incentivizes primary care which has been shown to spend health dollars more efficiently.

The United States and Canada followed the same trajectory in health care inflation until they adopted the Canada Health Act, providing a single payer system in each province. Since then health care inflation has been less in Canada than in the U.S. Likewise, adopting single payer in the U.S. would truly bend the cost curve, putting us on a more sustainable trajectory. Merely cutting prices 20 percent would continue us on a parallel inflationary trajectory.

Of course, there are some other advantages of single payer, besides the cost savings, which would not be achieved merely by cutting prices 20 percent – like truly universal coverage, free choice of physicians and hospitals, removal of financial barriers to care, and better access through capital planning.

We know what we know, but we don’t know what we don’t know. Although Hillary Clinton finds it politically expedient to leave out crucial facts in her critique of single payer, I would assume that Matt Yglesias, as a journalist of high integrity (and for whom I have great respect), would welcome a more thorough understanding of PNHP’s single payer model. We hope he reads this. Then we can have that debate that we should be having.

If You Can’t Measure Performance, Can You Improve It?

By Robert A. Berenson, MD
JAMA Forum,  January 13, 2016

“If you can’t measure it, you can’t manage it” is an often-quoted admonition commonly attributed to the late W. Edwards Deming, a leader in the field of quality improvement. Some well-respected health policy experts have adopted as a truism a popular variation of the Deming quote — “if something cannot be measured, it cannot be improved” — and point to the recent enactment of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) as a confirmation of “the broadening societal embrace” of this concept.

The problem is that Deming actually wrote, “It is wrong to suppose that if you can’t measure it, you can’t manage it — a costly myth” — the exact opposite. Deming consistently cautioned against requiring measurement to guide management decisions, observing that the most important data needed to manage often are unknown and unknowable.

Many Routes to Improvement

The requirement for measurement as essential to management and improvement is a fallacy, not a self-evident truth and not supported by Deming, other management experts, or common sense. There are many routes to improvement, such as doing things better based on experience, example, as well as evidence from research studies.

Comparative public performance using meaningful and accurate measures has led to quality improvements, as clinicians and hospitals reflect on their own comparative performance and seek to improve their public standing. Examples include improved hospital care for patients experiencing heart attacks and improved renal dialysis. In most clinical areas, however, we lack readily available measures to use as valid benchmarks to assess performance.

Not deterred, however, last year a rarely bipartisan Congress passed the MACRA legislation.  Its core element was repealing the unsustainable sustainable growth rate mechanism threatening huge payment cuts to physicians caring for Medicare patients. The law called for development of “value based” payment approaches that would pay for quality and cost outcomes, rather than just for the myriad services physicians provide or order, whether or not the services are needed or well performed. “Paying for value, not volume” has become the slogan du jour, itself assuming a mostly unchallenged position in health policy circles.

Now comes the hard part: actually achieving greater value, rather than fashioning an increasingly complex, intrusive, and likely doomed attempt to measure value. 

After the MACRA’s Merit-Based Incentive Payment System (MIPS) is fully phased in early in the next decade, a physician caring for Medicare patients under MIPS stands to lose up to 9% of their Medicare payments or conceivably gain 27%, based on their performance on measures of quality, their use of health care resources, the extent to which they have implemented electronic health records, and their participation in quality improvement activities.

But performance on a few, random and often unreliable measures of performance can provide a highly misleading snapshot of any physician’s value.

A Bad Idea?

Practical challenges aside, pay for performance for health professionals may simply be a bad idea. Behavioral economists find that tangible rewards can undermine motivation for tasks that are intrinsically interesting or rewarding. Furthermore, such rewards have their strongest negative impact when they are perceived as being large, controlling, contingent on very specific task performance, or associated with surveillance, deadlines, or threats, as with MIPS.    

Another major problem with the current preoccupation with measurement as the central route to improvement is the assumption that if a quality problem isn’t being measured, it basically doesn’t exist. A prime example is diagnosis errors. Recently, an Institute of Medicine (IOM) committee, on which I was a member, issued Improving Diagnosis in Health Care, documenting serious errors of diagnosis in 5% to 15% of interactions with the health care system.

As the report emphasizes, we cannot now measure the accuracy of diagnoses, which means MIPS scores will not include performance on this core physician competency. Still, the IOM committee proposed numerous improvement strategies. These include development of immediate feedback programs to erring clinicians from patients and other health professionals when a serious misdiagnosis occurs (making errors memorable if not measureable), greater attention in medical education to the cognitive bias that commonly clouds clinicians’ judgment, improved systems to ensure that abnormal test results are promptly communicated to patients and diagnostic team members, and giving patients direct access to their medical records so they can introduce relevant, missing information and correct the misinformation that is common in clinical records.

These and other IOM recommendations represent better practices that might dramatically improve diagnostic accuracy, relying not on performance measures but on adopting better work processes and focused education. Measures would help, but substantial progress can be made regardless.

The overarching concern is that under MIPS and similar programs, physicians will focus on the money while their intrinsic motivation to make accurate, timely diagnoses as a core responsibility will be crowded out. If so, the worthwhile recommendations in the IOM report will likely sit on the shelf, gathering dust, thanks to the misguided supposition that “if you can’t measure it, you can’t manage it.”

http://newsatjama.jama.com/2016/01/13/jama-forum-if-you-cant-measure-performance-can-you-improve-it/

***

CMS chief vows to replace meaningful use with better policy

AMA Wire, January 13, 2016

Centers for Medicare & Medicaid Services (CMS) Acting Administrator Andy Slavitt on Monday said that the agency is changing its culture to focus more on listening to physician needs and giving them the freedom they need to keep patients at the center of the practice of medicine.

Referring to execution of the electronic health record (EHR) meaningful use program, Slavitt noted that the agency’s previous regulatory approach created difficulties. “When in doubt, I think, do less and figure it out.”

“The meaningful use program as it has existed will now be effectively over and replaced with something better,” Slavitt said.

In its place will be the new Merit-Based Incentive Payment System (MIPS), called for in the Medicare Access and CHIP Reauthorization Act of 2015, which is intended to sunset the three existing reporting programs and streamline them into a single program.

“The stakes are high for this program,” Slavitt said. “As any physician will tell you, physician burden and frustration levels are real. Programs designed to improve often distract. Done poorly, measures are divorced from how physicians practice and add to the cynicism that the people who build these programs just don’t get it.”

http://www.ama-assn.org/ama/ama-wire/post/cms-chief-vows-replace-meaningful-use-better-policy

***

Comment:

By Don McCanne, M.D.

As several prior Quote of the Day messages warned, MACRA’s Merit-Based Incentive Payment System (MIPS) is a horrendous trade-off for getting rid of the flawed SGR payment system. At least for the next decade, we are going to have to live with a system which supposedly will reward or penalize physicians based on measured performance when “the most important data needed to manage often are unknown and unknowable.”

Robert Berenson writes, “a few, random and often unreliable measures of performance can provide a highly misleading snapshot of any physician’s value.” Further, under MIPS, “physicians will focus on the money while their intrinsic motivation to make accurate, timely diagnoses as a core responsibility will be crowded out.”

CMS is responding to the great dissatisfaction with the administrative burden of the “meaningful use” program for electronic health records, which would have been the source of many of these performance measurements. But what is their response? Acting CMS Administrator Andy Slavitt says, “The meaningful use program as it has existed will now be effectively over and replaced with something better” – MIPS! He says, “Done poorly, measures are divorced from how physicians practice and add to the cynicism that the people who build these programs just don’t get it.”

Well, yes. They just don’t get it.

If You Can’t Measure Performance, Can You Improve It?

By Robert A. Berenson, MD
JAMA Forum,  January 13, 2016

“If you can’t measure it, you can’t manage it” is an often-quoted admonition commonly attributed to the late W. Edwards Deming, a leader in the field of quality improvement. Some well-respected health policy experts have adopted as a truism a popular variation of the Deming quote — “if something cannot be measured, it cannot be improved” — and point to the recent enactment of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) as a confirmation of “the broadening societal embrace” of this concept.

The problem is that Deming actually wrote, “It is wrong to suppose that if you can’t measure it, you can’t manage it — a costly myth” — the exact opposite. Deming consistently cautioned against requiring measurement to guide management decisions, observing that the most important data needed to manage often are unknown and unknowable.

Many Routes to Improvement

The requirement for measurement as essential to management and improvement is a fallacy, not a self-evident truth and not supported by Deming, other management experts, or common sense. There are many routes to improvement, such as doing things better based on experience, example, as well as evidence from research studies.

Comparative public performance using meaningful and accurate measures has led to quality improvements, as clinicians and hospitals reflect on their own comparative performance and seek to improve their public standing. Examples include improved hospital care for patients experiencing heart attacks and improved renal dialysis. In most clinical areas, however, we lack readily available measures to use as valid benchmarks to assess performance.

Not deterred, however, last year a rarely bipartisan Congress passed the MACRA legislation.  Its core element was repealing the unsustainable sustainable growth rate mechanism threatening huge payment cuts to physicians caring for Medicare patients. The law called for development of “value based” payment approaches that would pay for quality and cost outcomes, rather than just for the myriad services physicians provide or order, whether or not the services are needed or well performed. “Paying for value, not volume” has become the slogan du jour, itself assuming a mostly unchallenged position in health policy circles.

Now comes the hard part: actually achieving greater value, rather than fashioning an increasingly complex, intrusive, and likely doomed attempt to measure value.

After the MACRA’s Merit-Based Incentive Payment System (MIPS) is fully phased in early in the next decade, a physician caring for Medicare patients under MIPS stands to lose up to 9% of their Medicare payments or conceivably gain 27%, based on their performance on measures of quality, their use of health care resources, the extent to which they have implemented electronic health records, and their participation in quality improvement activities.

But performance on a few, random and often unreliable measures of performance can provide a highly misleading snapshot of any physician’s value.

A Bad Idea?

Practical challenges aside, pay for performance for health professionals may simply be a bad idea. Behavioral economists find that tangible rewards can undermine motivation for tasks that are intrinsically interesting or rewarding. Furthermore, such rewards have their strongest negative impact when they are perceived as being large, controlling, contingent on very specific task performance, or associated with surveillance, deadlines, or threats, as with MIPS.

Another major problem with the current preoccupation with measurement as the central route to improvement is the assumption that if a quality problem isn’t being measured, it basically doesn’t exist. A prime example is diagnosis errors. Recently, an Institute of Medicine (IOM) committee, on which I was a member, issued Improving Diagnosis in Health Care, documenting serious errors of diagnosis in 5% to 15% of interactions with the health care system.

As the report emphasizes, we cannot now measure the accuracy of diagnoses, which means MIPS scores will not include performance on this core physician competency. Still, the IOM committee proposed numerous improvement strategies. These include development of immediate feedback programs to erring clinicians from patients and other health professionals when a serious misdiagnosis occurs (making errors memorable if not measureable), greater attention in medical education to the cognitive bias that commonly clouds clinicians’ judgment, improved systems to ensure that abnormal test results are promptly communicated to patients and diagnostic team members, and giving patients direct access to their medical records so they can introduce relevant, missing information and correct the misinformation that is common in clinical records.

These and other IOM recommendations represent better practices that might dramatically improve diagnostic accuracy, relying not on performance measures but on adopting better work processes and focused education. Measures would help, but substantial progress can be made regardless.

The overarching concern is that under MIPS and similar programs, physicians will focus on the money while their intrinsic motivation to make accurate, timely diagnoses as a core responsibility will be crowded out. If so, the worthwhile recommendations in the IOM report will likely sit on the shelf, gathering dust, thanks to the misguided supposition that “if you can’t measure it, you can’t manage it.”

http://newsatjama.jama.com/2016/01/13/jama-forum-if-you-cant-measure-performance-can-you-improve-it/

***

CMS chief vows to replace meaningful use with better policy

AMA Wire, January 13, 2016

Centers for Medicare & Medicaid Services (CMS) Acting Administrator Andy Slavitt on Monday said that the agency is changing its culture to focus more on listening to physician needs and giving them the freedom they need to keep patients at the center of the practice of medicine.

Referring to execution of the electronic health record (EHR) meaningful use program, Slavitt noted that the agency’s previous regulatory approach created difficulties. “When in doubt, I think, do less and figure it out.”

“The meaningful use program as it has existed will now be effectively over and replaced with something better,” Slavitt said.

In its place will be the new Merit-Based Incentive Payment System (MIPS), called for in the Medicare Access and CHIP Reauthorization Act of 2015, which is intended to sunset the three existing reporting programs and streamline them into a single program.

“The stakes are high for this program,” Slavitt said. “As any physician will tell you, physician burden and frustration levels are real. Programs designed to improve often distract. Done poorly, measures are divorced from how physicians practice and add to the cynicism that the people who build these programs just don’t get it.”

http://www.ama-assn.org/ama/ama-wire/post/cms-chief-vows-replace-meaningful-use-better-policy

As several prior Quote of the Day messages warned, MACRA’s Merit-Based Incentive Payment System (MIPS) is a horrendous trade-off for getting rid of the flawed SGR payment system. At least for the next decade, we are going to have to live with a system which supposedly will reward or penalize physicians based on measured performance when “the most important data needed to manage often are unknown and unknowable.”

Robert Berenson writes, “a few, random and often unreliable measures of performance can provide a highly misleading snapshot of any physician’s value.” Further, under MIPS, “physicians will focus on the money while their intrinsic motivation to make accurate, timely diagnoses as a core responsibility will be crowded out.”

CMS is responding to the great dissatisfaction with the administrative burden of the “meaningful use” program for electronic health records, which would have been the source of many of these performance measurements. But what is their response? Acting CMS Administrator Andy Slavitt says, “The meaningful use program as it has existed will now be effectively over and replaced with something better” – MIPS! He says, “Done poorly, measures are divorced from how physicians practice and add to the cynicism that the people who build these programs just don’t get it.”

Well, yes. They just don’t get it.

Disentangling Moral Hazard and Adverse Selection in Private Health Insurance

By David Powell and Dana Goldman
National Bureau of Economic Research, January 2016

NBER Working Paper 21858

Abstract

Moral hazard and adverse selection create inefficiencies in private health insurance markets and understanding the relative importance of each factor is critical for policy. We use claims data from a large firm to isolate moral hazard from plan selection. Previous studies have attempted to estimate moral hazard in private health insurance by assuming that individuals respond only to the spot price, end-of-year price, expected price, or a related metric. The nonlinear budget constraints generated by health insurance plans make these assumptions especially poor and we statistically reject their appropriateness. We study the differential impact of the health insurance plans offered by the firm on the entire distribution of medical expenditures without assuming that individuals only respond to a parameterized price. Our empirical strategy exploits the introduction of new plans during the sample period as a shock to plan generosity, and we account for sample attrition over time. We use an instrumental variable quantile estimation technique that provides quantile treatment effects for each plan, while conditioning on a set of covariates for identification purposes. This technique allows us to map the resulting estimated medical expenditure distributions to the nonlinear budget sets generated by each plan. We estimate that 53% of the additional medical spending observed in the most generous plan in our data relative to the least generous is due to moral hazard. The remainder can be attributed to adverse selection. A policy which resulted in each person enrolling in the least generous plan would cause the annual premium of that plan to rise by $1,000.

From the Introduction

Moral hazard and adverse selection create inefficiencies in health insurance markets and result in a positive correlation between health insurance generosity and medical care consumption. The policy implications are very different, however, depending on the relative magnitudes of each source of distortion, though isolating the independent roles of both moral hazard and adverse selection is rare in the health insurance literature. This paper separates moral hazard and adverse selection for the health insurance plans offered by a large firm.

The average observed expenditures in the most generous plan are $3,969 more than the per person costs in the least generous plan. We estimate that if selection were random, that the most generous plan would lead to $2,117 in more spending than the least generous plan, implying that 53% of the differential can be attributed to moral hazard. We also estimate adverse selection without restrictive structural assumptions. We find that if everyone in the sample were enrolled in the least generous plan that the premium for that plan would increase by over $1,000.

2.1 Moral Hazard and Adverse Selection

Optimal policy depends on the relative important of adverse selection compared to moral hazard in explaining the correlation between plan generosity and medical care costs. The policy implications for moral hazard are different than those required to confront adverse selection. Adverse selection typically requires risk-pooling, while distortions driven by moral hazard would motivate additional cost-sharing.

3.4 Attrition

If we define attrition as individuals enrolled in 2005 but enrolled for less than 365 days in 2007, the attrition rate in the MarketScan data (selecting on firms in the data in both 2005 and 2007) is 58.3%. Our sample has a 58.7% attrition rate.

Conclusion

Understanding moral hazard and adverse selection in private health insurance is widely- recognized as critical to policy. While the literature has frequently estimated the effect of price on medical care consumption, it has typically resorted to parameterizing the mechanism through which individuals respond to cost-sharing. We show that these assumptions typically contradict economic reasoning, and we provide empirical evidence that these specifications perform poorly. In this paper, we estimate the impact of different health insurance plans on the entire distribution of medical care consumption using a new instrumental variable quantile estimation method. These estimated distributions are the distributions caused by the plans in the absence of systematic selection into plans. We map these causal distributions to the parameters of the plans themselves. We can statistically reject that individuals only respond to the end-of-year price.

We also estimate the magnitude of adverse selection. We find favorable selection in the least generous plan and adverse selection in the most generous. We estimate that adverse selection is responsible for $773 of additional per-person costs in the most generous plan, implying that an individual considering this plan would pay over $60 per month in additional premium payments simply to cover the expected costs of the population selecting into the plan. Similarly, a policy which resulted in our entire sample enrolling in the least generous plan would cause annual premiums for that plan to rise by over $1,000.

We estimate that moral hazard is responsible for 53% of the differences in expenditures between the most and least generous plans. Adverse selection also plays an important role, accounting for the other 47%. In the absence of moral hazard, the difference in average medical expenditures across these plans would be $2,117 instead of $3,969. Finally, we find that using the previous year’s medical expenditures as a metric of selection greatly overstates the magnitude of selection.

http://www.nber.org/papers/w21858

PDF of full paper (53 pages):
http://www.nber.org/papers/w21858.pdf

***

Comment:

By Don McCanne, M.D.

In health insurance, moral hazard occurs when individuals obtain more health care than they would have if it were not paid for by the insurer. Adverse selection occurs when individuals with greater health care needs select plans that provide greater coverage. Both have an impact on health care spending. This paper estimates the relative impact of each of these in spending under private health insurance.

Each is responsible for roughly half of the differences of expenditures between the most and least generous health plans. So enrollees in the more generous plans pay higher premiums because of both moral hazard and adverse selection.

Today’s standard in insurance coverage is shifting towards lower actuarial value plans – plans that pay a lower percentage of the total health care costs. What does this study tell us about premiums for these less generous health plans? As more people enroll in them, which they are, the premiums increase to cover the additional expenditures for those who otherwise would have enrolled in the more comprehensive plans. The lower actuarial value plans are subject to favorable selection (the healthy buying less expensive plans in anticipation of not needing care), but that diminishes as higher cost patients move from the more comprehensive plans into these cheaper plans.

The insurance actuaries set premiums based partly on anticipated moral hazard and adverse selection. Though less comprehensive plans theoretically have less moral hazard and no adverse selection, the lower premiums are attractive even to those with higher health care needs. As Powell and Goldman have shown, increased enrollment in the least generous plans cause premiums for those plans to increase. This likely goes a long way toward explaining why premium increases this year were much higher than the overall rate of inflation, even though the rate of increase in total national health expenditures has slowed.

Under a single payer national health program, adverse selection doesn’t even exist since everyone is in the same plan. Efficiency is an important goal of health care reform, and wouldn’t it be much more efficient putting these health economists to work designing a simple single payer financing system, instead of laboring over the complexities of making a dysfunctional and inequitable market of private health plans somehow work for us, though not very well?

Disentangling Moral Hazard and Adverse Selection in Private Health Insurance

By David Powell and Dana Goldman
National Bureau of Economic Research, January 2016

NBER Working Paper 21858

Abstract

Moral hazard and adverse selection create inefficiencies in private health insurance markets and understanding the relative importance of each factor is critical for policy. We use claims data from a large firm to isolate moral hazard from plan selection. Previous studies have attempted to estimate moral hazard in private health insurance by assuming that individuals respond only to the spot price, end-of-year price, expected price, or a related metric. The nonlinear budget constraints generated by health insurance plans make these assumptions especially poor and we statistically reject their appropriateness. We study the differential impact of the health insurance plans offered by the firm on the entire distribution of medical expenditures without assuming that individuals only respond to a parameterized price. Our empirical strategy exploits the introduction of new plans during the sample period as a shock to plan generosity, and we account for sample attrition over time. We use an instrumental variable quantile estimation technique that provides quantile treatment effects for each plan, while conditioning on a set of covariates for identification purposes. This technique allows us to map the resulting estimated medical expenditure distributions to the nonlinear budget sets generated by each plan. We estimate that 53% of the additional medical spending observed in the most generous plan in our data relative to the least generous is due to moral hazard. The remainder can be attributed to adverse selection. A policy which resulted in each person enrolling in the least generous plan would cause the annual premium of that plan to rise by $1,000.

From the Introduction

Moral hazard and adverse selection create inefficiencies in health insurance markets and result in a positive correlation between health insurance generosity and medical care consumption. The policy implications are very different, however, depending on the relative magnitudes of each source of distortion, though isolating the independent roles of both moral hazard and adverse selection is rare in the health insurance literature. This paper separates moral hazard and adverse selection for the health insurance plans offered by a large firm.

The average observed expenditures in the most generous plan are $3,969 more than the per person costs in the least generous plan. We estimate that if selection were random, that the most generous plan would lead to $2,117 in more spending than the least generous plan, implying that 53% of the differential can be attributed to moral hazard. We also estimate adverse selection without restrictive structural assumptions. We find that if everyone in the sample were enrolled in the least generous plan that the premium for that plan would increase by over $1,000.

2.1 Moral Hazard and Adverse Selection

Optimal policy depends on the relative important of adverse selection compared to moral hazard in explaining the correlation between plan generosity and medical care costs. The policy implications for moral hazard are different than those required to confront adverse selection. Adverse selection typically requires risk-pooling, while distortions driven by moral hazard would motivate additional cost-sharing.

3.4 Attrition

If we define attrition as individuals enrolled in 2005 but enrolled for less than 365 days in 2007, the attrition rate in the MarketScan data (selecting on firms in the data in both 2005 and 2007) is 58.3%. Our sample has a 58.7% attrition rate.

Conclusion

Understanding moral hazard and adverse selection in private health insurance is widely- recognized as critical to policy. While the literature has frequently estimated the effect of price on medical care consumption, it has typically resorted to parameterizing the mechanism through which individuals respond to cost-sharing. We show that these assumptions typically contradict economic reasoning, and we provide empirical evidence that these specifications perform poorly. In this paper, we estimate the impact of different health insurance plans on the entire distribution of medical care consumption using a new instrumental variable quantile estimation method. These estimated distributions are the distributions caused by the plans in the absence of systematic selection into plans. We map these causal distributions to the parameters of the plans themselves. We can statistically reject that individuals only respond to the end-of-year price.

We also estimate the magnitude of adverse selection. We find favorable selection in the least generous plan and adverse selection in the most generous. We estimate that adverse selection is responsible for $773 of additional per-person costs in the most generous plan, implying that an individual considering this plan would pay over $60 per month in additional premium payments simply to cover the expected costs of the population selecting into the plan. Similarly, a policy which resulted in our entire sample enrolling in the least generous plan would cause annual premiums for that plan to rise by over $1,000.

We estimate that moral hazard is responsible for 53% of the differences in expenditures between the most and least generous plans. Adverse selection also plays an important role, accounting for the other 47%. In the absence of moral hazard, the difference in average medical expenditures across these plans would be $2,117 instead of $3,969. Finally, we find that using the previous year’s medical expenditures as a metric of selection greatly overstates the magnitude of selection.

http://www.nber.org/papers/w21858

PDF of full paper (53 pages):
http://www.nber.org/papers/w21858.pdf

In health insurance, moral hazard occurs when individuals obtain more health care than they would have if it were not paid for by the insurer. Adverse selection occurs when individuals with greater health care needs select plans that provide greater coverage. Both have an impact on health care spending. This paper estimates the relative impact of each of these in spending under private health insurance.

Each is responsible for roughly half of the differences of expenditures between the most and least generous health plans. So enrollees in the more generous plans pay higher premiums because of both moral hazard and adverse selection.

Today’s standard in insurance coverage is shifting towards lower actuarial value plans – plans that pay a lower percentage of the total health care costs. What does this study tell us about premiums for these less generous health plans? As more people enroll in them, which they are, the premiums increase to cover the additional expenditures for those who otherwise would have enrolled in the more comprehensive plans. The lower actuarial value plans are subject to favorable selection (the healthy buying less expensive plans in anticipation of not needing care), but that diminishes as higher cost patients move from the more comprehensive plans into these cheaper plans.

The insurance actuaries set premiums based partly on anticipated moral hazard and adverse selection. Though less comprehensive plans theoretically have less moral hazard and no adverse selection, the lower premiums are attractive even to those with higher health care needs. As Powell and Goldman have shown, increased enrollment in the least generous plans cause premiums for those plans to increase. This likely goes a long way toward explaining why premium increases this year were much higher than the overall rate of inflation, even though the rate of increase in total national health expenditures has slowed.

Under a single payer national health program, adverse selection doesn’t even exist since everyone is in the same plan. Efficiency is an important goal of health care reform, and wouldn’t it be much more efficient putting these health economists to work designing a simple single payer financing system, instead of laboring over the complexities of making a dysfunctional and inequitable market of private health plans somehow work for us, though not very well?

Long-term care must become a more prominent part of the single-payer campaign

By Henry Moss, PhD
January 11, 2016

We are facing a perfect storm. AARP’s Public Policy Institute points out that as boomers age into their 80s, there will be a sharp drop in available family caregivers due to the “birth dearth” following the postwar baby boom.  At the same time, longevity is increasing due to effective treatments of heart disease, lung disease, diabetes, cancer, and other conditions.  A longer life, however, will likely mean more years with severe disability for boomers due to the secondary effects of increased obesity, including high blood pressure, high cholesterol, and inflammation due to metabolic disorders.

These secondary effects include damage to brain blood vessels and a likely increase in the incidence of dementia, including Alzheimer’s disease.  We already know that the prevalence of dementia will grow due to the sheer size of the boomer cohort.  In addition, however, it now appears that a recent steady decline in the incidence of cognitive impairment and dementia have ended and are starting to reverse. Dementia is by far the most care-intensive of conditions.  More years with dementia (and other disabling conditions fed by the effects of obesity, including mobility disorders) will mean more need for 24/7 care in the face of declining numbers of family caregivers.

Hence the perfect storm.  Hence the “2030 crisis.”  2030 is when boomers start becoming the “oldest old” in large numbers.
 
The boomer generation is defined by a dramatic rise in home ownership.  This trend, coupled with real and perceived problems in nursing homes, means that home care has become, by far, the preferred approach to long-term care.  With declining numbers of family caregivers, an army of personal care aides, well-trained and better-paid, will be needed to address the coming crisis.  Medicare or another universal plan will need to cover the cost.

PNHP and the single-payer bills circulating in Congress fail to place enough emphasis on long-term care and severely underestimate the costs associated with an aging population and declining numbers of caregivers.  There is no way to separate long-term care and health care.  Living at home alone with dementia, frailty syndrome, or a mobility disorder are an invitation to falls and other safety-related events, a major source of healthcare costs for older adults.  Shortages of physicians, nurses, psychiatrists, and social workers with specialties in geriatrics and mental health will create serious concerns for elderly patients both in and out of nursing homes.  Medication management will be severely compromised.  The health of stressed family caregivers will also suffer.

Over the course of its history, Medicare has added mental health services, prescription drug benefits, and hospice care.  Long-term care is the next frontier and boomers and their future caregivers represent a massive potential constituency.  It must become a prominent part of the single-payer campaign.

(Henry Moss is a retired baby boomer doing independent academic and public policy research and writing. He has a PhD in philosophy and has written on cognitive science and the history and philosophy of technological progress.  His public policy interests include health care, housing and urban development, technological progress, and theories of social democracy.)

The 2030 Caregiving Crisis: A Heavy Burden for Boomer Children, by Henry Moss (250 pages)
For paperback, eBook or free PDF download:
http://www.2030caregivingcrisis.com

***

Comment:

By Don McCanne, M.D.

Most single payer advocates certainly support inclusion of coverage for long-term care in a national health program. Inevitably there is concern about the magnitude of the problem, including defining the conditions requiring long-term care, and the costs that care will entail.

In his book, “The 2030 Caregiving Crisis,” Henry Moss discusses the pending crisis when a disproportionately large number of baby boomers will require long-term care at a time when there will be a disproportionate decline in available family caregivers. Addressing this problem now will provide a policy platform which will ease the problems of long-term care once the surge in baby boomers diminishes through attrition.

His book is well researched and well referenced, plus he provides his own constructive thoughts as to addressing this problem. Hopefully it will be a helpful resource as PNHP members clarify and organize our concepts on the financing of long-term care, as a part of our mission to achieve health care justice for all.

Long-term care must become a more prominent part of the single-payer campaign

By Henry Moss, PhD
January 11, 2016

We are facing a perfect storm. AARP’s Public Policy Institute points out that as boomers age into their 80s, there will be a sharp drop in available family caregivers due to the “birth dearth” following the postwar baby boom.  At the same time, longevity is increasing due to effective treatments of heart disease, lung disease, diabetes, cancer, and other conditions.  A longer life, however, will likely mean more years with severe disability for boomers due to the secondary effects of increased obesity, including high blood pressure, high cholesterol, and inflammation due to metabolic disorders.

These secondary effects include damage to brain blood vessels and a likely increase in the incidence of dementia, including Alzheimer’s disease.  We already know that the prevalence of dementia will grow due to the sheer size of the boomer cohort.  In addition, however, it now appears that a recent steady decline in the incidence of cognitive impairment and dementia have ended and are starting to reverse. Dementia is by far the most care-intensive of conditions.  More years with dementia (and other disabling conditions fed by the effects of obesity, including mobility disorders) will mean more need for 24/7 care in the face of declining numbers of family caregivers.

Hence the perfect storm.  Hence the “2030 crisis.”  2030 is when boomers start becoming the “oldest old” in large numbers.

The boomer generation is defined by a dramatic rise in home ownership.  This trend, coupled with real and perceived problems in nursing homes, means that home care has become, by far, the preferred approach to long-term care.  With declining numbers of family caregivers, an army of personal care aides, well-trained and better-paid, will be needed to address the coming crisis.  Medicare or another universal plan will need to cover the cost.

PNHP and the single-payer bills circulating in Congress fail to place enough emphasis on long-term care and severely underestimate the costs associated with an aging population and declining numbers of caregivers.  There is no way to separate long-term care and health care.  Living at home alone with dementia, frailty syndrome, or a mobility disorder are an invitation to falls and other safety-related events, a major source of healthcare costs for older adults.  Shortages of physicians, nurses, psychiatrists, and social workers with specialties in geriatrics and mental health will create serious concerns for elderly patients both in and out of nursing homes.  Medication management will be severely compromised.  The health of stressed family caregivers will also suffer.

Over the course of its history, Medicare has added mental health services, prescription drug benefits, and hospice care.  Long-term care is the next frontier and boomers and their future caregivers represent a massive potential constituency.  It must become a prominent part of the single-payer campaign.

(Henry Moss is a retired baby boomer doing independent academic and public policy research and writing. He has a PhD in philosophy and has written on cognitive science and the history and philosophy of technological progress.  His public policy interests include health care, housing and urban development, technological progress, and theories of social democracy.)

The 2030 Caregiving Crisis: A Heavy Burden for Boomer Children, by Henry Moss (250 pages)
For paperback, eBook or free PDF download:
http://www.2030caregivingcrisis.com

Most single payer advocates certainly support inclusion of coverage for long-term care in a national health program. Inevitably there is concern about the magnitude of the problem, including defining the conditions requiring long-term care, and the costs that care will entail.

In his book, “The 2030 Caregiving Crisis,” Henry Moss discusses the pending crisis when a disproportionately large number of baby boomers will require long-term care at a time when there will be a disproportionate decline in available family caregivers. Addressing this problem now will provide a policy platform which will ease the problems of long-term care once the surge in baby boomers diminishes through attrition.

His book is well researched and well referenced, plus he provides his own constructive thoughts as to addressing this problem. Hopefully it will be a helpful resource as PNHP members clarify and organize our concepts on the financing of long-term care, as a part of our mission to achieve health care justice for all.

Insurers Say Costs Are Climbing as More Enroll Past Health Act Deadline

By Robert Pear
The New York Times, January 9, 2016

Eager to maximize coverage under the Affordable Care Act, the Obama administration has allowed large numbers of people to sign up for insurance after the deadlines in the last two years, destabilizing insurance markets and driving up premiums, health insurance companies say.

The administration has created more than 30 “special enrollment” categories and sent emails to millions of Americans last year urging them to see if they might be able to sign up after the annual open enrollment deadline. But, insurers and state officials said, the federal government did little to verify whether late arrivals were eligible.

That has allowed people to wait until they become ill or need medical services to sign up, driving up costs broadly, insurers have told federal health officials.

“Individuals enrolled through special enrollment periods are utilizing up to 55 percent more services than their open enrollment counterparts” who sign up in the regular period, the Blue Cross and Blue Shield Association, whose local member companies operate in every state, told the administration.

“Many individuals have no incentive to enroll in coverage during open enrollment, but can wait until they are sick or need services before enrolling and drop coverage immediately after receiving services, making the annual open enrollment period meaningless,” Steven B. Kelmar, an executive vice president of Aetna, said in a letter to Sylvia Mathews Burwell, the secretary of health and human services.

A quarter of the applications that Aetna received in the health law’s public insurance marketplace last year came through special enrollment periods, he said.

Kevin J. Counihan, the chief executive of the federal insurance marketplace, said nearly 950,000 people used special enrollment periods to get coverage through HealthCare.gov from late February to the end of June 2015.

“On average,” Aetna said, “special enrollment period enrollees stay with us for less than four months, while enrollees who come to us during the annual open enrollment period maintain their coverage on average for eight to nine months.”

Daniel J. Schumacher, the chief financial officer of UnitedHealthcare, the insurance unit of UnitedHealth Group, said more than 20 percent of its marketplace customers signed up after open enrollment ended last year. And they used 20 percent more health care than people who signed up before the deadline, he said.

Such concerns could portend higher insurance rates broadly. In setting current premiums, insurers say, they did not realize how many people would sign up after the deadline and how much care they would use. That information may affect future rates and benefits.

The federal government allows people to sign up or switch health plans outside open enrollment for various reasons. Lawyers said it was not easy to find a complete list of the eligibility criteria, which have been set forth in regulations, bulletins, official policy statements, manuals and informal “guidance documents.” Some of the reasons are straightforward, like getting married or having a baby.

Others are more complicated and less clear-cut. Consumers may, for example, be eligible for a special enrollment period in “exceptional circumstances” and in “other situations determined appropriate” by the Centers for Medicare and Medicaid Services. The circumstances may include “a serious medical condition” that kept a person from enrolling.

“Most consumers are confused by the rules on special enrollment periods and do not understand the system well enough to try to game it,” said Christine Speidel, a lawyer at Vermont Legal Aid. On the other hand, she said, “many people feel that insurance is not affordable, even with subsidies, and they will call the marketplace to see if they qualify for insurance when they get sick.”

http://www.nytimes.com/2016/01/10/us/politics/insurers-say-costs-are-climbing-as-more-enroll-past-health-act-deadline.html?ref=business&_r=0

***

Comment:

By Don McCanne, M.D.

Open enrollment periods for the ACA exchange health plans are limited in duration to prevent people from buying insurance only when a need arises, and then canceling the insurance after the need is met. This “adverse selection” would reduce premium revenues for the insurers while increasing expenditures for medical benefits. This drives up the cost of premiums for everyone else which can cause the healthy to bail out, driving premiums up even more and resulting in the “death spiral,” which is very disruptive to insurance markets.

Circumstances for individuals do change when enrollment is closed, thus the law allows special enrollment so that individuals don’t have to wait up to a year to gain coverage. The problem with special enrollment during closed enrollment periods is that it is the individuals with changing circumstances who also have pressing medical needs that will be compelled to enroll. Thus the payouts by the insurers will increase during these closed enrollment periods. Also, many healthy individuals who feel that they cannot afford their premiums will drop their coverage, decreasing revenue for the insurers. Increased expenditures and reduced revenues is not exactly the business model that insurers seek.

This creates a dilemma for the actuaries. To ensure solvency, premiums will have to be set higher than would be warranted based strictly on the better health of those enrolling during the open enrollment period. Higher premiums then threaten the insurers’ ability to gain market share. This is a problem for even the nation’s largest insurers, as we now see UnitedHealth is withdrawing from the exchanges for this very reason.

The Affordable Care Act perpetuates a market of private plans theoretically designed to use competition to improve quality while reducing costs. But because insurers are not allowed to exercise pure market forces since they must sell their products to people who will actually need to use them, the regulated market of private plans fails under these countervailing forces. Waste escalates because of the greater administrative burden of this defective market, and because of the need of the insurers to distort the functioning of their plans (e.g., higher deductibles and narrower networks) in an attempt to protect their bottom lines.

We can’t keep pretending that we will figure out a way to make private insurance markets work for everyone. We already have over half a century of failure. That’s enough. It’s time to enact a publicly-administered and publicly-financed single payer national health program – an improved Medicare for all.