Thursday, March 23, 2017

A Citizen's Ammendment to RyanCare

There are approximately 18 million Americans who purchase health insurance on the so called individual market, on and off the Obamacare exchanges. There are another 14 million or so who could be buying insurance on the individual market, but choose not to buy anything. This puts the total individual market at about 10% of Americans. Half of those are, or are eligible to be, heavily subsided through Obamacare (including those huge deductibles). The other 5% are facing the full brunt of health insurance price increases under Obamacare. Of those, 3% are paying for Obamacare health insurance and getting garbage in return for their money, while the remaining 2% are uninsured. This is the magnitude of the primary problem we are supposedly trying to solve.

The 17% of Americans on Medicare are not upset at Obamacare. The approximately 23% of Americans on, or eligible to be on, Medicaid are not angry at Obamacare either (although the 1% eligible for the Medicaid expansion in states that chose not to expand it, might be angry with their Governors). Some of the 50% or so, who are getting health insurance through their employer, and used to get rather flimsy insurance in the past, may be somewhat disgruntled because the Obamacare imposition of “essential benefits” caused their share of premiums and deductibles to rise, and their ability to choose their doctors to plummet. This is the secondary problem we are supposedly trying to solve.

The American Health Care Act (AHCA) addresses neither problem and exacerbates both.

Three Pronged Care

The proposed GOP solution is “three pronged”. Prong One repeals Obamacare (whatever that means) and replaces it with more widespread, but less generous, subsidies for the individual market and reduces funding for Medicaid, while also reducing Obamacare taxes on corporations and wealthy individuals, including taxes slated to increase the longevity of the Medicare trust fund. Prong Two is a flurry of yet to be determined regulatory relief that the Secretary of Health and Human Services will be supposedly providing at his discretion. Prong Three consists of new legislation, which will require the support of at least some Democrats in the Senate, to relax both the definition of Obamacare “essential benefits” and the regulations on health insurance corporations, so cheaper insurance plans can proliferate across the land (as they did before Obamacare).

The most important thing to understand about the Three Pronged Care proposal is that although the CBO can, and did, estimate the effects of the first Prong, nobody can estimate the cumulative results of all three Prongs, because nobody knows what the second Prong is and because it will take an act of God to make the third Prong materialize. Since we are talking about health care, think of this as some sort of orthopedic, cardiac or transplant surgery. First you cut the patient open, then you remove or adjust the offending parts, and then you put in something new and hopefully better. Coming in after a previous surgeon messed things up is obviously harder, but cutting the patient open and walking away until you figure out if you want to or are able to do more, is hardly a viable option for the patient, and will likely result in a huge malpractice suit (plus a copious prison sentence) for you.

What if Prong One is as good as it gets?

Unfortunately, this is precisely what Paul Ryan and his ragtag coalition are proposing to do with Prong One, whose sole effect will be to add insult to the Obamacare injury. Once we accept the premise that the Federal government has an obligation to help people get health care, the remaining disagreements are just haggling over price. And once we dismiss highfalutin principled rhetoric, the problem with Prong One is that for most people, in absence of Prongs Two and Three, this is just a stingier version of Obamacare. The GOP argument that two imaginary birds in the bush are better than a real bird in hand flies in the face of millennia of human wisdom. On top of that, there is absolutely nothing in Prong One that even begins to address the fundamental problem in our health care system, which is the unit price of health care services. Therefore, premiums and deductibles will likely continue to rise unabated.

In all fairness though, there is a twisted argument to be made that if you cut subsidies and there is less money available, insurers will work hard to lower the price of their products to match what the “market” can bear. That may be true if the reduction in funds affected the entire market, instead of at most 10% (likely 5%) of it, and the least profitable 10% to boot. In “normal” markets, a non-participation rate of 10% percent is certainly sustainable and actually pretty good for the sellers. That said, smaller health insurance vendors currently specializing in Medicaid managed care could step into this niche and offer a commercial product through their existing underpaid networks. If you’re a physician, this prospect should set your hair on fire.

The Free Market Delusion

At some point we will need to collectively disabuse ourselves of the notion that a market in health care insurance could be created without abolishing the provision of health insurance benefits through employment. I know everybody is talking about Flo and the little lizard selling health insurance on TV as the ultimate solution to health care affordability, but that is nothing short of demagoguery. Note that practically all auto insurance is business to consumer (B2C), while health insurance is overwhelmingly business to business (B2B). I suggest you try buying a cow from a feedlot and see for yourself how much negotiating power your consumer status bestows on you in a B2B market. If you want to try a free market solution for health insurance, you would need to do more than just kick a few poor people off their subsidies. You would need to kick 150 million people off their employer health insurance plans. Good luck with that.

I have to admit that there is something compelling about the conservative vision of a portable health insurance product that people buy and carry with them wherever they go. Obviously health insurance that is intended to serve people from cradle to grave cannot be a game of Russian roulette with covered benefits, or as Mr. Ryan refers to it, “patient-centered” insurance. Equally obvious is the fact that State and Federal governments will still have to honor their obligation to help those who can’t afford to purchase insurance for a predefined set of “essential benefits” on their own. Will such semi-free health insurance market deliver the health care affordability we seek? Not likely. The deceptively simple truth is that you cannot successfully tackle the pricing failure in the health insurance market without first taking an axe to our dysfunctional health care delivery system.

The Three Prong Shuffle

Obamacare not only failed to put a dent in health care delivery prices, but arguably made things worse by actively encouraging system consolidation. Under the best case scenario, a heavily modified GOP Prong One plan (e.g. higher tax credits, lower tax cuts for the rich, more money for Medicaid), will not change the Obamacare trajectory one bit and will not provide meaningful relief to people hurt by Obamacare. All this tinkering and re-tinkering with an insignificant portion of the health insurance market is like obsessively unclogging the kitchen sink on the Titanic. The sketchy descriptions of Prong Three, the free market prong, are just too ridiculous to consider at this point, but Prong Two, the regulatory prong, has great potential. After reading the manager’s amendment to the Ryan Make America Poor Again plan, I would like to offer my own citizen’s amendment.
  • New Prong One: Swallow hard and let the AHCA die a merciful death. Extend some temporary relief to the 5% hurt by Obamacare. Give Secretary Price a chance to affect regulatory changes first. Medicare is the de-facto price setter for health care services. The Secretary can affect changes to Medicare fee schedules and payment models that will quickly ripple through the commercial sector. I would start with the RUC and hike the relative value of comprehensive primary care. I would create a monthly CPT code that can accommodate subscription based primary care (not quite what the Direct Primary Care lobby wants, but darn close). And I would engage in a long string of multi-payer initiatives to accelerate dissemination of measures to control unit prices, while leaving behind the naïve and failed attempts to cut utilization.
  • New Prong Two: This is not a purely health care prong, but it is necessary because this is the only way to fix health care in America. Get those tax cuts done, renegotiate trade agreements, fix the education system, get infrastructure projects going, get manufacturing back, drain the swamp, and create lots of opportunities. Introduce specific pieces of legislation along the way to negotiate drug prices, break health system monopolies or at least encourage independent, small and more cost-effective practices to thrive. Keep up a brisk regulatory and deregulatory program to curtail the flow of billions of health care dollars to opportunistic corporations that do not provide care or any other benefits for patients. Think creatively about connecting health insurers’ participation in State/Federal programs to affordability in the individual market (at the very least make it count in Medicaid RFPs).
  • New Prong Three: If all goes well, we can finally do away with Obamacare, which should become automatically obsolete if Prongs One and Two are executed successfully (otherwise Obamacare will be the least of our problems). If the economy catches fire and more people have good paying jobs, and health care unit prices are at the very least contained, fewer people will need subsidies or Medicaid welfare. Make a note to schedule a symbolic full repeal and replace on January 21st 2021. I am certain it will pass with strong bi-partisan support.
Will Washington DC put the horses in front of the cart for a change? Not by choice. However, the good news is that all of a sudden Prong One seems to be on life-support in the House and dead on arrival in the Senate. The excellent news is that President Trump made another promise: "We will take care of our people or I’m not signing it" (it being Prong One, whatever it ends up being, if it ends up being). The disastrous news is that no self-respecting Democrat will engage in any effort to help the President help the American people. That would be too much to ask of our elected representatives.

Saturday, March 11, 2017

RSVP to an Invitation from Steve Bannon

Steve Bannon, the White House Chief Strategist and nationalist lightening-rod extraordinaire, has made his public speaking debut at the Conservative Political Action Conference (CPAC) a couple of weeks ago. I’ll leave the dissection of his remarks to people who get paid millions of dollars to spin things, but at the very end of the interview, Mr. Bannon invited the audience, and by extension the American people, to help the Trump administration in a very peculiar way: “We want you to have our back... but also and more importantly, hold us accountable. Hold us accountable to what we promised. Hold us accountable for delivering on what we promised”. Well, Mr. Bannon, here is my RSVP to your most gracious invitation.

I would like to hold you accountable for the way you are handling, or rather mishandling, the debate around Obamacare, and health care in general. As far as I can tell, and by your own admission, your job Mr. Bannon is to implement the President’s agenda as presented to the American people for consideration during his campaign. I have watched approximately 90% of candidate Trump’s rallies, all the debates and all the interviews, because as a bleeding heart liberal, I had to be sure I knew exactly what I was voting for. What he promised, what you all promised, was to protect Medicare, Medicaid and Social Security and you made it crystal clear that Mr. Trump was the only candidate (excluding the defeated Bernie Sanders) to commit to this trifecta of righteousness. I would like to hold you accountable for delivering on this promise in its entirety.

Yes, Mr. Trump promised to “repeal and replace the disaster known as Obamacare” multiple times to standing ovations, and yes, he spoke loosely about selling insurance across state lines and health saving accounts and having all sorts of choices. In rally after rally, the President explained over and over again what he thought was wrong with Obamacare: the premiums going through the roof, especially that blessed 116% in Arizona, the high deductibles that make it impossible for people to see a doctor unless they are hit by a truck or are near death (whichever comes first, I guess). But most of all he spoke about “something terrific” that will replace the “failing Obamacare” and more recently President Trump promised health insurance for all Americans including those who cannot pay for it. I would like to hold you accountable for this terificness in all its promised glory.

My inclination is to say that so far your team has not delved into the intricacies of health care reform. If you would have, one or another incendiary piece of paper would have leaked to The New York Times by now. I get that dealing with insurance is not as philosophically elevating as dealing with culture wars and other grand historical trends, but back in the trailers of the Appalachian Mountains, and in the modest homes of rust belt workers who lost their jobs to the globalized economy, and at every kitchen table in the America where decisions are still made at kitchen tables, health insurance is a life and death problem. President Trump promised to be the voice of these forgotten people. He promised to speak for them, fight for them and win for them. Of all the promises you made, this is the one promise I will hold you most accountable for.

The other day the new GOP “secret plan” to repeal and replace Obamacare has been finally unveiled in two separate pieces. We have seen Obamacare replacement plans from the party of Ayn Rand long before this election, so I will not hold you accountable for the childishly vindictive Ryan “plan”, or the more comprehensive cruelty of Dr. Price’s “bill”, and I know that this “new” abomination, which is a clumsy cross between the two, is not your plan, Mr. Bannon. For all I know this may be a brilliant strategy to eschew the responsibility of fixing Obamacare, because this new plan is not likely to clear the House and it certainly won’t get through the Senate, but in the unlikely event that it does, I will hold you accountable if this exercise in boldfaced deceit ever becomes law.

The “experts” will be delving into all the gory details, but please allow me to cut through the chase. The GOP plan is a perfidious conservative concoction. The GOP plan is killing Medicaid and Medicare. The GOP plan is reducing premium support for most people without employer or government supplied health insurance. The GOP plan is increasing exposure to those awful high deductibles for millions of additional people, poorer older and sicker than before.  And finally, the GOP plan is cutting taxes for wealthy people and corporations. Is this your idea of how we put America First, Mr. Bannon? Is this President Trump’s idea of how we Make America Great Again? It never occurred to me to ask, sir, but what do you guys mean when you say “America”? I cannot obviously hold you accountable for the answer, but history and whichever God you pray to, eventually will.

I do agree with you Mr. Bannon on the nefarious effects of a globalized economy and the feckless role played by a “globalist, corporatist media” machine, and I have your back in this fight for the soul of America and the dignity of the American worker. I am sure you can appreciate how difficult it is for a liberal to make such statements amidst the frothing and frenzied neo-McCarthyism upon us now. The only remaining question, Mr. Bannon, is whether you have our backs. I have not seen President Trump shrink from a fight before, and whether you like it or not, health care, not Russia, will be the defining issue of his presidency. As conservative corporatism is fusing with progressive globalism, combining the worst of both worlds into a formidable force against the people, I will hold you accountable for failing to side with the irredeemably deplorable masses that put you in the White House in the first place.

President Trump needs to stand up and clearly state that he will not sign a bill that takes away whatever little health care poor, sick and low income people still have. These people are us, Mr. Bannon. They are the #TrumpTrain, the Movement, the Bikers for Trump, the Latinas for Trump, the “build that wall” and “lock her up” chanters, and the ones who took you up on your offer, because “what the hell do they have to lose”. They didn’t come “pouring in” to demand less health care for themselves so there’s more cash available for the “administrative government”. These people may not know much about the abject art of politicking, but they have vast expertise in getting screwed. They know it when they see it. And they are seeing it now, Mr. Bannon. They are seeing it now.

It would be most unfortunate, and the end of the road for me, if the first legislation enacted by this administration is one where once again men in fancy suits forget those who have always been forgotten, in stark contradiction to explicit promises made repeatedly, both before and after the elections. A government of, by and for the people, another frequently made promise, does not enact immoral legislation, and the GOP plan to repeal and replace Obamacare is beyond immoral. Your boss, Mr. Bannon, is the President of the United States of America. He is the President of the American people, even the poor ones, especially the poor ones. He has the power and the duty to veto immoral legislation, and we the people will hold President Trump accountable for that.

Friday, February 24, 2017

A Scientific Method to Repeal & Replace (wink) Obamacare

“So how about it, Nash? You scared?”
“Terrified... mortified... petrified... stupefied... by you.” 
(--A Beautiful Mind)
Fear is now a sign that you are an intelligent, educated, open-minded and caring person. Being scared is incontestable proof that you have a beautiful heart. When it comes to your health, there is palpable terror that soon, very soon, the bad guys will take away Obamacare, which was the source of health care and life itself for many. And make no mistake the enemy is coming for us all, now that we lost the war to “the Republicans”. It is therefore incumbent upon brave souls everywhere to join La Résistance Américain. Since I am not now and never have been a brave souled Maquisard, I’ll just sit here and daydream about a kinder and gentler occupation, until the Vichy comes for me.

Obamacare is the Status Quo

Obamacare went into effect only three years ago, but in the age of information technology, years are like decades. Obamacare with its many tentacles and offshoots is deeply and solidly entrenched in the health care landscape. There is zero chance that anybody will be able to dig up its rhizomic growth into the actual practice of medicine, so let’s play along and see what can be done about the large shiny part, visible to the naked eye, namely health insurance.

Traditionally, health insurance coverage is segmented into public insurance, employer group insurance and individual markets. However, considering the changes introduced by Obamacare, a different classification, may be in order: People who have all or most of their health care paid for, people who have some of their health care paid for, and people who must pay for all their health care on their own. 
Health insurance for all classes now includes a fixed set of “essential benefits”, no limits on lifetime spending and prohibition from factoring preexisting conditions into coverage decisions has been expanded to include non-group policies. This is the post Obamacare status quo. This is what the Republican Party is currently endeavoring to repeal and replace. It is important to note that while approximately 95% of Americans are eligible for either fully or partially subsidized health insurance, there is a 5% “donut” hole of mostly middle class, mostly precariously employed people, left to fend for themselves.

Democrats are poking fun at Republicans for lacking an Obamacare replacement plan after six years of complaining and symbolically voting to repeal the law multiple times. The irony here is that the GOP has plenty of plans that could have been put in place in 2008 and even in 2012, but not today. Why? Because none of the old plans are equal, let alone better, than the new status quo. The simple fact is that on its face, and for the short term, Obamacare helps far more people than it hurts. The other simple fact is that the one overriding fiduciary responsibility of members of Congress is to get themselves reelected.

The Basic Laws of Repeal and Replace

With that in mind and considering that for some peculiar reason getting rid of Obamacare was a major campaign promise for both the GOP and the new President, I would like to humbly suggest an entirely scientific set of basic laws for repealing and replacing Obamacare.

Zeroth Law of R & R: Drain the swamp

If two systems (insurance and hospitals) are in profitable relationship with a third system (government), they are in profitable relationship with each other. This law helps define the notion of corruption.

First Law of R & R: Do no harm

No harm now and no harm in the future. No harm while you’re healthy and no harm if you get sick. Every American covered by some type of health insurance should be no worse than he or she currently is. Premiums should not be higher. Out of pocket spending should not be higher. Benefits included should not be fewer. Access to and choice of doctors and hospitals should not be reduced. And finally, government spending should not increase by too much either. If this law sounds to you like some sort of ridiculous wizardry, it isn’t. There are plenty of places to look for, and find money, other than working people’s pockets. Additionally, failure to comply with this basic law will guarantee loss of elected office for anybody remotely associated with such folly. Equivalently, perpetual election machines of the first kind (hurting people) are impossible.

Second Law of R & R: Fix what’s broken

Fix what the people say is broken, not what dead economists might have said is broken. Premiums, especially for unsubsidized people, are too high. Deductibles are way too high not just for those who have to pay full price for insurance, but increasingly so also for employer sponsored workers. Choice of doctors and hospitals is being narrowed for everybody, except the very rich and the very well connected. Those are the three things that voters need Congress to fix. Blabbering about death spirals and actuarial risk pools will get you zero (0) votes in your next election. Reducing Federal government spending on health care by a few billion dollars means nothing (0) to voters who have to cover the shortfall from their own individual pockets or go without. Equivalently, perpetual election machines of the second kind (ignoring people) are impossible.

Third Law of R & R: Watch your language

Do not lie to the American people and do not use words you don’t fully understand just because self-described experts use those words often in casual conversation. Don’t tell people that their health care will be affordable if they open another empty savings account. Don’t insult the intelligence of sick people by telling them that if they band together with other very sick people they’ll be able to buy more affordable health insurance. Do not tell States that cutting Federal support for Medicaid will finally free the States to innovate. First, the “dishonest” press will roast you alive, and second, your “base” of forgotten men and women will be forgetting all about you. Equivalently, perpetual election machines of the third kind (deceiving people) are impossible.

Repeal & Replace for Dummies

Based on the four simple laws above, I would like to submit one possible sequence of broad steps to “repeal and replace” Obamacare.
  • Step 0: Get rid of the individual mandate. It is irksome to many, it accomplishes nothing, and it’s already gone anyway. This, in and of itself, satisfies the minimum requirement for stating that Obamacare has been repealed.
  • Step 1: Take a baseline of who has what in the way of health insurance, and this includes covered benefits, because reducing health insurance prices by cutting benefits violates the First and Third Laws.
  • Step 2: Exclude programs where Obamacare changed little to nothing. Ignore the small changes and per the First Law, leave expansions in place.
    • Medicare, VA and other military related – Leave those out. Fix the VA separately.
    • Medicaid – Leave it alone, except make sure the remaining Republican governors expand it in their (your) states (threats, waivers and whatever it takes to help them save face).
    • Employer insurance – Leave the 26 years old children and the removal of lifetime limits in place because neither one makes much difference to affordability (preexisting conditions were never an issue for this group).
Now we’re down to about 18 million insureds in dramatically different situations. Half are subsidized to various degrees based on their Federal Poverty Level (FPL). People with less than 400% FPL (a bit south of $50,000 per year) get some form of subsidy for the premiums, but many are struggling with outrageous deductibles. Those who make less than 250% FPL get help with their high deductibles as well. The 9 million who pay full price, along with 7 million of the uninsured, are in desperate need of relief from Obamacare. Add to that an increasingly large portion of employees whose employers “offer” exceedingly high deductible plans, and you have your Obamacare resentment in a nutshell.
  • Step 3: The easiest and cheapest solution to the problem would be to allow people on the individual market to purchase Medicare coverage and direct all Federal subsidies (which will need to be spread out more broadly to include the 10% "donut" hole) back into Medicare. There should be no objection from the health insurance industry since they all seem eager to leave those tiny markets anyway. But of course, nobody is going to do that, because this would appear to be “government run health care” of the “socialized medicine” variety.
  • Step 3 (alternate A): Allow all subsidized people on the Obamacare exchanges to “buy” into local Medicaid plans, which should reduce cost significantly, and use the savings to broaden the subsidies to include the hurting half, with an option to get more “coverage” if they use those new subsidies to buy into Medicaid as well. Personally, I don’t find this alternative very appealing, certainly not as appealing as the Medicare option, but again, seeing how all Medicaid is privatized now and how health insurers are making fortunes from Medicaid, there should be no serious objections. This alternative violates the Second Law when it comes to choice of doctors.
  • Step 3 (alternate B): If increasing membership in Medicare or Medicaid (or both) is too much of a political hot potato (and it is), let’s use some of those buzzwords y’all enjoy throwing around to create a market-based solution. We have around 18 million people who participate in the individual market and perhaps another 13 million who fit the profile, but choose not to participate. We are talking about at most 10% of Americans.  I am pretty sure that some “brave” health insurance companies (preferably non-profits) would be willing to bid for contracts to insure these people. You can do this by state or by region “across state lines”. Here’s the deal: people don’t need choices of health insurance plans. They need choices of doctors and hospitals.
    • One generously subsidized HMO plan with an adequate but narrower network, which is essentially a Medicaid style option, but more expensive (go figure).
    • One less generously subsidized PPO plan with a comprehensive network, which is similar to a Medicare Advantage PPO.
    • You can add in your “health savings accounts” here, but only if they are fully or partially funded by the Federal government in lieu of direct payment to insurers. This is also a good place to experiment with subscription based comprehensive care, a.k.a. direct primary care (DPC), which introduces a small element of free-market competition into the health care delivery system.
  • Step 4: Limit employer high deductible plan offerings, because what is a reasonable deductible for the CEO, is most definitely not reasonable for the assembly line worker. If you think Obamacare is a huge problem now, wait until the employer health insurance sector collapses, and it will if left to its own devices. Yes, fully funded health savings accounts (and DPC) could be used here as well.
  • Step 5: If you are serious about providing relief to all the people, the government cost for replacement will be higher than the current Obamacare costs. To reduce health care insurance prices, you will need to consider the Zeroth Law of R & R and intervene in the pricing of health care products and services, such as drugs, devices, technology, regulations, the predatory environment created by consolidation of health systems, and the deprofessionalization of physicians.
Since all sides in this debate have strong ideological convictions or equally powerful financial interests, preventing them from civil collaboration, the most likely result of this R & R effort is that the people will end up getting hurt, again. But if the 2016 election wasn’t a clear enough message for you, here is another Nobel Prize worthy message attributed to John Nash (or rather the writers of A Beautiful Mind):
“If we all go for the blonde and block each other, not a single one of us is going to get her. So then we go for her friends, but they will all give us the cold shoulder because no one likes to be second choice. But what if none of us goes for the blonde? We won't get in each other's way and we won't insult the other girls. It's the only way to win. It's the only way we all get laid.”

Tuesday, January 24, 2017

Resist the Fiction of Health Insurance

It has come to pass. President Donald J. Trump. Are you scared? Are you planning to “resist” the policies you imagine President Trump will pursue by tweeting furiously with clever hashtags galore? Would you prefer to move my fastidious quotation marks from “resist” to “President”? This is after all, the first President in a very long time to take office without the blessings and financial support of established “world order” leaders. It must be rather disconcerting to proceed without clear guidance from our betters, especially seeing how well they served us over the last decades, and particularly when it comes to affordability of health care in America.

Are you binge-watching the Obamacare drama playing on America’s center stage these days? Are you tweeting and retweeting every shred of information that proves Obamacare is a huge success, and its repeal will mean certain death for millions? Or are you busy proclaiming your faith in free markets, the (undemocratic) government of Singapore, or the charitable nature of Americans in general and doctors in particular?  Is President Obama your tragic hero, or your shifty villain? Is President Trump your great liberator (although he promised not to do anything you really want), or the Grinch who will steal health care (although he promised to preserve everything you really like)? Are you not entertained? Pass the bread, please.

Health Insurance

In the latest plot twist of the greatest political show on earth, which according to all expert comedians managed to put Ringling Bros. and Barnum & Bailey Circus out of business, our newest  Republican President announced that “we’re going to have insurance for everybody”, even people who “can’t pay for it”. Sounds like some sort of universal health care to me, no? Ah, the sweet irony…  Amidst my deep joy with the ensuing gasps, grunts and groans, I have to assume that President Trump is really talking about health care for everybody, including those who can’t pay for said care, because “health insurance” is a fictional construct designed to extract profit from misfortune.

Would it surprise you if I said that most people in this country, or any country, don’t actually have “health insurance”? Medicare is not insurance. Medicaid is not insurance. TRICARE and CHAMPVA (Civilian Health and Medical Program of the Department of Veterans Affairs), as well as care provided by the Department of Veterans Affairs and the military, are certainly not health insurance. Even the health insurance you get from your employer is not insurance in the strict sense of the word. These are benefits, defined benefits. Obamacare extended these benefits to more people, and by essentially eliminating individual underwriting and monetary caps, it practically did away with the notion of health insurance. Good riddance.

Nevertheless, practically all our Obamacare conversations are about health insurance (or coverage), because those who sell products called “health insurance” want us to discuss health care on their terms. It’s more profitable that way. When we talk about insurance, we can talk about pools, actuarial risk, death spirals, corridors, and all sorts of obscure and complicated things that seemingly justify the need to pay health insurance companies for something. And what is that mysterious something we pay so much for? It’s certainly not “insurance”, seeing how at least half the revenues of for-profit insurers come from federal and state governments. It’s complexity. We pay insurance companies to paint a thick layer of complexity over the health care delivery system.

Price of Care

How much is a jar of pickles? Well, it depends on the brand, the size of the jar and yes, the grocery store where you shop, but one thing is certain: every person in your store pays the same amount of money for the same jar of pickles. Not so with your doctor visit. If you have traditional Medicare, your doctor gets $75 for a regular visit. If you have traditional Medicaid, he gets $40 for the same visit. If you have BCBS Super HMO, he gets $70.51. If you have BCBS Super HMO+, he gets $72.37. If you have BCBS Freedom PPO, he gets $82.86. If you have Cigna Gold Choice, he gets $90.03. If you have Cigna Liberty Sucks, he gets $65.99. If you have…. and on and on it goes, for the same exact 15 minutes, from the same exact doctor, in the same exact room. The doctor one floor up may have a completely different set of fees from the same exact complement of insurance plans. Add to that the avalanche of “value-based” payment “initiatives” triggered by the massive underbelly of Obamacare and the picture gets murkier than ever.

So what’s the real “value” of that doctor visit? Irrelevant, my dear Watson. Irrelevant. The true value is in not having a value at all. Why? Because then your doctor will need expensive software and an army of “expert billers”. The insurer will need different mega software to manage accounting across “product lines” and “initiatives”, and an army of analysts of its own. Of course contracted fees and quality initiatives change all the time, so the change process needs to be managed on both sides of the transaction. Extrapolate this to hospitalizations, diagnostic testing, procedures, a variety of specialists, and before you know it nobody has a clue what the price of anything is, except of course the number crunching data aggregators, usually owned and operated by, you guessed it, insurance companies.

Choices Galore

There is nothing America hates more than one-size-fits-all health insurance, you know, like Medicare. There are two health insurers and 23 individual “plans” on the Obamacare exchange in my county. Two are Gold, twelve are Silver and eight are Bronze. The same insurers offer additional “choices” off the exchange, and other choices for the employer market. There must be well over 50 “plans” from my health insurer alone floating out there. They vary by type and metal, and within each metal they vary by a few dollars here, a few dollars there and a few percentage points here and there. They all offer all the required Obamacare benefits. Why do I need two PPO Silver plans, from the same insurer, one with a $336.20 premium and one with a $336.91 premium, and similar earth shattering differences in deductibles, out of pocket maximum, copays and co-insurance?

I don’t, and neither does anybody else, other than the insurance company, of course. That layer of complexity must be nurtured and maintained. The more plan choices we have, the more we can agonize over each miserable and completely irrelevant detail. Furthermore, if the government pays for everything, including your deductible, the “actuarial value” of the plan means very little. If you’re not poor enough to qualify, and not wealthy enough to buy a top shelf plan, or pay your own way, you’re screwed no matter what you choose. The Ryan/Price “solution” to this quandary is to allow insurers to create many more plans that differ not only in price, but also in the benefits they cover, thus making insurance great again.

You can have plans that don’t cover pregnancy for example, or maybe they don’t cover physical therapy or expensive cancer drugs, because customers know best and government shouldn’t tell them what to buy. Well, that’s awfully nice, but what if your diaphragm malfunctions, or you shatter your tibia playing hoops, or God forbid those headaches were not due to stress, can you then switch to another plan just in time, or are you barred because preexisting conditions? This is a serious question, because if you can switch, every healthy person could maintain coverage for ten bucks a month, and if you can’t switch, then what’s the point having all those threadbare “plans” to “choose” from?

Let’s just get real

As gloriously delicious as the health insurance spectacle is promising to be, dwelling on it won’t solve anything. Whether you call it health insurance, health benefits, medical services or just plain health care, the darn thing is just too expensive. It’s too expensive for us to buy with our own money and it’s too expensive for us to buy with tax money. It was too expensive before Obamacare, it’s too expensive now, and the massive complexity introduced by the health insurance industry and its perpetually revolving door in and out of government, is making sure it will remain too expensive forever. Why? Because the more money we spend on health care, the better health insurance companies do, and they are doing swimmingly well lately.


And nothing, absolutely nothing, the GOP put forward up to this point is poised to change that. President Trump argued convincingly enough that we cannot solve major problems unless we are willing to correctly identify the problem by its proper name. I agree. If we are going to identify and refer to the main threat to our security as radical Islamist terror, then we should be brave enough to call the health care problem by its proper name. It’s not insurance. It’s funding. The question is not how we provide “access” to some fuzzy notion of health insurance to everybody. The question is how we fund the actual delivery of medical care to all Americans at a federal level or even state by great state.

This does not necessarily mean tax funding of free health care for all. It does not mean single-payer or Socialized medicine. It also does not necessarily imply free-market fantasies, supplemented by our legendary charity. It does not mean that employers are either off or on the hook, or that pooling money to pay for fluctuating medical needs is forbidden. It doesn’t mean that insurers should all go out of business either. It just means that the American people have no obligation to guarantee empires, executive salaries, profits, earnings, and return on equity for any industry, and certainly not at the expense of their own health.

Thursday, December 8, 2016

As Obamacare Lay Dying

The brand new President Barack Obama, whether wittingly or not, invested his entire political capital in reforming health care in America. He gambled and he lost, not because he had nefarious intentions, but because he left the gory details to a corrupt Congress and a shady cadre of lying and conniving technocrats, ending up with something vastly different from what he campaigned on. From everything I’m reading now, Mr. Trump is about to walk in Mr. Obama’s footsteps, and if he does, the results will be unsurprisingly identical.

On the campaign trail, Mr. Trump repeatedly stated that Bernie Sanders forfeited his place in history when he “made a deal with the devil” and embraced the corrupt Democratic Party establishment that fought his candidacy in most abject fashion. Guess what? Mr. Trump seems to be making the same deal with the red version of the same devil. Mr. Trump’s cabinet choices indicate that he is now embracing the ultra-conservative factions of the Republican Party, the same people who actively or passive-aggressively opposed his candidacy. Nowhere is this peculiar and completely unnecessary capitulation more evident than in the beleaguered health care sector.

Mr. Trump campaigned on repealing and replacing Obamacare with something “terrific”, because Obamacare premiums are “going through the roof”, and because deductibles are so high that you can't actually use your Obamacare plan “unless you get hit by a truck”, and because people can’t keep doctors and plans they like. Mr. Trump also recognized that some Obamacare provisions are good and should be retained. One would therefore assume that whatever Mr. Trump proposes to replace Obamacare with, will lower premiums, lower deductibles and increase choice of plans and doctors. Although the details were rather fuzzy, two things were consistently mentioned during the campaign: selling insurance across state lines and utilization of health savings accounts. Both “ideas” can be summed up as essentially deregulation of the health insurance industry and the unleashing of free-markets. We’ve seen this movie before.

Déjà Vu

As late as 1978, interest rates on loans were governed by local state usury laws. Based on biblical moral and ethical considerations, these local regulations placed modest limits on interest rates charged by banks in a particular state. Just like our own advocates for selling health insurance across state lines, the national banks lobbied back then for the ability to lend across state lines, which means that the bank home state governs the interest rates in all other states. In 1978 the Supreme Court ruled in favor of the banks, and in 1980 Congress passed formal legislation to that effect. The result, as surprising as that may be, was not fierce competition between banks offering the lowest possible interest rates in all states. Instead, some states immediately removed all caps on usury in order to attract big banks, and high interest rates spread like wildfire, rendering state protections against usury irrelevant.

With a little more help from the Court, the same deregulation was applied to credit card late fees in 1996, with the same typical free-market results for citizens who watched their late fees quadruple. To create the appearance of efforts to counteract the disastrous effects of deregulation on interest rates, the Federal government created the Consumer Financial Protection Bureau, an agency with no power to do anything of consequence, and which is currently busy spending taxpayer money on a mega database containing “more information than most people can remember about themselves”, financial, personal and social. The parallels to health care should be self-evident.

And then of course there is the saga of the Glass-Steagall Act of 1933, which enforced the separation between banking, insurance and dealing in securities, because mixing these activities was seen as a conflict of interest and an increased risk to bank failures. Glass-Steagall was repealed in pieces, with the death blow delivered by the Financial Modernization Act of 1999. Financial institutions merged and integrated vertically and horizontally into gigantic experiment labs for innovative financial instruments with no oversight and no accountability. The results came home to roost in 2008, with millions of people kicked out of their homes while their taxes were diverted to feed the gargantuan players of free financial markets. We never had a Glass-Steagall in health care, but watching hospitals merging, gobbling physician practices and morphing into underwriters, while insurers are expanding in the opposite direction, is more than enough to trigger that spooky déjà vu feeling.

Savings

Health Savings Accounts (HSA) are another financial instrument beloved by free-market advocacy groups. The idea is to allow people to spend their own money as they see fit, instead of forcing them to buy government defined insurance benefits. To sweeten the deal, HSA moneys are not taxable. HSAs are usually paired with so called catastrophic health insurance to cover life’s major disasters. The theoretical logic favoring HSAs is impeccable. Why should you buy insurance for things you don’t need? Why should you buy insurance for routine services you know you will need and are able to budget for, just like you budget for oil changes for your car, haircuts, gutter cleaning and such? Just imagine how expensive all these things would become and how little choice you would have, if you paid for them with insurance. Fair enough.

There is one small problem though. According to a recent Fed report, “forty-six percent of adults say they either could not cover an emergency expense costing $400, or would cover it by selling something or borrowing money”. Another survey from GoBankingRates found that “nearly seven in 10 Americans (69%) had less than $1,000 in their savings account”. A new study from the Association for Neighborhood & Housing Development finds that “more than half of New Yorkers are one paycheck away from homelessness”.  These are not “just” the traditionally poor people in inner cities, rural boonies, Appalachian trailer parks, or however your pampered mind imagines poverty in America. This is the middle class.  These are the “nice” people you see every day all around you. So how much funding do you think will be going into those spiffy HSA accounts? Not much.

Catastrophic Care

This week, President-elect Trump picked Rep. Tom Price, a former orthopedic surgeon, to be the next Secretary of Health and Human Services, and Dr. Price is a man with a plan. The plan is to replace Obamacare with age adjusted, tax credits and HSAs, while making the same model available to employers, Medicare and Medicaid too. People would use the tax credits to buy catastrophic health plans across state lines, and deposit the difference in their HSAs to cover routine health care. Sounds good until you realize that the tax credits proposed by Dr. Price are ridiculously low and would cover less than half the cost of a catastrophic insurance plan. Now, it is possible, that once all Obamacare protections are removed, trashy little health plans, priced exactly the same as the tax credits, will return to the marketplace, but I seriously doubt that anything will be left over for HSA deposits. I’m willing to bet that the majority of employers will jump at the chance to extend the same parsimonious offer to their employees.

Once the Medicare modernization features of Dr. Price’s plan are also implemented and Medicaid gets cut and tossed into the lap of perpetually bankrupt states, America will finally achieve universal catastrophic health care. Let me dispel the bleakness for a brief moment though. Dr. Price’s plan has all sorts of great features for doctors. Malpractice insurance reform, freedom to provide cash services to Medicare beneficiaries, freedom to balance bill, some relief from regulatory burdens and a seat at the table for medical associations, are all included in the plan. It is also quite possible that physicians in non-catastrophic specialties will get to enjoy some well-deserved leisure time. I can’t imagine too many non-catastrophic customers, flush with non-existent HSA cash, banging on their doors. 

Augment and Replace

Mr. Trump has a mandate to replace Obamacare with something “terrific”. He has a mandate to defend Medicare, Medicaid and Social Security. Those are the things he campaigned on and this is the mandate that comes with his election, nothing more and nothing less either. The conservative apparatus that rode into power on his surprisingly long coattails has no independent mandate. Donald Trump was elected President of the United States by the people of these United States in spite of the Republican Party not because of it. We did not send Mr. Trump to the White House to help Speaker Ryan and his conservative posse of faux intellectuals to dismantle the big bad “welfare state”. I can only hope that the President-elect understands that the manufactured urgency of repealing Obamacare, while blowing up Medicare, is nothing but a shrewdly laid trap for him personally, for his presidency, and for the American people.

It may be helpful to remember that for each Obamacare frustrated person, there is at least one fairly content person, and many if not most of those content people are less affluent, mostly white, working families who either receive large subsidies or have become eligible for Medicaid. These are the forgotten workers Mr. Trump promised to speak for, fight for and win for. Yes, Obamacare needs to be replaced, and the best and safest way to replace it is not to repeal it, but to augment it. Try selling insurance across state lines if you must. Add options to pair catastrophic plans with HSAs. Heck, while you’re at it, might as well try an experimental public option. And sure, get all your anti-abortion stuff in there to keep the faux intellectuals happy. Let people choose what works best for them, because free people trump free-markets every single time, and that is truly terrific.

Monday, November 21, 2016

Call to Action: Organizing for Patient Care

By NIRAN S. AL-AGBA, MD and MARGALIT GUR-ARIE     

On November 8th America elected a President who ran on a promise to restore government of the people, by the people, for the people (among other things). However, we cannot expect such government to be given to us on a silver platter, no matter who resides in the White House. We must build it ourselves, by definition. Government of, by, and for the people requires the people to stand up and do more than just vote every four years, do more than author clever blogs, do more than compose brilliant tweets, post cynical quips or write constructive comments on the websites of power. Self-government requires informed citizens with a vision to organize, mobilize, and take purposeful action.
For the last eight years we engaged in all of the former and none of the latter. We know many of you are in the same predicament. We are the everyday people and frontline doctors everybody in government is supposedly trying to help. We don’t entirely doubt the intent, but the end results have been so much less than we want, so much less than the American people deserve, so much less than we know is possible. We come from vastly different backgrounds. We have diametrically opposed political ideologies. We have a broad and dynamic spectrum of prescriptions for how health care in America should work. This is our strength.

You may be elated by the 2016 election outcome; you may be on the fence, indifferent, worried, depressed or positively enraged. Whether you love it or hate it, you cannot deny that something extraordinary happened on November 8th. Whether you think disaster breeds opportunity or victory itself is the opportunity, let’s “seize the present; trust tomorrow even as little as you may” and try to gain some control over our personal and professional fates.

Call to Action

We would like to propose that we organize a workgroup of physicians and people with interest in health care to create evidence and consensus based guidance and recommendations for the new administration as it undertakes major changes in health care policy, legislation and regulation. Our initial thoughts are that we create an objective position paper to address the impeding changes to current health care legislation, free of political and partisan shenanigans. Our dreams are that this grows into a perpetual grassroots advisory group which brings real-world experiences, varied points of view and wisdom from the frontlines of medicine and from everyday life into the hallowed halls of government to inform the work of public servants.

If you think the American people and their doctors should have a voice in governance, if you believe the welfare of your patients stands above politicking, if you want to amplify your voice and the voice of others, please join us. If you think you can contribute a small amount of time to such effort, we invite you to kick start this endeavor. You can remain anonymous if you so choose. You can contribute as much time as you have available. You can choose how, when and what. Let’s leave the actual details open and brainstorm together how best to move forward quickly.

Let’s Roll

Are you all in? Would you prefer to dip your toes in the water first?
Email us today: mga111026 at gmail.com
We will communicate via email to set up a conference call and take it from there. We will do the housekeeping, bottle washing and ashtray emptying to get us started. For those who already expressed enthusiasm (or guarded interest) on Twitter and elsewhere, retweet, spread the word and let’s make this happen. It’s time.

Download PDF version. Please share freely.



Saturday, November 12, 2016

Is the Better Way Really Better?

Dear President-elect Trump,

The American people, myself proudly included, chose to send you to Washington DC to do their bidding. That’s what happened on November 8th 2016. Everything you hear now from the elite punditry is aimed at obfuscating this simple truth. Forget about dainty glass ceilings, we the people were able to break through the fortified ramparts erected by entrenched money and power and exercise our right to govern ourselves. I would caution the smug intelligentsia against underestimating the wisdom of the people once again, and I would caution you against forgetting who sent you there and why we did so. We now know we have the power, and what the people giveth, the people can taketh away.

RyanCare

The ecstatic welcome you received from Paul Ryan and Mitch McConnell the other day looks more like an act of violence than one of true reconciliation. Fair weather friends are usually there because they want something, and in this case they want to hijack the people’s agenda and replace it with their own conservative garbage. Mr. Ryan in particular has been proposing bogus alternatives to Obamacare with alarming regularity. Similar to Obamacare, Mr. Ryan’s health reform plan is based on belief in his own superior intelligence and devoid of any evidence that it can indeed work. Unlike Obamacare, the Ryan plan is also based on the assumption that helping the poor get poorer and the rich get richer is the ultimate role of government.

A few days before this historic election, I used your Old Post Office renovation project to highlight the big picture facets of health care in America in ways you can easily relate to. It will be very helpful if you read that first, believe me. From reading your latest Obamacare repeal and replace literature, I am starting to think that you are about to swallow Mr. Ryan’s fantasy hook, line and sinker. I would like to remind you that on the campaign trail you promised to replace Obamacare with “something terrific”. In keeping with tradition, the GOP Better Way may be great for GOP corporate donors, but for us, it is anything but terrific.

Have you read Mr. Ryan’s plan, Mr. President-elect? I suggest you do, and I suggest you ask your old friend Chuck Schumer to bridge an introduction to Bernie Sanders, who is perhaps the only other elected public servant not beholden to lobbyists and special interests. If I had to summarize the difference between RyanCare and Obamacare I would say that whereas Obamacare is providing people with a government defined set of health care benefits, RyanCare is proposing to make a government defined financial contribution towards purchase of health insurance. This difference extends to all insurance including Medicaid and Medicare, with RyanCare essentially dismantling Lyndon Johnson’s 1965 landmark legislation. I know you’re now in the “take the lumps out, son” phase, but some lumps were just meant to be taken as is.

Industrial Care

While Obamacare and RyanCare differ on how they finance health care services, they are unsurprisingly similar when it comes to controlling health care delivery costs, because this portion of both nightmares was dictated by corporate lobbyists and special interests. When you leave medical decisions in the hands of millions of people interacting with hundreds of thousands of doctors in unique ways, the result is utter chaos, or what we call freedom. The Obamacare lieutenants decided early on that the best way to exert control over costs is to industrialize health care.  You have to admit that this sounds pretty tempting. Industrialization has made lots of things cheaper and often better and more reliable. The conservative Ryan plan, which is by definition dismissive of workers and non-wealthy people in general, went all in with this aspect of Obamacare.

But here we are attempting to industrialize people. Not only is this impossible without enslaving humanity as a whole, but these futile attempts at industrialization are costing us a fortune. This is the fundamental round-hole-square-peg paradigm plaguing both Obamacare and RyanCare, because insurance prices are driven by the prices of goods that are being insured and you cannot have affordable insurance prices for unaffordable products. During the 2008 election season, President Obama made fun of Mrs. Clinton’s proposal to mandate that everybody buys health insurance, because it would be like trying to solve homelessness by mandating that all homeless people buy a house. A couple of years later he did precisely that. RyanCare on the other hand is turning health care into a food stamps program.

Here is the most important piece of health care information you’ll ever need: When you go to a doctor who runs his or her own small business, you pay half as much as when you go to a doctor that is employed by a large health conglomerate, and you get better care to boot.

To be fair, consolidation of health care started decades before Obamacare, but the Obama administration trifecta (the 2009 Stimulus, the 2010 Obamacare and the 2015 MACRA) made consolidation of health care providers pretty much mandatory. In a perverse and illogical way, this set of laws ensures that excessive health care prices are baked into this cake in perpetuity. In particular, the bi-partisan and fairly new MACRA legislation represents a complete regulatory capture of medicine, its transition to indentured servitude to moneyed interests, and hundreds of billions of health care dollars wasted.  Get rid of MACRA Mr. President-elect. Replace it with what Sen. Tom Cotton suggested on the floor right before the Senate voted on it. You do that and you are 90% where we need you to be.

The other day I listened to your favorite negotiator, Mr. Carl Icahn, and his description of how excessive regulations are killing our industries by discouraging capital investment in new machines, which in turn suppresses productivity growth, leaving stock buybacks the only venue for CEO enrichment. Health care is different. In health care, regulatory capture mandates the purchase and expensive operation of machinery that is designed to kill productivity, which leaves consolidation to gain market power, the only revenue enhancing alternative. MACRA is the final, and still removable, nail in this coffin. Whatever you do with Obamacare, if you leave MACRA in place and allow the passage of the 100% lobbyist crafted 21st Century Cures Act, it will all be for naught. To put it in construction terms, if your remodeled Obamacare is the building, MACRA and the Cures Act, are the termites and black mold devouring it from within.

Words that Go Bump in the Swamp

I know the President of the United States sets the tone, but cannot possibly be delving into policy details. Unfortunately, Mr. President-elect, policy details is where corruption lives. You may not be bound by allegiances to money and power, but your political appointees will be. Big league. They will come to you with executive summaries, both written and verbal, so here are three of the most common, most potent and most dishonest health care buzzwords. You should never use them, and you should never use advice from any swamp dweller that is using them, because these are code words for defrauding the public and we, the public, know that, and we are watching carefully. As simple as that.

Patient-Centered – Every calamity in health care is patient-centered. Every time you hear or read patient-centered, repeal and replace it with “circular firing squad”. The most common usage is to demand “transformation to a patient-centered model of care”. Now, you’re a smart man, think. What the hell does that mean? Try these: guest-centered resort, golfer-centered club, gambler-centered casino. See what I mean? People who pitch patient-centered ideas are known as “thought leaders” or “industry experts” and are invariably looking to fleece either doctors or taxpayers or both.

Patient-centered means big health systems using big computers to collect and analyze personal information of patients and target them for certain services that optimize payments and revenues for the system. Very much like the RNC campaign software worked to target voters for you. You think that system was voter-centered? With that answer in mind, perhaps it would be a good idea to remove that patient-centered reference from your website and fire whoever put it there. You are supposed to be the authentic one, remember?

Value-Based – This is a very simple one to understand, because as a businessman, you should know what value-based pricing means, and you should know that it is not something that has the buyer’s welfare in mind. You should also be cognizant of the fact that value-based schemes are intended to enable wealthy patrons to purchase better stuff, while the masses are kept content with generic, cheap stuff. This may work well for socks, but this is not how health care can or should operate. There is no such thing as generic versions of coronary bypass surgery, or buy-one-get-one-free dollar-store stents.

Value-based care is the key to the regulatory capture of medicine. Its sole purpose is to herd doctors and the working class into cheap, substandard systems of health care, and use the leftover money to enrich a vast array of special interests, ranging from insurance companies, think tanks, Silicon Valley vultures, and all the way to software developers in India and computer manufacturers in China. Like all fraudulent schemes to steal hundreds of billions of dollars, this is a huge and very complex subject, but for now you just need to beware people carrying value-based health care solutions. Treat them like they were carrying the plague.

Transparency – I heard you read this term from the teleprompter in a speech about health care. I know you didn’t put it there. Please, stop. President Obama promised the nation that his will be the most transparent administration in history. It ended up being the exact opposite. You said many times during your rallies that you are struck by how smart the American people really are. You were correct in that assessment. We may not look smart, or sound smart, but we are smart and you, of all people, should sympathize with our predicament. We know that a promise of transparency is only necessary if the enterprise is a secretive sham. When you promise transparency in health care prices, we know that we are about to be brutally beaten, raped and robbed. Transparently.

Bottom Line

We did not vote for you because we fell in love with the Republican Party elitist agenda. If that were the case we would have elected Mitt Romney in 2012 or Jeb! in 2016. We picked you precisely because we recognized that the conservative agenda, much like the progressive agenda, is an anti-working people agenda. We know what “defined contributions” are. We know what “vouchers” imply. We know what “skin in the game” means for us. And we know what the synonyms for “modernizing” Medicare and “block granting” Medicaid are. Thanks, but no thanks. We didn’t take much of your campaign-trail bluster literally, but we took your promise to be our voice seriously. Consider this a friendly reminder from the deplorable gallery.
Godspeed Mr. President-elect!