Monday, February 28, 2011

Medicaid Costs

Matt Yglesias with a nice chart showing the percent of total state spending consumed by Medicaid across the nation. Both the long term federal budget deficit problem, and the short term state budget problems are most fundamentally health care cost problems. Dealing with health care costs will be the most important domestic policy issue for the next 30 years.

Close to Home

Austin Frakt asking what if colleges had to refund tuition if students didn't get a high paying job? Hmmm. It is true that just about the only thing going up as fast as health care inflation the past 30 years is the cost of college. The next bubble? Duke this weekend announced the cost of attendance for 2011-12: $53,905.

What is the goal of Malpractice Reform?

Medical malpractice is an issue that seems to ebb and flow. During health reform, it went away, I think because it is not what Democrats naturally focus on in health policy discussions because trial lawyers are such a large constituency, and Republicans went silent on this traditional issue of theirs because pushing for more on medmal reform would have too obviously lead to a deal on the ACA.

Now that the ACA has been passed, opponents remain viscerally against its implementation, yet no clear vision for what they would replace it with has been offered, and we await court rulings on the constitutionality of the individual mandate. When Republicans drive the agenda as they do in the North Carolina legislature, medical malpractice reform is the first health policy issue to be brought up (Republicans control the House and Senate in NC), in the form of S33. Here are past posts I have written on S33: here and here and here.

In any public policy debate, it is important to take a deep breath and ask yourself what problem is being addressed? When discussing the area of malpractice reform the following problems tend to be brought up by advocates:
  • Frivolous lawsuits. This is seen as a self evidently misuse of the legal system.
  • Defensive medicine. This is the increase in the health care costs that result due to physicians ordering unneeded tests and the like in order to be able to defend themselves if need be at trial. This tends to be the main reason advocates claim to be for reform.
  • Reduction of malpractice insurance premiums. If premiums are lower, it reduces the cost of doing business for physicians. This is linked to the issue of supply of physicians, especially the notion that a state with a more litigious climate would lose doctors to another state. There are also intangible benefits of reducing suits for physicians in the form of less worry.
The main argument of advocates is that reform of medical malpractice will reduce health care costs as defensive medicine is reduced. How big of a reduction could be expected? The CBO estimated in Fall, 2009 that a national reform that adopted malpractice caps similar to what has been enacted in Texas would reduce the federal budget deficit by $54 Billion over 10 years ($41 Billion in reduced medical care, and $13 Billion in indirect deficit reduction). That is a substantial amount of money, but keep in mind the 10 year total health system spending projection for the same 10 years was around $35 Trillion. So, savings due to malpractice reform are no panacea for our cost problems.

A recent study linked by Avik Roy of Orthopedic physicians in Pennsylvania says that 35% of imaging costs are driven by defensive medicine. This study made me perk up because it is prospective, meaning you investigate something as it takes place, and don't ask people after the fact why they did something. Generally, a prospective study has less bias than does a retrospective study, in which you would be assigning motive after the fact. In this study physicians were noting which tests were medically unnecessary, but ordered simply to provide them with protection should they be sued (they could use the test to show they took care in treating patients).

I cannot find a full copy of the study to completely evaluate the methods, but it sounds like from the abstract that it was a voluntary sample, which might be expected to draw physician participants who are most worried about malpractice, therefore overstating the effect of defensive medicine. I think that in this case, the prospective nature of the study does not necessarily produce better results because they are asking physicians to identify the existence of something that most of them believe to self-evidently be the case. However, in this issue, behavior change by physicians will be necessary for defensive medicine costs to be reduced, so it is hard to disentangle perception, interest, motivation and action.

Putting questions about the methodology aside, lets say that the figure 35% is correct, and that 35% of all imaging ordered by Orthopedic Surgeons is due to defensive medicine AND they know this at the point of ordering the test(s).

This would mean that if we fixed the medical malpractice problem that imaging costs associated with orthopedic practice would be reduced by 35%. This would be a tremendous savings and if we ever slow health spending increases it will mean that some care that would have been provided under the status quo will no longer be provided. Further, if this 35% reduction in imaging costs took place, orthopods will no longer get Christmas cards from Radiologists, but I digress.

The evidence from states that have passed robust malpractice reform shows very little effect on overall costs, though such caps do reduce malpractice insurance premiums for physicians. This means that either the 35% figure is something that is highly specialty specific, or is a case of physicians assigning a particular motivation for doing a test when in fact a variety of motivations exist. [variety of links on the issue of malpractice caps not slowing health care costs a great deal]

We need a more balanced, comprehensive reform of patient safety and medical malpractice, along the lines suggested by the work of Michelle Mello and others. Now the debate is almost always one sided. In fact, here is a press release from the American Academy of Orthopedic Surgeons last week noting the release of the Pennsylvania study noted above, citing a study showing that 4 in 10 suits are filed in the absence of an error, much less negligence, to focus attention on too many suits. However, this same study group also found that 19 or 20 cases of true negligence did not result in a suit. Similarly, legal groups tend to focus only on one side of this story as well.

There is a patient safety and quality of care problem that is best addressed through a change in the medical malpractice system away from an adversarial system toward one that focuses on addressing errors, compensating those injured, seeking to reduce future errors, and stabilizing the malpractice insurance system. S33 in North Carolina does not do this.

update: earlier this morning a one line post was linked....a post fail.
Another update, 10:20am: via Brad Flansbaum, a good piece in The MD column in LA Times arguing reasonably for a more comprehensive reform.

update: 4:30pm: I revised the post to reflect that the CBO estimated that the malpractice policies they reviewed in 2009 would reduce the deficit, by $54 Billion; the post imprecisely said reduce 'costs' by $54 Billion. The $54 Billion would be $41 billion of reduced health care spending and $13 Billion of increased taxes paid as private health insurance premiums were reduced, leading to slightly higher wages that are taxable, whereas employer paid insurance premiums are not taxable.

Friday, February 25, 2011

Hospice Face-to-Face

A first person account of a face-to-face re-certification of hospice eligibility following Medicare's new rules designed to prevent fraudulent use of hospice. This is a related link about the role of Nurse Practitioners in providing hospice care, and especially in serving as the bridge or gateway into such care. If the expansion of palliative care grows to meet the need and demand of patients, there will be workforce considerations on the near horizon, especially if palliative care is increasingly expected to be a part ACOs and the like . Who, what, where, when, how?

Senator Burr on Reform, Etc.

Senator Richard Burr (R-NC) interviewed on NBC-17 on a variety of topics. He talks health from around 1:40-3:30.

Most notably, he says that he plans to introduce a replace bill along with Senator Tom Coburn, as well as with Paul Ryan and Devin Nunes from the House. This is the same group that co-sponsored the Patients' Choice Act in the last Congress. Some past things I have written about the Patients' Choice Act:
  • General overview.
  • Detailed discussion of the inclusion in the Patients' Choice Act of a Health Services Commission to apply cost effectiveness research. The Health Services Commission proposed by the Patients' Choice Act on May 20, 2009--a full month before the first House Committee reported HR3200--was a far more aggressive use of cost effectiveness research than what actually was included in the ACA (The Independent Payment Advisory Board). The IPAB is a classic example of a policy idea that was once bipartisan becoming politically toxic once in the ACA.
  • Here is a link to a discussion of some private scoring of the PCA from July, 2009 (it was never scored by CBO).
The big idea of the Patients' Choice Act was to end the tax exclusion of employer paid insurance, and instead give everyone a tax credit with which to purchase health insurance. Ending the tax preference of employer paid premiums is something I am in favor of (it is the simplest policy to address cost inflation that exists), and the PCA would end the upside down subsidy that now exists and equalize (give everyone the same amount) of federal subsidy with which to purchase private health insurance. The amount of the tax credit (<$6,000 for a family) was less than half of what a typical family policy cost, so it was really providing a subsidy on the order of a catastrophic policy. Nothing wrong with this approach necessarily, they just didn't communicate that policy reality.

The plan then envisioned setting up state based insurance markets (that should sound familiar), and envisioned auto-enroll procedures whereby people would be put into the lowest cost plan when they did things like renew a drivers license; they could opt out, but the plan would depend on soft mandates to work. The biggest flaw with the plan was that the tax credit could be used in the exchange or outside, but pre-existing condition exclusions would only apply inside the exchanges. I wrote in July, 2009:

"Because the tax credits can be used to buy plans both inside and outside of the state-based exchange, there is a danger that only the sickest patients will seek coverage via the exchange, since coverage cannot be denied. If this happened systematically, it could result in death spiral whereby only poor risks are included in exchange-based plans. However, the Plan notes that exchanges "shall develop mechanisms to protect enrollees from the imposition of excessive premiums, reduce adverse selection, and share risk."

The short sentence "shall develop mechanisms to protect enrollees from the imposition of excessive premiums, reduce adverse selection, and share risk" is quite a policy mouthful and I hope Senator Burr and co-sponsors will be clear on how this will be achieved this time around. They have certainly had enough time to think about it.

We of course don't know how different a new Patients' Choice Act may be from the original one. The original bill had a great deal in common in policy terms with the ACA, but the rhetoric used by Senator Burr (and others) to describe the ACA never matched the policy reality. I have written about what a compromise might look like. I would be happy to implement the ACA and move ahead, but I increasingly think that we need a compromise on how to expand coverage so that we can move ahead on getting serious about costs. The level of political turmoil around the law is going to make it hard for us to truly deal with costs, which will be very very hard. If the reintroduction of the Patients' Choice Act or a modified bill helps move us toward that then I am glad for it.

Update: I fixed some layout problems.

Thursday, February 24, 2011

NC Atty General Says H2 Unenforceable

North Carolina Attorney General Roy Cooper today said the bill passed by the NC General Assembly (H2) declaring that the individual mandate doesn't apply in North Carolina is unenforceable, saying states cannot pick and choose what laws to enforce. He further says that H2 could cause the state to lose Medicaid funding because the state will be able to comply with Medicaid anti-fraud portions of the ACA id H2 became law. Governor Perdue has been saying she would neither sign it, nor veto it, in which case it would become law. According to radio and television reports tonight, she is reconsidering whether to veto the law or not. Republican leaders disagree with the Attorney General's assessment.

I keep hoping the Republicans in the North Carolina House and Senate will say what their plan is to address the three biggest problems in our system:
  • cost
  • coverage
  • quality

Global Remittances

Off topic for this blog, but interesting report from CBO on remittances from workers in the U.S. to their home countries that total $48 Billion in 2009; 70% more than official development expenditures of the U.S. government to foreign nations.

KHN Malpractice Column

Kaiser Health News with a column that touts damage caps and a bill in Congress to bring about changes. Some interesting comments about needing to be careful that damage caps don't simply shift liability to non physician defendants and the relative role of federal v. state reform of medical malpractice reform.

I think a more comprehensive patient safety approach is needed, with malpractice and liability reforms being a part of the answer, not the full answer. My recent posts on the topic and consideration in the NC General Assembly here, and here and here.

Dual Eligibles and what NC could do

Kaiser Health News with an interesting interview with Melanie Bella, director of the new Federal Coordinated Health Care Office (CHCO) aka "office of the duals." Dual Eligibles are persons who are eligible for Medicare (because they are 65+; or permanently disabled or have ESRD) and Medicaid (because they are poor). Such persons tend to be very ill and/or disabled. A good many live in nursing homes, but most live in the community. Some became eligible for Medicaid by paying for nursing home care (spending down) while others were poor and/or disabled prior to moving to a nursing home.

Medicare and Medicaid were not designed to work together. Medicare has standard benefits, while Medicaid differs state to state. Dual eligibles tend to use large amounts of health care (Medicare spends about 5x more on dual eligibles than other Medicare beneficiaries) because they are very sick. The CHCO office is designed to focus on both quality and cost concerns in providing care for such persons. In particular, this office is focusing on the over 3 Million persons who are dual eligibles and younger than age 65 (most are permanently disabled).

Bella sums up the main goals of the office as follows:

"It's really two main themes. Improve the beneficiaries' experience and make it easier for them to understand and navigate the system, so they can expect to get good care."

Another goal is to reduce the cost of caring for such persons, especially because many high cost events are signs of system failures and may not follow patient preferences. Along these lines, state demonstrations in which state Medicaid programs get increased money, flexibility and responsibility to care for patients have been tried and sound like priorities for this office. Some hear this as 'block granting' of Medicaid which sounds like more responsibility to states with less money. However, it seems clear to me that one payer should assume responsibility for providing care and being responsible for outcomes for the dual eligibles.

My intuition is that it would be better for the responsibility to pay for the care of dual eligibles be taken over by Medicare. This would mean Medicare would become responsible for the long term care portion of care for dual eligibles in addition to their other services. A particular barrier for dual eligibles is in access to hospice services paid for by Medicare. Most such care is provided in the home of patients, but if you live in a nursing home paid for by Medicaid, there are numerous barriers to accessing the Medicare hospice benefit. This likely leads to suboptimal care from a patient preference and quality standpoint, and probably results in more expensive care.

I would like to see North Carolina put together a Medicaid and a sec. 1332 Affordable Care Act Waiver along the following general lines:
  • Medicare become financially responsible for all the care of the dual eligibles, including long stay nursing home care, with expanded access to concurrent palliative care and hospice being readily available without the patient unelecting curative care (the current Medicare rule).
  • North Carolina move toward a goal of ending acute care Medicaid for non dual-eligible persons who are eligible for Medicaid, and instead provide premium support for the purchase of private health insurance in the exchanges to be set up under the ACA. Medicaid would identify and provide extra services needed by such groups, if any.
  • Evaluate this approach to addressing dual eligibles to determine the impact of concurrent expanded access to palliative/hospice care on quality and costs, along with one entity being financially responsible for everything. It would provide an important test of the model of concurrent care that has been shown to reduce costs and improve quality in one private insurance company (not a dual eligible population). A key aspect of palliative care is focus on the patient's goals of care which is key for improved quality.
  • Idea 1 (Medicare responsible for full cost of dual eligible) could be expected to reduce costs for the state, while idea 2 (buy-in non dual eligible Medicaid eligible persons into private health insurance) would be expected increase costs for the state, because premiums for private insurance cost more than does Medicaid. However, transitioning away from acute care Medicaid would remove from our state both the stigma of this insurance type and the lower payment rate (which is why it costs less to insure someone via Medicaid) that leads providers to not want to provide care to Medicaid beneficiaries.
  • Big unknown: the effect of competition in the exchanges on premiums is unproven. Having more consumers shopping in them would maximize the chances for consumers to benefit through insurers competing for their business. There are only 14 Million persons in the U.S. with individually purchase policies today (110 Million with Medicare or Medicaid; 160 Million with group purchase private insurance), so the most unproven part of the ACA is how well consumers will be as shoppers for their health insurance. But, if we are going to try it, lets try it.
Doing something like this means that you accept that the ACA is the current vehicle we have to move ahead. This type of state tweaking and experimentation is what is likely inevitable and needed. If states begin to develop ideas and models, I would anticipate increasing flexibility to allow states to experiment. If a Democratic Governor and a Republican Legislature went together and asked for the right to try a new model, I would expect our state would get maximal leeway. The political pressure to allow North Carolina to try a new model that had bipartisan support in our state would be enormous.

To all my friends in North Carolina who have been mostly saying what they are against....don't like this idea....what are yours?

Wednesday, February 23, 2011

Still more on S33/Med Mal

Kevin Pho of with a brief post noting medical malpractice reform in return for less pay. The comments to his post are interesting (you should follow him on twitter if you are interested in medical malpractice @kevinmd). Kevin has written a lot about medical malpractice, and thinks it is a big problem but is not a big fan of damage caps (like those envisioned in S33 in North Carolina), instead preferring medical courts.

In the comments section of my post yesterday on medical malpractice, a comment says:

"We need to distinguish clearly between two kinds of reforms: a jury of experts rather than peers to determine guilt, and reforms on the awards permitted for malpractice verdicts. Perhaps the experts, following clear rules, should decide the size of the award but not guilt?"

You could imagine a variety of reforms, including ones that kept citizen juries in a portion of the process and others that were totally expert-driven. You could also imagine a system in which a lawsuit was not needed to obtain money for needed medical care, which would allow the malpractice system of whatever design to focus on remediation and attempts to prevent future injuries. There are a lot of interesting and plausible alternatives, but one gets the feeling that the writers of S33 haven't thought far afield on the issue of medical malpractice, and especially haven't thought of how this issue is related to the overall health care system and need to improve quality and reduce errors. That is disappointing.

Tuesday, February 22, 2011

Latest Ruling: ACA Constitutional

Another judge has ruled the individual mandate constitutional. That makes it 3 constitutional, 2 unconstitutional (and a fair number who didn't rule for a variety of reasons, like plaintiffs didn't have standing or the mandate didn't kick in until 2014). All 3 judges who have ruled it constitutional were appointed by Democratic President's, and both who have ruled in unconstitutional were appointed by Republican ones. It is interesting that both times a judge has ruled it unconstitutional, there was an immediate national hyperventilation about it....when judges rule it constitutional, nothing.

More on S33/MedMal

From the comments of earlier post on S33 is the following report on medical malpractice cases that went to trial in NC over the past decade, from Chris Nichols who blogs at It is very interesting to look down the list of cases and see that many are won by the defendant, quite a few by the plaintiff, with tremendous variation in the amount of the award in won by plaintiff. I believe this report is only those cases that are tried and doesn't capture those that are settled.

Again, the big picture facts of medical malpractice from the best national studies are:
  • 4 in 10 suits filed are done so when there is no medical error (many of these are dismissed or are lost by the plaintiff at trial)
  • only 1 in 20 cases of actual negligence result in a lawsuit being brought.
  • These two factoids and many other links are backed up here.
While I suspect I think the overall medical malpractice system is more in need of reform (I don't think it does anything well) than does Mr. Nichols, I think the evidence is on his side in claiming the situation in North Carolina is 'not a crisis.'

One random aside about this issue. When I teach undergrads at Duke in a health policy class with many pre-meds, they worry a great deal about someday being judged by a jury filled with ordinary people, who will not be experts on evidence, medical care and the like. When I ask them if they are bothered by the fact that the same jury pool--again, not likely to have expertise in serology, forensics and the like--on which many criminal felony trials turn, they are not bothered that such persons deprive others of their liberty. I think that just means that Duke undergrads can imagine being a defendant in a medical malpractice case, but cannot imagine being one in a violent felony, for example. The bed rock of our judicial system is that normal people decide. I could be in favor of medical courts for malpractice, but shouldn't all the worries that lead there, also lead me to worry about juries deciding criminal cases?

Public Pensions

Austin Frakt links to an NBER working paper on public pensions....I don't have anything evidence-based to say about Wisconsin. The paper linked by Austin is on my reading list. I can say based on field reporting during my only visit to Madison that State Street Brats is one of the greatest places to each lunch ever; Brats, free Pop Corn and Spotted Cow beer!

Showdown on CLASS

Kathleen Sebelius with the most direct acknowledgment of actuarial problems with the CLASS provisions. She says she has the discretion to make the changes needed to make it sustainable, while others are saying she doesn't. People often criticize legislation for being too vague and granting too much discretion in implementation; CLASS is the opposite, the legislation may have been too specific in some cases. I don't think it is sustainable as it was written, but it could easily be changed to make it so. Basically, it needs a more expansive definition of work and/or an initial underwriting step. The biggest danger with CLASS is self fulfilling prophecy: if various actuary groups say it won't work, then good risks won't sign up and it won't work.

CLASS is an attempt to set up a self sustaining long term care insurance plan, that if successful would make planning for long term care a normal part of being a young adult. Today it is not and that is a large policy problem.

Here are some links to what I have written about CLASS in the past, with lots of background:

Monday, February 21, 2011

NC S33--Medical Malpractice

I have been wanting the Republican leaders in the North Carolina General Assembly to make clear their health policy priorities now that they control both Houses in the Legislature. They have now shown us that part of what they are for is medical malpractice reform.

A successful malpractice system would protect patients from harm via a deterrent effect of lawsuits, compensate patients for harm and exact justice. In addition, a good system would protect physicians from frivolous suits, identify substandard physicians so that medical licensure boards could remediate them or remove their licenses and provide a clear signal to insurers regarding the risk of insuring a physician.

Our malpractice system does none of these well.

I always thought that medical malpractice reform was the key to a health reform deal, and the fact that such a deal wasn't struck is the most compelling evidence for me that Republicans in Congress punted on policy in favor of politics in the entire debate on health care reform from 2009-10. They thought they could kill the Affordable Care Act (ACA), and given that it passed, they missed an opportunity to advance a longstanding interest of theirs. Now the issue has moved to the states. If the Republicans in North Carolina said that the ACA didn't do enough to address medical malpractice, I would agree, but would also say that the problem is broad and multi-faceted and cannot be addressed by damage caps alone. A comprehensive patient safety/medical malpractice reform is needed. S33 is not that and is not a good bill as written.

Most people focus on only one part of broader patient safety problem: the effect of frivolous lawsuits OR the fact that patients who are harmed via true negligence are rarely compensated and there are large problems with medical errors in our nation. [a variety of related links]. In fact, which ever problem worries you the most, the opposite is also a big problem that is best addressed in a comprehensive manner. North Carolina could be an innovative state and try and produce a comprehensive approach to the patient safety/medical malpractice problem, but S33 does not do that.

S33 would bring about caps on non-economic damages in lawsuits, which are fairly common across states. They are usually sold as a way to slow health care cost inflation by reducing defensive medicine, but the evidence shows the effects of such policies on costs are not strong. In short, this likely won't do much, if anything, to address costs in North Carolina. More controversially, S33 would make it hard if not impossible to sue an ER doctor or a hospital in North Carolina for negligent care provided in an emergency setting, as I read the bill. This strikes me as a bizarre policy.

I get that talking about medical malpractice is politically popular, but in my personal experience, while everyone hates lawyers in the abstract, when they or a family member is harmed they want justice.

A reform of the current malpractice laws by capping non economic damages could have a place in a comprehensive patient safety reform that sought to reduce the adversarial nature of the malpractice system, and instead transform it into one that compensates harm and tries to reduce the future occurrence of errors through openly discussing what caused the error. In such a system, physicians would have to do a better job of policing their own than they currently do, but the acknowledgment of and compensation for harm would be separated from the adjudication of negligence.

Advocates of S33 should also remember that one of the motivations for filing a malpractice lawsuit based on patient harm in the absence of negligence is the fact that an injury can produce both large medical bills and render the harmed individual uninsurable. Medical malpractice reform makes sense in the context of an overall strategy to expand insurance coverage, address costs comprehensively, and create a patient safety approach to dealing with medical errors and improve quality.

The Republicans in the General Assembly have said they are opposed to the ACA, so they desire to remove the route to expanding insurance coverage that is provided by the ACA. Do they have a plan that would expand coverage and thus remove a key motivation for filling a lawsuit? If so, I haven't heard it, but would like to do so. This is necessary for a meaningful reform of ALL the problems with medical malpractice in North Carolina.

update 9pm, 2/21: Brad Flansbaum writing at Hospitalist Leader with usual good sense and a balanced take. Also, from hanging out around universities and teaching universities for a long time, the psychic burden of med mal worry among docs is very real. This column I wrote in Aug 2009 in the News and Observer touched on this and that is a side benefit of 'dealing' with med mal in some way. This policy answer is just typically oversold for what it can actually do, especially to change the cost of medical care. It is part of a solution. NC can do a lot better than S33. Another thought that Brad notes is that federal notions of med mal such as what was offered in the substitute motion in the House in Nov. 2009 with national med mal is a somewhat odd policy for persons to take who are worried about over-reach of the federal government. The NC General Assembly focusing on this issue could thus be seen as the correct level of government to address these issues, though the bill S33 is a bit wanting.

Also, Brad Flansbaum asking in the comments for a cite that notes how much of the 'frivolous lawsuit' action is due to people suing to pay for current and/or future care for uninsurable persons. The logic of the motivation seems straightforward, but I don't have a cite for this assertion. This paper notes that 37% of the suits filed are in cases in which no error was judged to have been made, presumably just a bad outcome. The question is what prportion of these would go away if everyone had access to guaranteed health insurance?

Sunday, February 20, 2011

State of the Science in Palliative Care

The American Academy of Hospice and Palliative Medicine just completed its annual meeting in Vancouver over the weekend and here is the list of the 8 most important papers of the year as presented in the state of the science plenary session. Here is a new op-ed on the role of palliative care in health reform/the transformation of the health care system by Diane Meier, one of the top palliative medicine leaders.

Also, this year I enjoyed following the conference from afar (I could not attend) via twitter. Here is a list of #hpm tweets from the conference. Each Wed at 9pm EST, there is hospice and palliative medicine tweetchat, where 2 to 3 questions are discussed via twitter. You should check this out if you are interested in hospice and palliative care.

Of particular note in the 8 best papers is the paper by my Duke colleague Amy Abernethy and others that reported on a RCT of oxygen v. forced room air to treat breathlessness, a common (distressing) symptom for persons who have advanced life-limiting illness. They found that oxygen did not produce better symptom relief than forced room air, meaning less intensive therapy could produce the same results.

Amy and I recently got a palliative care/hospice focused grant but I can't talk about it publicly until March 1....more later on that.

Saturday, February 19, 2011


The full CBO report on the result if HR2 becomes law (Repealing the Job Killing Health Care Reform Law Act, I guess RJKHCRLA; you've got to have an acronym) is here.

It is not hard to figure out that since CBO said the passage of the ACA would reduce the deficit from current law at the time of its passage, they say unpassing it will increase the deficit from current law, which is the ACA. Various groups saying that CBO said that passage of RJKHCRLA would decrease the deficit simply took part of the CBO report (getting rid of the subsidies for private insurance and Medicaid spending). The other side of the equation is increases in taxes and cuts to other spending, namely Medicare. You really either have to take CBO as a source of information or say they are not, you really cannot with a straight face only take part of their report.

In 2021 with RJKHCRLA, there will be about 33 Million fewer people with health insurance than there will be in the ACA is implemented. With ACA, about 95% of the population would be insured in 2021, with RJKHCRLA it will be 82% (today is about 83%).

Given that the Republican party seems to be opposed to expansions of government insurance, an employer mandate, and now an individual mandate, I don't think they have a credible health reform strategy that includes addressing coverage and cost. If they do, I would love to see it/hear about it.

Economic Crisis and Health Reform

I was sharing a cab to the airport in DC yesterday with two colleagues. One said, "If it weren't for the economic collapse, health reform wouldn't be so controversial and the country would have moved on." The other disagreed and thought it was the opposite. "The economic collapse was the impetus for passage, because it made average folks feel vulnerable; it wouldn't have passed without the economic crisis."

I am unsure.

Friday, February 18, 2011


take on political spectrum from Andrew Sullivan.

Negotiated rulemaking, Day 3

Day 1 and Day 2. The Negotiated Rulemaking committe has split into two workgroups this morning who are each addressing the same task: how to put together the supply of primary care in an area with the population of a service area. The key question is whether to simply count the population which is now what is done, or whether to adjust the population for need in some way. Possibilities:
  • age and gender adjustment
  • use of visits to primary care (actual - needed). Of course you have to set the need standard
  • need of population that doesn't use actual use of visits
10:25am: in my workgroup, quick consensus that at least an age and gender adjustment based on visit rates is the minimum adjustment. Some interest in doing more complicated and comprehensive adjustments. Merging groups. Our groups bottom line was:
  • age and gender adjustment
  • with evidence of high need, the threshold for a HPSA designation would be reduced (similar to current policy)
11:05am: The two groups have merged and is there is consensus on the the weighting of the population by age and gender using the use rates from MEPS of persons with good access to care and average health status.

An issue that has been pushed for later is whether/how the HPSA designation approach will have a health status/high need adjustment. Currently there is an adjustment that works as follows: typical population-to-provider ratio ratio for HPSA is 3500:1; in presence of high need, the designation ratio is reduced to 3,000:1. Whether and if yes, how to have such a second step in HPSA.

11:30am: Discussing how to set the threshold for the population-to-provider ratio for HPSA designation. Talking in terms of where to draw the line conceptually, meaning 25th percentile, median, etc. Discussing how the 3500:1 was the 25th percentile in mid-1970s, but 3500:1 written into the rules and not the 25th percentile. Lots of discussion about tradeoff between focusing resources. CMS particularly interested in HPSA because at this point all physicians practicing in a HPSA get a Medicare bonus payment (10% bump of part B)....a large drop in HPSA designation ratio that increased HPSA designations would have automatic impact on Medicare part B. For most other programs, designations are the first step to allowing communities to apply for funding, but doesn't guarantee it will flow to communities.

In the background is a general awareness of the community that the rules the committee writes should try and be flexible in a way that allows for updating as things change over time.

Noon: We set subcommittees to work between now and the next meeting. I had to leave early. This was a productive meeting and we made a good deal of progress on all parts of the MUA and on provider availability which is relevant for both the HPSA and MUA.

Detail on CLASS Implementation

Great, detailed post from HealthReformGPS on CLASS Act background and implementation. Here are a few things I have written about CLASS. The bottom line on CLASS goes like this:
  • The big idea is to make planning for long term care a normal part of being a young adult. That would be a good policy outcome if successful.
  • The big question is whether CLASS can be implemented with a mixture of benefits, premiums and uptake rate to be self sustaining given what was passed in the ACA. The key issue is what is the definition of work that will be implemented (you must be working to sign up).
  • There is a big danger of self-fulfilling prophecy related to point 2, because uncertainty on whether the pool can be set up to be self sustaining could lead some to not sign up.

h/t Austin Frakt.

Money and Cognitive Impairment

Eric Widera and colleagues have an interesting paper in JAMA this week on the role of the primary care physician in assessing and addressing financial competence among older patients with cognitive impairment. Older persons with dementia eventually lose their ability to comprehend and weigh the impact of financial decisions, and physicians may be uniquely situated to identify when such patients can no longer make such decisions, and they are increasingly looked to by patients and families for help in such cases. This has not historically been seen as the role of the physician, and most physicians are not be trained to address these issues.

Widera and colleagues note several roles of the primary care physician in assessing and addressing the degree to which cognitively impaired patients need assistance in dealing with money and the making of similar important decisions. 3 key roles noted for primary care physician in the patient with dementia stand out to me:
  • educating patients about the need to plan ahead for such eventualities
  • recognizing signs of financial incapacity
  • knowing where and when to refer patients for other services, be they medical or legal
The key point seems to be the need of primary care physicians to plan ahead and anticipate the eventual loss of financial decisionmaking at the first signs of cognitive decline and dementia. These issues are best dealt with earlier in the disease process than later. In an accompanying editorial, Charles Sabatino, JD says,

"In an aging society, all professionals serving older adults have an obligation to understand diminished decisional capacity, especially with respect to financial issues, and to acquire the basic skills to identify it and respond constructively to it. Failure to meet the challenge will only increase the potential for financial abuse and exploitation."

Thursday, February 17, 2011

Negotiated Rulemaking, Day 2

Day 1.
Trying to divide into two workgroups this morning to try and focus on clarifying how we will measure health status and accessibility/ability to pay in the MUA measure.

I am in the health status workgroup and we are having an excellent discussion about how to measure health status. We are considering Social Deprivation Indices that use secondary measures that proxy health status and direct measures of health status. Key question is whether to use one approach to measure health status (which is required for an MUA designation) or both.

There is some broad interest in the SDI approach we have used, but one tricky issue is that poverty is a key component, and ability to pay is another portion of the MUA. Other key issues to work through include whether to include racial, ethnic and linguistic isolation type variables in the SDI. Issues here include the hispanic mortality paradox.

1:30 pm: The two workgroups (one addressing how we mesaure health status and the other how we measure access and ability to pay). The workgroup looking at how we measure access and ability to pay have provided a useful framework to categorize different types of access barriers and ways to measure ability to pay.

For the health status workgroup, there are two areas of uncertainty that needs to get worked out:
  • does the use of poverty in the Social Deprivation Index that could be used to proxy poor health status create either a real and/or a perceived double counting issue with measures that can be used to measure ability to pay?
  • where will race, ethnicity and linguistic isolation variables go? For example, race has been suggested as both a proxy of health status, a proxy of access barriers, and a proxy for ability to pay.
These are big issues and represent that there is a bit of conceptual muddle about different measures that could be seen as ways to measure different concepts: health status, access and ability to pay.

2:30pm: Trying to see if we can work through toward some sort of consensus that the social deprivation index approach to proxying health status exists, and then figuring out how we put such an index together with a direct measure of health status like standarized mortality ratio.

3:40: back in two workgroups trying to get to a proposal for measuring health status, accessibility and ability to pay to allow for some initial attempts to put together a draft MUA index.

4:50pm: the health status workgroup has developed a recommendation for testing out a draft health status portion of the MUA index. The workgroup focusing on access and ability to pay is still working.

5:50pm: both workgroups reached a tentative consensus to go ahead and test out a proposal to measure health status, access and ability to pay for the purpose of developing an MUA. Tomorrow we will try and develop a plan to move toward measuring provider availability.

Wednesday, February 16, 2011

The best thing about Bowles/Simpson

was that it set a percent of GDP at which to balance the budget in 2035 (21% of GDP; taxes up and spending down from today) and provided a path to get there. Most everyone wants lower taxes, and even though they want lower spending in the abstract, they oppose cuts that would be meaningful. Only with a target percent of GDP at which to balance the budget can you have (any hope of) a meaningful discussion of relative priorities as we move toward a balanced budget.

Update: movement in the Senate toward a deal?

Negotiated Rulemaking, Fifth Meeting, Day 1

The fifth meeting of the HRSA Negotiated Rulemaking Committee to reconsider how the federal government designates Health Professional Shortage Areas (HPSA) and Medically Underserved Areas (MUA) begins this morning in Rockville, MD. Here are links to the last meeting in January: day 1, day 2, day 3.

This morning the technical subcommittees will meet and the full meeting begins at 1pm and runs through Friday. First step today will be receiving the reports and recommendations from subcommittees that are organized around the parts of the statutorily-determined components of the MUA designation:
  • health status
  • ability to pay
  • accessibility
  • provider availability
Basically, we are getting to the point of deciding how we will operationalize these concepts and put them together in useable manner.

On the HPSA side, we will also begin making decisions about what providers to count toward primary care, how to weight them, and eventually have to set standards for designation. The work of the provider availability subcommittee informs the HPSA designation as well.

There are myriad issues to be considered and decided upon for both MUA and HPSA. I will blog about the meeting and do so by updating this post.

2:30pm. Productive subgroup meetings in the morning and now the full committee is receiving subgroup committee reports.

The subgroup working on provider availability (how to measure the supply of primary care) has made the most progress and is probably closest to having a recommendation about what types of providers to count. Key issues will remain the weighting of certain groups that provide primary care, and the relationship between secondary data and local areas completing surveys of local supply to produce the most accurate FTE primary care available in a local area.

For all of the presentations, the issue of what is the rational service area comes quickly. We are working on that tomorrow. For the early testing of the health status component of the MUA measure we have used the county and PCSAs.

5:00pm: good progress made. There has been convergence among several of the subgroups in terms of questions and issues. There are some inevitable muddles with variables potentially 'showing up' in different parts of an MUA designation that will have to be worked through.

We are currently discussing the draft recommendations of the provider subgroup to tentatively adopt a definition of primary provider for the purpose of identifying HPSA shortage areas and capturing provider availability in a MUA designation.

5:25pm: trying to get to a vote on the list of providers to count as primary care providers for the purposes of designation. Biggest change as compared to what is currently done is the adding of some non-physician primary care providers (e.g., Nurse Practitioners, Physician Assistants). Many issues still to determine in terms of how counts will be finalized for designation, but this is a big (tentative) step so that we can begin to see the distribution of providers using these definitions. Entirely new thresholds will have to be developed given the addition of non-physician primary care providers.

5:37pm: consensus obtained on primary care providers to count. woot woot!

Do You Ever Change Your Mind?

Harold Pollack asks a good question, which I saw via Austin Frakt:

"Have your own views changed on any basic issues of domestic policy the past 3 years?"

  • On health policy, I think I have gotten to the point where I reject the existence of the 'best way to reform the system' because of the primacy of both political (between the parties) warfare in health policy, and the degree of cultural disconnect between what people say they want in health care (save money) and how they react to any policy with a chance of achieving such an outcome (hate it). However, we need to deal with costs, and coverage and quality problems in the system so we need a general acceptance of an approach to coverage so that we can get serious about cost and quality. This has lead me to think we need something like this: a next step in modifying and then implementing an ACA compromise between the parties that is based on policy preferences that have tended to hold over the past 20 years or so. It is not what I think is necessarily the best, but what I think is the best way forward, and has the best chance to get coverage decided so we can deal with cost and quality.
  • On the economy/jobs/tax policy. In the big change department, I believe that we should abolish the corporate income tax. Note, I believe if we are going to make a change, we should go all the way because if we lower them, even to 1% and the results aren't good, people will say they are still too high. Ending this tax would give the maximal incentive to create jobs that we can provide. If it greatly boosts employment, that is good for everyone. If it doesn't work, then at least we know the claim of high tax rates is not why jobs aren't being created, and we can move ahead knowing this. My thinking has gone like this. From 1990-1999 the US created about 23 Million or so net new jobs. From 2000-2009, we created around 0 net new jobs. The last year or so, the economy has started to grow, Wall Street has done well, and 401 k accounts have rebounded. But unemployment remains high and job growth is very weak. If we reset normal unemployment to be 9-10% instead of 4-5% that implies a great deal of pain for our nation. This is a big problem, and what has lead me to think we should abolish the corporate income tax, a huge change in my view. Further, in reading and thinking about tax reform, I have come to realize that corporate income taxes have only collected between 9-13% of the total federal tax receipts since 1980 (in the 1950s corporate taxes collected were between 5-6% of GDP, and in 2008-2010 ~2% of GDP). Further, there are huge disparities in the actual marginal rate paid across firms and industries which seems unfair and inefficient. Finally, my intuition is that the complexity of the corporate tax code (and deductions) probably over time leads to more such personal deductions (though I don't have proof of this). Such deductions and tax expenditures are a big part of why we have such a large deficit.

Arizona Doesn't Need Waiver

to drop around 250,000 persons from its state Medicaid roles according to Sec. of HHS Kathleen Sebelius. The letter to Gov. Brewer says that because these persons were covered by Arizona under a Medicaid waiver that ends on Sept. 30, 2011, the state can simply not renew the waiver and such persons could then be dropped from coverage without running afoul of the Affordable Care Act Maintenance of Effort (MOE) provisions. However, according to the article linked, Arizona will have to cover these persons in 2014 when the ACA goes into full effect. The MOE provisions in the ACA were designed to hold state Medicaid coverage levels in place as the law expanded coverage via Medicaid. About half of the 32 Million persons who will be insured in 2020 who would be uninsured without the ACA, will be covered by Medicaid.

There will be questions about why it took so long for HHS to let Arizona know this information, as they have been discussing this move for some time. I don't know enough to say whether this is an obvious interpretation of the ACA and the existing waiver, but Arizona must have thought they needed a waiver or they wouldn't have gone to the trouble to request one.

I have a hunch that going forward, HHS is going to try to be as flexible as possible with states, and any state with a plausible plan for their Medicaid program will likely have a decent chance of getting it approved, especially if they are expanding coverage. States certainly won't get a waiver approved if they don't ask, and states who have plans they would like to undertake shouldn't be shy. The political reality suggests more flexibility for states and not less is likely to come about in the years ahead.

At this point, Arizona and Vermont seem to be at the two ends of the spectrum in regards to seeking of waivers and implementing the ACA: Arizona desiring to cut coverage, and Vermont trying to cobble together a 'single payer' approach that is really not a single (meaning one) payer, but a universal coverage scheme. Interestingly, both states say they must take their proposed steps because they cannot afford to not do so.

h/t @sarahkliff initially and @HEALTH_NOTES for the link

Tuesday, February 15, 2011

Deficit Redux

I have written a lot lately about deficit reduction and I am tired so won't re-spill too much ink right now. This link from Ezra Klein is interesting. Andrew Sullivan has been writing with a mix of outrage and hope all day. I am not sure what will happen, and can talk myself into both the most pessimistic and optimistic scenarios.
  • The most pessimistic interpretation is that no long range reduction agreement will happen before 2012, we will have short terms cuts that are harmful, the election will be fought out by both sides saying they are not as bad as the other, and we will be closer to dealing with the real issues only through a debt driven crisis at some point in the future.
  • The more optimistic interpretation is that if President Obama proposed anything out in the open that would kill it, he knows this, and that there are grown ups in both parties who are or will be negotiating in private and the deal pops out later, probably starting in the Senate. I hope the latter, more optimistic scenario is true.

Thoughtful Comments on Reform

Bill Roper, CEO of UNC Health Care, and health policy adviser to President's Reagan and Bush 41 with some thoughtful comments on health care, health policy and the need for health reform. The remarks were given a speech last week at N.C. State University's Emerging Issues forum.

I Can't Hear You

Alexander Hart writing that the states are in trouble and could use some help from the feds in dealing with their budget crisis or else many workers will be laid off. He makes a good case, but this is the type of plausible policy that has no chance of even being heard without a serious long range plan to address the budget deficit along the lines of what the Debt Commission proposed.

You could credibly say, we are doing the hard part on addressing the true nature of the long run deficit (health care costs, tax reform, and to a lesser extent Social Security and Defense) and in the interim we must help the states. On the path to a balanced budget you could say we must invest in (education, energy, infrastructure, etc) and people could hear you out, but without a credible plan to address the long range deficit people will just stick their fingers in the ears and sing loudly like you did when you were a kid and you thought the noise under your bed might be a monster.

  • This is why progressives have more at stake than conservatives in developing a balanced budget; because we believe government has an important role to play in society.
  • It looks like we are headed for the worst possible policy outcome regarding the deficit, cuts in the short run and inaction on the real problem.
  • It is a really bad idea to wait for a crisis to address the hardest issue, there will be fewer options left and progressive priorities will be at more risk under that type of scenario.
  • I have been saying only the President could lead with his budget on the hardest stuff, I hope I am wrong and the Senate picks up the ball and then the President jumps in.
  • Bubbles of a secret deal, but that seem far fetched.
That said, if we ever develop a reasonable (taxes up, spending down) long range plan to address the deficit and develop a sustainable federal budget, the last political step will include members of both parties passing a bill that is akin to their holding hands (and both sides holding their noses) and jumping off a cliff together. Seems like the most likely outcome is no deal on the long range problems (and short term cuts; the worst possible outcome). But, a big deal on the long range problems seems more likely than a small one.

update: interesting take on grand bargains from Matt Yglesias. Andrew Sullivan saying you can be pissed but still support the President.

Monday, February 14, 2011

Heart Failure and Palliative Care

NIH has a RFA out on Palliative Care and Heart Failure. The August 2010 publication of a randomized control trial of early palliative care for stage 4 lung cancer showed that those receiving early care had longer survival, improved quality of life and reduced costs got a great deal of attention and helped increase the policy attention paid to expanding access to palliative care. Palliative care addresses symptoms and quality of life regardless of prognosis.

Hospice is a multi-disciplinary approach to providing palliative care to persons who are believed to be in the last 6 months of their life. Hospice is a subset of palliative care, but is not synonymous with palliative care.

The RCT of palliative care described above was particularly notable because patients did not unelect curative treatments as they must if they choose hospice in the Medicare program, but instead, patients in the treatment group were simply referred to the palliative medicine service within 1 week of diagnosis of their lung cancer as being stage 4. They were eligible to receive any treatments, be it chemotherapy, radiation or otherwise. They could also decide to stop receiving such treatments. In policy terms, this is known as concurrent palliative care, or the treatment of symptoms and focus on patient goals alongside treatments designed to forestall the Cancer.

One of the calls after the publication of the Temel et al. study was for replication of this study in other diseases. This is particularly important because Cancer generally has a more predictable time course to death than do other diseases, such as congestive heart failure, or dementia. This has an impact on how palliative care could best be offered, and it likely differs across diseases. In policy terms, at least some of the discussion and debate over long stays in hospice and whether this represents inappropriate or even fraudulent care is related to the increasing use of hospice by persons with congestive heart failure (CHF) and dementia (diseases with a more ambiguous prognosis).

If Cancer is the most predictable disease (and that doesn't mean it is predictable, just comparatively so), then CHF may be the least predictable, with a series of crisis events, one of which eventually ends in death. At the same time, CHF results in a great deal of suffering for patients, and palliative care has lots to offer patients. So, this RFA is timely and important.

I am hopefully working with colleagues at Duke to put together a RCT of early palliative care with CHF patients. I see two huge issues/problems with this type of study, one related to CHF and the other related to palliative care.
  • When do you randomize CHF patients? There is not a diagnostic point as 'clean' as the identification of a stage 4 lung cancer at which to randomize patients to early palliative care or the control group of normal care. There are many clinical possibilities (not my area so won't wade into the details) but this will be a tricky part of doing such a study well with CHF patients.
  • What are patients being randomized to? I sat in on a broad ranging discussion of some stakeholders of the Duke Cancer Care Research Program about two months ago talking about research priorities and protocols. One point that came up (it wasn't the main point of the discussion, but this RFA triggers it for me) was how specific RCT of pharmaceuticals or chemotherapy agents must be. Exactly how much is given, when, how, by whom, etc. But a randomization to a palliative care service is less clear. In the context of pharmaceutical RCTs, often a control group is access to 'best supportive care' which may mean access to a palliative care service. In the context of this RFA, palliative care is the treatment, so needs to be nailed down and replicable. One of the points of palliative care is to listen to patient goals and to even help patients identify their goals given the reality of the disease process. The choices or outcomes won't be the same across patients, but of course that is also true with RCTs of pharmaceuticals, that is why you do them. But, there doesn't seem to be as much experience is nailing down what is meant by palliative care or best supportive care in the control arm of other studies. Getting straight what patients are randomized to will be a big part of doing this well.

President's Budget

Here I repost Friday's post about he harm of short term deficit reduction in the absence of longer term policy attempts to address these issues.

The President's budget does not contain broad tax reform or long range entitlement reform proposals that were recommended by the Debt Commission, and his OMB director says that those are separate discussions. It does reduce the deficit by $1.1 Trillion over the next decade, it just doesn't address the long range drivers of our structural deficit (and neither do Republicans appear ready). This is disappointing. Here is a round up of comments on the budget from Kaiser Health News. Update: Ezra Klein with lots of links. Update 2: here is the actual budget.

The budget does offer a 2 year doc fix, meaning it identifies cuts to Medicare and Medicaid to forestall planned payment cuts to physician fees over the same time, basically arguing that not cutting physician payments is a higher priority. The cuts come mostly from reduced subsidies by Medicare to teaching hospitals ($60 Billion) for Graduate Medical Education, reduced payments to hospitals to compensate for when patients don't pay co-pays and deductibles ($23 Billion), and slow of the growth of home health updates ($9 Billion. This is the most responsible dealing with the so-called 'Doc Fix debacle' since 1997. A completely redone payment approach is needed. Also, if such cuts are followed through on next year year, it will give credence to the ability to see through reductions in planned Medicare spending. Even though these acts are politically hard, they are nothing compared to what it will take for a long range balanced budget.

Hopefully, the bipartisan discussions in the Senate on tax reform and a broader consideration of the debt commission proposals will take root, but I had hoped the President would wade in more clearly on what he wants in the way of long range entitlement and tax reform. If we don't get around to this fundamental discussion, we are headed for our fourth straight election in which one side is looking for a large victory by simply arguing I am not as bad as the other guy.

Update, 9:00pm: word of a secret deal in the works....a grand deal is what it will take but it seems far fetched. I hope I am wrong.

Friday, February 11, 2011

House CR FY 2011

Text of the House CR bill that proposes cutting $100 Billion from the President's FY 2011 request. Current continuing resolution to fund the government runs out on March 4, 2011. (h/t @HEALTH_NOTES)

CBO did not say ACA will kill 800,000 jobs

Was going to do a post on this, but Jon Chait did it. They say that access to health insurance will reduce job lock (those working mainly or only because of the need for health insurance) and some folks after the ACA will decide to work less. For example, a parent might decide to stay home with their kids instead of work since they could obtain health insurance without a job after the ACA.

I won't even get into the irony of Republicans touting minor points out of the CBO's analyses given how they have spent the past few months trying to discredit them.

NC and Tort Reform

I have been wanting Republican leaders in the NC General Assembly to make clear what they are for in the realm of health policy, and it looks like tort reform may be their first step. They appear interested in torts generally, but both Speaker Tillis and Sen. Berger have noted medical malpractice as areas of focus for this NC General Assembly Session. The John Locke Foundation, a Libertarian think tank has this proposal out today.

The medical malpractice system we have now does nothing well. It leads to frivolous suits, and misses most cases of true negligence, and that is just getting started with the problems. If you want a book length treatment of the (many) problems and realities of medical malpractice, this book by my Duke colleague Frank Sloan, and Lindsay Chepke (a lawyer) is excellent.

A few thoughts on tort reform and medical errors (this post has links to multiple primary sources on these and related topics; new one from AMA).
  • Medical errors are a huge problem, and tort reform would best be coupled with a patient safety approach that moved medical errors out of an adversarial system toward one that seeks to learn from mistakes.
  • One motivation of bringing a lawsuit on the basis of harm in the absence of negligence is the cost of medical care and the possibility that an injury could render someone uninsurable. Tort changes in the context of a guaranteed access to insurance for those injured is quite different from tort reform and nothing on the insurance side. In this way, tort is linked to the larger health reform discussion.
  • The Republicans in the General Assembly seem clearly opposed to the Affordable Care Act. It is easy to be opposed to something, but now they need to say what they are for in the way of expanding insurance coverage. I have noticed more persons willing to say privately (and some publicly) that they reject the notion that universal coverage is a worthy goal. I have no idea if this is the position of few/some/many Republicans in NC, but if it is their position it would be good to make that clear. If it is not their position, and universal coverage is something they want to work toward, they should say how they plan to do that.

Different Options on the Deficit

To simplify, lets assume there are two possible ways to address our budget deficit, a short term solution and a long term one. Further, lets say the short term approach is budget cuts that are being discussed by the Republicans in the House to cut money from the current year's budget. The long term approach could be seen as addressing entitlement reform (Medicare and Social Security), Military spending, and a comprehensive tax reform that lowers marginal rates, reduces exclusions and increases taxes collected.

For the sake of simplicity, lets define the short term approach as cutting $100 Billion from the current budget, and no is a continuing resolution through September 30, 2011.

For long term, lets say a yes is adopting something similar to the President's Debt Commission (Simpson/Bowles Commsion), which would balance the budget in 2035 at 21% of GDP in taxes and spending, and a no is doing nothing.

So, there are 4 budget deficit scenarios in the 112th Congress (yes/no short term) and (yes/no long term).

Short term yes/long term no. This is by far the most likely scenario. And this is probably the worst possible scenario in policy terms, because it would impose large cuts in the midst of a slow economic recovery. I am not saying domestic discretionary spending cannot be cut, and I am sure there is wasteful or non productive spending that could either be cut or be better used. This approach imposes a great deal of pain, and perhaps endangers our recovery, but worse than that, it is only symbolic in addressing the true cause of our long term budget problems. This does nothing to address the long term structural deficit. If you take this approach to its absurd conclusion and cut ALL non defense, non discretionary spending, then in 2020 we would still have a deficit if the current income tax rates are extended until 2020 (and this assumes the Medicare cuts of the ACA take place [see figure]).

Short term no/long term yes is the best scenario in policy terms. The likelihood of this scenario seems virtually nil. It is a bad idea to have large cuts during the recovery, but the most important deficit policy need is to develop a plan for long range deficit reduction which by definition includes entitlement reform and tax reform. If we don't slow health care cost inflation over the next 30 years, we have no chance for a sustainable budget in the future in any event, and our current tax code has no chance of bringing in the revenue necessary for even reduced spending levels of spending on Medicare, Social Security and current levels of defense spending. Spending must come down, and taxes received must increase, though preferably in the context of a tax reform that does all we can to try and make the job climate as attractive as possible.

Short term yes/long term yes could also be a pretty good outcome in policy terms. As noted, the cuts being discussed by House Republicans are nothing more than a symbolic gesture from the perspective of developing a long range sustainable budget. However, symbolism can be important, and if somehow passing such a current year budget cut spurred on negotiations that lead to a real addressing of the true cause of our long term budget deficit (Social Security, Defense, and most notably, health care costs) then so be it. Again, if you eradicate all non defense, non discretionary spending, then in 2020 we will still have a budget deficit given the tax code we have today, and that assumes there are ~$420 Billion in Medicare cuts over the next decade as specified by the ACA.

Short term no/long term no is also a possibility. House passes a budget cut, Senate gums it up and/or the President vetos the bill and all this is taken to the 2012 election. Probably a government shutdown of some length. I am torn on this one....part of me says that this is a better policy outcome than short term yes/long term no, but I don't want to give up on at least partly getting to a long term yes. Divided government likely means it is harder to get started on the grand deal, but may also paradoxically be the only way to finish it off. The problems with our budget are not like fine wine (getting better with age), they are getting worse, in the sense that the longer we wait to undertake large scale entitlement reform, discussion of Military spending and developing a tax code that pays for the spending we say we want, the fewer options we have. If we wait for a debt driven crisis to address all this, then both in policy and psychological terms, huge cuts in programs that are Progressive priorities may be inevitable.

House Republicans especially are talking a great deal about spending and dealing with the deficit. In policy action terms, they are attempting to legislate in only a symbolic manner that may well harm our fragile economic recovery. This may help them do well in the next election, but it is bad policy. If Progressives don't react boldly, they will get away with it.

Both in policy and political terms, the best step for Progressives is to lay down a serious long range deficit reduction proposal along the lines of the President's Debt Commission proposal. Something like this is what it will take to shore up Progressive priorities such as Social Security and Medicare. Something like this is the only way to reduce our very high levels of Military spending. And something like this is the only hope of developing a tax code that has a hope of leading to long range balanced budget. I also think this is also the only way politically to argue against short term budget cuts, because the public does want something to be done. If the argument against the Republican plan is 'that is only symbolic and doesn't address the real problem' then we have to introduce a proposal to address the real problem.

I don't see how this way forward is possible without the President leading on it, and reframing the agenda away from large discretionary budget cuts to the real issues of our long range budget problem. Perhaps a bipartisan group in the Senate could get this going and the President could support it. Without some change, it appears that we are headed for the worst possible deficit policy outcome: large cuts in non defense discretionary spending in the current year's budget, and no action on the actual long range problem.

Thursday, February 10, 2011

State Flexibility

Kathleen Sebelius with an op-ed noting flexibility for states in implementing the Affordable Care Act. There seems to be a great deal of variation in what states are doing in the way of using the implementation of the ACA to develop new models. Some states are saying there is not much flexibility, while others, like Vermont are bringing forth grand plans. It seems to me that if a state has goals and a plan to get there that can expand insurance coverage, they should put them forth. Even if the ACA were struck down as unconstitutional, the problems of the default system will remain, and the options of what is feasible in response won't change that much.

There is both the reality of what is allowed in the way of state variation and there is also the political reality, and they aren't the same thing but are likely to converge over time. If a state like North Carolina, which has a Democratic Governor and a Republican General Assembly managed to agree to a plan that sought flexibility in implementing the ACA and seeking some sort of Medicaid waiver, politically it would be hard for the feds to deny a bipartisan state-based effort.

Does anyone have a list or ranking of ongoing or expected activity of what states are likely to do in the way of seek sec. 1332 waivers and/or Medicaid waivers to implement the ACA?

Update: Ezra Klein writing that Sebelius and Daniels need to talk. There is flexibility in the ACA, and I think any state with a concrete plan will get a strong hearing. Saying we can't act because of uncertainty I think is mostly saying we want to bring down the ACA. People are welcome to this position, but if the ACA goes away, the problems won't.

More update: Also via Ezra Klein interesting interview with Vermont Gov on his single payer plan.

And more update: with Aaron Carroll saying the crux of the matter is mandated benefits and there is not going to be agreement.

Galston on Deficit

William Galston with a post with a useful summary of the different CBO long term budget projections, as well as a prediction that the President is unlikely to offer substantial deficit reduction proposals in his budget. At this point, it seems as though the ongoing bi-partisan discussions in the Senate on at least a tax reform if not more comprehensive deficit reduction proposals may be the best hope for any action before the 2012 election.

Update 10am: Matt Yglesias well makes the point that cuts from FY 2011 budget do not address the long range deficit problems we have. We don't need symbolic (in terms of the magnitude of the long range problem) cuts to this years budget, we need a long range plan. If symbolism lead to real solutions, then maybe....but that doesn't seem to be what is likely to happen.

Illness Trajectories

Drew Rosielle has a post over on Pallimed blog about illness trajectories, and how they relate to end of life care. The paper that triggered this post is on End-Stage Renal Disease (ESRD) trajectories and published in the latest issue of the Journal of the American Geriatrics Society (JAGS). However, illness trajectories have become a mainstay in the field of palliative care and end of life care generally. This paper in the BMJ provides a useful overview of the concept.

The rise of the recognition and naming of 3 distinct trajectories (rapid steady decline, like in Cancer; slow steady decline, like in Dementia/Frailty; slow steady decline, with precipitous declines, like with organ failure) of the dying process is a basic attribute of the field of geriatrics and palliative medicine. It seems as though these trajectories have arisen as physicians have had to answer the following questions from patients:
  • how long do I have left?
  • what is going to happen to me? (what will my quality of life be like)
They have also arisen because of the availability of improved data, and the ability to describe patient symptoms prior to death.

I am not a provider, so don't face these questions on a daily basis, but I can observe them after the fact (of death) in various data sets using various measures of decline and quality of life. Identifying a pattern and categorizing a person after they are dead is not the same as meeting a living, breathing human being and trying to answer their questions, how long do I have left? and what will happen to me?

Rosielle, who is a provider, has some interesting doubts about the usefulness of these trajectories in actually caring for patients. Rosielle notes that in his clinical practical the trajectories are "useful for explaining, less so for predicting" and that he worries that an over-reliance on the trajectories misses persons who may be very near death but who are not offered the appropriate palliative care services. This means needless suffering may take place.

This is especially true in the Medicare hospice program since patients must un-elect curative treatments in order to begin receiving hospice care. A move to concurrent hospice or expanded palliative care in Medicare could help to alleviate some of these concerns by not forcing clinicians to be so certain that death was imminent, just certain that a patient was in in pain or suffering in a way that could be addressed. A recent study demonstrated that early palliative care improved quality of life and actually extended life in stage four lung cancer. This is only one disease process and the results need to be replicated, but it is a hopeful study that suggests that more needs to be done to make sure palliative care is provided to those who need it.

Worries about moving to concurrent palliative care in Medicare are mostly that it will increase costs and whether the extra cost is worth it. I think these sorts of questions should be asked, but not so selectively. If a new surgical procedure that was 3 times as expensive but only 3% better were identified and was an approved medical procedure, Medicare would cover it no questions asked. Hospice and palliative seem to be the only part of the Medicare program that has to answer these sorts of questions and that makes little sense.

What we need is the best information that we can get that will allow us to try and give patients an evidence based and straightforward answer about the care options they have. Will it extend how long they have left? Will it improve the quality of their lives while they are alive? The models we have to do all this prospectively are not great. There are numerous sources of uncertainty. But, we have to keep trying, and hopefully we can better match the needs of patients with what care options are available.

Wednesday, February 9, 2011

Individual Mandate Alternatives

Paper from Jon Gruber, the MIT Economist who was an adviser to Mitt Romney in Massachusetts has a paper on the relative merits of risk pooling mechanisms that are replacements to an individual mandate via Austin Frakt.

Most interestingly to me is his estimate (which does have lots of assumptions, especially since lots of auto-enroll examples are not health insurance) that auto-enroll procedures such as those envisioned by the Patients' Choice Act cost about the same amount with only two-thirds as much coverage because they default people into the low cost government option. I have always wondered why the Patients' Choice Act was never scored by CBO, and this may be why. A staffer for one of the sponsors told me they couldn't get it scored because CBO was so busy, but the PCA was introduced in May 2009 before the flurry of bills began coming out of House Committeess. Here is an old post linking to some discussion of private scoring that was done by S. Parente at Univ. of Minnesota. Just for kicks, I wish someone would reintroduce the PCA and have it scored by CBO.

Gruber's conclusion about making projections of coverage options is worth highlighting:

"Modeling the impact of fundamental health reform is a balancing act between leaning on what is known and modeling what we need to know. In the case of the new health reform law, that balancing act was greatly assisted by the experience of Massachusetts, which provides a great case study of the world with reformed insurance markets and an individual mandate. Once we move away from the individual mandate, our estimates become considerably more uncertain."

We have better evidence on how an individual mandate works than we do for alternatives.

State Experimentation

I have a hunch that the next decade will turn into a period in which States will be granted a great deal of discretion to implement the ACA and any modifications in the ways they think best. There are such opportunities in the ACA such as section 1332 waivers, but I suspect any state with a coherent plan will get a strong listen from Washington. Most people likely think this means pared-down proposals, with a goal of expanding coverage via catastrophic insurance, but the most aggressive early experimenter appears to be Vermont, who wants to create a single-payer system.

Some key factors across states that will determine the type of experimentation they may attempt include:
  • relative intensity of the current system, especially in Medicare. There is tremendous variation if per capita Medicare expenditures across the nation and high spender areas will have fewer options because providers are used to doing more and being paid more; it will be easier if you are in a 'low intensity practice pattern state'
  • relative economic vitality of the state
  • current rate of uninsurance. Massachusetts is around 2.5% uninsured, while Texas is around 25%
  • Health outcomes/population health
  • Medicaid share rate (what proportion of Medicaid costs are paid by the federal government; poorer states get more federal subsidy)
  • Politics of the state
Should be interesting to watch what happens in Vermont and whether other states will be emboldened to search for a grand solution. (h/t for links @ezraklein)

Update: Aaron Carrol also writing about Vermont.

Savings Reduces Someones Income

Austin Frakt's latest Kaiser Health News column is here making the case that insurance reforms could achieve some savings, but will not be enough to create a sustainable health system. He notes that for the past half Century, the overall medical loss ratio (percent of premiums spent on care) has been at least 85%, so the codification of this standard is not going to have massive impacts on costs. Similarly, counter proposals that claim to increase competition for insurance won't revolutionize costs either unless there is also a reduction in the 'loss' portion of insurance, which means amount paid (providers get less income) times amount of care received (patients get less care).

Austin notes that payments to providers have got to be part of the solution, which reminds me of the way I ended my July 31, 2009 column in the News and Observer while the legislation that became the ACA was still being put together:

"We need to expect more value for money in health care while reducing costs. It will not be easy, as any savings realized will be a reduction in someone's income. For now, everyone is saying reform is needed, but no one has had to be opposed yet. As legislation moves toward a final House, Senate and ultimately conference committee vote, there is only one certainty. If opposition to a consensus bill does not become ferocious, it can mean only that the proposal does not seriously address health spending growth."

Slowing costs appreciably will take paying providers less and reducing the amount of care that people receive. The first will be hard, and there are limits to how much of that you can do. The second will be very hard, but should be lead by asking the questions 'does it extend life?' and 'does it improve quality of life?' and how much does it cost? And then providing evidence based answers, and figuring out how to provide this information to patients and providers in a prospective manner. That will be technically hard. In our current political climate, asking these questions reasonably seems culturally impossible.

Any replace option to the ACA has to work in the exact same climate.