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Trump must decide whether to support or undermine Obamacare
President Trump is pressuring Congress to sink parts of the Affordable Care Act. But now that the first attempt at a GOP health-care overhaul has failed, he must decide whether to throw the law a line.
The White House and Republican lawmakers are facing key decisions that could either improve the insurance marketplaces established by the ACA next year or prompt insurers to further hike rates or withdraw from those marketplaces entirely. Republicans had hoped to protect those with marketplace coverage while lawmakers replaced Obamacare.
But with that effort hitting a wall, Trump and his health-care decision-makers are in a bind: They can either let the current system fail and risk raising the ire of 11 million Americans who use the marketplaces, or help stabilize Obamacare and potentially make it harder for Republicans in Congress to abandon the law itself.
“It’s an awkward political environment, there’s no question about it,” said Lanhee Chen, a health-policy expert and former adviser to 2012 presidential candidate Mitt Romney.
Republican objections to the ACA naturally lead them away from assisting it, but the party now bears some responsibility for what happens to it, Chen added.
“The reality of this is Republicans will face some political repercussions for what happens to Obamacare,” he said.
Trump and other Republicans have long predicted a so-called death spiral for the state-based marketplaces set up under President Obama’s signature domestic achievement. Trump has often tweeted and said on the campaign trail that the law will “die of its own weight.” He shrugged off the recent failure of the GOP health-care bill by saying the law is “exploding” anyway.
“The best thing we can do, politically speaking, is let Obamacare explode,” Trump said in the Oval Office last month. “It’s exploding right now.”
The dire predictions have partially come true: Although some state marketplaces offered multiple plan options and only modest premium raises last year, many others provided only one plan choice and double-digit premium hikes. Next year’s outlook is still unclear, but it’s unlikely the marketplaces will suddenly attract a better mix of healthy enrollees to help lower costs.
If the marketplaces further deteriorate, Republicans may take the fall, surveys show. A recent Kaiser Family Foundation poll found that a majority of Americans will now blame Republicans, not Democrats, for marketplace problems, because the GOP spent the past seven years promising to fix and replace the system.
That reality is forcing Republicans, including Trump, to seriously consider a half-dozen actions that could help improve — or at least sustain — the marketplaces where Americans without employer-sponsored plans buy coverage.
“Looking at next year, if we imagine that the marketplace right now is, say, a C-minus, there are several things that need to be done to just preserve it at its C-minus level,” said Mike Adelberg, who under Obama directed the Center for Consumer Information and Insurance Oversight established at the Department of Health and Human Services.
There is a list of actions the administration must decide whether to take to keep the marketplaces humming, most of them through regulatory actions at the Health and Human Services Department or through the Internal Revenue Service.
The actions center on three programs: cost-sharing reductions, reinsurance and risk corridors. Cost-sharing refers to government subsidies to low-income Americans to help them pay for insurance. Trump threatened recently to let such subsidies lapse, but Democrats say they will shut down the government as part of the spending negotiations next week if the president follows through.
Administration officials and lawmakers are still deciding how to handle the issue. A White House spokesman said only that “no decisions have been made at this time.”
Reinsurance and risk corridors are two programs set up under the ACA to redistribute funds from insurers with healthier enrollees to insurers with sicker, more expensive customers.
The marketplaces could also be hurt or helped depending on whether the IRS enforces the ACA’s individual mandate to buy coverage and whether the administration enforces new, tighter rules around enrollment.
With Drug Costs In Crosshairs, Health Firms Gave Generously To Trump’s Inauguration
Facing acute risks to their businesses from Washington policymakers, health companies spent more than $2 million to buy access to the incoming Trump administration via candlelight dinners, black-tie balls and other inauguration events, new filings show.
Drugmaker Pfizer gave $1 million to help finance the inauguration, according to documents filed with the Federal Election Commission. Amgen, another pharmaceutical company, donated $500,000. Health insurers Anthem, Centene and Aetna all gave six-figure contributions.
They joined a surge of corporate donors from multiple industries to break inauguration-finance records even as then-President-elect Donald Trump promised to “drain the swamp” of Washington influence-peddling.
But the stakes for the health industry were especially high as the new administration prepared to take power.
Two weeks before Pfizer’s donation, Trump told Time magazine: “I’m going to bring down drug prices.” At the same time, one of his top goals was repealing Obamacare — the Affordable Care Act — and its billions in subsidies for insurance companies and hospitals.
Also writing checks for the inauguration were drugmaker Abbott Laboratories, drug wholesaler Caremark, insurer MetLife and Managed Care of North America, a dental benefits manager.
Trump’s inaugural committee raised $107 million, more than twice as much as for any previous presidential investiture. President Barack Obama’s 2009 inauguration held the previous record of $53 million.
Obama banned corporate donations that year and limited individual donations to $50,000 but accepted corporate grants for his 2013 inauguration.
No health company gave more to Trump’s event than Pfizer, whose profits for Lyrica, Prevnar 13 and other high-priced medicines could come under pressure if the Medicare program for seniors is allowed to negotiate on cost, as Trump has suggested.
Lyrica alleviates nerve and muscle pain. Prevnar 13 is a vaccine against pneumococcal pneumonia.
Along with several other pharma companies, Pfizer is the subject of a Justice Departmentinvestigation over donations to charities that help Medicare patients avoid copayments for expensive drugs.
Pfizer CEO Ian Read is also a vocal advocate of cutting corporate income taxes, which Trump has pledged to do. The Obama administration thwarted Pfizer’s $160 billion deal to move its legal residency to low-tax Ireland to merge with Botox maker Allergen.
Pfizer’s $1 million donation entitled it to four tickets to a “leadership luncheon” with “select Cabinet appointees and House and Senate leadership,” according to a solicitation brochure obtained and posted online by the Center for Public Integrity.
“As it has been the case with previous presidential inaugurations, we made a financial contribution to the 58th Presidential Inaugural Committee and a group of our senior leaders participated in various official events,” said Pfizer spokesperson Sharon Castillo. She declined to identify the executives.
Medicare Advantage risk selection
http://www.academyhealth.org/blog/2017-04/medicare-advantage-risk-selection
One of the concerns about Medicare Advantage (MA) is that it doesn’t serve sick beneficiaries well, motivating some of them to switch to traditional Medicare (TM). If true, it’s an argument for maintaining affordable access to TM.
There’s considerable evidence that it is true. The most recent (if you can call last summer recent) is found in a paper by Elizabeth Goldberg and colleagues. They examined Medicare beneficiaries 65 years or older between 2000 and 2012, a period during which enrollment in MA grew from 19% of beneficiaries to 28%. For each year, they classified a beneficiary as “MA” if enrolled in an MA plan in January of that year, and “TM” otherwise. Note, however, that it wasn’t until 2006 that beneficiaries had to stick with their plan choice for most of the year (lock-in). Nowadays, they can adjust their plan choice only until mid-February. Prior to 2006, they could switch plans every month.
TM has no Part A (hospital insurance) premium and it’s standard Part B (physician services insurance) premium is 25 percent of program costs, or $134 per month in 2017. The premium is higher for individuals and couples with higher income. Both parts include considerable cost sharing and both have an open network and impose no managed care-type restrictions on utilization. Though MA plans tend to fill in much of Medicare’s cost sharing, as well as offer supplemental benefits at little to no additional premium, they usually have limited networks and attempt to manage care. It’s these latter features that can make TM more attractive than MA to sicker beneficiaries.
Older studies also found that sicker people tended to prefer traditional Medicare and were more likely to leave Medicare H.M.O.s. And other, more recent studies found that lower-income, less educated and sicker people reported worse experiences in Medicare Advantage than in traditional Medicare.
My takeaway from all this is that MA may promote efficiency and higher quality care, but it doesn’t serve some types of sicker beneficiaries as well as TM. They vote with their feet and leave MA when TM appears relatively more attractive. Though not without cost, this degree of choice — that spans both private and public options — is a strength of Medicare and a large benefit to its beneficiaries, while remaining the focus of intense political attention.
The Future Of Delivery System Reform
http://healthaffairs.org/blog/2017/04/20/the-future-of-delivery-system-reform/
Over the past several years, the federal government has put billions of dollars into a variety of programs aimed at improving the way health care is delivered. The Affordable Care Act (ACA) authorized a broad agenda of reform projects, including accountable care organizations (ACOs), bundled payments, value-based purchasing, primary care initiatives, and other payment and service delivery models. The Medicare Access and CHIP Reauthorization Act (MACRA) of 2015 established new ways of paying physicians intended to promote high-quality patient care.
What will happen to these initiatives under a Congress where Republicans are still seeking to enact major new health reforms and a president who could aggressively use authority granted by the ACA to make sweeping changes in Medicare and other health programs? Does this spell the end of delivery system reform, or could this be a new start with a greater potential to promote efficient and effective health care?
The prospect of ACA repeal has raised concerns among advocates, who argue that the enactment of Medicare-led efforts to promote higher-value care represents a real turning point in the battle to reduce waste and inefficiency. They fear that any reversal of the ACA framework would be a setback to the cause of lower costs and higher quality.
Those fears are overblown. There is bipartisan agreement on the goal of promoting more efficient and effective health care. MACRA, which is aimed at improving the value of physician services through payment changes, was enacted on a bipartisan basis. The debate is over the best way to accomplish the goal, not the goal itself.
We agree that it would be unwise to jettison entirely the delivery system reform provisions of the ACA, but their demise would not be the end of efforts to improve US health care. Rather, we see those provisions as far less consequential than their advocates claim, yet they can serve as departure points for putting in place more effective changes that provide room for private initiative and consumer preferences alongside changes in Medicare’s payment systems.
Summing Up
The cost of health care in the United States has grown rapidly for many years, typically well above growth in the overall economy. Those high costs have not guaranteed high-quality care or good patient outcomes, and our delivery system remains inefficient. What is needed is a process of continuous improvement in the efficiency and quality of the care delivered to patients. That is the core belief motivating the delivery system reform effort, which should be continued even as important features of the ACA come under review.
The key question is how best to pursue more cost-effective care delivery in the United States. At the moment, the federal government is trying to use its leverage to bring about greater efficiency, employing its regulatory powers under the Medicare program. That approach, while understandable, should be amended to make room for more private initiative and consumer incentives. Those are the driving forces for productivity improvement in other sectors of the national economy, and they should be harnessed to produce better outcomes in health care as well.
Why an “Empty Desire” for Big Data is Inhibiting Value-Based Care
For the most part, the healthcare industry has embraced the idea that access to big data is a critical part of doing business in the modern care environment. But there’s a major difference between having big data and leveraging it effectively for cutting costs and improving quality.
The chasm is growing between organizations that simply have access to data and those who know how to use it well, argues Shahid Shah, Entrepreneur-in-Residence at the AHIP Innovation Lab, and the resulting imbalance of information is making it difficult for payers and providers to truly make the leap into value-based care.
If provider organizations and their payer partners wish to bridge those gaps and prepare for a financial environment that prioritizes better outcomes, they will need to completely overhaul their approach to developing quality metrics, designing their health IT environments, and quantifying their data-driven relationships.
The process must start with taking a closer look at what payers really want or need when they talk about sharing information.
“Payers have an empty desire for data,” Shah told HealthITAnalytics.com at the HL7 FHIR Value-Based Care Summit in Chicago.
“It’s empty because it’s not in contracts yet. They haven’t reached the level of sophistication where they can accept data from providers and do something meaningful with it. If providers actually started giving them data, they wouldn’t know what to do with it, because they don’t have the systems in place.”
While there are still some technical challenges that make data aggregation and analytics a problematic proposition, the bigger issues are cultural, organizational, and legal.
“The infrastructure isn’t the main obstacle,” explained Shah, who is also Co-Founder and CEO of Netspective Communications. “Developers will always try to solve whatever problems you throw at them, even if it takes a while. There is nothing that a developer won’t eventually be able to do.”
“Data blocking and the inability to share data really happen because we haven’t created the demand ecosystem for interoperability. The fundamental flaw of our so-called desire for interoperability is that we haven’t reduced it to a transaction that can be measured and monitored in legal terms.”
The current generation of value-based care contracts simply don’t contain the necessary language to establish clear parameters for effective data sharing, he stated.
“They just don’t deal with data,” he said. “There aren’t clauses that say things like, ‘I want you to send me this amount of data on this number of your patients over this period of time using this particular standard so that I can calculate these ten measures using such-and-such as the denominator, et cetera.’”
“Instead, payers ask for raw data so that they can compute the measures on their own, but that can lead to conflicts with providers and confusion over payments. We need a better way to share data – and better data to share – if we’re going to make value-based care work.”
For Malpractice Reform, Focus on Medicine First (Not Law)
Congressional Republicans have recently revived efforts to overhaul malpractice laws, including capping certain kinds of suits at $250,000. A perennial argument of supporters of such measures is that many claims are frivolous, clogging the court system and driving up health care costs for everyone. But does the evidence support this?
You don’t have to look too hard to find backing for the notion that some malpractice claims lack merit. A 2006 New England Journal of Medicine study reviewed a random sample of 1,452 claims from five malpractice insurers. Its authors found that 37 percent of these cases involved no errors, and 3 percent involved no verifiable injuries.
It’s also undeniable that defending against malpractice suits gets costly. Other research shows that providers and hospitals spent $81,000 to $107,000 (in 2008 dollars) to defend cases that went to verdict, on average. Even defending claims that were dropped, withdrawn or dismissed cost $15,000 per claim.
But it is not so clear that the best way to solve malpractice lawsuits is through changes focused on the legal system rather than the medical one.
The same 2006 N.E.J.M. study also found that, in many ways, the malpractice system works reasonably well. Most claims without errors or injuries didn’t result in payments, and most claims with errors did.
A study published last month in the American Journal of Health Economics explored the link between malpractice suits and metrics known as Patient Safety Indicators (P.S.I.). These indicators, developed and released by the Agency for Healthcare Research and Quality in 2003, are intended to quantify harmful events in the health care system. These events are thought to be preventable by changes at the level of the physician, the hospital or the system itself.
The study’s researchers combined a number of data sets from Florida and Texas to see how the rates of 17 indicators were related to malpractice claims for hospitals. Their hypothesis was straightforward: Patient Safety Indicators are a reasonable measure of safety; poor safety makes medical errors more likely; and medical errors lead to malpractice claims.
It turns out that hospitals differed quite broadly in P.S.I. rates. In Florida, among the larger hospitals, adverse events ranged from 55 to 390 per 10,000 discharges. The researchers also found a strong correlation between P.S.I. rates and the rates of malpractice claims.
Bernard Black, one of the authors of the study and a professor at Northwestern’s school of law, said that even small changes in patient safety helped a lot: “Moving a hospital from roughly the 33rd percentile (worse than two-thirds of other hospitals) to the 67th percentile (better than two-thirds of other hospitals) reduces the rate of lawsuits by 16 percent. This level of improvement should be achievable.”
This research is not the last word on this subject, of course. Patient Safety Indicators, while widely accepted as measures of safety and quality, are imperfect. This study includes only two states, with hospital-level data available only in Florida. The study wasn’t a randomized controlled trial, and causality isn’t assured.
Causation is likely, though, because reverse causality doesn’t make much sense — it’s hard to see how higher malpractice rates would lead hospitals to pay less attention to safety.
The study points to a significant link between measures of quality and safety and malpractice claims, suggesting that taking steps to improve patient safety should reduce the risk of lawsuits. Such measures would also probably improve outcomes for patients — a good in itself.
Too often, efforts to fight undeniable problems in the malpractice system start from the assumption that there are too many cases, that they’re not “real,” and that we need to come up with solutions to limit them. But what the data suggest is that improving medical practices may be a more effective approach than passing new laws.
The CHCF Blog Californians in Individual Market Spent $2,500 Less on Care in 2015 Than Before the ACA
http://www.chcf.org/articles/2017/04/californians-individual-market-spent-less
Two years into the Affordable Care Act (ACA), Californians who bought health insurance on the individual market spent $2,500 less on health care compared to 2013, the year before the ACA was fully implemented, according to data from the US Census Bureau’s Current Population Survey (CPS) available on ACA 411. This decline was likely driven primarily by the premium tax credits and cost-sharing reductions provided through the ACA’s health insurance marketplaces. This progress toward making health care more affordable is at risk as federal lawmakers debate repealing or radically changing the ACA.
Californians’ Spending Decline Beats National Trends
In 2013, Californians with individual coverage spent, on average, $7,300 out of pocket on health care (defined as spending on health insurance premiums, copays, deductibles, coinsurance for services and prescription drugs). That amount fell to $4,900 in 2014, the first year the ACA health insurance marketplaces (called Covered California in California) were open for business. In 2015 average spending for those covered through the individual market continued declining to $4,800 for a total drop of $2,500 over the two-year period.
Nationally, the amount spent on health care by consumers with individual coverage dropped from $6,800 in 2013 to $5,500 in 2015, a $1,300 decline.
Similarly, the percentage of consumers with individual coverage reporting “high-burden spending” (defined as spending more than 10% of total income on health care) fell nationally, with California seeing a steeper decline, from 42.9% in 2013 to 33.8% in 2015. Nationally, it dropped from 44.7% to 38.8% during the same period.
For more information on national trends in high-burden spending, read this new analysis of the CPS data by the State Health Access Data Assistance Center (SHADAC). There was a small but statistically significant decline in the overall US rate of high-burden spending, with improvements also among those on Medicare and those earning less than 400% of the federal poverty level (about $47,000 a year for a single person). The brief also highlights which states saw statistically significant changes in high-burden spending among various coverage types and income levels.
What do you do when you know someone is going to die?
What do you do when you know someone is going to die? I’m not talking about death when it comes at the end of a long protracted illness or a terminal diagnosis. Or the final act at the end of a “good” life, when the body and mind have ultimately given way. I’m talking about when you realize the twenty-five-year-old woman in front of you, who you met five minutes ago, has no idea she will not survive to see another sunrise.
Moonlighting during residency in the ICU of a community hospital, I was summoned to the ED to evaluate a feverish, septic young woman. In his book, Blink, Malcolm Gladwell describes the gut/reflexive first impression we make before our “thinking” brain starts getting in the way of those initial thoughts. Walking into the ER bay, all the warning bells were ringing. The mottling of her skin told me she was in shock. The visible, rapid rise and fall of her chest told me she was working hard to compensate for an acidosis. Her eyes told me she was afraid, and rightfully so. The rapid pulse and low blood pressure were punctuated by red on the monitor up in the corner of the room. She looked sick, but the reality was much worse. I had known her now all of ten seconds. But I didn’t know she was dead. Not just yet.
South Carolina hospitals see major drop in post-surgical deaths with nation’s first proven statewide Surgical Safety Checklist program
South Carolina saw a 22 percent reduction in post-surgical deaths in hospitals that completed a voluntary, statewide program to implement the World Health Organization Surgical Safety Checklist.
The findings of the five-year project between the South Carolina Hospital Association, Ariadne Labs, and Harvard T.H. Chan School of Public Health will appear in the August 2017 print issue of the Annals of Surgery and is published online. The study is the first to demonstrate large-scale population-wide impact of the checklist.
“That is a major reduction in post-surgical mortality and it demonstrates that when done right, the Surgical Safety Checklist can significantly improve patient safety at large scale,” said lead author Dr. Alex B. Haynes, associate director of the Ariadne Labs Safe Surgery Program and a surgeon at Massachusetts General Hospital.
Adoption of a safe surgery checklist has been demonstrated to reduce deaths in controlled research studies since 2009. But the ability to produce improved outcomes at large scale has remained questioned.
In the Safe Surgery South Carolina program, all hospitals in the state were invited to participate in a voluntary, statewide effort to complete a twelve-step implementation program with Ariadne Labs that included customizing the checklist for the local setting, doing small scale testing, and observing and coaching on checklist performance. Fourteen hospitals, representing nearly 40 percent of the inpatient surgery volume in the state, completed the program. Researchers compared the 30-day post-surgery mortality outcomes between these hospitals with the mortality outcomes of the rest of the hospitals in the state. Surgical procedures in the analysis represent a wide range of specialties, from neurological, thoracic and cardiac, to soft tissue and orthopedic.
The study found that the post-surgery death rate in the 14 hospitals that completed the program was 3.38 percent in 2010 (prior to implementation) and fell to 2.84 percent in 2013 after implementation. In the other 44 hospitals in the state, mortality was 3.5 percent in 2010 and 3.71 percent in 2013. This corresponded to a 22 percent difference in mortality between the groups.
With these results, South Carolina offers a national model of best practices in implementing a team-based, communication checklist to drive quality improvement in the operating room.
“We are honored to be a learning lab for the rest of the country,” said Thornton Kirby, President and CEO of the South Carolina Hospital Association. “The study validates what we hoped and believed from the outset — if you change the operating room culture of how you communicate and coordinate your efforts, you can produce better outcomes.”
Ariadne Labs’ Executive Director Dr. Atul Gawande led the development of the WHO Surgical Safety Checklist in 2008 with a team of international experts. The 19-item checklist prompts surgical team discussion of the surgical plan, risks, and concerns. Following surgery, patients are at risk of complications and death from a variety of causes such as infection, hemorrhage, and organ failure. Collectively, the checklist items create a culture of operating room communication that improves overall surgical care and safety.
Evidence from a 2009 pilot study with selected operating teams in eight countries around the world demonstrated a 47 percent decrease in post-surgical mortality. Further studies went on to confirm the powerful effect. But translating the checklist into population-wide mortality reduction has not been proven until now.
“Safety checklists can significantly reduce death in surgery. But they won’t if surgical teams treat them as just ticking a box,” said Gawande. “With this work, South Carolina has demonstrated that surgery checklists can save lives at large scale — and how hospitals can support their teams to do it.”
Funding for the study came from the Branta and Rx Foundations, AHRQ (R18:HS019631).
