Health care spending, Medicaid expansion, preventable deaths…

It’s been awhile since I’ve posted on this blog, but I wanted to keep any (remaining) readers updated with two posts I’ve published on separate blogs over the last two months. Links and descriptions are below:

  1. The ACA did not cause the slowdown in spending–but it may be contributing to the recent uptick (The Incidental Economist, April): After four years of historically low growth, health care spending is exhibiting an uptick again (a trend that has accelerated since this post was published in April). It appears the ACA’s value-based payment models are not kicking in quite yet. However, it may be contributing to the upsurge in spending–although not quite through the exchanges/Medicaid expansion as one might expect.
  2. Not having health insurance: a top cause of preventable death? (Daily Briefing Blog, May): Starting with the landmark Annals of Internal Medicine study that found insurance expansion significantly reduces risk of mortality, I look at how this would translate to the 15.1 million uninsured adults that could gain coverage if every state expanded Medicaid. The answer is concerning, especially in light of a recent CDC report on the top causes of potentially preventable deaths.

I hope to start writing again soon, so keep an eye out for new posts!

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(My List of) 2013 Health Care Trends to Watch

Welcome to 2013! Apologies for the long hiatus since last October; I got hit with crunch time at work, then the flu, and then went on a week-long road trip to the south.

Being super nerdy at the CDC.

Being super nerdy at the CDC.

However, with the project finished, the flu defeated, and myself filled with more fatty fried foods than I’d care to think about, I thought it would be appropriate to kick off 2013 with an overview of the biggest health care trends to watch for in the upcoming year. I know, every health news outlet is doing it–but for those who don’t subscribe to Modern Healthcare and Kaiser Health News, here is what I hope to be a pithy, reader-friendly list. Enjoy!

  1. The impending (?) roll out of health insurance exchanges. Mandated by the Affordable Care Act, state-wide exchanges are slated to begin enrollment this October. What is a health insurance exchange? Imagine Amazon.com, except for health plans, where individuals without health insurance (or whose companies drop their health insurance because the penalties aren’t high enough) can go to buy their own insurance. Want a living example? Visit the Massachusetts Health Connector site, which has been up and running since 2006. The Department of Health and Human Services conditionally approved 8 more states last Thursday, bringing the total to 19 plus DC. Key questions include how many employers will actually leave their employees to the exchanges (one survey suggests, none); how insurers will react to capture this new market segment; and perhaps most importantly, whether the fed can actually roll out well-functioning exchanges in the 25+ states that have opted for federal exchanges by the October deadline.
  2. More posturing and debate about Medicaid expansion. The ACA had initially required all states to expand eligibility of Medicaid to all adults under 65 at or below 133% of the federal poverty line (with the fed covering 90-100% of the cost). Thanks to a surprise Supreme Court ruling, that expansion is now optional. Check out this cool map I’m shameless posting from my company showing where the states stand on the expansion decision. More news stories come out every day, with Idaho’s governor rejecting expansion this Monday, New Mexico accepting expansion today, and Florida’s governor brandishing exorbitant costs of expansion–even when his own experts tell him the numbers are wrong.
  3. Possible Medicare overhauls? The fiscal cliff fiasco and the last-minute deal in Congress didn’t save us from disaster–it just created Fiscal Cliff 2.0 in February and March, during which automatic 2% spending cuts are scheduled to hit again unless Congress can strike another deal. The fact that we’ve already played the tax-increase card has some analysts predicting the end of Medicare and other entitlements, which will have to be cut to escape our deficit crisis. Not so, say others, who think that Medicare and Social Security are still too sacred to be touched. In any case, Pres. Obama has expressed a willingness to consider changes to Medicare to address its unsustainable cost to the government, and may even try to use it to find common ground with conservatives.
  4. Continued transition to “value-based payment”. For those unfamiliar with health care jargon, that basically means shifting from a world in which providers are paid for volume of services to one in which they are paid for based on the quality of care they provide (you think we’d have figured that out sooner, go figure). Much of this shift is being accelerated by various ACA programs. CMS kicked off its Value-Based Payment program last October (here’s a great overview by Kaiser Health News), which is already rewarding and penalizing hospitals (apparently those here in DC are doing the worst), and beginning this October will be adding patient mortality to the mix of incentive measures. CMS is also accelerating its Accountable Care Organization program, in which groups of providers can band together into systems that can be awarded savings for providing cost-effective, high-quality care. Starting with only 32 “pioneer” ACOs in December 2011, recent research indicates 328 ACOs as of November 2012, with CMS expected to announce the 2013 participants soon just announcing 106 new ACOs today (updated Jan. 10).
  5. …And due to the surging interest in ACOs and population health management, hospitals are responding with continued consolidation, building of physician networks, and partnering with post-acute and other providers. Scale is once again the name of the game. Expect a slew of anti-trust cases to follow.
  6. Finally, often under-reported by the mainstream media, expect further developments in health IT. Continuing growth of electronic health records, app-enabled consumer tech, and cybersecurity breaches, oh my! Take a look at some of the biggest trends here.

SCOTUS to US: “Look, We’re Politically Neutral!”

Four days after the historic health law decision, and news outlets have already moved on to speculations about winners and losers, the next political battlegrounds against the law, and the impending fall of Medicaid (and why it won’t happen).

However, let’s backtrack a bit; for those of you who didn’t rush to download the 193-page decision as soon as it was available, here are the take-away points (as well as political points):

  • The individual mandate does not regulate existing commerce, but instead compels individuals to become active in commerce. In this manner, it is NOT constitutional under the Commerce Clause. (+1 Republicans) This is likely what caused a number of news outlets to erroneously report that SCOTUS had struck down the law, causing mass confusion.
  • However, the mandate is functionally equivalent to a tax. Therefore, it IS constitutional under Congress’ power to tax. (+1 Democrats) This is, of course, in spite of the fact that a few paragraphs up, the Justices had just rejected the applicability of the Anti-Injunction Act (which prevents a ruling on taxes before they are collected) because “the Affordable Care Act describes the payment as a ‘penalty,’ not a ‘tax.’”
  • The Medicaid expansion clause of the ACA (Huh? This was an issue?) is NOT constitutional despite the federal government’s offer to pay for 90-100% of the expansion, because the threat to withdraw Medicaid funding from states that fail to comply becomes unreasonably coercive. (+1 Republicans)
  • However, this “constitutional violation is fully remedied” as long as the government does not execute said threat. (+1 Democrats)
  • Justice Kennedy, the expected swing vote, sided with the Conservatives in a rather scathing accusation of “vast judicial overreaching” (+1 Republicans). Chief Justice Roberts, long believed to be likely to side with the conservatives unless Kennedy swung liberal, actually turned out to be the key vote in upholding the law (+1 Democrats).

The whole decision reads like a blow-by-blow boxing match, with almost equal attention given to both sides of the political aisle. Particularly surprising was the convoluted method of justifying the mandate, validating conservatives’ concerns about regulating so-called “economic non-activity” while in effect delivering a victory to Obama. Perhaps Obama’s warning of “judicial activism” three months ago was hanging rather heavily over their heads.

The fact that the Justices couldn’t tell the difference between health insurance and broccoli means one of two things:

  1. They actually didn’t understand Solicitor General Verrilli’s argument (which is not unimaginable, given his oh-so-impressive eloquence). This is the same argument made by many economists, that a mandate to purchase insurance isn’t compelling people to purchase a good, but rather regulating a way to pay for health care, which everyone is already in the market for. As Cornell University economic professor Robert H. frank writes, “[the Justices’] interpretation will strike many economists as a misreading of the mandate’s purpose. It isn’t that people should buy health insurance because it would be good for them. Rather, failure to do so would cause significant harm to others.”
  2. They were throwing a political bone to the Republicans.

Given the convoluted rationale for the ruling on the health law, including a number of arguments that seem to fly in the face of the expectations of experts, I am led to believe that here is a case where the Justices tried everything in their power to maintain an image of political neutrality for the court. As Santa Clara University law professor Bradley Joondeph stated, “The court avoided, despite an enormous amount of pressure to invalidate this law, staining itself as excessively partisan.”

Which, ironically, reveals just how cognizant of political pressures the court actually is.

The Supreme Court Decision: A Birthday Gift for Rousseau?

Tomorrow is the day that political pundits, news media outlets, and most of the general public have been anxiously waiting for, the day when Obama’s landmark legislative accomplishment could either be validated or razed to the ground. Perhaps less known, tomorrow also happens to be the 300th birthday of Jean-Jacques Rousseau, whose writings on political philosophy are strikingly relevant to tomorrow’s decision.

Prof. Frederick Watkins provides an insightful overview of Rousseau’s philosophies here. The crux of Rousseau’s theory on the social contract can be summarized as such:

According to Rousseau, humans in presociety times was neither brutish (a la Hobbes) nor noble, but simply operating by the sense of self-preservation, and never interacting enough with other humans to need social morals. The increasing concentration of the population and the development of society requires humans to bond together and form a social contract, complete with rules for governance by which all agree to live.

In the society-gone-wrong Rousseau scenario, the dominance of private interests and increasing economic inequality allows the rich and powerful to usurp governance, resulting in a populace hoodwinked into thinking it’s free but actually serving the wishes of the elite. “Man is born free; and everywhere he is in chains.” However, in the ideal Rousseau scenario, civic-minded individuals set aside their self-interest and adopt a General Will, making political decisions that improve the general societal welfare, which they then agree to abide by. As his (in?)famous quote goes, only then can man “force himself to be free.”

The distinction that saves Rousseau’s line of reasoning from tyranny of the majority is his distinction between an individual’s “particular will” and society’s  “general will”. For Rousseau, it wasn’t simply enough for policies to be determined by majority vote or even unanimous consensus. Instead, each individual had to make decisions with the good of the general society in mind, suppressing any selfish urges that may conflict with this ideal. As a young, active, healthy adult, I may personally prefer to save the $700 in annual health insurance premiums for other expenditures, but as a well-informed citizen, I would prefer to live in a society where I can be assured that if I run into an unexpected health problem, or when I become old and decrepit, I will nonetheless have access to basic health care services. If I truly believe in advancing the general good, then society’s collective decisions will be exactly the same decisions I want.

Watkins seems almost prescient when he writes:

For the modern constitutionalist, as for Rousseau, respect for the moral responsibility of individual citizens is the foundation of all political legitimacy. Coercion is justified only in so far as it is based on some sort of general agreements. Constitutional government assumes that all the citizens of a particular state, no matter how divided they may be in their personal opinions, are so firmly agreed in their desire to share a common political existence that they are willing to repress their particular views in the interest of common action. The skill of constitutional statesmanship consists in limiting the demands of collective action to the area of actual or potential agreement. If this proves impossible, minority groups may come to feel that the values of the community are less important to them than the particular interests they are asked to sacrifice on its behalf. When this happens, there ceases to be any constitutionally legitimate basis for coercion, and a proper constitutional government must either relax its demands in such a way as to win back the disaffected minority, or else recognise the right of the latter to set themselves up as an independent political society. (Emphasis mine)

In about eight hour’s time, we will find out whether we live in a society in which consideration for a general will is too much to ask for.