Monthly Archives: June 2019

Health system cost-effectiveness

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Health system cost-effectiveness

How much value do we obtain per dollar spent on the health system? How has that changed over time? How does it compare across countries? These are tough but important questions.

To explore them, this chart is worth close study. It’s an updated version of one that appears in this 2017 Lancet article by Reinhard Busse, Miriam Blümel, Franz Knieps, and Till Bärnighausen. It represents how much health systems reduce mortality per dollar spent.

Let’s unpack it. Seven countries are represented: US (red, labeled “USA”), Denmark (yellow), France (dark green), Germany (light green, labeled), United Kingdom (red), Switzerland (blue, labeled), Canada (grey). For each country, about a dozen points are plotted, roughly 2006 – 2016 (some start in 2005 and some end in 2015).

Each plotted point represents a year — earlier years are toward the upper left, later ones toward the lower right. And each point, for each country, conveys how many lives were lost that could have been saved by the health system and how much is spent by the health system.

Specifically, the horizontal axis is per capita health spending, in US dollars and adjusted for purchasing power (meaning a dollar equivalent of another currency buys the same amount of goods and services as a US dollar does in the US). All else held constant, one would prefer to spend less on health care, so movement to the left along the axis is preferred.

The vertical axis is amenable mortality per 100,000 people, for those under 75 years old. That is, it’s the number of 0-74 year olds that die per 100,000 due to factors that they health system can address with accessible, timely, and effective health care. All else held constant, one would prefer fewer deaths, so movement downward along the axis is preferred.

With that in mind, points more to the left and further downward are to be preferred than points upward and to the right. That’s because they imply fewer deaths for less money. I don’t care what your values are, you should always prefer less death at lower cost. I’ll let you conclude from that what to make of US health care spending relative to that of any other country represented.

There’s another way to look at this chart, though. Just focus on one specific country— let’s take Germany. As the years passed, Germany (and every other country) spent more on health care. How much reduction in death did it achieve as it did so? The spending is more efficient the greater decrease per dollar. In other words, the steeper the downward slope of a country’s line, the more efficiently it is investing in health care.

Relative to other countries depicted, Germany has a moderately steep downward slope. From about 2010-2015, Denmark’s slope is the steepest shown—vast improvements in mortality per dollar spent. Switzerland’s really flattens out in recent years, indicating very little gain for a lot more spending.

Now look at the US. Recently, it’s line has sloped a tad bit upward. More spending and more death. That’s the worst deal of all.

 

 

 

 

 

Wonky Supreme Court Ruling on Medicare DSH Formula to Affect More Than Money

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Moving forward, the government will have to complete notice-and-comment rulemaking for a broader set of its decisions.

KEY TAKEAWAYS

Monday’s decision by the Supreme Court kicks the dispute back to the District Court level. What happens next is unclear.

Beyond the money at stake, this case increases the rulemaking burden on HHS and CMS, though the extent of that burden is disputed.

Hospitals that treat high numbers of low-income patients secured a big win this week at the U.S. Supreme Court.

Seven of the justices agreed that officials in the U.S. Department of Health and Human Services stepped out of line when they rejiggered a Medicare reimbursement formula for disproportionate share hospitals (DSH) five years ago without a formal notice-and-comment process.

The decision carries implications well beyond the money hospitals say they are owed.

“It’s a big deal for the hospitals, obviously,” says Helen R. Pfister, JD, a New York–based partner with Manatt Health.

By the government’s estimates, the dispute implicates $3-4 billion in payments over nine years. That’s how much more the Centers for Medicare & Medicaid Services would have paid in DSH reimbursements, had the formula not been changed, according to court records.

“But I think it’s also a big deal in terms of the fact that the Supreme Court has clearly indicated that, going forward, CMS is going to have to do notice-and-comment rulemaking for a much more expansive set of agency decisions than they thought and argued in this case that they would need to do,” Pfister adds.

Precisely how much of the routine work completed by HHS and CMS will be affected by this broader take on notice-and-comment rulemaking remains to be seen. While some stakeholders have raised concerns the added burden could stifle the government’s work, others contend any inconvenience imposed will be both manageable and beneficial.

In any case, the impact of Monday’s decision will flow along two distinct paths, affecting not only hospital finances but also, for better or worse, the way HHS and CMS operate.

What’s Next, Procedurally?

In 2016, nine hospitals led by Allina Health Services lost their case against HHS at the U.S. District Court in D.C., where a judge ruled that notice-and-comment rulemaking wasn’t required. In 2017, however, three judges at the D.C. Circuit Court of Appeals reversed the lower court’s decision and sent the dispute back for further proceedings.

In 2018, attorneys for HHS asked the Supreme Court to review the appellate decision. Now that the justices have affirmed the Circuit Court’s decision, the parties have up to seven days to file a status report at the District Court level on where the case stands, according to court records. That filing, expected by early next week, could shed light on where things are headed procedurally.

Pfister says she doesn’t think anyone knows for the time being whether the government will automatically revise DSH payments for the affected fiscal years, pursue another round of notice-and-comment rulemaking, or take some other course of action in response to the Supreme Court ruling.

And the parties themselves aren’t saying much. When asked about the agency’s plans, a CMS spokesperson told HealthLeaders on Wednesday that the agency is still reviewing the decision. Allina referred questions to its law firm, which declined to comment.

Beyond the nine plaintiff hospitals involved in this week’s Supreme Court decision, there are hundreds of plaintiffs suing HHS on similar grounds. Dozens of follow-on lawsuits have been consolidated into a single docket pending before U.S. District Judge Amy Berman Jackson. Parties to that proceeding have up to 14 days to file a status report in light of the Supreme Court’s decision, according to court records.

An Overly Burdensome Decision?

The government’s attorneys had issued dire warnings about the potential consequences of the decision the Supreme Court ultimately reached.

The notion that CMS must go through a notice-and-comment process for the sort of routine process at issue in this case could “substantially undermine effective administration of the Medicare program” because it would apply not just to DSH formula calculations but to “nearly every instruction” the agency gives to its contractors as well, U.S. Solicitor General Noel J. Francisco argued on HHS’ behalf.

Pfister largely rejects the government’s dire take on the decision’s impact.

“I think that might have been a little bit hyperbolic,” she says.

But other stakeholders outside the government have taken the Supreme Court’s ruling as a troubling sign of uncertainty to come.

“This is a frightening decision, that throws a lot of doubt on the validity of thousands of pages of Medicare sub-regulatory guidance,” Adam Finkelstein, JD, MPH, counsel with Manatt Health and a former health insurance specialist with the CMS Innovation Center, wrote in a tweet.

Stephanie A. Kennan, senior vice president of federal public affairs for McGuire Woods Consulting in Washington, D.C., tells HealthLeaders that she thinks the government’s argument “is somewhat overblown.” Officials should be able to manage any added burden from this ruling, even if it slows them down a bit, she says.

“I think it may mean they cannot move as quickly on some policies as they would like to,” Kennan says.

A Boon to Public Input?

The benefits of a more-transparent process justify any added hassle that may stem from having to go through a mandatory comment process more often as a result of this decision, Kennan says.

“In this case, they have to do 60-day comment periods, which can seem like an eternity if you want to keep the process moving, regardless of whether you’re the agency or a stakeholder,” she says. “The transparency is probably worth the 60 days.”

But others reject the notion that this decision should be seen as balancing effective governance with transparency.

“Allina isn’t a vindication of the importance of public participation in agency decision-making. It’s a testimonial to the heedlessness of lawyers who impose silly procedural rules on an administrative state they only dimly understand,” Nicholas Bagley, JD, a law professor at the University of Michigan who teaches on administrative law and health law, wrote in a series of tweets.

“Bear in mind,” he added, “that CMS is a tiny, beleaguered agency … To further encumber it will make Medicare more capricious, not less, as staffers tend to senseless procedures instead of doing their jobs.”

Moving forward, HHS and CMS will continue to have discretion to determine whether to go through notice-and-comment with a given action, Pfister says. The difference now, she says, is that there’s a stronger incentive for government officials to cover themselves; otherwise, another case like Allina’s could pull them into another round of prolonged litigation.

 

 

A Large Employer ‘Frames’ The ‘Medicare For All’ Debate

Posted on by • Posted in 2020 Election Issues, Business Case, Competition, Economic Case, Employer-Based Health Insurance, Health Insurance Industry, Health Policy, Labor Union, Medicare, Medicare for All, Single Payer Health System • Leave a comment

https://www.healthleadersmedia.com/finance/large-employer-frames-medicare-all-debate

As health costs continue to grow, straining employer budgets and slowing wage growth, the business community is beginning to take the option more seriously.

KEY TAKEAWAYS

More than 156 million Americans get employer-paid healthcare, making it by far the single-largest form of coverage.

Medicare-for-all supports say the health system overall would see savings from a coordinated effort to lower prices and administrative costs and eliminate insurance company profits.

While large business lobbying groups strongly oppose Medicare for all, the resolve of many in the business community — especially among smaller firms — may be shifting.

Walk into a big-box retailer such as Walmart or Michaels and you’re likely to see MCS Industries’ picture frames, decorative mirrors or kitschy wall décor.

Adjacent to a dairy farm a few miles west of downtown Easton, MCS is the nation’s largest maker of such household products. But MCS doesn’t actually make anything here anymore. It has moved its manufacturing operations to Mexico and China, with the last manufacturing jobs departing this city along the Delaware River in 2005. MCS now has about 175 U.S. employees and 600 people overseas.

“We were going to lose the business because we were no longer competitive,” CEO Richard Master explained. And one of the biggest impediments to keeping labor costs in line, he said, has been the increasing expense of health coverage in the United States.

Today, he’s at the vanguard of a small but growing group of business executives who are lining up to support a “Medicare for All” national health program. He argues not that healthcare is a human right, but that covering everyone with a government plan and decoupling healthcare coverage from the workplace would benefit entrepreneurship.

In February, Master stood with Rep. Pramila Jayapal (D-Wash.) outside the Capitol after she introduced her Medicare for All bill. “This bill removes an albatross from the neck of American business, puts more money in consumer products and will boost our economy,” he said.

As health costs continue to grow, straining employer budgets and slowing wage growth, others in the business community are beginning to take the option more seriously.

While the influential U.S. Chamber of Commerce and other large business lobbying groups strongly oppose increased government involvement in healthcare, the resolve of many in the business community — especially among smaller firms — may be shifting.

“There is growing momentum among employers supporting single-payer,” said Dan Geiger, co-director of the Business Alliance for a Healthy California, which has sought to generate business support for a universal healthcare program in California. About 300 mostly small employers have signed on.

“Businesses are really angry about the system, and there is a lot of frustration with its rising costs and dysfunction,” he said.

Geiger acknowledged the effort still lacks support from any Fortune 500 company CEOs. He said large businesses are hesitant to get involved in this political debate and many don’t want to lose the ability to attract workers with generous health benefits. “There is also a lingering distrust of the government, and they think they can offer coverage better than the government,” he said.

In addition, some in the business community are hesitant to sign on to Medicare for All with many details missing, such as how much it would increase taxes, said Ellen Kelsay, chief strategy officer for the National Business Group on Health, a leading business group focused on health benefits.

Democrats Propel the Debate

For decades, a government-run health plan was considered too radical an idea for serious consideration. But Medicare for All has been garnering more political support in recent months, especially after a progressive wave helped Democrats take control of the House this year. Several 2020 Democratic presidential candidates, including Sens. Bernie Sanders and Elizabeth Warren, strongly back it.

The labor unions and consumer groups that have long endorsed a single-payer health system hope that the embrace of it by employers such as Master marks another turning point for the movement.

Supporters of the concept say the health system overall would see savings from a coordinated effort to bring down prices and the elimination of many administrative costs or insurance company profits.

“It’s critical for our success to engage employers, particularly because our current system is hurting employers almost as much as it is patients,” said Melinda St. Louis, campaign director of Medicare for All at Public Citizen, a consumer-rights group based in Washington.

Master, a former Washington lawyer, worked on Democratic Sen. George McGovern’s presidential campaign before returning to Pennsylvania in 1973 to take over his father’s company, which made rigid paper boxes. In 1980, he founded MCS, which pioneered the popular front-loading picture frame and steamless fog-free mirrors for bathrooms. The company has grown into a $250 million corporation.

Master frequently travels to Washington and around the country to talk to business leaders as he seeks to build political support for a single-payer health system.

In the past four years, he has produced several documentary videos on the topic. In 2018, he formed the Business Initiative for Health Policy, a nonprofit group of business leaders, economists and health policy experts trying to explain the financial benefits of a single-payer system.

Dan Wolf, CEO of Cape Air, a Hyannis, Mass.-based regional airline that employs 800 people calls himself “a free market guy.” But he also supports Medicare for All. He said Master helps turn the political argument over single-payer into a practical one.

“It’s about good business sense and about caring for his employees and their well-being,” he said, adding that employers should no longer be straddled with the cost and complexity of healthcare.

“It makes no more sense for an airline to understand health policy for the bulk of its workers than for a health facility to have to supply all the air transportation for its employees,” he said.

Employers are also an important voice in the debate because 156 million Americans get employer-paid healthcare, making it by far the single-largest form of coverage.

Master said his company has tried various methods to control costs with little success, including high deductibles, narrow networks of providers and wellness plans that emphasize preventive medicine.

Insurers who are supposed to negotiate lower rates from hospitals and doctors have failed, he added, and too many premium dollars go to covering administrative costs. Only by having the federal government set rates can the United States control costs of drugs, hospitals and other health services, he said.

“Insurance companies are not watching the store and don’t have incentives to hold down costs in the current system,” he said.

Glad The Boss Is Trying To Make A Difference

What’s left of MCS in Pennsylvania is a spacious corporate office building housing administrative staff, designers and a giant distribution center piled high with carton boxes from floor to ceiling.

MCS pays an average of $1,260 per month for each employee’s healthcare, up from $716 in 2009, the company said. In recent years, the company has reduced out-of-pocket costs for employees by covering most of their deductibles.

Medicare for All would require several new taxes to raise money, but Master said such a plan would mean savings for his company and employees.

MCS employees largely support Master’s attempt to fix the health system even if they are not all on board with a Medicare for All approach, according to interviews with several workers in Easton.

“I think it’s a good idea,” said Faith Wildrick, a shipper at MCS who has worked for the company 26 years. “If the other countries are doing it and it is working for them, why can’t it work for us?”

Wildrick said that even with insurance her family struggles with health costs as her husband, Bill, a former MCS employee, deals with liver disease and needs many diagnostic tests and prescription medications. Their annual deductible has swung from $4,000 several years ago to $500 this year as the company has worked to lower employees’ out-of-pocket costs.

“I’m really glad someone is fighting for this and trying to make a difference,” said Wildrick.

Jessica Ehrhardt, the human resources manager at MCS, said the effort to reduce employees’ out-of-pocket health costs means the company must pay higher health costs. That results in less money for salary increases and other benefits, she added.

Asked about Medicare for All, Ehrhardt said, “It’s a drastic solution, but something needs to happen.”

For too long, Master said, the push for a single-payer health system has been about ideology.

“The movement has been about making healthcare a human right and that we have a right to universal healthcare,” he said. “What I am saying is this is prudent for our economy and am trying to make the business and economic case.”

 

“This is prudent for our economy and am trying to make the business and economic case.”

 

 

Oral arguments to be heard in birth control coverage case

Posted on by • Posted in Birth Control, Birth Control Coverage, Dept of Health and Human Services (HHS), Health Insurance Coverage Adequacy, Health Insurance Industry, Injunction, Lawsuit, Religious Exemptions • Leave a comment

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A federal judge in California will hear oral arguments today in a case that could decide whether employers can refuse to provide certain health services that go against their religious beliefs.

Following a 2011 HHS mandate that required employers to provide certain health care — including birth control and emergency contraception — the Catholic nonprofit Little Sisters of the Poor sued in 2013 to be exempt from the rule, but five years and lengthy court battles later, the case is still ongoing.

New HHS rules created in 2017 allowed for religious exemptions for employers, including the group run by nuns, but 13 states and the District of Columbia sued to block the rules.

Two judges in January temporarily blocked the rules from going into effect, and today’s hearing will decide whether those injunctions will stay in place.

Trump administration adds new restrictions for fetal tissue research

Posted on by • Posted in 2020 Election Issues, Abortion, Clinical Research, Clinical Research Funding, Fetal Tissue, Health Policy, Planned Parenthood • Leave a comment

https://www.axios.com/trump-admin-new-funding-issued-fetal-tissue-research-eb644a59-72d2-44c7-b0ca-ea9c2708214b.html

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The Trump administration eliminated funding for fetal tissue medical research by government scientists on Wednesday.

Why it matters: The decision is considered a win for anti-abortion rights supporters and a major blow to scientists who rely on the tissue from elective abortions for research into diseases like cancer, HIV and Zika, the Washington Post reports.

The administration also revoked a multimillion-dollar contract for a University of California at San Francisco lab that uses the tissue to test HIV treatments, per the Post.

  • UCSF’s multiyear government contract was terminated on Wednesday without further detail.

Context: The debate over the federal use of fetal tissue — obtained from abortions — got off the ground in 2015, when an anti-abortion rights group released videos alleging Planned Parenthood profited from selling the material. Planned Parenthood claimed the footage had been doctored to mislead, and after several state and congressional inquiries, the health care provider was cleared of misconduct.

  • Trump’s health department conducted a several-month audit of fetal tissue research “in light of the serious regulatory, moral, and ethical considerations involved,” per the Department of Health and Human Services.

The National Institutes of Health funds about 200 external research products that use fetal tissue, which will be unaffected. There are only 3 NIH-run projects that will be impacted.

  • Future grant applicants will be reviewed by an ethics advisory board.

What they’re saying: While the move is supported by anti-abortion advocates, scientists say it’s an impediment to finding new medical treatments.

  • The new rules “further erode the unique potential fetal tissue research holds for addressing such critical objectives as fighting blindness, ending Parkinson’s Disease, and advancing maternal and child health,” Research!America said in a statement.
  • “Valuable research that is directed at helping to develop therapies for terrible diseases will be stopped,” Larry Goldstein, a distinguished professor in the University of California, San Diego, told the Washington Post.

While scientists say that there is no equally effective alternative to fetal tissue in research, opponents of its use say that some newer methods show potential, the Post reports.