Tuesday, March 28, 2017

Trump Lemonade for Dr. Price

President Trump campaigned on making health care better, cheaper and available to all Americans, regardless of ability to pay. Once Mr. Trump was safely in the White House, the Republican “thought leaders” in Congress were quick to supply him with their stale and superficial “plans” to repeal and replace Obamacare, which were written in protest to President Obama’s policies and were never meant to be implemented. When scrutinized by the rank and file of the Republican Party, it turned out that the Ryan/Price American Health Care Act was neither repealing enough for some, nor replacing enough for others. Nevertheless, Mr. Ryan felt a sense of urgency to ram his pet bill down the throats of not only the opposition party and the public at large, but also the throats of his own party and its rookie President.

The Democratic Party lost no time in whipping up public frenzy against the Ryan/Price bill, and Speaker Ryan lost no time in generating a sense of false urgency to pass his bill now, now, now, because for Paul Ryan this was a once in a lifetime opportunity to begin dismantling the welfare state. From the left, it looked like the bill will be withdrawing billions of dollars in health care benefits from the most vulnerable citizens who also happen to be Trump supporters. From the right, the bill looked like Obamacare Lite because it didn’t throw all the poor people under the bus fast enough.

These were the cards President Trump was dealt. If he signs the bill, he breaks his campaign promises and loses his base. If he comes out against the bill, he confirms the worst fears of all Conservatives and loses Republican support in Congress. There is zero chance for this President to appeal to another set of voters anytime soon, and currently, there is zero chance that even one Democrat in Congress will support anything President Trump proposes, no matter how liberal and beneficial that proposal might be. It was a difficult hand to play, but he played it brilliantly, in my view. Or maybe it was just beginner’s luck.

Right now the Democratic Party and its echo-chamber media are celebrating the defeat of the would-be destroyers of Obamacare. The Republicans are in disarray again. Paul Ryan has been humiliated. Trump, the closer, the grand deal maker, lost big league. Nancy Pelosi declares victory without having to fire one parliamentarian shot. The President in the meantime calls The New York Times and Washington Post reporters and doesn’t sound angry at all. No irate tweets. No below-the-belt punches. No fighting back. No nothing. How weird is that? Think about it. Is this how a beaten Donald Trump sounds like? Nope. That’s how a winning Donald Trump sounds like - calm, collected, magnanimous and low-keyed. President Trump passed his first test.

What’s not next?

According to my Twitter list of health care policy experts, the Big Bad President Trump will now “sabotage” Obamacare so it fails spectacularly, right before the mid-term elections, dragging millions of poor people down with it. Sabotage, espionage, life is good when you are kibitzing from the sidelines. Now why would a Trump administration want to create huge hardships for millions of people right before the mid-term elections? The thought process here is that if Obamacare collapses, the people will blame the Democratic Party, because as long as Republicans do not repeal and replace anything, Democrats continue to “own” health care. Therefore, the GOP will finally have a mandate to get rid of Obamacare any way they see fit, and will likely increase their majorities in both houses in 2018. There is only one little problem with this logic: when things go wrong, most people blame the currently governing administration, not the previous ones, and rightfully so.

Deliberately blowing up the health care system is a criminal endeavor that must be executed in the public eye, because Secretary Price cannot promulgate secret regulations. No administration can afford to do something like this, and expect to survive. Every new President in recent memory insisted that he “inherited a mess”, and every President then gives a State of the Union Address taking credit for fixing said mess. President Trump will be no different. Obamacare may not be in a “death spiral”, as detractors love to decry, but for millions of people, including those who receive generous subsidies, Obamacare is already a monumental mess. No sabotage needed.

Here is a tiny example. Remember that poor 64 year old, making $26,500 per year who, according to the CBO, ended up paying $1,700 under Obamacare and would have had to pay $14,600 under the Ryan plan? Well, that’s only part of the story, because those dollar amounts are just for premiums. Thus a fully subsidized healthy 64 year old is indeed paying “only” $1,700 for the cheapest Silver plan currently available on the Obamacare marketplace (in my zip code). A sicker 64 year old, making $26, 500, with high medical expenses is projected to have over $7,500 in total yearly costs, which is almost 30% of his gross income. I would like to humbly suggest to the Washington DC jet-setters that for this gentleman, there is no difference whether he needs to pay $7,500 or $14,600, or $140,000 or $14,000,000. He can’t come up with any of this. He is uninsured for all practical purposes. The only difference is that under Obamacare, they may have talked him into donating $1,700 to some insurance company.

What is next?

I know conservatives and libertarians abhor the sheer existence of Medicare and Medicaid, but a savvy Secretary of Health and Human Services (HHS) could use the girth and might of these government programs to nurture the reemergence of a relatively free market in medical services, and minor bi-partisan legislation could create a relatively less predatory market in medical products. These two efforts will do more to reduce the price (and costs) of health care than any Obamacare folly or any Obamacare repealing and replacing idiocy. Furthermore, the effects could be framed in terms of freedom, choice, access and even deficit reduction, in addition to quality and affordability for those less fortunate, pleasing people on both sides of the ideological aisle.

Here is my very modest wish list for Secretary Price. All I’m asking for is that from this point onward, we start practicing evidence-based health care reform.
  • Independent Evaluation – Between CMS itself, CMMI, HRSA and other agencies, HHS has billions of discretionary dollars in its budget to try new things, and even more billions to implement statutory experimentations. Traditionally, large sums of money have been spent on health system “transformation” to patient-centered, team-based, coordinated, value-based, managed care (feel free to insert your favorite buzzword if I left something out). Many, but not all, of these “demonstration programs”, pilots, innovation models, etc. include evaluation studies to assess performance and so far the results have been tepid at best, but artfully spun as inconclusive. I want independent evaluations of all CMS funded “initiatives”, and I want programs that do not deliver on promised fantasies to be wound down immediately and the money reallocated to better thought out projects.
  • Practice Research – For the last decade or more, it has been the unequivocal position of HHS that better health care at lower costs necessitates large integrated delivery systems. There is not one iota of bona fide research to support this assertion. And yet, the Federal government has engaged in massive direct and indirect efforts to dismantle the so called “cottage industry” of small independent physician practices. I want CMS to fund several serious comparative-effectiveness studies across various medical practice models before it’s too late and we have nothing left but monopolistic chains for medicine. And I want CMS to follow through and undertake the deconstruction of all infernal medical factories where nobody knows your name, but everybody knows your risk score.
  • Hospital Research – I remember reading something a couple of years ago about someone trying to study the effectiveness of hospitalist care compared to community doctors who are allowed to admit and care for their own hospitalized patients. Hospitalists are another pre-Obamacare “innovation” based solely on hospital profitability arguments. As such, it caught on like wild fire and we have very few community physicians left who follow their patients inside the hospital walls. I want to see that study performed immediately, before the last dinosaurs die off and we forget that continuity and coordination were once built into health care, by default.
That’s it. That’s all I want for Christmas. Disappointed? Don’t be. A comprehensive, well researched report on our health care delivery models (shall we call it The Price Report?) could change the trajectory of health care in America and the entire world. I did not forget about Medicaid, the ludicrous deductibles, the device taxes, the pharma bidding and all those big huge things every pundit is reciting on cable news channels. These are important things of course, but they are temporary solutions at best. Single payer, if implemented tomorrow, is going to implode just as quickly as Obamacare did, and end up rationing care worse than the British system does. The various free market solutions are even more vulnerable to the ominous crescendo of unchecked profit extraction and incompetence engulfing our health care system.

Health care cannot be sustainably fixed in broad political strokes. If we want a real and lasting solution, we will need to step away from the political theater and engage in painstakingly detailed work on fundamentals. Health care is about medicine, and medicine is about applying science to the bodies and souls of people. We know how to do it. We do have the best health care in the world. We just forgot where it is, so now we have to systematically look around until we find it again. Hopefully Dr. Tom Price understands the historic moment he finds himself in.

Thursday, March 23, 2017

A Citizen's Amendment 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.