Does the United States Ration Health Care?

https://www.commonwealthfund.org/blog/2019/does-united-states-ration-health-care

MRI taking place in the U.S.

As recent congressional hearings on Medicare for All proposals have illustrated, members of Congress and presidential candidates are looking outside the United States to find ways to achieve universal coverage. Some have suggested that other countries are able to provide universal coverage because they “ration” care — a term rife with negative connotations. This post examines the extent to which health care is rationed in Germany, the Netherlands, Sweden, Switzerland, and the United Kingdom — as compared to the U.S.

Examples of health care rationing tend to focus on long wait times for procedures —such as hip replacements, or MRIs — or limited access to the newest drugs. This happens in some (but not all) countries and can be a challenge for policymakers. But there are other ways in which health systems engage in rationing, by restricting access to insurance, through insurance benefit design, or by imposing high patient cost-sharing. While other countries may ration because of national budget constraints and supply-side factors, the United States’ lack of access to comprehensive insurance and affordable care represent a de facto form of rationing that leads people to delay getting care or going without it entirely.

Getting in the Door

In the five European countries we examined, all residents are entitled to health care through the national system. These range from tax-funded systems in Sweden or the U.K. to private insurance-based systems in Germany, the Netherlands, and Switzerland. In the latter, governments regulate premiums to be affordable and provide income-related subsidies to low-income families, which include 27 percent of Swiss and 30 percent of Dutch residents. Governments also mandate generous benefit packages that typically guarantee a minimum set of services: primary, specialty, and hospital care; prescription drugs; mental health; maternity; and palliative care.

In comparison, there are 30.4 million uninsured people in the U.S. Not having affordable, comprehensive insurance coverage often means that sick Americans do not even get in the door to see a doctor. For those who do have coverage, new rules that allow states to circumvent the Affordable Care Act’s mandated essential health benefits may mean skimpy coverage for some.

Waiting to Be Seen

Patients in some countries face longer wait times for specialty care than in the U.S., where only 25 percent of Americans need to wait longer than one month for a specialist appointment. Patients in Germany and Switzerland get in just as fast (27% and 26%, respectively) as their U.S. counterparts, but those in Sweden and the U.K. do not (45% and 43%, respectively). Similarly, very few U.S., Dutch, and Swiss patients (4% to 7%) who need elective surgery face wait times longer than four months, while 12 percent of Swedish and British patients do. It should be noted that in Sweden and the U.K., where wait times for specialty care are longer, people can buy supplemental insurance to gain quicker access to private specialists.

While Americans overall enjoy shorter wait times for specialty care, wait times for same- or next-day appointments when sick are around average compared to other countries. U.S. adults are among the most frequent users of emergency departments. Nearly half who do report doing so because they couldn’t get an appointment with their regular doctor.

Weighing Health Against Your Wallet

In a recent Commonwealth Fund survey, fewer than one of 10 patients in the U.K., Germany, the Netherlands, or Sweden reported skipping needed care or treatments because of cost. This contrasts sharply with the U.S., where one of three Americans reported the same. This is partly because of the rise in high deductibles, unpredictable and opaque copayments, and higher health care prices in the U.S. than in other countries. An estimated 44 million Americans who have insurance are effectively underinsured because their out-of-pocket costs and deductibles are very high relative to their incomes.

Other countries are more protective. In the U.K., Germany, and the Netherlands, patients have no out-of-pocket costs when they visit a primary care doctor, and Brits never pay for hospital care. In Germany, out-of-pocket costs are capped at 2 percent of annual household income and 1 percent for chronically ill people. In Sweden, out-of-pocket costs for physician visits and drugs are capped at $370 annually. No one in these five countries declares bankruptcy because of medical debt.

Paying for Value

A commitment to providing universal coverage means that other countries have to make hard choices to ensure that each health care dollar is spent effectively.

Countries aim to give patients access to the most clinically meaningful and cost-effective drugs. In the U.K., only drugs that are deemed cost-effective are covered, while in Germany, manufacturers have to demonstrate that their new drug adds clinical benefit to negotiate a higher price than other existing drugs. This doesn’t mean that new technologies aren’t available; in fact, 79 percent of new cancer drugs are approved for routine use in the U.K.

These kind of controls, coupled with fixed copayments and annual caps on patient drug spending, translate into better access. While nearly one of five U.S. adults skip doses or do not fill a prescription because of costs, just 2 percent to 9 percent of patients do so in the other countries discussed here.

Conclusion

It would be a missed opportunity for America to ignore lessons about universal coverage from other countries out of a fear that they ration health care more than we do. In reality, more people in the U.S. forgo needed health care because access to care is rationed through lack of access to adequate insurance or unaffordable services and treatments.

 

 

 

2020 Election’s Healthcare Debate: Truths, Half-Truths, And Falsehoods

https://www.forbes.com/sites/joshuacohen/2019/07/08/2020-elections-healthcare-debate-truths-half-truths-and-falsehoods/#57fb72076466

Image result for health policy

are may emerge as the number one issue in the 2020 election. In itself this isn’t surprising, given that for many decades the electorate has considered healthcare a key issue.

And, the truth is healthcare access continues to be a major problem in the U.S., along with inequalities in outcomes, relatively high prices for healthcare services, and high out-of-pocket spending. Democratic presidential candidates have weighed in on these issues.

Without more clarity, however, the debate runs the risk of unraveling into exercises in sophistry.

Politicians in America have had a knack for telling half-truths or even untruths about healthcare. For example, in 2012, John Boehner claimed that “the U.S. has the best healthcare delivery system in the world.” And, just prior to signing the Affordable Care Act (ACA) into law, President Obama stated “if you like your healthcare plan, you can keep it.”

Many constituents — myself included — are also confused by certain terms used in the current debate.

Democrats appear to all want universal coverage. Among the presidential candidates there are different ideas about how to achieve the objective. One group, led by Vermont Senator Bernie Sanders, wants a single payer system, misnamed “Medicare for All.” When Sanders and others talk about Medicare for All, they aren’t aiming to expand the currently existing Medicare program to include all U.S. residents. Rather, they’re talking about a government program that would replace all currently existing forms of insurance, both private and public. Sanders’s plan would also substitute premiums and out-of-pocket spending with taxes. Whether this single payer system would result in lower healthcare costs for individuals – paid in the form of premiums and out-of-pocket costs, or taxes – remains to be calculated.

When Sanders and others speak of eliminating private insurance and replacing it with Medicare for All they ignore the fact that private insurance is embedded in many aspects of the Medicare program. For example, more than a third of Medicare beneficiaries are enrolled in a Medicare Advantage plan, and over 60% have their prescription drug coverage managed in stand-alone fashion by a prescription drug plan. So, in addition to the abolition of commercial private insurance, Medicare for All would radically alter the Medicare program as it operates today, which makes the name of Sanders’ plan all the more curious.

There are of course some things that presumably Medicare for All would do that the currently existing Medicare program does not, including coverage of long-term care expenses, hearing, dental, vision and foot care.

A number of candidates have proposed tinkering with the existing system by expanding Medicare eligibility, i.e., Medicare for More, and still others have proposed including a “public option” to augment ACA. Regarding the former, certain groups of people — for example, those over age 50 — would be offered the opportunity to purchase Medicare. And, in the ACA-plus scenario, certain individuals could buy into existing programs, such as Medicaid, state employee health plans, or an entirely new health plan run by the state.

One area of apparent consensus across the Medicare for All, Medicare for More, and ACA-plus camps is establishing a system in which there are lower reimbursement rates for healthcare services, which would drive down costs. Currently, there is a very sizable gap between Medicare and private health insurer reimbursement rates to hospitals and physicians. Medicare for All goes furthest in ratcheting down payments to essentially a single rate. By abolishing private insurance the rates would be reduced to Medicare levels, which are at least 40% lower. This, however, could prove to be problematic as such measures could force hospitals to close if they had to accept the rates currently paid by Medicare. Physicians would also stand to lose under a drastic rate reduction.

The healthcare industry is particularly opposed to Medicare for All because of concerns about disruption to the system – even undermining insurers’ raison d’être – and much lower reimbursement rates.

A frank discussion would be welcome regarding the implications of all proposals across the political spectrum, including ramifications of undoing the ACA. For too long, the healthcare debate on both sides of the aisle has shied away from explaining the consequences of policy proposals, or inaction for that matter.

 

 

The Fifth Circuit Court Hears Arguments on the Future of the ACA

https://www.commonwealthfund.org/blog/2019/fifth-circuit-court-ruling-future-aca

columns at courthouse

The future of the Affordable Care Act (ACA), the millions of Americans who depend on it, and, frankly, the American health care system, every part of which is touched by the ACA, were on the line in a federal courthouse in New Orleans on Tuesday. The Fifth Circuit United States Court of Appeals heard 106 minutes of oral argument in the case of Texas v. U.S., in which a district court judge ruled that the entire ACA was invalid. The case is being pursued by 18 Republican states and two individuals, joined by the United States on the appeal. Twenty-one Democratic attorneys general (AGs) and the U.S. House of Representatives have intervened to defend the ACA.

The plaintiffs argue — in a decision accepted by district court Judge Reed O’Connor — that:

  • the Supreme Court in 2012 held that the ACA’s individual mandate was unconstitutional as a command, and constitutional only as a tax
  • Congress in 2017 zeroed out the tax, leaving the mandate entirely unconstitutional
  • the mandate is essential to the rest of the ACA, which must be invalidated once the mandate is struck down.

The defendants contest each of these claims and further argue that the plaintiffs lack standing to bring the case since they have not been injured by the mandate.

The case was heard by three judges: Carolyn Dineen King, appointed by President Jimmy Carter; Jennifer Walker Elrod, appointed by President George W. Bush; and Kurt D. Engelhardt, appointed by President Donald Trump. Judges Elrod and Engelhardt questioned the parties vigorously; Judge King did not speak during the proceeding.

Nearly half of the argument focused on the question of the plaintiffs’ standing to bring the action and of the Democratic AGs and House to appeal the judgment. Under the Constitution, federal courts can only hear a case challenging a law if at least one of the plaintiffs is actually injured by the law and can only hear an appeal if at least one of the appellants is affected by the judgment.

Judge Elrod seemed skeptical of the argument made by the appellant Democratic AGs that the zeroing out of the tax made compliance with the mandate optional and therefore incapable of harming the plaintiffs. Judges Elrod and Englehardt seemed to accept the plaintiffs’ argument that the mandate remains a legal command, and as such harms the individual plaintiffs by requiring them to buy insurance they do not want. Judge Elrod also suggested that the Republican states might have standing because they had to fill out tax forms related to the mandate.

All the parties agreed that the court had jurisdiction to hear the appeal and did not contest the fact that the invalidation of the ACA would cost the Democratic states a substantial amount of money, although Judge Elrod questioned whether the lower court’s order applied to the Democratic states.

Judges Elrod and Engelhardt also greeted skeptically the argument of the Democratic AGs and House that the 2017 tax bill did not affect the constitutionality of the mandate. The Democratic AGs and House argued that the Supreme Court held in 2012 that the ACA merely gave individuals subject to the mandate a choice between buying insurance or paying a tax. The tax bill did not change this; it simply made the tax optional. The plaintiff–appellees argued that with the tax zeroed out, the mandate was wholly unconstitutional. Judges Elrod and Englehardt seemed sympathetic to this argument, although Judge Elrod prodded the plaintiffs on their position.

The court seemed a bit more uncertain, however, on the consequences of holding the mandate unconstitutional on the rest of the ACA. The Republican AGs argued that the findings section of the ACA created an “inseverability clause” by declaring that the mandate was “essential” to — and thus not severable from — other sections of the ACA. The Democratic AGs and House disagreed, arguing that when Congress adopted the 2017 tax bill it clearly intended to affect no other provisions of the ACA.

The judges seemed unimpressed with the statements made by members of Congress to this effect, asking why Congress did not repeal the mandate or the findings if it meant to preserve the rest of the law. (In fact, Congress couldn’t have done so, since the tax bill was a budget reconciliation bill that could only address provisions with financial impact.) Judge Elrod suggested that some members of Congress might have seen the zeroing out of the mandate tax as a “silver bullet” to bring down the ACA, even though there is no evidence of this and it would impute to Congress the intent to create an unconstitutional law. Judge Engelhardt asked why the Senate was not involved in the case if their intent not to harm the law was so clear.

The position of the Department of Justice (DOJ) on severability was quite murky, frustrating the court. On one hand, the DOJ argued that the entire ACA was inseverable from the mandate and thus invalid. On the other, the DOJ contended that as a matter of remedy, the court (or the district court on remand) should only enjoin compliance of provisions that directly affected the plaintiffs; perhaps only in the states that had sued. Remanding to the district court would likely be a futile exercise. Judge O’Connor has already concluded that the entire statute is inseverable. At one point, as the court pressed the DOJ attorney to clarify his position, he responded, “A lot needs to get sorted out and it’s complicated.”

Judge Englehardt seemed to think the problem was essentially political and should be left to Congress to determine which provisions were invalidated and which survived. Accusing Congress of not taking responsibility to clean up the mess that would be caused by invalidation of the statute overlooks, however, the responsibility of the judiciary not to create the mess in the first place, as the district court has done in its sweeping decision. This is one of the reasons why existing law on severability directs courts to invalidate only so much of a law as is necessary when a provision is found to be unconstitutional.

Listening to the argument, one may conclude that judges Engelhardt and Elrod do not understand the scope of the ACA and the serious trouble that invalidating it in its entirety would cause for the American health care system. Suggesting that Congress could readily “fix” the problems caused by the lower court’s decision or that a supposed “fix” other than reversal is even needed — or possible — reveals a lack of understanding of the scope of the ACA and a frightening degree of irresponsibility.

There seems to be a real possibility, however, that the Fifth Circuit may affirm the lower court’s judgment. It will then again be up to the Supreme Court to sort things out. In the meantime, a Fifth Circuit decision invalidating the ACA will likely become a major issue in the 2020 election. We should see by the fall whether the questions pressed by the court today presage its conclusions.

 

 

 

Judge halts Philadelphia hospital closure

https://www.beckershospitalreview.com/finance/judge-halts-philadelphia-hospital-closure.html

Image result for hahnemann university hospital

A Philadelphia Common Pleas judge granted part of a preliminary injunction request sought by the city to stop Hahnemann University Hospital from closing, but the Philadelphia hospital plans to continue scaling back services this week.

Judge Nina Padilla granted the injunction, which stops Hahnemann’s owners from shutting down the hospital without a closure plan authorized by the Philadelphia health commissioner. The injunction specifically prohibits Hahnemann’s owners “from closing, ceasing operations, or in any way further reducing or disrupting services” at the hospital’s emergency room until the health commissioner signs off on the closure plan, according to KYW Newsradio.

Hahnemann is diverting high-level trauma cases, but the hospital’s ER will remain open to treat patients with minor health issues, Marcel Pratt, city solicitor of Philadelphia, told KYW Newsradio.

Although the ER will remain open, Hahnemann plans to scale back other services this week. The hospital said it will stop all nonemergency surgeries and procedures, including child deliveries, on July 12, according to CBS Philly.

Philadelphia Academic Health System, which entered Chapter 11 bankruptcy June 30, plans to close Hahnemann University Hospital by Sept. 6.

 

Accountable Care Organizations: The case for “embracing” down-side risk

https://www.linkedin.com/pulse/accountable-care-organizations-case-embracing-risk-thomas-campanella/

The picture above is not exactly on point, but who can resist a little boy “embracing” a bear.

Per the Centers for Medicare & Medicaid Services (CMS), Accountable Care Organizations (ACOs) are groups of doctors, hospitals, and other health care providers, who come together voluntarily to give coordinated high quality care to the Medicare patients they serve (and hopefully saves money in the process).

ACOs are a product of the Affordable Care Act of 2010 (ACA). The theory behind ACOs was based on the recognition that we have a fragmented healthcare system that contributes to poor quality and higher healthcare costs.

Hospital-based health systems aggressively jumped on the ACO bandwagon starting with the passage of the ACA and, in the process, established relationships with physicians, ancillary providers, long-term care organizations, etc. Many times these Health Systems acquired (especially physicians) rather than established collaborative agreements with these community providers.

As a result of these acquisitions and collaborations, the hospital-based ACO and, in turn, the parent health systems became an even greater force in their communities. They were also in a better position to negotiate with payers because of the increased leverage they had as a result of their enhanced local provider presence. 

This also had a negative impact on health systems, since it did increase their fixed costs and made them less flexible to respond to competitors of different forms, especially in the outpatient and home setting.

Have ACOs lived up to their promise?

There have been many articles and research studies on the value of ACOs to determine if they have lived up to their promise of increased quality and cost-efficiencies. The consensus of research seems to be that ACOs have had a positive impact on quality, especially with regard to continuity of care for individuals with chronic diseases.

The jury is still out on the cost savings side, especially for hospital-based ACOs. 

Recently CMS has required that hospital-based ACOs to take on both up-side and downside risk.

Historically, ACOs have had the ability to take on only upside risk (or rewards), but at a lower percentage of potential gain vs. what they would have received if they were also willing to take on downside risk.

As I have noted in prior blogs, I am believer in risk/value-based contracting with downside financial exposure for hospital systems. I support this approach, not in a vindictive way, but because I want hospitals to survive and prosper in this new world of healthcare.

I also believe that if we are to successfully evolve from a “sick-care” system to a true “health” system, hospitals need to enter into the appropriate payer contracts that reward them for keeping patients healthy, not just for providing additional services.

Breaking down the silos inside and outside the walls of the hospital

I have worked in the healthcare industry in a variety of sectors since the early 1980s and during that period of time, I constantly heard the refrain about the need to break down the silos of healthcare both inside and outside the walls of the hospital.

The fee-for-service payment methodologies that exist today “the more you do the more you make” creates no “real” incentives to break down these silos. ACOs that have downside risk exposure along with payment methodologies such at capitation and bundled payments have the real ability to break down these silos.

As long as the majority of payments from payers is based on the fee-for-service payment methodologies, hospitals will have no “real” incentives to break down the silos that prevent value-based care from being provided. It also does not provide any “real” incentives to keep people healthy.

Per the dictionary, “Accountability refers to an obligation or willingness to accept responsibility for one’s actions. … When roles are clear and people are held accountable, work is accomplished efficiently and effectively. Furthermore, constructive change and learning is possible when accountability is the norm.”

While this definition was not met for ACOs, it really does apply and was ultimately the goal of the original drafters of the ACO concept. ACOs must be held accountable, and only through downside risk along with appropriate rewards will that occur.

If we want to achieve our goals of a value-base healthcare system as well as an overall healthier society, we need to create the proper incentives in our payment methodologies. As I have stated repeatedly in past healthcare blogs, “a healthcare system is shaped by what you pay for and how you pay for it.” The “how you pay for it” gets to the heart of the “risk” linkage with regard to hospital-based ACOs.

All of this is not to say that physician-led ACOs should not have risk but, given their size, these independent practices are much more financially vulnerable. Payment models for physician-led ACOs need to recognize the current value they are bringing to the ACO world, and consider ways to gradually add a risk component.

Hospital-based ACOs are looking to exit (or walk away from) Medicare Shared Savings Programs if required to take on downside risk

Per a recent article (April 26, 2019), “Just over half of accountable care organizations (ACOs) said they would consider leaving (or walking away from) the Medicare Shared Savings Program (MSSP) if required to take on more downside risk, revealed a study published in Health Affairs.

Thirty-two percent of ACOs said they are extremely or very likely to leave, and 19 percent believe they are moderately likely to leave.

The results also showed that there were significant differences in responses from physician-based ACOs and hospital-based ACOs.

“Approximately two-thirds of physician-based ACO respondents reported that they were likely to remain in the program if required to accept downside risk, compared with only about one-third of hospital-based ACOs,” the team said.

“This reflects the fact that physician-based ACOs have performed better, and a higher proportion of these ACOs have earned shared savings, than hospital-based ACOs. Physician-based ACOs have generated substantial savings by reducing spending for both inpatient and outpatient hospital services, which has not been true for hospital-based ACOs.”

Hospital based ACOs and well as hospital systems in general are doing themselves “no favors” by not accepting risk. 

By entering into “risk-based” contracts, hospital systems will create the appropriate incentives to address their supply-chain costs. Hospitals would also find it easier to engage physicians in addressing the cost side of the equation if physicians also understood and embraced the risk-based payment methodologies.

Under risk arrangements, hospitals would also have even more motivation to develop strategic relations with their vendors (medical device, etc.), such as what the auto industry does with their suppliers.

These risk arrangements will also allow hospital systems to be better prepared for the new world of healthcare. In this new world there will be winners and losers and different types of competitors, especially in the outpatient and home setting.

As we have also noted in prior blogs, hospital inpatient admissions are decreasing and patients have a higher acuity. Hospital inpatient care has been evolving to some form of a center of excellence. As hospitals look to find ways to expand their revenue opportunities they should be looking to bundle services for prospective patients and employers. These bundled services would and should have a risk-component tied to them.

Accepting risk-based contractual arrangements with payers is also better than competing in the retail marketplace where hospitals are much more vulnerable to lower priced regional and national competitors, especially as the result of the increased push for transparency.

Payers: Medicaid Managed Care, Medicare Advantage, Commercial Carriers, Self-insured employers should be pushing risk contracts. 

As noted in this article in Health Affairs, there are two ways employers should push ACO arrangements to evolve:

Financial Risk

“As experts jest, if ACO providers don’t take on the financial risk of caring for their population of patients (for example, only shared savings), it is like “vegan barbeque…or gin and tonic without the gin.” Payers’ ability to change provider behavior is likely to be negligible if they only reward providers with small bonuses for effective care a year after the fact. Greater financial accountability would encourage providers to promote preventive care and look for ways to cut waste.

In fact, without downside risk, health systems may take advantage of the ACO model. Experts argue that health systems may take on the practice of “ACO squatting” (that is, they form ACOs, take on patients, but avoid looking for ways to cut waste, reduce total cost of care, and improve quality) and that “a migration to two-sided risk for ACOs…after a certain number of years, so that there is a cost [downside financial risk]…would help to address this issue.”

Alignment of Patient Incentives

“Providers would be loath to assume financial risk for a patient population without the ability to manage their care. Commercial payers can modify patients’ out-of-pocket spending to encourage them to seek care only within the ACO. For example, by treating the ACO as a narrow network, the payer could pair it with a benefit design that offers lower premiums and minimal out-of-pocket spending for care from an ACO provider but little to no coverage for care sought outside of the ACO.

If the vast majority of patient visits occur within the ACO, it might be more likely to stay within budget because those providers can coordinate care and reduce redundancies. In addition, the ACO leadership can communicate with ACO providers about the cost and quality implications of their care decisions.”

If Medicare Advantage and Medicaid Managed Care Plans are not pushing for risk arrangements with Hospital-based ACOs or health systems, and these Plans continue to rely on some form of fee-for-service, then the true payers, Medicare and the individual states, should be reevaluating their own payment formulas with these entities. The payment formulas maybe too rich and do not provide enough incentives for these Plans to enter into risk arrangements with the above providers.

CONCLUDING THOUGHTS:

If you have been a reader of my blogs, you know I like sprinkling in health economic concepts into them. It is natural for individuals and other entities to make decisions based on their own self-interest.By not embracing risk in a manageable, but continuous fashion, hospital-based ACOs as well as hospital systems are sacrificing their long-term self-interest for immediate gain.

Active purchasers of healthcare services will continue to demand value in the marketplace, and for hospital-based ACOs and hospital system to meet this demand they need to break down the silos which can only be done effectively by embracing risk-based contracting tied to appropriate rewards.

Finally, we, as a society, are recognizing the need to focus our attention on population health, not only because it is the right thing to do, but because it also represents the best uses of our resources. We will not be able to achieve our goal of population health unless hospitals fully embrace it. One true way to expedite the transition to population health is for hospitals and ACOs payment methodologies to incorporate in their reimbursement contracts the appropriate risk/rewards that incent them to keep people healthy both inside and outside the walls of the hospital.

 

 

 

Trump’s Next Phase on Health Care: Everywhere and Nowhere

https://www.bloomberg.com/opinion/articles/2019-07-09/trump-health-care-reform-he-s-everywhere-and-nowhere

A scattershot and at times contradictory approach to fixing the system is impeding progress.

A hodgepodge of news this week is telling the confusing and contradictory story of President Donald Trump’s efforts to change American health care.  

On Monday, a federal judge blocked the administration’s efforts to force drugmakers to disclose the often astronomical list prices of medicines in their TV ads. It was intended to shame pharma into lowering prices, and would have been the first of the Trump administration’s major drug-cost initiatives to actually take effect.

On Tuesday, oral arguments were set for a Department of Justice-backed case that could wipe out the Affordable Care Act. 

Wednesday will reportedly see the president reveal an ambitious set of initiatives intended to rein in spending on kidney costs. 

The kidney initiative is among the administration’s better notions, along with its effort to index some drug costs covered by Medicare to the lower prices available abroad. Yet even when the administration lands on a good idea in health care, it seems to get in its own way. The Trump-backed ACA lawsuit, for example, would directly undermine the kidney initiative and price-indexing plan. And while the president has a variety of other proposals in the works – from an effort to pass drug discounts directly to consumers to a plan to force hospitals to make their pricing transparent – many could be exposed to the kind of legal risks that killed the drug-ad initiative. It’s all part of a scattershot and often incoherent approach that isn’t as effective as it could be.

Take the kidney-care push: this area of treatment is costly in part because the current system incentivizes expensive care at dialysis centers that are largely run by two companies: DaVita Inc. and  Fresenius Medical Care AG. (Peter Grauer, the chairman of Bloomberg LP, is the lead independent director at DaVita.) The Department of Health and Human Services reportedly wants to change that dynamic with new payment models intended to shift patients to more cost-effective treatment at home. At least part of the administration’s ability to implement those models comes from the Center for Medicare and Medicaid Services’ Innovation Center, which was created by the ACA and is threatened by the lawsuit.

The contradictions don’t end there. People with end-stage kidney disease are covered by Medicare, so the lawsuit wouldn’t strip their coverage. However, the administration’s plan reportedly emphasizes intervening before people get to the point where they need dialysis or transplants. Killing the ACA is at direct odds with that goal. It would see millions lose insurance coverage, would eliminate protections for people with pre-existing conditions like chronic kidney disease, and crimp access to preventative care.

Though it is a long shot, the court case demonstrates the administration’s inconsistency in health care. Just about every health initiative would be harmed by the disruption that would result if this lawsuit succeeds, especially considering that the administration doesn’t have a replacement plan. If it were serious about keeping people off of dialysis or curing HIV, it would oppose this suit and stop other ongoing efforts that harm the ACA’s individual market and Medicaid.

The administration hasn’t detailed an ACA alternative because its previous effort to pass one was a political disaster that helped Democrats seize control of the House of Representatives in 2018. Instead, its health-care efforts have largely been confined to executive orders and rule-making. That approach narrows the scope of what the administration can accomplish, and comes with significant risks. If a federal judge thinks that forcing the disclosure of drug prices in ads is an overreach, there’s clearly a chance that the administration’s more ambitious plans will also have issues.

I’m rooting for the kidney effort. It targets a real problem and could have an impact, depending on the details. I’d be more optimistic about the plan’s chances if it were part of a cohesive set of policies that had Congressional backing, rather than the current jumble. 

There’s little chance appeals court will strike down ACA, legal experts say

https://www.modernhealthcare.com/legal/theres-little-chance-appeals-court-will-strike-down-aca-legal-experts-say?utm_source=modern-healthcare-daily-finance&utm_medium=email&utm_campaign=20190708&utm_content=article3-readmore

Seven months after a federal judge struck down the Affordable Care Act, a coalition of 21 Democratic attorneys general will once again defend the landmark healthcare law in New Orleans on Tuesday. The challenge, if upheld, would have far-reaching consequences for millions of Americans and the healthcare companies that serve them.

Left-leaning and conservative legal experts alike say there’s little chance the three-judge panel in New Orleans agrees with the lower court and declare the ACA unconstitutional. The arguments used by the Republican states that sued to wipe out the ACA are “frivolous,” the experts say.

“This case is different from all of the previous Obamacare cases because there is a consensus among the Republican intellectual establishment that the legal arguments are frivolous,” said Yale University health law professor Abbe Gluck. “You’ve got a lot of prominent Republican legal experts siding against the Trump administration in this case, so I think that most people are hoping that this circuit will apply very settled law and reverse the lower-court decision.”

Even so, Democratic senators on Monday were worried that the ACA would ultimately be struck down, causing millions of Americans to lose their insurance and consumer protections overnight without any Trump administration plan to pick up the pieces.

“Make no mistake, this lawsuit has a good chance of succeeding,” Sen. Chris Murphy (D-Conn.) said during a conference call Monday with reporters. “I understand that there are some legal scholars that say that the theory of the petitioners is wacky, but it survived the district court and it now has the administration as a full and complete partner with the attorneys general. There is real muscle on the side of the plaintiffs in this case.”


The appellate court arguments largely mirror those in the district court. This time around, the U.S. Justice Department is urging the 5th U.S. Circuit Court of Appeals to uphold the lower-court ruling that the entire Affordable Care Act must fall because the 2017 Congress reduced the individual mandate penalty to zero. Previously, the Justice Department argued the individual mandate is unconstitutional, but could be “severed” from most of the ACA.

This question of whether the entire ACA must go is the crux of the case. Gluck explained that a non-controversial, settled legal doctrine called “severability” states that the decision to scrap a piece of a law or destroy the whole thing rests on what Congress would have wanted. That’s something courts usually have to guess, but in this case there’s no question what Congress would have wanted: it already zeroed-out the individual mandate penalty and left the rest of the ACA alone.

“It is an absolutely outrageous argument to say that the district court was doing what Congress wanted when Congress in 2017 reduced the penalty and left the entire statute standing,” Gluck said.

Nicholas Bagley, a law professor at the University of Michigan Law School, similarly said, “These are bad legal arguments.”

The odds of the Fifth Circuit declaring the entire ACA unconstitutional are low, he said, given the arguments in the case “are thin to the point of frivolousness, and I think the Fifth Circuit judges will know that, whatever their political disposition may happen to be. But I’d be lying if I said I knew that for sure.”

The panel announced last week includes Judges Jennifer Walker Elrod, Kurt Englehardt and Carolyn Dineen King. Two were appointed by Republican presidents; one is a Democratic appointee. U.S. District Judge Reed O’Connor, who struck down the healthcare law, was also appointed by a Republican president.

Legal experts said it is also likely that oral arguments will devote time to whether the Democratic states and the U.S. House of Representatives have standing to intervene in the case. The Fifth Circuit judges last week asked for supplemental briefs on that question. While the court’s request was seen by some as a sign that it is supportive of the Republican states, others viewed it as normal, given the high stakes and the fact that the Justice Department declined to defend the law.

Gluck said it’s unlikely the court will decide neither the blue states or the House have standing in the case. It would be hard to argue that the Democrat-led states would not be harmed by a ruling that invalidates the entire ACA, and the House has previously intervened to defend a statute when the executive branch chose not to, she said.

But if the Fifth Circuit does decide neither have standing, it would have to decide whether to let the lower-court decision stand or erase it, she said.

Should the appellate court uphold the lower-court ruling, the consequences would be sweeping. In a June analysis, the left-leaning Urban Institute found that the number of uninsured Americans would climb 65% to 50.3 million in 2020 if the ACA is ultimately struck down. The decision would affect not only people who buy coverage in the individual market but also those with coverage through Medicaid expansion, Medicare and from their employers.

That would also impact healthcare providers and insurers.

“No industry has been more directly impacted by the ACA than health insurance providers, which have invested vast amounts of resources to participate in the relevant markets, comply with the law’s myriad reforms, and organize their businesses to operate in a revamped healthcare system,” insurance industry lobbying group America’s Health Insurance Plans wrote in an amicus brief filed in April in support of reversing the lower-court decision.