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Keep Harmful Cuts in Federal Medicaid Disproportionate Share Hospital Payments at Bay
Congress may delay a funding reduction for state Medicaid disproportionate share hospital (DSH) payments — direct, supplemental payments to hospitals serving high numbers of low-income patients — as part of end-of-year legislation. Although protecting the poorest communities from the loss of DSH funds has emerged on a short list of must-dos, final passage is far from certain. It may hinge on finding a funding strategy other than the one originally chosen by the House of Representatives — a more than $6 billion cut in critical public health funding from the Prevention and Public Health Trust Fund.
For nearly four decades, DSH payments have been a crucial part of Medicaid policy. But in light of the major gains in coverage anticipated for the poor under the Affordable Care Act’s adult Medicaid expansion, Congress scheduled a substantial reduction in federal Medicaid DSH payments beginning in 2014. Lawmakers assumed, not unreasonably, that the coverage expansions would translate into additional hospital revenue, thereby alleviating the need for as much direct DSH payment supplementation.
The relatively rosy scenario for DSH hospitals — especially those serving the poorest communities — changed dramatically in 2012 when the United States Supreme Court made Medicaid expansion optional; as of the end of 2017, nearly 3 million poor adults in 19 states continue to go without the Medicaid coverage they should be receiving.
To be sure, the ACA has had a major impact on reducing hospitals’ uncompensated care burdens. The Medicaid and CHIP Payment and Access Commission (MACPAC), which advises Congress on federal Medicaid policy, reports that between 2013 and 2014, hospital uncompensated care spending dropped by $4.6 billion, a 9 percent decrease, with the greatest declines occurring in Medicaid expansion states. But uncompensated care remains a crucial issue for many hospitals, especially those located in the poorest communities, and, in particular, hospitals serving poor communities in Medicaid nonexpansion states.
Additionally, even in Medicaid expansion states, a considerable number of low- and moderate-income adults who qualify for subsidized marketplace coverage remain uninsured. Even among those with subsidized marketplace plans whose incomes also are low enough to qualify for cost-sharing assistance (250 percent of poverty, or an annual income of about $30,000, and below), unpaid medical bills continue to add to hospitals’ uncompensated care burdens.
Should final congressional action before the holiday include a DSH cut delay, it would be the latest in a line of postponed Medicaid DSH cuts enacted by Congress over several years. Without another postponement, hospitals will lose $2 billion of the almost $12 billion federal allotment for fiscal year 2018. If this last-minute effort to stop the cuts once again as part of the spending bill does not succeed, then over 10 years, the cuts would reduce DSH payments by some $43 billion according to MACPAC.
For many reasons — the number of states that have failed to expand Medicaid; the number of Americans who continue to report that insurance coverage is unaffordable; high deductibles and other patient cost-sharing even among those with private health insurance — continuing to push back the day of reckoning on federal DSH funding reductions is a matter of high importance, not only for individual hospitals but for the communities whose health care systems these hospitals help anchor. The situation facing hospitals in nonexpansion states is especially grim; according to one estimate, failure of 19 states to implement the ACA Medicaid expansion can be expected to translate into an additional loss of $81.5 billion by 2026.
The White House and Congress have a final shot at once again ensuring that the poorest communities are not left without vital health care resources — and doing so in a way that does not pit health care against public health.
Can insurers sue to recover cost-sharing money?
Murray-Alexander is going nowhere. Senator Collins insists that passing the bipartisan legislation, which would restore cost-sharing payments for two years, is a condition of her vote on the pending tax bill. But she appears willing to accept airy promises that Senate leadership will make the bill a priority.
Never mind that House Republicans have no intention of passing the bill and that Democrats have ruled out cooperating if the individual mandate is repealed. Never mind, too, that the Democrats’ threat is credible: they don’t stand to gain much if the bill is passed. By and large, insurers have already adjusted to the loss of the cost-sharing subsidies.
How exactly have they adjusted? Most states instructed insurers to anticipate the withdrawal of the cost-sharing payments and to concentrate the resulting premium hikes on silver plans. Because the ACA caps the premiums that people receiving subsidies have to pay for insurance, those price spikes won’t harm most exchange customers. To the contrary, most are better off. Premium subsidies increase as the price of silver plans go up, so gold and bronze plans—whose premiums won’t increase on account of the funding cut-off—are more affordable than they otherwise would be.
In other words, “silver loading” has mitigated much of the fallout from the loss of the cost-sharing subsidies. If Congress appropriated the cost-sharing money now, it’d be a windfall for insurers. Why should Democrats throw their support behind a bill that won’t stabilize the markets and would give the Republicans cover for repealing the mandate?
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If I’m right that Murray-Alexander is a dead man walking, the cost-sharing money won’t be appropriated for 2018. That, in turn, gives rise to an interesting legal question.
As I first pointed out back in 2015, insurers can sue in the Court of Federal Claims to recover their cost-sharing payments. It’s a simple lawsuit: insurers were promised some money; the federal government reneged; and the insurers want damages on account of the breach. The payment of court-ordered damages can come out of the Judgment Fund, even without an appropriation to make the payments in the normal course.
The law is clear; the lawsuit practically writes itself. Insurers should have no trouble recovering the money owed for the last months of 2017—about $1 billion. But what about the money owed for 2018 and beyond?
As a first cut, it seems that insurers should still be able to recover. In a typical breach of contract claim, the courts aim to put a non-breaching party in the same position it would have been in if the breaching party had kept its promise. Here, Congress promised to reimburse insurers for giving their low-income customers a discount on out-of-pocket payments. Insurers are still giving those customers a discount, but the government has refused to pay.
The proper measure of expectation damages, then, is the full amount of promised reimbursement. That amount will continue to accrue for every month that Congress refuses to appropriate the money. If that’s right, the question isn’t whether Congress will pay the cost-sharing payments. It’s when.
But matters may not be so simple. In measuring damages, the Court of Federal Claims will also inquire into mitigation—a principle that might be familiar to you if you’ve ever thought about breaking a lease on an apartment. Although your landlord can sue you for any rent owed for the months remaining on the lease, he also has a duty to find a new tenant. If he does, you only have to compensate your landlord for the time that the apartment was empty. The landlord has mitigated his losses.
The same principle should kick in here. Silver loading has allowed insurers to sidestep most of the harm associated with the loss of the cost-sharing subsidies. Insurers haven’t hemorrhaged customers; instead, they’ve adapted. Indeed, some insurers are better off now than they were before: as premium subsidies increase, they’ll get more customers signing up for their gold and bronze plans.
In short, insurers have mitigated a large part of their losses. Giving them the full amount of the cost-sharing money wouldn’t put them in the same position they would have been in if the federal government adhered to its promise. It would give them a windfall. Contract law doesn’t require the courts to make contracting parties even better off than they would have been in the absence of a breach.
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That doesn’t mean that insurers will lose. The default rule is still that insurers should be paid what they were promised, and the onus is on the government to prove that they’ve mitigated their losses. That’s not an easy burden to discharge: it’s hard to know what the world would have looked like if the cost-sharing payments had been made, so it’s hard to know whether any given insurer is better off or worse off now that they’ve been terminated. The factual inquiries will be demanding.
My tentative sense, however, is that insurers shouldn’t be too bullish about recovery. One reason can be found in Murray-Alexander itself. As currently written, the bill would require state insurance commissioners to develop plans to provide rebates to customers and the federal government. Why? Because funding the cost-sharing payments for 2018 would otherwise give insurers a huge windfall.
Allowing insurers to recover their money in court would give them an identical windfall. The courts aren’t likely to stand for that.
Medicine Must Start Caring for the Caregivers
Practicing medicine is bad for your health. Mounting evidence shows that stress-related burnout is a significant and growing threat to doctors – and their patients. If there is a silver lining, it is that the medical community is beginning to acknowledge and address the complex factors at play, recognizing that good health care must include caring for the caregivers.
Numerous studies reveal that physician burnout – generally defined as a loss of enthusiasm for work, feelings of cynicism and a low sense of personal accomplishment – is a major problem.
A Medscape survey found that 51 percentof doctors surveyed in 2016 said they suffered from burnout, an increase of more than 25 percent since 2013. This dovetails with a 2015 paper published in Mayo Clinic Proceedings, which reported a burnout rate of 54.4 percent in 2014, compared with a 45.5 percent rate in 2011. These burnout rates are almost twice as high as those found in the general population.
A 2015 Mayo Clinic study reported that roughly 40 percent of physicians suffer depression each year and almost 7 percent had considered suicide within the prior 12 months. It is estimated that 300 to 400 doctors take their lives every year.
The pain and suffering those statistics only hint at is bad enough. They are compounded by findings that burnout corrodes the doctor-patient relationship, resulting in lower levels of patient satisfaction, job satisfaction and productivity as well as higher levels of medical errors and disruptive behavior.
Burnout is also connected to the decision to switch jobs or leave medicine altogether – an ominous trend as the U.S. experiences a growing doctor shortage.
Many forces are driving this trend: long work days (doctors work an average of 50 hours per work, 10 more than other Americans), the demands of juggling busy careers with family obligations and the pressures caused by student debt (the average medical school graduate with student loans owes about $190,000 upon graduation).
These and other factors – especially the challenges of balancing work-home obligations – take a special toll on female doctors, whose burnout rates as twice as high as their colleagues, making them more likely to leave the profession.
Still, there is one significant new development that seems to be driving the recent increase in burnout: electronic health records (EHRs). It is no coincidence that the spike in burnout rates has come at the same time as the broad adoption of EHRs. Someday, EHRs may revolutionize health care by dramatically increasing our ability to share and review patient information. But today, EHRs are turning many physicians into clerks. It can take 32 clicks to order and record a single flu shot. Some studies show that doctors now spend about two hours on paper and desk work for every hour they devote to deliver direct patient care.
It is hard to overstate how much this dispiriting lack of personal contact, which is the major reason people choose careers in medicine, leads to the depersonalization and depression that are the hallmarks of burnout.
Perhaps the best evidence that practicing medicine is bad for one’s health is studies showing that medical students begin their training with stronger mental health profiles than their fellow college graduates. This advantage vanishes and a deficit emerges as they progress through their schooling, residency and professional practice.
As in medicine, we must identify the problem before we can treat it. A crucial step was taken in July when the National Academy of Medicine called on researchers to identify interventions that ease burnout. Many universities and academic hospitals have already been exploring ways to address the problem.
At the University of Michigan we established two groups earlier this year – one to look at burnout among our doctors, the other among our younger residents. It is still too early to say what might work. But ideas to help physicians achieve a better work-life balance, including more flexible scheduling that recognizes family commitments as well as better child care assistance, seem promising. So, too, does the use of “scribes” to handle some paperwork chores and drawing a sharper distinction between the care only doctors can deliver and that which can be provided effectively by physician’s assistants and other trained personnel.
Above all, we must allow doctors to ask for help and provide them with the care they need without penalty. Medicine has long been hampered by the ancient myth of invincibility – the notion that physicians must never show weakness, every embodying grace under pressure. This is not only wrong, it’s dangerous.
Physician burnout is a national crisis. Unfortunately, it does not offer a quick fix. Medicine will always be a uniquely demanding profession, requiring years of training and long hours of service to be ready to make life and death decisions.
Fortunately, a broad consensus has emerged in the medical community that doctors cannot provide the best care for their patients if we don’t figure out how to take care of them.
ObamaCare mandate repeal would put pressure on states
The expected repeal of the ObamaCare mandate to buy health insurance means that states will soon have to step in and decide whether to create their own mandates.
The requirement that everyone must purchase insurance or pay a fine is a bedrock principle of ObamaCare, but it’s also one of the most unpopular parts of the law.
GOP leaders have tried for years to find a way to repeal it, arguing that it’s an unaffordable burden on working class Americans. Now, by including a provision that eliminates the penalty in the tax bill, Republicans are on the cusp of achieving a major legislative victory.
Outside experts and supporters of ObamaCare predict chaos in the insurance markets if the tax bill passes and the mandate is repealed.
Premiums are expected to rise significantly and insurers could leave the marketplace. The Congressional Budget Office estimated that about 13 million more people would be without insurance in 10 years.
States have the power to potentially blunt the damage if they choose to enact their own mandate penalties, but even officials in the most liberal states could face a bruising political battle.
“The idea of penalizing people for not getting insurance is controversial, even in blue states,” said Larry Levitt, a senior vice president at the Kaiser Family Foundation. “The debates on reimposing the mandate are not the same as opposing Republican efforts to repeal it. It’s a different dynamic.”
Levitt noted that the idea has split Democrats in the past. For example, in the 2008 presidential campaign, Hillary Clinton’s health plan included a penalty for being uninsured, while former President Obama’s did not.
“The mandate is the most unpopular part of the Affordable Care Act, so there are political challenges in focusing a debate on just that issue,” Levitt said. “States would have to make the case that it would stabilize the market to overcome political opposition.”
There are no legal barriers if other states want to set up their own mandates, but one of the biggest obstacles is time.
If the tax bill passes as expected early next week, states will face a rapidly ticking clock to try to stabilize their health insurance markets.
“It’s faster to destroy something than to create something. For states to create a replacement infrastructure, it takes time,” said Stan Dorn, a senior fellow at the advocacy group Families USA.
Dorn said states would need to decide how much of a penalty people would pay. There would also have to be regulations about reporting requirements, and the whole package would need to pass a state legislature.
But a former Obama administration official said the administrative costs and logistics of a state-level individual mandate shouldn’t be that complicated.
“It’s something of an operational lift, but compared to what states did to implement the ACA, it’s not that hard,” said Jason Levitis, a policy expert at Yale Law School and former senior official in the Treasury Department under Obama.
Insurers have urged Congress not to repeal the federal mandate, but so far have remained quiet about state alternatives.
To date, California, Maryland and Washington, D.C., have been having public discussions about replacing the federal mandate with a state penalty.
Massachusetts has had an individual mandate on the books since 2006, when it was enacted under the law known as RomneyCare. The Massachusetts mandate is more stringent than the federal one, so other states may not want to follow that template exactly.
Earlier this year, officials in the District of Columbia recommended continuing to enforce the mandate if the federal government stopped. While it’s not the same as enacting a state-level mandate, experts said doing so would be the next logical step.
Much of the Republican opposition to ObamaCare’s individual mandate has been on a philosophical level; they don’t want the federal government imposing a financial requirement on Americans.
But advocates worry that the partisan divide will make state disparities even worse, just like with ObamaCare’s Medicaid expansion.
“The very states that tend to have the most people in need haven’t expanded Medicaid,” Dorn said. “Not all states are going to respond, and in a lot of states we’ll see premiums jump through the roof.”
Levitis said that if the individual mandate were repealed, state Republicans would face a reckoning.
“It’s been really easy over the past eight years to attack the mandate without understanding it, but now that it’s going away … state officials will be faced with a stark reality of what the market looks like without it,” Levitis said.
“One would hope it acts as a wake-up call,” he added.
Veterans’ Health Care Needs Another Big Fix
The VA is not coordinating well with community care programs or paying them promptly, and funding crises threaten access to private care.
More than a century ago, President Abraham Lincoln signed a law establishing a new agency dedicated to the support of our Civil War veterans. Its mission was “to care for him who shall have borne the battle, and for his widow, and his orphan.” Today, our Department of Veterans’ Affairs (VA) provides essential services to 22 million Americans who have served in the armed forces.
All Americans are indebted to our veterans for the enormous sacrifices they have made on our behalf. These men and women took an oath to defend the Constitution and served dutifully to preserve our way of life. Like their valiant forebears who humbled dictators and liberated millions from oppression, they exemplify what is best in our country.
Regrettably, the VA has at times struggled to uphold its obligations to our veterans. In 2014, our country was shocked to learn that thousands of veterans were denied care or experienced unconscionable delays in treatment at the Phoenix VA. Dozens of those veterans died while waiting for care. Unfortunately, this wrongdoing was not confined to Phoenix. The VA Office of Inspector General has completed at least 100 criminal investigations related to wait-time manipulation at VA facilities nationwide.
In the wake of that scandal, Congress gave veterans the freedom to receive medical care from providers in their local communities through the Veterans Choice Program. The program was intended to make certain that veterans would never again be forced to wait in long lines or drive hundreds of miles to access care they deserve. Demand for Choice has since grown considerably; more than a million veterans are receiving care closer to home, through millions of appointments with community providers.
From the program’s inception, however, we emphasized that Choice was only the first step toward broader reform of veterans’ health care. That’s why we have introduced legislation that incorporates lessons learned from Choice to transform the VA into a modern, high-performing and integrated health care system that will improve veterans’ access to timely and quality care — within the VA and in the community. This bill tackles some of the most significant flaws and problems we’ve seen in recent years, including the VA’s slow payment process to community providers, poorly coordinated community care programs and — crucially — an inability to accurately predict demand for Choice, which has resulted in multiple funding crises that threaten veterans’ access to community care.
One of the fundamental undertakings in our bill is the creation of a Veterans Community Care Program, which would consolidate existing community care programs at the VA and increase care coordination with community providers. We would require the VA to use objective data on health care demand to set standards for access and quality, and to identify and bridge gaps in veterans’ care. We would also ensure that the VA promptly pays community providers, opens access to walk-in clinics, offers telemedicine, increases graduate medical education and residency positions for employees, and improves VA collaboration with community providers.
Unlike other proposals, our legislation creates and specifies the tools the VA must use to reform health care rather than relying on the bureaucracy to determine the rules. We have learned over time that Congress must provide clear direction and guidance to the VA to prevent inconsistent experiences, enhance veterans’ quality of life, and achieve better health outcomes.
Key veterans’ service organizations such as American Legion, AMVETS and Concerned Veterans for America have expressed their support for this effort, which will transform the VA into a 21st century health care system that seamlessly weaves together both VA and community health care services.
Throughout history, the VA has undergone changes to meet the needs of new generations of veterans. Following World War II, General Omar Bradley led the effort to overhaul the VA for the millions of Americans then returning home. At the time of that enormous undertaking, Bradley rightfully kept the needs of veterans at the forefront, stating: “We are dealing with veterans, not procedures; with their problems, not ours.” The VA responded admirably to the challenge by constructing new facilities and expanding its capacity to serve a new generation of American heroes.
Today, the VA is in need of another major reform and we have the opportunity to deliver real transformation. Just as Bradley did, we must keep veterans’ unique wants and needs in mind as we reshape and reform the delivery of health care. Veterans require and deserve the best our nation has to offer, and the VA must not shy away from changes that help them achieve that outcome.
THE GIFTS OF LEADERSHIP: HOW TO GIVE ADVICE THAT PEOPLE RESPECT
The Gifts of Leadership: How to Give Advice That People Respect
People don’t want advice. They want the pain to go away. They want to keep doing the same thing but get different results.
The world is full of answer-givers, but who can find a skillful advisor?
The surprising truth about giving advice is it’s more about listening than talking.
What kind of advisor are you?
- Expert. You know something others need to know. Perhaps you have relevant technical knowledge.
- Experienced. You’ve been there and done that. You’ve failed and learned.
- Skilled. You have relevant abilities?
- Problem-solving.
- Conflict-resolution.
- Option-generating.
- Question-asking.
- Outsider. You see things differently. Perhaps you’re older or younger, married or single, on the front-line or in management, or from a different culture.
Warnings:
Don’t fall in love with giving advice.
Give advice from a position of humility. It’s heady to have someone seek your advice. Keep your feet on the ground.
Avoid these seven advice-givers.
#1. Needy advisors rush to answers. Good advice begins by exploring and defining problems. People who are eager to tell people what to do, don’t know the real problem.
Explore roots, not just fruits. There are symptoms to problems and there are root causes.
#2. Hard-headed advisors make up their minds quickly and defend their position.
#3. Inept advisors neglect values and strengths. Advice needs to fit the advisee. Generic advice should be presented as guiding principles that anyone might use.
#4. Bungling advisors think it’s all about advice and forget about energy. Good advice fits the situation AND lights people up.
#5. Incompetent advisors always have an answer. Instead say, “I don’t know, but lets figure it out.”
#6. Self-centered advisors talk about themselves more than asking about others.
#7. Confused advisors have it all together. They don’t have their own issues, challenges, and problems. Problem free advisors are blind, ignorant, arrogant, or all three.
Anyone who has it all together, doesn’t.
How might you turn the above warnings into suggestions for giving advice that people respect?
What are the qualities of skillful advisors?
HENRY KOTULA 