Obamacare Crashes Again?

There are bad reviews and then there are bad reviews.  But it would be difficult to imagine some worse headlines than the ones Obamacare has received during the past month.

My favorite for over-the-top headline?  How about this gem from the National Journal: “Why Obamacare May Be Obama’s Katrina, Iraq.” That’s right.  An initiative to insure millions of Americans has been equated with the most frightening American natural and man-made disasters of the 21^st century. 

In a world in which we have come to expect tight plotlines, heroic successes, and quick and satisfying endings, I imagine that a blockbuster like Obamacare was never going appeal to critics.

The Obamacare story is being reported this month as if it were a classic disaster movie, with millions of people about to be left out in the cold to fend for themselves in a chaotic healthcare system as Obamacare exchanges crash and burn around them.

But that’s not close to reality.

This week’s announcement that the Obamacare website will work 90 percent of the time (which is another way of saying it still could be down over two hours per day) is hardly worth celebrating.  But the truth is that Obamacare itself is unfolding pretty much as expected.  The changes to the system that have been in place are for the most part popular and glitch-free.

And in another thirty days, people with pre-existing conditions will be guaranteed insurance at the same price as everyone else.  In roughly half the country, people with incomes below 138 percent of poverty will start to receive Medicaid benefits.  And nearly everyone with incomes up to 400 percent of poverty who purchase insurance through the exchanges will be given tax credits that make it more affordable.

But one big number – seven million – is already setting up Obamacare for a disaster sequel in the spring.

That’s the number of people who are supposed to get insurance through Obamacare exchanges by March.  And when the October and November numbers were slower than desired, another Obamacare disaster narrative began to take shape.

But no one ever thought that signing up seven million people would be effortless.

In fact, way back in March, Phil Galewicz wrote an insightful and prescient article for Kaiser Health News in collaboration with the Washington Post.  He quoted several people who are familiar with the challenges of enrolling people in health insurance programs.  He and they highlighted some of the issues that would confront the Obamacare exchanges.  The article’s conclusion?  People should be prepared for a “slow ramp up.”

In this context, some of the early numbers don’t look so bad after all.

Californians alone had completed over 360,000 insurance applications as of November 19.  Covered California - the state’s exchange – reported that 135,000 would qualify for the state Medicaid program and 80,000 others had already selected a health plan. 

And, according to the exchange, sufficient numbers of those people appeared to be young enough that the California program wouldn’t sink into the sea.

In New York, the reality was similar. As of November 24, according to its marketplace, NY State of Health, over 257,000 people had completed applications, and over 57,000 people were enrolled in insurance plans.

And in Kentucky, 60,000 people have already obtained either Medicaid or private insurance through its exchange.  And of those signing up for private insurance, 41 percent are in the 18-34 year old group.

CNN also reported in mid-November that the Washington and Connecticut exchanges were generating healthy enrollment numbers.  And the federal exchange numbers were not as bad as one might expect.  The November numbers included over 100,000 sign-ups despite the balky website, and according to HHS and CNN over 900,000 more people had completed applications. 

So how did CNN headine this good news?  “Obamacare success story sours.”

What will it mean if 4 or 5 million, not seven million, people enroll by next spring?  That will be enough to drop the uninsured percentage nationally from 15.4 percent to around 14 percent.

That might warrant some favorable reviews.

But if the reporting of the Obamacare story next spring is anything like it has been over the past month, the headline you will be reading may well be “Obamacare Crashes Again.”

So stay tuned.  And in the meantime, imagine what things would be like if the alternative to Obamacare had passed.  And believe it or not, there is one – from 2009.  In my next column, I’ll take a look at how it might be faring today.  You’ll be surprised.  

Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/

Where Do We Draw the Line on Paying for Home Health Care?

A relatively modest Medicare proposal put forward by President Obama in his 2014 budget may help to rekindle the debate about how we pay for long term care services in the coming years.  But where will we draw the line about our own responsibilities and those of the government?

This is because the President’s proposal is simple and easy to understand, and it will affect nearly all of us sooner or later.

He has asked for a $100 Medicare co-pay, starting in 2017, for five or more home care visits that are not preceded by a stay in an institution, according to a story this week in Kaiser Health News.  KHN added that “home care is one of the few areas in Medicare that does not have cost sharing.”

So should it?

While there is cost-sharing throughout most of the Medicare program – hospital deductibles, nursing home benefits, drug payments, and physician co-pays, for example – home health care has always been something of a special case.

A century ago, home care was pretty much all there was.

But as American medicine transformed itself during the first half of the 20^th century, home health care nearly disappeared.   According to Centers for Medicare and Medicaid (CMS) historical data, by 1960 the total amount we spent as a nation on home health care was only $57 million, barely a blip in national health care spending. 

CMS also notes that home health care spending still represents a very small share of national health care spending – around 2.7 percent.  In 2011, we spent $74 billion on home care – more than one thousand times what we spent on it fifty years earlier, but still not much in relative terms.  We spent more than ten times that, or $850 billion, on hospital care, and two times that, or $149 billion for nursing home and other residential care.

Hospital spending represents one third of our nation’s health care bill.  And nursing homes have been at the center of our long term care delivery system for at least forty years now.

But things have been quietly changing for Medicare recipients over the last thirty years.  The average inpatient length of stay in hospitals for people over the age of 65 was cut in half between 1980 and 2004.  Nursing homes picked up part of the slack, offering new short-term rehabilitation services in addition to long term care. 

But we gradually turned back to home care to meet many of our care needs.

By 2007, 1.5 million people were using home care health services, and not just for short-term recovery and rehabilitation.  The average length of stay in home care services was 315 days. 

And according to the Bureau of Labor Statistics, the home health care industry grew rapidly.  Over 839,000 people worked as home health aides in 2012.  This represented an industry growth rate of more than 400% over a quarter of a century.    

The problem isn’t the numbers.  It’s the trend.

An industry that represented a near zero share of our nation’s health care spending as recently as 1971 has tripled its share of our national health care bill since 1981.  It was one-sixth the level of nursing home spending in 1981.  Now it is half.  And that share will represent nearly $150 billion in spending by 2021 – almost 3,000 times what we spent on it in 1961.

That’s enough to get the attention of policy leaders, who don’t want to foot the bill by themselves. 

Some of us think they should not have to do so – we assume we may need long term care some day, and we’ve purchased long term care insurance to cover some of those down-the-road nursing and home care costs.  More of us seem to take the position that we will never need health care – that we will remain healthy and active up to the moment we die.

But the President’s proposal takes the middle ground.  It recognizes that most of us will need and want home health care some day, and that we will be willing to share the responsibility with our government to pay for this.

The President is not alone in seeking cost-sharing for home care.  Greater cost-sharing is a part of every Medicare reform proposal being floated today.  The only question is: where will we draw the line? 

To reach Paul Gionfriddo via email: gionfriddopaul@gmail.com.  Twitter: @pgionfriddo.  Facebook: www.facebook.com/paul.gionfriddo.  LinkedIn:  www.linkedin.com/in/paulgionfriddo/ 

Wait a Minute

An accurate but off-the-mark news headline this week proclaimed that health care costs for people insured in the private sector rose twice as fast as inflation in 2010.  But it didn’t mention that health insurance premium prices rose six times as fast.

The Health Care Cost and Utilization Report, 2010 was released by the Health Care Cost Institute (HCCI).  It was based on claims data for 33 million people – one fifth of those with employer-based health insurance.

The bottom line: the consumer price index rose by only 1.6% in 2010, but health care spending was up by 3.3% for the same year.

The report summarized that “prices increased across all categories of service, with outpatient services experiencing the fastest growth.” 

This is bad news for Americans with private health insurance already fed up with low and flat salaries and the high price of health.  The cost of health care now absorbs over one-sixth of our entire gross domestic product, and just seems to grow every year.

But wait a minute.  There was a piece missing in the HCCI report.  It was related to an insured consumer’s most significant health care expensive – the cost of insurance premiums.

That would have been even more newsworthy.  The price of employer-based family insurance coverage increased by 9%, or almost six times the rate of inflation, for policies renewed in the same time frame.

You won’t find that number headlined in the HCCI report, but you will find it in an equally impressive study released by the Kaiser Family Foundation and Health Research and Educational Trust last August.

How was it possible for HCCI to overlook so significant a cost increase? 

It might have something to do with HCCI’s funding.  HCCIwas formed just last September, “with an aim” according to its website, “of becoming the nation’s leading source of information on health care costs.” An article appearing on May 21, 2012, in Kaiser Health News makes it clear that insurance companies are the sources of both HCCI data and funding.

This bias doesn’t make the data in the report bad.  But it does suggest that the actual aim of HCCI might be better re-stated as “becoming a leading source of information on health insurers’ payments.” 

Especially if HCCI plans to continue to leave out the information about health insurance premiums.

Because when you add that into the mix, here’s another headline. 

At a time when – according to insurance companies themselves – health care costs rose by just over 3%, private insurance companies increased consumer health insurance premiums by three times that amount.

Adding insult to this injury, consumers got hit not once, but twice.  HCCI noted that out-of-pocket health spending increased by 7.1%.  In other words, insurance companies also required consumers to pay twice their fair share of the increase in health care prices.

This begs the question: where did all this money go?

If the purpose of the HCCI report was to deflect our attention away from this, it won’t work. 

The public may not have all the facts at its fingertips, but a March, 2012, survey sponsored by NPR, the Robert Wood Johnson Foundation, and the Harvard School of Public Health was released this week.  It found that 77% of all respondents, and 75% of sick ones, said that insurers “charging too much money” is a major reason for rising health care costs.

Americans don’t buy it when insurers point fingers at providers, any more than they believe major providers who just point fingers at insurers.  In the survey, consumers blamed hospitals and drug manufacturers for the rise in health care costs just as much as they did insurance companies.

So here’s the real bottom line. 

When – in the private sector – health care costs increase twice as fast as CPI, out-of-pocket costs increase four times as fast as CPI, and the cost of insurance increases six times as fast, there’s plenty of blame to be spread around.

The one entity we can’t blame for the increase is the one at which everyone usually points a finger – our government.

This in no way lets the government off the hook.

Instead, the data make a compelling case that elected officials should do more, not less, to contain all health care costs – if for no other reason than to protect the interests of the people who elected them. 

Will they do this, or will they leave us at the mercy of the marketplace?

The 13,386 Lives Congress Sacrificed Last Week

“I will keep them from harm and injustice.”

“I will prevent disease whenever I can, for prevention is preferable to cure.”

-Classic and modern versions of the Hippocratic Oath, from MedicineNet.Com

Senator Tom Coburn of Oklahoma is a physician.  He’s familiar with the Hippocratic Oath, and has used it to explain his opposition to health care reform.

Last November, Senator Coburn famously termed a $15 billion appropriation for public health and prevention a “slush fund.”  That’s because it was paying for community tobacco control programs, immunization activities, and addiction disorder prevention and treatment services around the country. 

For information on sources, see note below

“Prevention is about focusing on an individual patient,” he commented, apparently forgetting everything he learned about epidemiology at the University of Oklahoma’s College of Medicine and at least some of the words of the Hippocratic Oath.

Public health is the basis of health promotion and disease prevention. 

It focuses on the well-being of entire populations and communities.  It gets only 3% of our total health funding according to CMS data.  It has been responsible for at least half of the increase in life expectancy in America in the last century.

Now it is going to get even less funding, because Senator Coburn’s view has prevailed. 

Last week, his Congressional colleagues – in approving what was described as the last significant piece of legislation like to pass this year – agreed to cut $5 billion from the public health fund.  (Senator Coburn voted against the final bill, but not because it cut public health funding.)

We now know how many lives that $5 billion cut to public health will cost. 

This is because of an article written by Glen Mays and Sharla Smith and published last July in Health Affairs.  In that article, the authors showed that increasing spending on public health reduces infant deaths and deaths from cancers, heart disease, diabetes, and other chronic illnesses. 

They found that a 10% difference in public health funding is associated with a 6.9% difference in infant deaths, a 3.2% difference in heart disease deaths, a 1.4% difference in diabetes-related deaths, and a 1.1% difference in cancer deaths.

The CMS tally of U.S. spending on public health in 2010 was $78 billion.  A $5 billion dollar cut represents 6% of that total.

So that 6% cut this year will be associated with the following:

• 1,077 additional infant deaths;
• 7,831 additional deaths from heart disease;
• 617 additional deaths attributed directly to diabetes;
• 3,861 additional deaths from cancer.

Let’s be clear.  Mays and Smith were careful to point out that we can’t say that lower public health spending causes more deaths – but the association is real.  The amount of disease and death go up as public health spending goes down.

There are two levels of irony in the vote.

The first is that, before this happened, Mays and Smith cited the public health fund as evidence of Congress’s increasing awareness of the value of public health.  So much for awareness.

The second is that Congress decided to use the $5 billion to pay physicians to see Medicare patients who suffer from conditions like heart disease, cancer, and diabetes.

Physicians needed that so-called “doc fix.” Congress caused the problem way back in 1997 when it adopted a Medicare reimbursement formula with a flaw. 

Ever since the flaw became apparent a decade ago, Congress has plugged the reimbursement hole it created one year at a time, kicking the solution another year down the road.  After ten years of kicking, the hole is so large that doctors’ reimbursements would have been cut by 27% without the plug.

Kaiser Health News has an excellent summary of the doc fix dilemma on its web site for those who want to read more about it.  Because Congress won’t fix it for good, doctors are forced to waste their time and money lobbying for a fix every year.

Physicians are undoubtedly relieved that they came out okay again this year, but I seriously doubt that most of them would have wanted the money to be taken from public health.  After all, they’ve all sworn the same Oath as Senator Coburn.

But here’s the important question.  When Congress is able to afford $40 billion in oil and gas tax subsidies over the next ten years for hugely profitable companies, how come, when our health and well-being is concerned, it has to be either/or – and at the expense of thousands of lives?

Note on Source Data for Lives Lost Calculations:  Sources for numbers of deaths attributable to cancer, diabetes, heart disease, and infant mortality were websites of national chronic disease advocacy organizations and U.S. Government (CDC).  Death calculations were made by OHPM using the one-year death total for the most recent year available (usually 2010) and applying a 6% change factor.  The implicit assumptions is that if the 6% cut were to become annualized, so too would the annual number of increased deaths.

If you have any questions about this column, or would like to receive an email notifying you when new Our Health Policy Matters columns are published, please email gionfriddopaul@gmail.com.

We Need Foundations to Innovate in Health Care

Implementing health reform in the states is a governmental responsibility.  But Kaiser Health News reported this week that states are turning to foundations to help them with the costs of implementing these reforms. 

Financing governmental duties has not traditionally been the role of a foundation.  Governmental programs should be implemented efficiently, but asking foundations to pay for this implementation is drawing dollars away from the most important work of foundations.

This important work involves investing resources in promising initiatives that aren’t yet “government ready.”  Foundations are uniquely equipped to provide seed funding to experimental and innovative programs before they are ready for governmental action.

On the other hand, funding governmental obligations leads to two unintended consequences. 

First, it relieves governments of their obligation to justify to the public the expenditures they need to make to implement their programs.  This always seems to lead to unrealistic public expectations about how much things costs, and problems down the road with funding them.

Second, it takes limited foundation dollars away from innovation and experimentation.  Not every foundation initiative will succeed, and that’s the point.  While some fail quietly, many have changed the way we understand and address health problems in America.  Some of the best fundamentally change American society for the better. 

To name just three recent examples that illustrate this point, consider our 30 year history with HIV/AIDS, our emerging approaches to addressing the mental health epidemic, and our understanding of health disparities across populations and regions.  

The Robert Wood Johnson Foundation created the AIDS Health Services Program in 1986, five years after AIDS was first reported in the United States.  It was also the same year that President Reagan first mentioned AIDS publically.  While government responded slowly to the crisis, the RWJF initiative flourished and was responsible for enabling the Ryan White CARE Act, which wasn’t passed by Congress for four more years.  

Foundations are also leading the way in breaking down the barriers between health care and mental health care.  Primary and behavioral health “integration” emerged as a treatment strategy in the early 1990s, nurtured along by foundation investments.  It took the federal government fifteen more years before it began to make a serious commitment to integration through passage of the Mental Health Parity Act in 2008, the Medicare Mental Health parity law in 2008, and the Affordable Care Act in 2010.

Health disparities are underreported and poorly understood.  This is because they often offer no “local angle” to a story, but can only be understood in the context of comparing one group or region to another.  Such comparisons are easily dismissed as “apples to oranges” by local policymakers.

However, a government-supported university-based study shows vast and stunning differences in the life expectancies of various racial and geographic groups in the United States that can’t be so easily dismissed. 

The complete article, authored by Christopher Murray and others, is rich in comparative data, and its conclusions are more than troubling.  Asian Americans in well-integrated counties have a life expectancy that is 15 years longer than African Americans living in urban settings sometimes just a few miles away.  Rural white Americans in the Midwest have a 7 year life expectancy advantage over rural African Americans in the south. 

Native American and African American men have life expectancies of between 60 and 70 years, but Asian American and white women living in rural areas have life expectancies well into their 80s.  These numbers are underscored by readily-available CDC data tables. 

Nevertheless, the federal government did not make a major commitment to funding specific programs aimed at tackling disparities until more than four years after this study was published.  Just recently, HHS announced its Promotores de Salud community health workers initiative, a strategy specifically designed to address health disparities in minority populations.

However, as Grantmakers in Health points out, both local and national foundations have been focused on this problem for years, leading the way by funding important initiatives looking at both populations and place as determinants of health status for many years.

At their finest, foundations lead governments to action by experimenting with differing approaches to solving emerging policy problems, and finding and promoting those that work best.

It’s government’s job to bring them to scale.  Then it can solve the underlying problems – like AIDS treatment and prevention, mental health and primary health care integration, and health disparities – it may have been too timid to address, either because it didn’t know what would work or because it didn’t know what the public would support.

Asking foundations also to take on this job of government will reduce the dollars available for innovation and experimentation.  The risk is that we miss out on finding an early solution to the next public health crisis.

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