The Diane Rhem show had a one hour discussion of palliative care today....I heard a lot of it but not all. Here is the audio.
I find myself wondering if the preposterous 'death panel' screech of last August would have been upended had the NEJM study showing that palliative care extended life and improved quality of life for patients with stage IV metastatic lung cancer been published a year ago. After all, the proposal that was somehow morphed into 'death panels' was simply increased payment for consultations for palliative care and advanced care planning. Anyone who engaged in the 'death panel' mantra really shouldn't be listened to on matters of health policy as they either don't know what they are talking about, or they were purposefully misleading people for political gain.
One August to the next....quite a turnaround as far as palliative care goes.
Tuesday, August 24, 2010
Monday, August 23, 2010
Interesting comments on Medicare voucher
Austin Frakt has a very smart post up about what it would take for him to support a vouchered approach to Medicare. The most important of these is that there would have to be an actual competitive bidding process run as a pilot to see if competition could actually reduce the cost per beneficiary (risk adjusted). In other words, there has to be some evidence that a private bidding process would actually reduce costs, when trying to provide the same benefit package.
The current Medicare Advantage plan is not this, and I am not a big fan as I have written. MA has been a complete failure as a way to 'save money' for the past 30 years, mostly because of cherry picking, but also because of politically driven increases in premiums amounts to be able to say more beneficiciaries were choosing private plans.
Austin's suggestions for what would be required to 'be for' a vouchered approach to Medicare make sense, and least in moving that direction. I am still not sure it is possible. I wonder if you could actually make a private voucher approach work if you didn't somehow have entire geographic areas included in the vouchering? If not, you are always so worried about cherry picking and adjusting premiums either before or after the fact. The true test of competitive bidding is to show that it can lower per capita costs in setting in which everyone in a geographical area has their care financed in that manner.
The current Medicare Advantage plan is not this, and I am not a big fan as I have written. MA has been a complete failure as a way to 'save money' for the past 30 years, mostly because of cherry picking, but also because of politically driven increases in premiums amounts to be able to say more beneficiciaries were choosing private plans.
Austin's suggestions for what would be required to 'be for' a vouchered approach to Medicare make sense, and least in moving that direction. I am still not sure it is possible. I wonder if you could actually make a private voucher approach work if you didn't somehow have entire geographic areas included in the vouchering? If not, you are always so worried about cherry picking and adjusting premiums either before or after the fact. The true test of competitive bidding is to show that it can lower per capita costs in setting in which everyone in a geographical area has their care financed in that manner.
Wednesday, August 18, 2010
Palliative care improves QOL and extends life
An important new study has been released by the New England Journal of Medicine that shows that early access (upon diagnosis of metastatic lung cancer) to palliative care services extends lifespan (11.6 in early palliative group v. 8.9 months in normal care group), reduced the receipt of aggressive end of life care, and improved quality of life as measured by a standard assessment scale.
This is a very important study that brings good news. The key is how we move to expand access to palliative care throughout the system, particularly in the Medicare program.
Currently, the hospice benefit in the Medicare program requires patients to 'unelect' curative care before they can begin receiving hospice care. Hospice is not synonymous with palliative care, but hospice is an inter-disciplinary approach through which patients who are believed to have 6 months or less to live do receive palliative care services. [Palliative care is care that address the physical and psychosocial symptoms of serious life limiting illness and helps patients deal with the complex issues inherent with such an illness] This study demonstrates that early provision of palliative care benefits patients in terms of life span and quality of life and appears to reduce intensive end of life costs. It is important to note that the mean survival time for both treatment and control in this study was longer than 6 months, the presumptive period of hospice eligibility in the Medicare program.
There are several good reasons why the hospice benefit, which has been generally unchanged since the early 1980s should be changed. First, this study, and one published looking at a demonstration tested by Aetna in its non-Medicare (younger) business, show that opening up eligibility for palliative care (before there has been a certification of someone being in their last 6 months of life) improves patient benefit and reduces cost. Second, it is very difficult to accurately predict death, and this uncertainty likely hinders access to/choosing of hospice, which practically limits palliative care. In turn, this harms patients and likely increases costs. Third, in spite of great improvement in the availability of hospice and an increase in knowledge of this option in the Medicare program, 1 in 4 Medicare decedents who die while using hospice only do so for 5 days or less, and the median is still less than 3 weeks. Patients are not getting the maximum benefits they might from hospice, and certainly not from palliative care. Fourth, the image of hospice, especially as it relates to 'unelecting' something in the Medicare program is likely unpalatable to a substantial segment of the population. The length of hospice use figures appears to be stalled at current levels, and new approaches are likely needed to deliver the needed palliative services. The current Medicare hospice benefit structure simply imposes a choice that does not seem necessary either from the perspective of helping patients or conserving the resources of the Medicare program.
The PPACA allows for concurrent care demonstration projects in which access to palliative care would be granted to patients without their 'unelecting' any type of care treatment. These demonstrations seem to have been conceived of with the Aetna study in mind, but this latest study should provide even more impetus to move ahead aggressively and quickly in carrying out these demonstrations and to then begin moving toward policy changes in the Medicare program fairly rapidly.
Policy/implementation questions I have about this study and how it can be applied broadly are as follows:
This is a very important study that brings good news. The key is how we move to expand access to palliative care throughout the system, particularly in the Medicare program.
Currently, the hospice benefit in the Medicare program requires patients to 'unelect' curative care before they can begin receiving hospice care. Hospice is not synonymous with palliative care, but hospice is an inter-disciplinary approach through which patients who are believed to have 6 months or less to live do receive palliative care services. [Palliative care is care that address the physical and psychosocial symptoms of serious life limiting illness and helps patients deal with the complex issues inherent with such an illness] This study demonstrates that early provision of palliative care benefits patients in terms of life span and quality of life and appears to reduce intensive end of life costs. It is important to note that the mean survival time for both treatment and control in this study was longer than 6 months, the presumptive period of hospice eligibility in the Medicare program.
There are several good reasons why the hospice benefit, which has been generally unchanged since the early 1980s should be changed. First, this study, and one published looking at a demonstration tested by Aetna in its non-Medicare (younger) business, show that opening up eligibility for palliative care (before there has been a certification of someone being in their last 6 months of life) improves patient benefit and reduces cost. Second, it is very difficult to accurately predict death, and this uncertainty likely hinders access to/choosing of hospice, which practically limits palliative care. In turn, this harms patients and likely increases costs. Third, in spite of great improvement in the availability of hospice and an increase in knowledge of this option in the Medicare program, 1 in 4 Medicare decedents who die while using hospice only do so for 5 days or less, and the median is still less than 3 weeks. Patients are not getting the maximum benefits they might from hospice, and certainly not from palliative care. Fourth, the image of hospice, especially as it relates to 'unelecting' something in the Medicare program is likely unpalatable to a substantial segment of the population. The length of hospice use figures appears to be stalled at current levels, and new approaches are likely needed to deliver the needed palliative services. The current Medicare hospice benefit structure simply imposes a choice that does not seem necessary either from the perspective of helping patients or conserving the resources of the Medicare program.
The PPACA allows for concurrent care demonstration projects in which access to palliative care would be granted to patients without their 'unelecting' any type of care treatment. These demonstrations seem to have been conceived of with the Aetna study in mind, but this latest study should provide even more impetus to move ahead aggressively and quickly in carrying out these demonstrations and to then begin moving toward policy changes in the Medicare program fairly rapidly.
Policy/implementation questions I have about this study and how it can be applied broadly are as follows:
- will patients choose early palliative care if offered the choice? Put another way, how important (if at all) is selection bias in explaining these results, meaning were those who consented to the study very different from the typical patient?
- will these findings hold up/will this choice be replicated in more ethnically diverse patients? There were only 6 of 151 patients in this study that were not white. This is not a criticim of the study, merely a fact that must be kept in mind from a policy perspective since their are many differences in care use across race and ethnic groups.
- will doctors and other providers offer or 'sell' early palliative care to their patients? Both doctors and patients need to learn the message that palliative care improved quality of life and extended life. How threatening of a message will this be to oncologists? Other doctors?
- Can other studies replicate similar results in other disease groups, like congestive heart failure, or COPD?
- In one sense, all of these points above hinge on the fact that while RCTs are ideal for assessing internal validity, they can be wanting for external validity (how broadly applicable are their findings). The concurrent care demonstrations in Medicare should focus on nailing down these issues of how this expanded/early palliative care approach can be most broadly implemented to local conditions given the mounting evidence that expanded palliative services without patients having to 'unelect' curative services seems to benefit both patient and the Medicare program.
Tuesday, August 17, 2010
Where did medical malpractice go?
One of the most interesting aspects of the debate over health reform from June 09-now is the fact that medical malpractice was not as large a part of the debate as I assumed it would be. Why did this come about? Three main reasons, I think.
First, organized medicine in the form of the American Medical Association was in the (historically unusual) position of supporting the reform efforts. Even when they didn't get changes they wanted in the area of medical malpractice, and didn't get the SGR update (aka 'the doc fix) included in reform. So, one of the groups that would have historically been using med mal to drive opposition to reform was in support. This made a big difference.
Second, the CBO came out with a report in October, 2009 that did two things. The first was that it concluded that the current malpractice system does increase the overall cost of the health care system. The second thing it did was estimate the level of effect at a much lower level than many pundits and advocates for malpractice reform argued. CBO estimated that adopting a national set of reforms similar to those adopted in the state of Texas (having, notably a cap on non-economic damages) would reduce the deficit by $54 Billion over 10 years (with $13 Billion of this being indirect savings due to slower premium increases and less revenue loss due to the fact that employer paid premiums are tax free income to employers). $54 Billion over 10 years is real money, but the projected total health care spending over the same 10 years is around $35.5 Trillion, or 35.5 thousand Billion dollars. So, changes in medical malpractice laws is no cost panacea. There were some pundits writing about malpractice, saying annual costs of defensive medicine were $200 Billion per year, and others who took a study that asked doctors why they ordered tests and concluded that 25% of doctor visits were due to defensive medicine. This of course means that if one 'fixed' the malpractice system and reduced defensive medicine, that doctor visits in the U.S. would fall by 1 in 4! If I thought that were true, I promise I would sign up....no matter what my friends who are lawyers would say.
In short, defensive medicine is real and has a cost, but it is relatively small as a way to reduce expenditures, and a close look at the issue shows there is a related patient safety/quality issue.
Third, President Obama was ready to call the bluff of Republicans in the area of medical malpractice and cut a deal. It is true that the law that passed has only smallish demonstration projects in the area of medical malpractice. However, close your eyes and imagine what would have happened if one or two Republicans would have been willing to vote for the motion to proceed (and end the filibuster) of the health reform bill in the Senate last winter. Yep, they could have gotten quite a lot of malpractice reform. As I was writing about health reform all last year in the News and Observer, I always thought the political deal went through malpractice reform. And the President in his September 2009 speech noted willingness to talk. One of the key reasons that politicians at least turned down the malpractice talk (at least as compared to normal discourse) was that they didn't want a deal. In raw political terms, they choose poorly. If they would have defeated the reform bill, they would have chosen wisely, again in raw political terms. Given the bill became law, the Republican advocates of malpractice reform missed an opportunity to push forward a long term interest of theirs.
The reality is that there are many problems with the medical malpractice system in the United States, as I wrote last year. The current system really does almost nothing well. Doesn't protect patients, doesn't protect doctors from unwarranted suits, doesn't give a good risk signal to malpractice insurance companies, doesn't efficiently compensate patients who have actually been harmed by negligence and so on. In short, whatever aspect of the system you dislike most (defensive medicine, quality concerns and patient errors) there is plenty of evidence that the 'opposite' problem is a big problem. We need reform of the malpractice and patient safety systems in the U.S., it just won't save us that much money, but we need to find all the ways to reduce spending we can. Maybe malpractice reform will be the key aspect of a deal between Democrats and Republicans to take another step ahead in the next Congress.
First, organized medicine in the form of the American Medical Association was in the (historically unusual) position of supporting the reform efforts. Even when they didn't get changes they wanted in the area of medical malpractice, and didn't get the SGR update (aka 'the doc fix) included in reform. So, one of the groups that would have historically been using med mal to drive opposition to reform was in support. This made a big difference.
Second, the CBO came out with a report in October, 2009 that did two things. The first was that it concluded that the current malpractice system does increase the overall cost of the health care system. The second thing it did was estimate the level of effect at a much lower level than many pundits and advocates for malpractice reform argued. CBO estimated that adopting a national set of reforms similar to those adopted in the state of Texas (having, notably a cap on non-economic damages) would reduce the deficit by $54 Billion over 10 years (with $13 Billion of this being indirect savings due to slower premium increases and less revenue loss due to the fact that employer paid premiums are tax free income to employers). $54 Billion over 10 years is real money, but the projected total health care spending over the same 10 years is around $35.5 Trillion, or 35.5 thousand Billion dollars. So, changes in medical malpractice laws is no cost panacea. There were some pundits writing about malpractice, saying annual costs of defensive medicine were $200 Billion per year, and others who took a study that asked doctors why they ordered tests and concluded that 25% of doctor visits were due to defensive medicine. This of course means that if one 'fixed' the malpractice system and reduced defensive medicine, that doctor visits in the U.S. would fall by 1 in 4! If I thought that were true, I promise I would sign up....no matter what my friends who are lawyers would say.
In short, defensive medicine is real and has a cost, but it is relatively small as a way to reduce expenditures, and a close look at the issue shows there is a related patient safety/quality issue.
Third, President Obama was ready to call the bluff of Republicans in the area of medical malpractice and cut a deal. It is true that the law that passed has only smallish demonstration projects in the area of medical malpractice. However, close your eyes and imagine what would have happened if one or two Republicans would have been willing to vote for the motion to proceed (and end the filibuster) of the health reform bill in the Senate last winter. Yep, they could have gotten quite a lot of malpractice reform. As I was writing about health reform all last year in the News and Observer, I always thought the political deal went through malpractice reform. And the President in his September 2009 speech noted willingness to talk. One of the key reasons that politicians at least turned down the malpractice talk (at least as compared to normal discourse) was that they didn't want a deal. In raw political terms, they choose poorly. If they would have defeated the reform bill, they would have chosen wisely, again in raw political terms. Given the bill became law, the Republican advocates of malpractice reform missed an opportunity to push forward a long term interest of theirs.
The reality is that there are many problems with the medical malpractice system in the United States, as I wrote last year. The current system really does almost nothing well. Doesn't protect patients, doesn't protect doctors from unwarranted suits, doesn't give a good risk signal to malpractice insurance companies, doesn't efficiently compensate patients who have actually been harmed by negligence and so on. In short, whatever aspect of the system you dislike most (defensive medicine, quality concerns and patient errors) there is plenty of evidence that the 'opposite' problem is a big problem. We need reform of the malpractice and patient safety systems in the U.S., it just won't save us that much money, but we need to find all the ways to reduce spending we can. Maybe malpractice reform will be the key aspect of a deal between Democrats and Republicans to take another step ahead in the next Congress.
Sunday, August 15, 2010
Problems with Peer Review
Peer review is the process through which researchers review one another's work in order to determine whose paper is published in a given journal. The better the journal, the more competition for space. Here is an interesting critique of peer review, or more directly, a piece noting the problems of peer review.
I think that peer review is probably best understood as the least worst way to determine what papers are published (there are problems, but science/research is quite conservative about changes of any type). I think the two changes I would most like to see would be (1) ending anonymous review; the writers of the paper and the reviewers should know who wrote/reviewed the paper; and (2) the reviews of published papers should be made available via the web so that researchers could see clearly the dialogue and discussion (many times best understood as negotiation) between authors, reviewers and editors over what is published.
Anonymity in peer review (and the internet) mean that people do not have to take responsibility for their words in a way that harms discourse, be it in scientific journals, blogs, comments on news stories, etc.
H/T to Damjan Denoble, one of my former students, for pointing me to this. He also writes asiahealthcareblog.
I think that peer review is probably best understood as the least worst way to determine what papers are published (there are problems, but science/research is quite conservative about changes of any type). I think the two changes I would most like to see would be (1) ending anonymous review; the writers of the paper and the reviewers should know who wrote/reviewed the paper; and (2) the reviews of published papers should be made available via the web so that researchers could see clearly the dialogue and discussion (many times best understood as negotiation) between authors, reviewers and editors over what is published.
Anonymity in peer review (and the internet) mean that people do not have to take responsibility for their words in a way that harms discourse, be it in scientific journals, blogs, comments on news stories, etc.
H/T to Damjan Denoble, one of my former students, for pointing me to this. He also writes asiahealthcareblog.
Friday, August 13, 2010
Health Reform and the Deficit
Ezra Klein in Newsweek about heath reform and deficit reduction. Most are for 'saving money in health care' so long as nothing changes. I have yet to hear a credible alternative to PPACA that has any hope of addressing both the fact that we have uninsured persons and at the same time have a system that is unsustainable due to cost.
What should the tax rate be?
Interesting question posed by Dylan Matthews on Ezra Klein's blog: "What is the revenue maximizing marginal tax rate?"
Obviously a rate of 0% raises $0, and a rate of 100% would provide no incentive for work, so we know what the two ends of the Laffer Curve look like. The real question is what shape is the curve in between? The answers above vary a great deal.....roughly 60-70% for economists who focus on this from a research standpoint, lower say 40-50% for more conservative economists, and much lower for conservative pundits.
The most interesting response to me was Martin Feldstein's who basically says this is the wrong question and gives the logic for running a small deficit all the time in order to increase consumption....of course now we don't have a small deficit...but he says he wouldn't only look for the revenue maximizing point, but would also not want to give us $1 Billion in national consumption for a $100 Million reduction in the deficit.
More on where the curve bends....
Obviously a rate of 0% raises $0, and a rate of 100% would provide no incentive for work, so we know what the two ends of the Laffer Curve look like. The real question is what shape is the curve in between? The answers above vary a great deal.....roughly 60-70% for economists who focus on this from a research standpoint, lower say 40-50% for more conservative economists, and much lower for conservative pundits.
The most interesting response to me was Martin Feldstein's who basically says this is the wrong question and gives the logic for running a small deficit all the time in order to increase consumption....of course now we don't have a small deficit...but he says he wouldn't only look for the revenue maximizing point, but would also not want to give us $1 Billion in national consumption for a $100 Million reduction in the deficit.
More on where the curve bends....
Reinhardt on Arrow--Rd 2
Economix blog with Uwe Reinhardt's second post discussing Kenneth Arrow's famous 1963 paper which essentially asks 'is health care a special good?' to which many of the general laws of economics don't easily apply. Short answer is yes. Of course, the laws of perfectly free markets are violated for many goods, but not for many that are as important to most people as health care.
Last weeks post on Reinhardt's first blog entry.
Last weeks post on Reinhardt's first blog entry.
Thursday, August 12, 2010
More on illegal immigration and SS
Interesting post on Ezra Klein's blog on Socical Security and Medicare taxes being paid by illegal immigrants. What I wrote on joining the two last week.
The only hope of an illegal immigration issue is to think of it first and foremost as a labor market(s) issue.
The only hope of an illegal immigration issue is to think of it first and foremost as a labor market(s) issue.
Alzheimer's Tests and Insurance
Word of a test of spinal fluid for Alzheimer's Disease has started discussions of whether one should get a test for an incurable disesase. I wrote a paper with colleagues from Boston University, University of Michigcan and Duke that looked at the potential impact of a genetic marker for AD on adverse selection in private long term care insurance. Basically, we confirmed a story that was consistent with adverse selection whereby persons with the genetic marker were more likely to actually use nursing home care (the most expensive form of long term care) and that their knowledge of their genotype was associated with them being more likely to purchase insurance.
The paper has a discussion of the issues surrounding the use of genetic markers as underwriting/risk adjustment tools. The logic of the Genetic Information Non-Discrimination Act of 2008 (GINA 2008) is to ban the use of genetic markers for such purposes. Interestingly, GINA 2008 doesn't ban the use of genetic markers for use in writing long term care insurance policies, while it does ban the use for virtually all other types of insurance. It is unclear to me if this was purposeful, or just an oversight.
Our paper concludes with a discussion of the issues around the potential use of genetic markers to underwrite/risk adjust long term care insurance policies and premiums (which is not currently done). While the reflexive instinct of many is to say this should be banned, if the public policy goal is to expand the rate of coverage by long term care insurance policies, it is not clear that is the correct intuition. It really boils down to whether the goal is actuarial fairness, or a more general notion of moral fairness (you can' control your genes).
The spinal fluid test for AD is not a genetic marker, but the presence of a test that could predict the onset of a debilitating disease such as AD will likely make it more difficult for long term care insurance coverage to expand unless the test is directly used, because you would expect insurers to assume applicants have inside information, to raise prices for all comers, further driving out better risks (at least with respect to a test like this).
The best policy to insure agaisnt long term care is to spread risk broadly, which means to get as many persons into an insurance market as possible. With insurance that is rare, the adverse selection risk is great, and anything that provides information to only one side of this type of market is likley to hinder uptake of this type of insurance, which only occurs when a buyer and seller of an insurance policy can agree on a price/premium.
The paper has a discussion of the issues surrounding the use of genetic markers as underwriting/risk adjustment tools. The logic of the Genetic Information Non-Discrimination Act of 2008 (GINA 2008) is to ban the use of genetic markers for such purposes. Interestingly, GINA 2008 doesn't ban the use of genetic markers for use in writing long term care insurance policies, while it does ban the use for virtually all other types of insurance. It is unclear to me if this was purposeful, or just an oversight.
Our paper concludes with a discussion of the issues around the potential use of genetic markers to underwrite/risk adjust long term care insurance policies and premiums (which is not currently done). While the reflexive instinct of many is to say this should be banned, if the public policy goal is to expand the rate of coverage by long term care insurance policies, it is not clear that is the correct intuition. It really boils down to whether the goal is actuarial fairness, or a more general notion of moral fairness (you can' control your genes).
The spinal fluid test for AD is not a genetic marker, but the presence of a test that could predict the onset of a debilitating disease such as AD will likely make it more difficult for long term care insurance coverage to expand unless the test is directly used, because you would expect insurers to assume applicants have inside information, to raise prices for all comers, further driving out better risks (at least with respect to a test like this).
The best policy to insure agaisnt long term care is to spread risk broadly, which means to get as many persons into an insurance market as possible. With insurance that is rare, the adverse selection risk is great, and anything that provides information to only one side of this type of market is likley to hinder uptake of this type of insurance, which only occurs when a buyer and seller of an insurance policy can agree on a price/premium.
Tuesday, August 10, 2010
Duke/PKU Certificate in Global Health
video about our experience the past two summers teaching in Beijing. We should have gotten some video of several hundred elderly Chinese ladies doing Tai Chi in formation just after dawn in the park.....or of people on the street looking behind me when I ran (jogged) by in the morning....they were looking for who was chasing the big guy in the skimpy shorts! My overall thoughts on this year's version here.
Facing a poor diagnosis
Very interesting blog and excerpt of a book (Laugh, Sing and Eat Like a Pig: Facing Death with Hope)....with hat tip to Diane Meier's twitter account. If you are interested in palliative care, hospice, physician/patient communication, you should follow her on twitter as she reads around and shares....http://twitter.com/DianeEMeier
Monday, August 9, 2010
60 minutes on cost of dying
report last night on 60 minutes, video here. It is a reasonable look at the situation, high marks for starting it on the right foot by saying, "All medical studies agree, that patients have a 100% chance of dying eventually." They could have talked a bit more about options, such as hospice care. And they failed to mention the concurrent care demonstrations that were financed as part of Medicare (where folks get expanded access to hospice services without unelecting curative care). However, talking in plain terms about the reality that a good deal of health care we spend in non-productive is important. We have to learn how to do so. A couple of weeks back, I had this along with Amy Abernethy in Health Affairs blog that discusses why it is hard to move from 'it is possible to have a state worse than death' to a practical means of reducing such spending.
Whaddaya wanna cut?
Nothing apparently for Republican leaders in Congress. Eric Cantor (minority whip) waxing on about needing to cut spending but identifying no spending he would cut. I think the 'pay for' for extending all the tax cuts that are set to run out on Dec. 31, 2010 because they were enacted via budget reconciliation is around $800 Billion over 10 years. Here are two very simple suggestions that won't quite get there but will be a start:
*cap the tax exclusion for employer paid health insurance premiums at the national mean premium level of ~$13,500 for family cover and corresponding single cover (~$5,000). This will reduce the deficit by around $500 Billion over 10 years. This would make those of us (like me) with employer sponsored insurance pay attention to our health insurance like never before.
*raise the Medicare eligibility age by two months per year staring in 2014 until it reaches age 67 by 2025. This will save about $50 Billion over 10 years, but much more in the long term. And in 2014 there will be income based subisidies for the uninsured to purchase private cover in the exchanges.....
*cap the tax exclusion for employer paid health insurance premiums at the national mean premium level of ~$13,500 for family cover and corresponding single cover (~$5,000). This will reduce the deficit by around $500 Billion over 10 years. This would make those of us (like me) with employer sponsored insurance pay attention to our health insurance like never before.
*raise the Medicare eligibility age by two months per year staring in 2014 until it reaches age 67 by 2025. This will save about $50 Billion over 10 years, but much more in the long term. And in 2014 there will be income based subisidies for the uninsured to purchase private cover in the exchanges.....
Saturday, August 7, 2010
Illegal Immigration and Social Security
I have an op-ed in today's Raleigh, NC News and Observer suggesting a practical solution to address illegal immigration and helping the financing problems of Social Security and Medicare at the same time. Illegal immigration is a complicated topic with many facets, but it is first and foremost a labor market(s) issue. Any solution that works will start from there.
Friday, August 6, 2010
More on Ryan
Paul Krugman has a column labelling Rep. Paul Ryan's plan to balance the budget a flim-flam. Ezra Klein weighs in here with lots of links to stuff he has written about Ryan and his Road Map during the past 6 months.
Here were my thoughts on Ryan's proposal in February. I think Paul Krugman is too harsh in saying that Ryan's ideas offer nothing to the debate. However, Ryan doesn't have a plan to balance the budget, he has a list of spending cuts that will balance it along with a tax increase over the tax code we have now.
Ryan's proposal shows what is possible given his proposed spending cuts, ONLY IF you have a tax system that will bring in 19% of GDP long term....that is what the CBO estimated. They did not estimate his tax proposal, which most say won't come close to raising 19% of GDP. It will take tax increases and spending cuts to balance the budget in the long term.
Update: 538.c0m on Ryan roadmap.
Here were my thoughts on Ryan's proposal in February. I think Paul Krugman is too harsh in saying that Ryan's ideas offer nothing to the debate. However, Ryan doesn't have a plan to balance the budget, he has a list of spending cuts that will balance it along with a tax increase over the tax code we have now.
Ryan's proposal shows what is possible given his proposed spending cuts, ONLY IF you have a tax system that will bring in 19% of GDP long term....that is what the CBO estimated. They did not estimate his tax proposal, which most say won't come close to raising 19% of GDP. It will take tax increases and spending cuts to balance the budget in the long term.
Update: 538.c0m on Ryan roadmap.
Interesting letter from Duke
Got an interesting letter from Duke yesterday. It said that my dependents covered on my health insurance (my wife and 3 kids) could be dropped from my health insurance plan unless I proved they were legitimately my dependents. Follow up email text from HR person in public policy last night....
From 2014 and on, a person that is offered a health insurance plan through an employer larger than 50 people cannot decline said offer and go into the exchange and purchase insurance unless the insurance offer (from employer) is higher than the affordability standard. That is the most direct way I can see this info being used.....and I believe that beginning in 2011, the value of premiums paid on behalf of employees by employers will be reported on W-2, though not taxed (though they should be, but that is another story).
Also, I have 'heard' that Duke has been worried that some employees had folks on as dependents who actually were not dependents....like nephews, etc. This is not an issue related to same sex couples as Duke has long had quite expansive 'spousal equivalent' benefits.
Update: apparently, employees going nuts about the audit. In classic fashion, one colleague who is known to hyperventilate about the need to control health care costs, is mad about the audit and even said 'it is none of their business' you know, because the benefit fairy brings health insurance, right? Sigh. See below for boring letter from a job I wouldn't want (VP for HR at Duke)
******************
FROM: XXX XXXXXX, Vice President, Human Resources
RE: Clarification on audit of health plans
____________________________________________________________
During the past six months, as part of the ongoing effort to manage the cost associated with our health care plan, eligibility audits have been initiated. Such audits have become a standard management practice and are underway at the majority of our peer institutions.
Faculty and staff with children covered by one of our health plans recently received a letter about the next phase of this audit with a deadline for response by August 16. Unfortunately, the distribution of the letter by our vendor was delayed by two weeks, which created an unrealistic deadline for response.
The deadline for return of the Dependent Eligibility Certification form has been extended until September 30 to ensure a 30-day period for response, consistent with previous phases of the audit. Additional documentation (birth certificate, tax return, etc.) is not required to be submitted with the form, but it may be required later by request.
The form also requests the submission of Social Security numbers for spouses/partners and children. Collection of this information is in anticipation of requirements for the Patient Protection and Affordable Care Act, known more commonly as national healthcare reform. As with other confidential personnel information maintained by Human Resources, the collection of Social Security numbers is being handled with all appropriate security safeguards.
As referenced in last year’s open enrollment guide, the audit will help ensure that Duke is providing coverage only for eligible individuals. Covering those who are not eligible increases the cost of our health plan, which results in higher premiums and co-payments for health insurance.
Please share this information as appropriate with faculty and staff in your areas who may have questions. Thank you.
**********************
Basically, everyone wants to spend less on health care.....they just don't want anything to change. I have been calling this a culture of delusion.
To all faculty and staff that are using the Duke insurance. If you have this, you might receive a letter from XXXXXXXX, Health Plan Manager at Duke. This letter is legitimate as I called Human Resources to confirm.
Duke is conducting this audit to make sure the dependents on employee health plans are actually eligible to receive benefits. Therefore, in order to verify if they are eligible, they are asking for your dependent’s social security number and date of birth. They are doing this for two reasons. One is to ensure the benefits Duke pays out is actually legitimate. The second reason is that Health Reform is coming soon and this will be required and Duke is being pro-active in doing this beforehand.
The date on the letter states you are to return this information back to HR by August 16, 2010. They have extended this date to September 30, 2010. There was never any communication that was sent to employees regarding this and this letter came from a different department than from Human Resources.
Here is the web site that explains a little about it.
http://www.hr.duke.edu/news/items/2010_08_05dependentaudit.php
....From 2014 and on, a person that is offered a health insurance plan through an employer larger than 50 people cannot decline said offer and go into the exchange and purchase insurance unless the insurance offer (from employer) is higher than the affordability standard. That is the most direct way I can see this info being used.....and I believe that beginning in 2011, the value of premiums paid on behalf of employees by employers will be reported on W-2, though not taxed (though they should be, but that is another story).
Also, I have 'heard' that Duke has been worried that some employees had folks on as dependents who actually were not dependents....like nephews, etc. This is not an issue related to same sex couples as Duke has long had quite expansive 'spousal equivalent' benefits.
Update: apparently, employees going nuts about the audit. In classic fashion, one colleague who is known to hyperventilate about the need to control health care costs, is mad about the audit and even said 'it is none of their business' you know, because the benefit fairy brings health insurance, right? Sigh. See below for boring letter from a job I wouldn't want (VP for HR at Duke)
******************
FROM: XXX XXXXXX, Vice President, Human Resources
RE: Clarification on audit of health plans
____________________________________________________________
During the past six months, as part of the ongoing effort to manage the cost associated with our health care plan, eligibility audits have been initiated. Such audits have become a standard management practice and are underway at the majority of our peer institutions.
Faculty and staff with children covered by one of our health plans recently received a letter about the next phase of this audit with a deadline for response by August 16. Unfortunately, the distribution of the letter by our vendor was delayed by two weeks, which created an unrealistic deadline for response.
The deadline for return of the Dependent Eligibility Certification form has been extended until September 30 to ensure a 30-day period for response, consistent with previous phases of the audit. Additional documentation (birth certificate, tax return, etc.) is not required to be submitted with the form, but it may be required later by request.
The form also requests the submission of Social Security numbers for spouses/partners and children. Collection of this information is in anticipation of requirements for the Patient Protection and Affordable Care Act, known more commonly as national healthcare reform. As with other confidential personnel information maintained by Human Resources, the collection of Social Security numbers is being handled with all appropriate security safeguards.
As referenced in last year’s open enrollment guide, the audit will help ensure that Duke is providing coverage only for eligible individuals. Covering those who are not eligible increases the cost of our health plan, which results in higher premiums and co-payments for health insurance.
Please share this information as appropriate with faculty and staff in your areas who may have questions. Thank you.
**********************
Basically, everyone wants to spend less on health care.....they just don't want anything to change. I have been calling this a culture of delusion.
Is health care different?
In what Austin Frakt calls must read, Uwe Reinhardt has blog post at economix that reviews the 1963 ("Uncertainty and the welfare economics of health care") paper by Kenneth Arrow that discusses whether health care is different from other goods. Put another way, do the following principles of perfectly competitive markets hold in health care (from Reinhardt):
"The crucial characteristics of a perfectly competitive market are (1) that all of the quality dimensions of the good or service traded in that market are accurately understood by buyer and seller; (2) that potential buyers have full transparency on the price they will have to pay per unit of that good or service; (3) that it is easy and relatively costless for potential sellers to enter and exit this market; (4) and that there are so many potential buyers and sellers that none individually can affect the market price of the thing being traded."
By the way, Reinhardt's overview is a lot easier to understand than the original paper.....and he promises a follow up post that provides an overview of Arrow's conclusion about whether health care is different.
"The crucial characteristics of a perfectly competitive market are (1) that all of the quality dimensions of the good or service traded in that market are accurately understood by buyer and seller; (2) that potential buyers have full transparency on the price they will have to pay per unit of that good or service; (3) that it is easy and relatively costless for potential sellers to enter and exit this market; (4) and that there are so many potential buyers and sellers that none individually can affect the market price of the thing being traded."
By the way, Reinhardt's overview is a lot easier to understand than the original paper.....and he promises a follow up post that provides an overview of Arrow's conclusion about whether health care is different.
Thursday, August 5, 2010
Medicare Cash Cow
Great succinct post by Austin Frakt on the history of using Medicare to finance deficit reduction in various bills over the past 15 years...with the notable exception of the Medicare Modernization Act of 2003 (which created part D) which was the opposite, a deficit buster.
The cuts in future Medicare spending in PPACA are fairly large, but nowhere near as large as BBA '97. The arguments against the cuts to Medicare in PPACA being made by Republicans are schizophrenic.
"They are huge and will harm patients" AND (in the same speech) "they will never be made." Which is it?
Congress needs to be out of the weeds of the details of Medicare policy, and the moves in PPACA to develop Independent Medicare Commission and the like are a good step. To make Medicare sustainable will take a great deal of policy making. Congress is incapable of doing this well.
The cuts in future Medicare spending in PPACA are fairly large, but nowhere near as large as BBA '97. The arguments against the cuts to Medicare in PPACA being made by Republicans are schizophrenic.
"They are huge and will harm patients" AND (in the same speech) "they will never be made." Which is it?
Congress needs to be out of the weeds of the details of Medicare policy, and the moves in PPACA to develop Independent Medicare Commission and the like are a good step. To make Medicare sustainable will take a great deal of policy making. Congress is incapable of doing this well.
Wednesday, August 4, 2010
Joining Immigration Reform and Social Security
I have an op-ed in today's South Florida Sun-Sentinel and which may run in several newspapers nationally over the next day or so. The text in the Sun-Sentinel was shortened, so here is the full text of the piece:
********************************************************
Joining Immigration Reform and Social Security
By Donald H. Taylor, Jr.
Rarely do you see two of our country’s most intractable problems -- illegal immigration and the solvency of Social Security -- lumped together in the same sentence.
I would like to propose an imperfect idea that could address both problems at once. The plan wouldn’t have to work that well to be an improvement on the current immigration system, and we know the financing problems of Social Security are dire.
So here goes: We allow immigrant workers to come to the United States to work for up to three years. The cost of a work permit would be that immigrant workers and/or employers would have to pay Social Security and Medicare payroll taxes. Workers would not be able to get benefits from either system even though they paid taxes, thereby lessening the impact of the looming baby boomer retirement on both programs. Some illegal immigrants pay such taxes now and cannot benefit, but routinizing this arrangement would maximize taxes paid and reduce identity theft. Employers would get employees, and workers would get a job that enabled them to return money to their home nation. At the end of three years, they would return home.
I start out with two basic assumptions -- that the benefits of illegal immigration accrue mostly to the immigrants and their employers, and that these same benefits outweigh the costs to society as a whole. If it were the other way around, we would have found a more effective means of stopping illegal immigration. The benefits include the contribution of illegal workers to the economy, perhaps doing jobs that citizens don’t want. Costs include health care and other social services, notably schooling that is provided to workers and their children.
The intangible benefits and costs of the cultural diversity inherent with illegal immigration are difficult to estimate, and I doubt if any analysis on such a subjective question would change the views of many people, so I assume they are a wash.
I acknowledge there are many problems with my idea. First, one reason illegal labor is attractive to employers is because they can presumably pay such workers lower wages. Such employers are unlikely to want any change.
Second, lack of health insurance and the related issues of a person receiving care in an emergency room will remain. We would need to develop a catastrophic insurance scheme that could be financed primarily or fully by immigrant workers. (most workers are likely to be young and healthy).
Third, what if they have kids while in the U.S.? Currently, that child is an American citizen, with all the afforded rights. There have been suggestions of changing the Constitution so that children so born would not be citizens. What about children born to parents of mixed status (one parent a citizen, the other not)? This is a tangled issue with many dimensions, and some sort of compromise solution would have to be worked out.
Fourth, this doesn’t address the illegal immigrants currently in the U.S. I view the deportation of 12 million people as unrealistic, so some form of amnesty is inevitable.
And, finally, how do we make sure the workers leave the country when their three years are up? The best hope of doing so is transforming a now illegal labor market into a workable guest worker program that can be monitored.
These problems notwithstanding, the biggest benefit of my idea is that it acknowledges that some employers now see fit to hire illegal immigrants. If they didn’t, there wouldn’t be an illegal immigration problem. The goal should be to maintain this source of labor if it is truly important to our economy, but to do so in a way that broadens the benefits of now illegal labor by helping to address the financing problems of Social Security and Medicare.
And if it turned out that persons no longer wanted to come to work under this arrangement, or that employers no longer wanted to hire them because they would be forced to pay Social Security and Medicare taxes, then we would have developed a market-based solution to illegal immigration where an interdiction approach has not worked, and seems unrealistic.
Donald H. Taylor, Jr. is an associate professor of public policy at Duke University who blogs at www.donaldhtaylorjr.blogspot.com
****************************************************
Some illegal immigrants now pay social Security and Medicare taxes. A recent estimate says $9 Billion of the $593 Billion paid into Social Security in 2005. Related issues include identity theft, which is a collateral cost of illegal immigration even if it leads to some paying Social Security and Medicare taxes. Some illegal workers have ITIN numbers that allow them to work, but do not allow them to gain benefits.
A CBO report from 2007 on effect of legal and illegal immigrants on state and local budgets.
Of course anyone who buys anything in the US pays sales tax.
There would be no illegal immigration problem if there were not a labor market for such immigrants. It seems as though this source of labor is important to our economy, even with high unemployment. However, I am sympathetic to the border communities that feel overwhelmed by immigration (there well may be a very unequal distribution of the costs, and benefits of illegal immigration [whatever the net effect may be]). A nation has the right to decide who can enter its borders, why and when and it is an important issue. However, the debate seems to have degenerated into a shouting match that has the sides resorting to the very unimaginative and unhelpful slogans of 'you are racist' if you are worried about illegal immigration and 'you hate America' if you don't support deportation of all illegal immigrants now here and building a wall on our Southern border and defending it as against an army. We need some practical solutions that acknowledge that illegal immigration is borne out of a market for labor.
Update: another way of making the point from Andrew Sullivan.
********************************************************
Joining Immigration Reform and Social Security
By Donald H. Taylor, Jr.
Rarely do you see two of our country’s most intractable problems -- illegal immigration and the solvency of Social Security -- lumped together in the same sentence.
I would like to propose an imperfect idea that could address both problems at once. The plan wouldn’t have to work that well to be an improvement on the current immigration system, and we know the financing problems of Social Security are dire.
So here goes: We allow immigrant workers to come to the United States to work for up to three years. The cost of a work permit would be that immigrant workers and/or employers would have to pay Social Security and Medicare payroll taxes. Workers would not be able to get benefits from either system even though they paid taxes, thereby lessening the impact of the looming baby boomer retirement on both programs. Some illegal immigrants pay such taxes now and cannot benefit, but routinizing this arrangement would maximize taxes paid and reduce identity theft. Employers would get employees, and workers would get a job that enabled them to return money to their home nation. At the end of three years, they would return home.
I start out with two basic assumptions -- that the benefits of illegal immigration accrue mostly to the immigrants and their employers, and that these same benefits outweigh the costs to society as a whole. If it were the other way around, we would have found a more effective means of stopping illegal immigration. The benefits include the contribution of illegal workers to the economy, perhaps doing jobs that citizens don’t want. Costs include health care and other social services, notably schooling that is provided to workers and their children.
The intangible benefits and costs of the cultural diversity inherent with illegal immigration are difficult to estimate, and I doubt if any analysis on such a subjective question would change the views of many people, so I assume they are a wash.
I acknowledge there are many problems with my idea. First, one reason illegal labor is attractive to employers is because they can presumably pay such workers lower wages. Such employers are unlikely to want any change.
Second, lack of health insurance and the related issues of a person receiving care in an emergency room will remain. We would need to develop a catastrophic insurance scheme that could be financed primarily or fully by immigrant workers. (most workers are likely to be young and healthy).
Third, what if they have kids while in the U.S.? Currently, that child is an American citizen, with all the afforded rights. There have been suggestions of changing the Constitution so that children so born would not be citizens. What about children born to parents of mixed status (one parent a citizen, the other not)? This is a tangled issue with many dimensions, and some sort of compromise solution would have to be worked out.
Fourth, this doesn’t address the illegal immigrants currently in the U.S. I view the deportation of 12 million people as unrealistic, so some form of amnesty is inevitable.
And, finally, how do we make sure the workers leave the country when their three years are up? The best hope of doing so is transforming a now illegal labor market into a workable guest worker program that can be monitored.
These problems notwithstanding, the biggest benefit of my idea is that it acknowledges that some employers now see fit to hire illegal immigrants. If they didn’t, there wouldn’t be an illegal immigration problem. The goal should be to maintain this source of labor if it is truly important to our economy, but to do so in a way that broadens the benefits of now illegal labor by helping to address the financing problems of Social Security and Medicare.
And if it turned out that persons no longer wanted to come to work under this arrangement, or that employers no longer wanted to hire them because they would be forced to pay Social Security and Medicare taxes, then we would have developed a market-based solution to illegal immigration where an interdiction approach has not worked, and seems unrealistic.
Donald H. Taylor, Jr. is an associate professor of public policy at Duke University who blogs at www.donaldhtaylorjr.blogspot.com
****************************************************
Some illegal immigrants now pay social Security and Medicare taxes. A recent estimate says $9 Billion of the $593 Billion paid into Social Security in 2005. Related issues include identity theft, which is a collateral cost of illegal immigration even if it leads to some paying Social Security and Medicare taxes. Some illegal workers have ITIN numbers that allow them to work, but do not allow them to gain benefits.
A CBO report from 2007 on effect of legal and illegal immigrants on state and local budgets.
Of course anyone who buys anything in the US pays sales tax.
There would be no illegal immigration problem if there were not a labor market for such immigrants. It seems as though this source of labor is important to our economy, even with high unemployment. However, I am sympathetic to the border communities that feel overwhelmed by immigration (there well may be a very unequal distribution of the costs, and benefits of illegal immigration [whatever the net effect may be]). A nation has the right to decide who can enter its borders, why and when and it is an important issue. However, the debate seems to have degenerated into a shouting match that has the sides resorting to the very unimaginative and unhelpful slogans of 'you are racist' if you are worried about illegal immigration and 'you hate America' if you don't support deportation of all illegal immigrants now here and building a wall on our Southern border and defending it as against an army. We need some practical solutions that acknowledge that illegal immigration is borne out of a market for labor.
Update: another way of making the point from Andrew Sullivan.
Tuesday, August 3, 2010
Needed Changes in the Medicare Hospice Benefit
When Medicare began covering hospice in the early 1980s, first as a demonstration and then as a normal benefit, this helped transform the hospice movement from a loose group of activists into a viable industry. There is a good chance you would have never heard the word hospice if Medicare had not decided to cover the multi-disciplinary approach to caring for persons who are 'dying' (an expected life span of 6 months or less). Hospice typically focuses on palliation of symptoms and helping patients achieve goals within the confines of their illness. To elect hospice benefits, a Medicare beneficiary must 'unelect' so-called curative care. Most persons receiving hospice care financed by Medicare do so at home, though inpatient hospice facilities are also covered. Atul Gawande has beautifully described many of the problems with how our health care system and culture views and treats persons who are extremely ill and dying.
This post covers a few problems/policy areas/decisions focused on the Medicare hospice benefit that need to be addressed. Doing so will certainly not deal with all of the problems with our nation's approach to treating serious illness, and end of life care, but they are some steps that need to be taken. These problems/issues have been around a while, but there seems to be renewed attention placed on the issues relating how our health care system views deaths and treats patients who are very ill. These issues influence the Medicare program more than any other part of the health care system, simply because over 8 in 10 persons who die each year are Medicare beneficiaries (in spite of the fact that only 13% of the population is age 65 or over). So, if you are talking about end of life care, you are talking about Medicare.
Here are several key policy issues that need to be addressed in the Medicare hospice benefit.
Stays that are too short. One in four Medicare decedents who choose hospice use the service for 5 days or less. The median is around two weeks. Myself and colleagues at Duke have shown that hospice reduces Medicare expenditures in the last year of life (modestly: by $2,200 as compared to similar persons who died but did not choose hospice, or 6-7%) with maximum reductions occurring with a length of use around 7 or 8 weeks. This means that about 7 in 10 Medicare hospice decedents would have reduced Medicare expenditures in their last year of life if they had used hospice for longer than they actually did.
It should be noted that the common occurrence of short stays exits within a per diem payment structure for the Medicare hospice benefit that should incentivize longer periods of use for hospice providers since they get paid more for each day they provide care.
The broad cultural issues described by Gawande are likely at the heart of the fact that many persons use hospice either not at all, or for very short periods only prior to death. There may be some technical issues and policy issues, but to extend the length of hospice use will probably take a broad cultural conversation that focuses on patient preferences, costs and benefits of care.
Stays that are too long. Around 6-7% of hospice decedents use the benefit for longer than 180 days, the presumptive period of eligibility. To be eligible for hospice, two physicians must certify they believe your lifespan is likely to be 6 months or less; if that is incorrect and you live longer, you can receive hospice care for longer than 180 days. It is important to note the cost savings we have noted for hospice were found in spite of the 6-7% of users that might be described as 'long users' (more than 180 days).
Long hospice stays have generated a great deal of policy attention because of worries that they represent inappropriate or fraudulent use of the benefit. Figure 2e-2 (page 150) of the MEDPAC report shows that the length of long stays (90th percentile) have risen over time, while the short ones have remained steady. Of course, fraudulent care (billing for fake patients, or for days after a patient has died) is a crime. Inappropriate care is a more hazy issue. As I have noted with my colleague Amy Abernethy in discussing the difficulty of translating the fact that we spend lots of money at the end of life and some of it is likely non productive to reductions in EOL spending is hard because the last year of life is only defined upon the death of an individual. So, determining appropriateness can be hard, especially as the use of hospice expands far beyond Cancer to other diseases such as heart failure, dementia, etc. There have been competing forces at work: expanding hospice beyond cancer, and then worrying about the long length of use that some non-cancer diagnoses seem to be associated with.
Changing the payment structure for the Medicare hospice benefit? The Medicare Payment Advisory Commission (MEDPAC) has long been interested in the growth of hospice as measured by the proportion of decedents choosing such care, and the rapid increase in the last decade in the number of hospice providers nationally. The increase in use of hospice is linked with improved benefit and quality of life and especially family satisfaction. However, the expanding use of the program also seems to give rise to worries about cost increases, in spite of some research showing the opposite. For profit hospice providers have accounted for most of the increase in hospice providers over the past decade, and this has increased worries among some that inappropriate use of hospice was being driven by the profit motive of providers and not the benefit of patients. In several briefings I have seen in Washington and elsewhere, this fact is front in center in the minds of many, especially in the Congress and MEDPAC. The March 2010 MEDPAC report highlights many of the concerns they have with the current hospice benefit (section 2E, pp. 141-161), and identifies ways in which the benefit might be altered.
Current hospice policy caps the number of inpatient days of hospice one can receive, and provides for an aggregate (mean) amount per patient that a given hospice may receive from Medicare. This cap is applied across all hospice patients for a given hospice, so the epidemiology of many short periods of use and a few long ones has meant that historically, it was rare for a hospice to bump up against the cap. However, MEDPAC notes this is increasing and likely to continue to do so.
These concerns lead MEDPAC to recommend in 2009 (reiterated in 2010, page 146-47 of March 2010 MEDPAC report) that the Medicare hospice benefit change its payment policy to adopt a u-shaped per diem payment, with higher payment levels for the first few days of a period of hospice use as well as higher payments for the last few days. The thinking is that the cost of providing care is highest at intake and as symptoms are likely to intensify very near death, with a lower cost profile while a patient is stable in hospice.
What would the effect of such a payment change be?
*many say that it would incentivize hospice providers to get patients into such care earlier. However, I am not convinced that it is unwillingness of providers that produces common short lengths of hospice use, but instead it is cultural factors and patient preferences that cause many patients to shift into hospice care only a few days before death.
*Others have criticized the proposed payment change have said that it could unwittingly incentivize hospice providers to seek out short stays only....if you had many patients with only a 5 day length of hospice use, then you would only be billing for the highest payment days of a course of hospice care. Some have been quietly terming this proposed change as 'turning bad apples (hospices that seek very long stays) into bad oranges (hospices that only seek very short stays if the payment method is altered).
I think that this move to a u-shaped per diem payment change makes sense simply because the cost profile of delivering the needed care is likely shaped in this manner, with higher costs early and late in a hospice stay. For many hospice providers, I suspect opposition is a case of the devil you know is preferred to uncertainty, and a general wariness of any change to the benefit that is a major impediment to change.
Beneficiaries must unelect curative care to access hospice. Medicare beneficiaries have had to unelect 'curative' care to use hospice services since the beginning of the benefit in the early 1980s. The phrase 'curative' really makes no sense; if we could cure something we would do so. This really meant unelect all of the expensive, normal course care for someone who was very ill. This bright line between curative care and hospice care has had several effects.
*First, persons can move in and out of hospice. A recent study I did with colleagues at Duke documented that about 15% of those beginning hospice stopped doing so before they died....some changed their mind, others got better in a surprising way, and still others moved in and out of the benefit, meaning they later re-entered hospice and died while using hospice. It is likely that the bright line curative v. hospice distinction leads to suboptimal care, notably in the area of patients not receiving sufficient palliative care. A recent study by Aetna of their commercial insurance business (not Medicare) showed that opening up hospice services to persons in the last year of life actually reduced costs, and improved satisfaction of patients. The Patient Protection and Affordable Care Act (PPACA) allows for demonstrations of concurrent care (allowing persons to access hospice/palliative services without unelecting curative care). Ending this need to unelect curative care is viewed by most looking at the hospice benefit and something that should be changed, and hopefully the concurrent care demonstrations in PPACA will be able to provide evidence to this end in a timely manner.
Barriers to hospice for people living in Nursing Homes. Just over 4 in 10 Medicare decedents use hospice before death; this fraction is a bit smaller for residents of nursing homes, which is surprising based on the likely need profile of NH residents. Note page 144 of the MEDPAC report noted above, it shows that 35% of dual eligible Medicare decedents used hospice while nearly 42% of non dual eligibles did. You would expect a strong majority of patients living in a NH to have needs that could be addressed by hospice. Haiden Huskamp and colleagues at Harvard have been focused on this issue for some time and have proposed the outlines of what an improved hospice benefit would look like for NH residents who are Medicare beneficiaries. In short, there are numerous regulatory and turf battles that crop up if a Medicare beneficiary is living in a NH, and these all result in far fewer patients utilizing this benefit than could likely benefit from it. The perverse incentives are particularly acute if a person is a dual-eligible (for Medicare and Medicaid) and living in a NH. The further I delve into this issue, the more I come away thinking that federalizing the NH/long term care portion of the Medicaid population would actually move toward removing some barriers to both receipt of hospice/palliative care in NHs, and also removing the incentive of NH to send very ill patients to the hospital, since Medicare will way (this is an especially strong incentive if a person in spent down to Medicaid).
What research is needed? There is a great deal of policy making that needs to be done, and much of it is likely just applying what we now know about hospice and seeking to make the Medicare hospice benefit work better. However, MEDPAC notes concern that there is not enough evidence of the quality of hospice care (many studies have focused on family satisfaction after the death of their loved one). And I note that most persons who study hospice seem to either study costs/economics of hospice OR the study the quality/benefits of same, with a key measure of benefit being family satisfaction. The implementation of PPACA is bringing on new pressures to justify care and to show benefit, even in the area of hospice that has been widely accepted to be beneficial and useful to patients and their family members. MEDPAC and others are saying that the case needs to be made more clearly about the benefits of hospice care in the current Medicare benefit, and likely about palliative care to set the stage for expanded financing of palliative care.
We do need to see the effects of the Medicare hospice benefit on the cost AND quality in the same patient population and studies. In particular, we need to see the relationship between quality of length of hospice use. With the 25th percentile being 5 days, then 1 in 4 Medicare decedents using hospice are almost certainly not reaping the full benefit from hospice. And with maximum cost savings due to hospice occurring with length of hospice use of around 7 to 8 weeks, around 7 in 10 beneficiaries could save Medicare money by using hospice longer. What we don't really know is how much benefit to patients there are from increasing hospice uses from 4 or 5 days to 40 or 50 days? If the benefit gains over this range are great, then the incentives for all parties would seem to be to redouble efforts to expand the use of hospice and increase length of use. And to be wary of policy efforts that focus only on the long ends of the tail, because they may inadvertently serve to shorten overall length of hospice use. I suspect they are great, but we need to nail that down definitively.
Update: Society of Actuaries RFP on end of life issues. Proposals due sept. 7.
This post covers a few problems/policy areas/decisions focused on the Medicare hospice benefit that need to be addressed. Doing so will certainly not deal with all of the problems with our nation's approach to treating serious illness, and end of life care, but they are some steps that need to be taken. These problems/issues have been around a while, but there seems to be renewed attention placed on the issues relating how our health care system views deaths and treats patients who are very ill. These issues influence the Medicare program more than any other part of the health care system, simply because over 8 in 10 persons who die each year are Medicare beneficiaries (in spite of the fact that only 13% of the population is age 65 or over). So, if you are talking about end of life care, you are talking about Medicare.
Here are several key policy issues that need to be addressed in the Medicare hospice benefit.
Stays that are too short. One in four Medicare decedents who choose hospice use the service for 5 days or less. The median is around two weeks. Myself and colleagues at Duke have shown that hospice reduces Medicare expenditures in the last year of life (modestly: by $2,200 as compared to similar persons who died but did not choose hospice, or 6-7%) with maximum reductions occurring with a length of use around 7 or 8 weeks. This means that about 7 in 10 Medicare hospice decedents would have reduced Medicare expenditures in their last year of life if they had used hospice for longer than they actually did.
It should be noted that the common occurrence of short stays exits within a per diem payment structure for the Medicare hospice benefit that should incentivize longer periods of use for hospice providers since they get paid more for each day they provide care.
The broad cultural issues described by Gawande are likely at the heart of the fact that many persons use hospice either not at all, or for very short periods only prior to death. There may be some technical issues and policy issues, but to extend the length of hospice use will probably take a broad cultural conversation that focuses on patient preferences, costs and benefits of care.
Stays that are too long. Around 6-7% of hospice decedents use the benefit for longer than 180 days, the presumptive period of eligibility. To be eligible for hospice, two physicians must certify they believe your lifespan is likely to be 6 months or less; if that is incorrect and you live longer, you can receive hospice care for longer than 180 days. It is important to note the cost savings we have noted for hospice were found in spite of the 6-7% of users that might be described as 'long users' (more than 180 days).
Long hospice stays have generated a great deal of policy attention because of worries that they represent inappropriate or fraudulent use of the benefit. Figure 2e-2 (page 150) of the MEDPAC report shows that the length of long stays (90th percentile) have risen over time, while the short ones have remained steady. Of course, fraudulent care (billing for fake patients, or for days after a patient has died) is a crime. Inappropriate care is a more hazy issue. As I have noted with my colleague Amy Abernethy in discussing the difficulty of translating the fact that we spend lots of money at the end of life and some of it is likely non productive to reductions in EOL spending is hard because the last year of life is only defined upon the death of an individual. So, determining appropriateness can be hard, especially as the use of hospice expands far beyond Cancer to other diseases such as heart failure, dementia, etc. There have been competing forces at work: expanding hospice beyond cancer, and then worrying about the long length of use that some non-cancer diagnoses seem to be associated with.
Changing the payment structure for the Medicare hospice benefit? The Medicare Payment Advisory Commission (MEDPAC) has long been interested in the growth of hospice as measured by the proportion of decedents choosing such care, and the rapid increase in the last decade in the number of hospice providers nationally. The increase in use of hospice is linked with improved benefit and quality of life and especially family satisfaction. However, the expanding use of the program also seems to give rise to worries about cost increases, in spite of some research showing the opposite. For profit hospice providers have accounted for most of the increase in hospice providers over the past decade, and this has increased worries among some that inappropriate use of hospice was being driven by the profit motive of providers and not the benefit of patients. In several briefings I have seen in Washington and elsewhere, this fact is front in center in the minds of many, especially in the Congress and MEDPAC. The March 2010 MEDPAC report highlights many of the concerns they have with the current hospice benefit (section 2E, pp. 141-161), and identifies ways in which the benefit might be altered.
Current hospice policy caps the number of inpatient days of hospice one can receive, and provides for an aggregate (mean) amount per patient that a given hospice may receive from Medicare. This cap is applied across all hospice patients for a given hospice, so the epidemiology of many short periods of use and a few long ones has meant that historically, it was rare for a hospice to bump up against the cap. However, MEDPAC notes this is increasing and likely to continue to do so.
These concerns lead MEDPAC to recommend in 2009 (reiterated in 2010, page 146-47 of March 2010 MEDPAC report) that the Medicare hospice benefit change its payment policy to adopt a u-shaped per diem payment, with higher payment levels for the first few days of a period of hospice use as well as higher payments for the last few days. The thinking is that the cost of providing care is highest at intake and as symptoms are likely to intensify very near death, with a lower cost profile while a patient is stable in hospice.
What would the effect of such a payment change be?
*many say that it would incentivize hospice providers to get patients into such care earlier. However, I am not convinced that it is unwillingness of providers that produces common short lengths of hospice use, but instead it is cultural factors and patient preferences that cause many patients to shift into hospice care only a few days before death.
*Others have criticized the proposed payment change have said that it could unwittingly incentivize hospice providers to seek out short stays only....if you had many patients with only a 5 day length of hospice use, then you would only be billing for the highest payment days of a course of hospice care. Some have been quietly terming this proposed change as 'turning bad apples (hospices that seek very long stays) into bad oranges (hospices that only seek very short stays if the payment method is altered).
I think that this move to a u-shaped per diem payment change makes sense simply because the cost profile of delivering the needed care is likely shaped in this manner, with higher costs early and late in a hospice stay. For many hospice providers, I suspect opposition is a case of the devil you know is preferred to uncertainty, and a general wariness of any change to the benefit that is a major impediment to change.
Beneficiaries must unelect curative care to access hospice. Medicare beneficiaries have had to unelect 'curative' care to use hospice services since the beginning of the benefit in the early 1980s. The phrase 'curative' really makes no sense; if we could cure something we would do so. This really meant unelect all of the expensive, normal course care for someone who was very ill. This bright line between curative care and hospice care has had several effects.
*First, persons can move in and out of hospice. A recent study I did with colleagues at Duke documented that about 15% of those beginning hospice stopped doing so before they died....some changed their mind, others got better in a surprising way, and still others moved in and out of the benefit, meaning they later re-entered hospice and died while using hospice. It is likely that the bright line curative v. hospice distinction leads to suboptimal care, notably in the area of patients not receiving sufficient palliative care. A recent study by Aetna of their commercial insurance business (not Medicare) showed that opening up hospice services to persons in the last year of life actually reduced costs, and improved satisfaction of patients. The Patient Protection and Affordable Care Act (PPACA) allows for demonstrations of concurrent care (allowing persons to access hospice/palliative services without unelecting curative care). Ending this need to unelect curative care is viewed by most looking at the hospice benefit and something that should be changed, and hopefully the concurrent care demonstrations in PPACA will be able to provide evidence to this end in a timely manner.
Barriers to hospice for people living in Nursing Homes. Just over 4 in 10 Medicare decedents use hospice before death; this fraction is a bit smaller for residents of nursing homes, which is surprising based on the likely need profile of NH residents. Note page 144 of the MEDPAC report noted above, it shows that 35% of dual eligible Medicare decedents used hospice while nearly 42% of non dual eligibles did. You would expect a strong majority of patients living in a NH to have needs that could be addressed by hospice. Haiden Huskamp and colleagues at Harvard have been focused on this issue for some time and have proposed the outlines of what an improved hospice benefit would look like for NH residents who are Medicare beneficiaries. In short, there are numerous regulatory and turf battles that crop up if a Medicare beneficiary is living in a NH, and these all result in far fewer patients utilizing this benefit than could likely benefit from it. The perverse incentives are particularly acute if a person is a dual-eligible (for Medicare and Medicaid) and living in a NH. The further I delve into this issue, the more I come away thinking that federalizing the NH/long term care portion of the Medicaid population would actually move toward removing some barriers to both receipt of hospice/palliative care in NHs, and also removing the incentive of NH to send very ill patients to the hospital, since Medicare will way (this is an especially strong incentive if a person in spent down to Medicaid).
What research is needed? There is a great deal of policy making that needs to be done, and much of it is likely just applying what we now know about hospice and seeking to make the Medicare hospice benefit work better. However, MEDPAC notes concern that there is not enough evidence of the quality of hospice care (many studies have focused on family satisfaction after the death of their loved one). And I note that most persons who study hospice seem to either study costs/economics of hospice OR the study the quality/benefits of same, with a key measure of benefit being family satisfaction. The implementation of PPACA is bringing on new pressures to justify care and to show benefit, even in the area of hospice that has been widely accepted to be beneficial and useful to patients and their family members. MEDPAC and others are saying that the case needs to be made more clearly about the benefits of hospice care in the current Medicare benefit, and likely about palliative care to set the stage for expanded financing of palliative care.
We do need to see the effects of the Medicare hospice benefit on the cost AND quality in the same patient population and studies. In particular, we need to see the relationship between quality of length of hospice use. With the 25th percentile being 5 days, then 1 in 4 Medicare decedents using hospice are almost certainly not reaping the full benefit from hospice. And with maximum cost savings due to hospice occurring with length of hospice use of around 7 to 8 weeks, around 7 in 10 beneficiaries could save Medicare money by using hospice longer. What we don't really know is how much benefit to patients there are from increasing hospice uses from 4 or 5 days to 40 or 50 days? If the benefit gains over this range are great, then the incentives for all parties would seem to be to redouble efforts to expand the use of hospice and increase length of use. And to be wary of policy efforts that focus only on the long ends of the tail, because they may inadvertently serve to shorten overall length of hospice use. I suspect they are great, but we need to nail that down definitively.
Update: Society of Actuaries RFP on end of life issues. Proposals due sept. 7.
Legal Challenges to PPACA
A Federal Judge in Virginia ruled that the state of Virginia's case against the federal government claiming the individual mandate is unconstitutional can proceed. The essence of the ruling is that the State of Virginia has standing to bring the case; the burden of proof on the motion to dismiss the case rested with the federal government. In next stages, the burden will shift to the plaintiff, the State of Virginia.
Questions about constitutionality generate lots of interesting debate and discussion...in the end, the ultimate definition of what is constitutional is what 5 of 9 people on the US Supreme Court say it is.
Timothy Jost has the best take, I think here at politico.com blog.
The most consequential aspect of this case, if it continues moving up the court food chain and if applied broadly, would mean that any state could litigate just about anything done by the federal government by simply passing a law contrary to a federal law.
Questions about constitutionality generate lots of interesting debate and discussion...in the end, the ultimate definition of what is constitutional is what 5 of 9 people on the US Supreme Court say it is.
Timothy Jost has the best take, I think here at politico.com blog.
The most consequential aspect of this case, if it continues moving up the court food chain and if applied broadly, would mean that any state could litigate just about anything done by the federal government by simply passing a law contrary to a federal law.
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