Defined Contribution Versus Defined Benefit in the Proposed Republican Reform of Medicare

Unpredictability?

The Disease Management Care Blog took a look at the House of Representatives' Republican proposal that reportedly includes a massive reform of Medicare. 

What's It All About?

As the DMCB understand it, persons who are currently less than age 55 would, when they become Medicare eligible, get "premium support payments" (think of them as sliding scale vouchers) that could be used to buy commercial insurance.  When this is combined with switching Medicaid to block grants and the repeal of the Affordable Care Act, health care costs measured as a percentage of gross domestic product (GDP) would be halved.  In exchange, however, the average beneficiary's out of pocket costs would likely increase.  The Congressional Budget Office has calculated the price of a 'standardized benefit" and determined that Medicare currently covers about 75% of its cost (it's all on page 21).  All else being equal, Medicare's share would decrease by 2030 to about 68% of the cost, leaving beneficiaries having to pay for the absolute difference of 7%.

The Politics

Check out the Republican pitch and viewers will see a prudent cost cutting "path to prosperity."  Given the Democrat's pugilistic retort using the tiresome jargon of "Big Oil," "slashes support for seniors in nursing home," "tax breaks" and "tax cuts for the wealthiest," voters can predict where this is going. 

Curiously, (at the time of this writing*) there are no fawning "web-first" policy exclusives on this Republican proposal from any of the high visibility medical journals. This forced the intrepid DMCB to go-it-alone. Navigating through the distraction of the partisan background nattering, the DMCB concluded the Republican proposal could be nothing less a "tipping-point" public sector move away from an entitlement policy of "defined benefit" to one of "defined contribution". 

Defined Benefit vs. Defined Contribution

In broad terms, the Medicare entitlement (once deductibles, co-pays and other limitations are factored in) covers the "benefit" of  all medically necessary services. Representative Ryan proposes the government change that by providing Medicare beneficiaries with a dollar "contribution" that, in turn, can be used by them to buy on their own insurance.  While the details are fuzzy, the Republicans are proposing that that contribution can be flexed based on income status, pre-existing illness and the evolving price of a standard benefit.

Those of us working in the private sector have long gotten used to the notion of "defined contribution" in retirement funding.  That's obviously less true for public employees, who are grappling with the twin downsides of grumpy taxpayers and governments' fickle unwillingness to adequately fund an open ended benefit promise. Medicare's travails are eerily similar, the only difference being that a) this is health care, not retirement (Social Security is not being touched... yet) and b) future Medicare beneficiaries have met the two-headed enemy of taxpayer vexation and government underfunding, and they are us.

The Third Rail?

While this wrinkle on "benefit" versus "contribution" may be noteworthy, the DMCB will bravely go one step further on the notion of the dreaded "Third Rail."  Given the growing familiarity with "defined" benefit arrangement in the young and middle aged workforce, the DMCB thinks this may turn out to less of a showstopper than generally appreciated. Arguments that future Medicare beneficiaries can find a better health insurance plan on their own may resonate with chronically disillusioned and independently minded Generation X'ers.  Current Medicare beneficiaries - the ones who vote - won't see any change.  Next?

Aside From the Politics, What Else?

Is this all about cutting the budget deficit?  A responsible attack on the burgeoning U.S. debt?  A repugnant exercise in social injustice? A long needed debate on the role of government? Irresponsible cost cutting that ignores the revenue side of fiscal probity?  2012-style political brinkmanship?  "All that too!" says the DMCB, but as the debate unfolds, it will ponder two additional under-appreciated dimensions in the Republican proposal:

1. What will the Republican plan do to assure that these "premium supported" insurance plans deliver?  That includes financial strength, a decent benefit and the flexibility to adopt novel features like future iterations of population health management.  Given the stubborn pandemic of chronic conditions, there may be a role for government in assuring that insurers cover modern versions of high value health care.

2.  While cost cutting is always welcome to the DMCB, what do the health insurance actuaries (and international bond markets) have to say about the predictability of the Republican plan? Thanks to countless broken promises, the DMCB is initially skeptical about government projections on a "percent of a standard benefit."  Yet, one possible advantage of the Ryan Plan is that taxpayers (and holders of Treasurys) won't continue to be held hostage by the open-ended promises of Medicare.  We may or may not be able to ultimately afford what the House Republicans are proposing, but at least our budgets may turn out to more predictable than the current Medicare benefit.

Stay tuned!

*Coda:  After posting this on the evening of April 7, the DMCB got an early morning April 8 New England Journal email alerting it about this Perspectives article predictably titled "How Not to Reform Medicare" by the Brooking Institution's Henry Aaron.  It makes many of the same distinctions between "benefit" versus "contribution" and, while extolling many of the virtues of premium support payments, notes there's a problematic cost-shift to beneficiaries as well as diminished consumer protections (especially among duals).  Dr. Aaron points out he invented the concept of premium support payments and doesn't like what he sees.

A Hearty "Good Luck" To Two Victims of the Affordable Care Act

While the health reform hand-to-hand combat continues, the Disease Management Care Blog had a chance to see two features of the Affordable Care Act (ACA) up close and personal.

The first was courtesy of the AcademyHealth National Health Policy Conference, where there was a breakout session on how employers will have to cope. It wasn't pretty. The speakers, who were experts on the ACA's wording and the likely supporting regulations, described an emerging horrid thicket of employer and employee tax credits, penalties, fines, benefit design rules, assumptions, subsidies, gaming, audits, reporting requirements and what-if calculations. The DMCB figures that companies that want to buy health insurance for its employees will eventually need to hire a small army of tax and benefit consultants and, despite trying to do the right thing, will still risk being in violation of some rule some where. It's so complicated, the DMCB predicts that it won't be the "money" but the indirect costs, administrative burdens and hassles that will lead to businesses bailing out, paying the fines and pushing their hourly employees into the individual market health exchanges. The DMCB heard that the ACA's architects ultimately wanted employer-sponsored insurance to waste away, and it looks like they'll get their wish. Despite this, however, the message was that the employers liked some features of the ACA and were patriotically planning to comply.

The DMCB wishes our nation's employers good luck.

The second was at a separate conference a few blocks away, where Acting Medicare Administrator Donald Berwick spoke. The good news is that Dr. Berwick's comments amply demonstrated his smarts, credibility and passion. He genuinely believes in the merits of health system change involving electronic records, self-directed care, team-based coordination, dissemination of best practices and paying for value. He supports the ACA "after thinking about it," avoided any gratuitous comments about his boss and brought a roomful of physicians to their feet in a standing ovation. The bad news is that he naively thinks aggressive Federal activism is a good thing for patients and doctors everywhere, that there is broad political support simply because the Angels of Light are on his side and that the huge expanded Medicare bureaucracy is up to the task of leading and executing on centralized health system reform. Dr. Berwick is a good man, but his challenges are practically insurmountable.

The DMCB wishes Administrator Berwick good luck.

Is This All They Got?

Writing in the September 15 Washington Post about the legal challenges to the Affordable Care Act (ACA), Attorney General Holder and HHS Secretary Sebelius once again turned to the Administration's now familiar health reform rhetoric.

By now, observers have come to recognise the White House's standard and adaptable boilerplate: open with a heart breaking anecdote about a victim unable to afford treatment for their curable condition. Follow with some framed statistics about the uninsured and runaway health care costs. Get in the usual dig at evil health insurers run amok. Lump opponents to the Administration in with the crackpots that want to dismantle anti-Social Security and roll back civil rights. Close with the reasonableness of Team Obama and a call to bipartisan collaboration.

Good boilerplate can be adapted to any argument including the latest threat to the ACA. Opponents to the individual mandate argue that the U.S. Constitution's Commerce Clause does not grant Congress the power to compel Americans to purchase health insurance in a private market. The retort in the Washington Post? Use the opening "victim" anecdote to portray what could happen if the individual mandate is rolled back. State that the uninsured and runaway cost statistics are the result of not having an individual mandate in place. Portray the individual mandate as a way of bringing insurers under control. Lump the mandate's attackers with other extremists. Close with the observation that the mandate's opponents would make better use of their time by working with the White House.

On and on.

The Disease Management Care Blog thinks the article interesting for what it didn't do:

1. It didn't reach into the heartland and is going unread by persons outside that beltway.

2. It didn't offer up an easily grasped and Constitutionally sound counter argument, other than electing to go without insurance is a form of commerce that eventually harms everyone. Rather, it spent far more verbiage portraying the mandate as the fair thing to do. They have a point, but since when were U.S. laws about fairness?

3. It didn't attack the health insurers until the seventh paragraph and even then it was rather mild. This may be bad news for the Administration, which rode voter anger against the industry to garner political support. That won't work anymore and bodes ill in the continuing Administration battle for support outside their base.

4. Finally, it failed to adequately explain how making everyone buy insurance will lower the price of insurance and simultaneously control health care costs. While the Disease Management Care Blog believes the concept of risk pooling is within the reach of most voters, they'll then have no problem also discerning that spreading unrestrained health care costs over more people will do little to ease exploding debt levels.

The DMCB hopes this is the usual public relations posturing and that some real work, negotiating, learning and dialogue is going on behind the scenes. If this is all the Administration has, health reform may be in real trouble.

How Things Stand Now With the Politics of Health Reform: A Summary from the New England Journal

Maybe the Disease Management Care Blog is reading too much of the New England Journal, but it liked Dr. Oberlander’s analysis of the morbid politics of health reform. This is a good update of how things stand and what to watch for in the coming months.

To wit:

The resurgent Republicans' seem to have a threefold battle plan:

1) Symbolism with hopeless attempts to repeal Obamacare, having noisy hearings and forcing votes that embarrass their political opponents, all designed to cater to a political base,

2) Pointed attacks, using their majority in the House of Representatives to fiscally castrate the more unpalatable components of the law, such as the Independent Payment Advisory Board or "the mandate" by refusing the necessary appropriations. While not mentioned in the article, the DMCB also wonders if the Republicans will get in the "weeds" and make mischief in the wording of the enabling reglations behind the ACA.

3) Seeking political advantage by building on the political momentum of the 2010 elections by forcing their Democratic opponents – including the President – to "resell" the Affordable Care Act (ACA) in 2012. Not only will they have to champion a law that is unpopular among many voters, but they will have to deal with its “identity crisis.” In other words, the ACA, which is a complex amalgam of consecutive programs, new subsidies and complex regulations, has failed to achieve a single “story” or recognizable brand. This is not like the "Civil Rights" legislation of the 1960's.

What is high stake politics, however, without some risk? Parts of the ACA are popular (coverage of children through age 26 and no lifetime limits, for example) and it’s not like the Republicans have any easy answers of their own that control costs, maintain insurance coverage and doesn’t add to the deficit. It remains to be seen how they will deal with this.

Two additional wild cards are 1) the States, many of which may resist going along with the health reform law and 2) the Courts’ rulings on the Constitutionality of the law. Both seem to favor the Republicans, because even if the States are forced to cooperate and the law is ultimately ruled constitutional, the drawn out political and legal wrangling may prompt voters to doubt the law’s legitimacy.

Right now, this political tide favors the Republicans. The turbulence favors bloggers. Stay tuned.

The Obama Administration Gets Into the Pre-Approval Business: "Coming Between You and Your Doctor"

Unless you are a national T.V. reporter, vacuous socialite Paris Hilton or a leading official in the Obama Administration, you probably already know that health insurers do not deny coverage of medical services based on cost. Instead, payment (or non-payment) for healthcare services is based on an assessment of "medical necessity," which, in turn, is ultimately determined by published evidence, expert opinion, clinical guidelines and national standards of care (here's an example). Once what is covered is known, it's a matter of knowing the unit charge and expected utilization and rolling that up into the insurance benefit design and the price of the premium. From time to time, insurers may require knowing if the medical treatment fits the science. That can be complicated and can be a source of insurer mischief. Doctors and patients can get tangled up in differing interpretations of a policy. Ultimately, however, the often derided "insurers coming between you and your doctor" is typically a function of thought, not thievery.

Well, thanks to this summary, courtesy of the New England Journal of Medicine, we are now witnessing an intrusion of the Federal government into the decision-making between doctors and their patients. Aside from a problem with occasionally killing patients, Avandia remains an important option in the treatment of diabetes. It's possible for a doctor and a patient to weigh the benefits, risks and alternatives and correctly mutually decide to use it. Their problem now, however, is that they'll need to seek permission. According to the Journal, the Food and Drug Administration's "Risk Evaluation and Mitigation Strategy" (REMS) will require the following prior to obtaining approval to use the drug:

"Doctors will have to attest to and document their patients' eligibility; patients will have to review statements describing the cardiovascular safety concerns"

The Disease Management Care Blog points out that the FDA is doing this because of two reasons 1) it's science-based and 2) using that science to come between a doctor and a patient works. So, the DMCB says "welcome to the managed care club" to the FDA and the Obama Administration.

By the way, the better health insurers typically strive to streamline this kind of pre-approval process by making toll-free lines available 24-7 or using web portals with data entry fields that can be completed in minutes. The DMCB hopes the FDA sets up a similar process for Avandia. Doing this by paper promises to be a bureaucratic nightmare.

Is A Back Door Being Built For A Single Payer System?

That question is considered in the guest post that was provided below by a DMCB physician-colleague.......

From my perspective as a solo family doctor it looks that way to me.

I am seeing some disturbing changes in how physicians bill for their services, the rise of insurance mandates and increasing consolidation of the health insurance industry. Carried to their logical conclusion, the government will need to step in. Maybe that's the intent.

My daughter recently had an appointment with her pediatrician for a “well-child” visit. When I received a copy of the physician’s bill, I noticed that there was a fee for the well visit as well as for an intermediate acute visit (99213). This is important because my family insurance uses a high deductible policy. When I brought the possibility that there may be overbilling to the attention of physician’s office, they claimed it was well within coding guidelines.
I didn’t agree, so I asked for a copy of the physician’s office note. This was enough to have my inquiry referred to the physician’s coding and compliance officer. After reviewing my daughter’s chart, he agreed that it did not meet requirements for a 99213 intermediate visit and informed me that the account would be credited.

This is more important than now being able to enjoy a night out with my spouse. That pediatrician’s practice was recently acquired by a hospital that is positioning itself to become an “Accountable Care Organization” (ACO). Before the hospital owned the pediatrician's practice, it was unheard of it to bundle a well and acute visit. But now, the hospital has apparently launched an aggressive coding initiative that is designed to maximize revenue. I predict that future ACO’s will find this and other ways to maximize revenue in ways that would have never been considered by well-meaning physicians and policy makers. This will increase costs.

In the news, I hear that some are calling the individual insurance mandate unconstitutional. They are trying to strike this provision from “Obamacare”. If this is taken out without modifying the other provisions (i.e. dealing with preexisting conditions ), there is evidence that this will bankrupt insurance companies or cause skyrocketing premiums.

Government mandates for coverage without regard for actuarial consequences will also cause premiums to dramatically increase. In Pennsylvania we now have an autism mandate for enhanced coverage to care for autism patients. Any enhanced or generous coverage for any specific disease process has the ability to bend the cost curve in the wrong direction. This will also increase costs.

Lastly, insurance company mergers and acquisitions have been commonplace in the last decade. If oligopolies occur (and by many accounts they already have) prices will go up and the government may be inclined to enact anti-trust protections, further increasing the involvement of government in health care.

Taken together, these developments and others may ultimately open up a back door for the single payer system. The combination of aggressive clinical billing, expanded disease coverage without universal coverage and insurance oligopolies may set the stage for increased government intervention backed by a frustrated voting public.

The most worrisome aspect is that the government may be as dumb as a fox. It is well known that the Obama Administration is enamored with increased federal involvement of healthcare. Between navigating the health care system for myself and my patients, watching the news and following the political dramas, it sure looks as if the stage has been set for the eventual passage of a single payer system.

Ideology vs. Values in Health Reform: We Deserve Better

Following the collapse of the housing market back in 2008, former Federal Reserve Board Chair Alan Greenspan appeared before the U.S. House Oversight Committee for a rather painful post-mortem examination. Over the course of several hours, he endured biting criticism for relying on what was described as a flawed free market "ideology." Henry Waxman's metaphysical questioning of the humbled former Fed Chief was a masterful combination of partisan opportunism, photo-op politics and angry revenge.

It was also a demonstration of the political process run amok.

David Brooks, writing recently in the New York Times, has it right: the political classes' ideological anger is out of step with Main Street citizens' anger over values. While the two concepts overlap, the former deals with creed and belief systems, while the latter deals with interests and materiality. The former has led to intellectual/political gridlock that now presides over a bloated, metastasizing and unwieldy thicket of statutes, regulations, law suits, lawyers, unions and craven complex of private sector government contractors. Mr. Brooks argues this has ultimately short-circuited a key American value: being able to benefit or suffer from the upsides and downsides (including luck) of personal initiative. He's not sure that things will necessarily change after the midterm elections, but he does predict that to succeed, a future President may need to understand the difference.

And look no further for a poisonous example of recent ideological jousting than HHS Secretary Kathleen Sebelius' editorial in the September 28 Wall Street Journal. In it, Ms. Sebelius retreads an ultimately ideological perspective that the purpose of health insurance, apparently in the absence of a preferred single payer system, is to guarantee access to care by selling "reasonably" low-priced insurance policies that cover all the medical costs for anyone who wants to buy it anytime. And, as typical for ideologues, falsely contrived good vs. evil battle lines are drawn: in this instance she pits down-on-their-luck self-employed, hard-working persons against faceless and avaricious health insurers.

As testimony to the righteousness of Ms. Sebelius' side, her Exhibit A is a recent North Carolina Blue Cross Blue Shield premium rebate. It turns out that the story is a little bit more complicated. For that, see Carl Mecurio's excellent summary of what happened here. Basically, the introduction of exchanges in the near term meant that the insurer's reserves against long term costs were becoming redundant. Sending checks out for a few hundred dollars to the involved BCBS enrollees was based on an actuarial decision that had little to do with the HHS' saintliness.

The Disease Management Care Blog will be the first to admit that it and its fellow bloggers suffer from a sometimes overzealous dose of ideology, but heck, they're blogs. Their role is to use all the tools of rational thought to uncover points of view that deserve higher visibility. Public service and governance, on the other hand, calls for a far more subtle, balanced and difficult job of reining in ideology and reconciling the important notion of personal responsibility with our other cherished values of progressivism, justice and others. It's not easy, but the talent is out there.

The Wall Street Journal editorial only demonstrates how badly this Administration's lack of that talent is failing in that key attribute when it comes to health care reform.

The Yellow Cake of Passing a Health Reform Bill

Knowing that the facts on the ground didn’t support its ideology, the Administration resorted to a sordid mix of selective disclosures, dissembling, outright spin and occasional bullying. Career analysts were ignored. What was left of the truth was stretched. The lazy media were rolled. A preconceived plot, engineered to support a dangerous dogma and short-term political gain, swamped a craven political opposition. The entire stinky premise was accepted hook line and sinker by a gullible public. When things didn’t quite work out as planned, it's only then that critics emerged to use hindsight to connect the dots. Administration excuses notwithstanding, there were serious allegations that the American people had been lied to.

The invasion of Iraq, you ask?

Off topic, says the Disease Management Care Blog. Yet, the DMCB wonders if a similar scenario could be unfolding for Mr. Obama and his fellow Democrats over the health reform legislation. Unbiased and informed observers have long been legitimately skeptical of the intellectual underpinnings of the Affordable Care Act. They doubted that it would simultaneously bend the cost curve, increase quality, expand coverage and rationalize health care. After-the-fact contrary information (for example, here, here and here) has begun to pop up faster than MSNBC's evening broadcasting of unflattering pictures of Tea Party candidates. As for the bullying, you be the judge.

And now, the Dartmouth Atlas - the Bible of the Beltway, those Groupies of GeoMapping, the Mavens of Medicare, the Prophets of Physician Behavior, the Oracles of Obamacare, the Viziers of Variation and those Diviners for the Democrats - has come out with another inconvenient healthcare truth: that the local availability of primary care may have little relationship with local health care quality.

Using their considerable expertise in navigating Medicare’s fee for service (FFS) data sets, the folks at the Dartmouth Atlas (DA) examined enrollment (including race) and medical claims data to look at the the relationship between primary care office availability and visits versus quality of care for diabetes and the incidence of limb amputations. The DA researchers geographically split the country up according to over 3400 “hospital service areas” (HSAs) (defined by how patients travel for inpatient care) from 2003 to 2007. Based on the utterances from the Administration, you'd think that HSAs with a lot of primary care providers would have many primary care office visits which in turn would lead to better health care. Right?

What was found was that about 78% of Medicare beneficiaries in the various HSAs typically see a PCP at least once a year with a range that extends from 60% (the Bronx HSA) to 90% (in a South Carolina HSA). Blacks were less likely to have a visit than whites (70% vs. 78%). There was, however, very little relationship between the HSA area supply of primary care physicians and the likelihood of a beneficiary having at least one visit (though the relationship was slightly stronger when analyzed by family physicians vs. other types of primary care). What’s more, there was also little correlation between having one primary care encounter and subsequently having a high number of primary care claims.

At a greater level of detail, however, there was only a modest correlation between having had at least one primary care visit and mammogram and A1c diabetes testing. This didn’t hold up at all for other types of diabetes testing (for example, eye examinations), getting a leg amputation (something that could be prevented if diabetes or atherosclerosis was aggressively treated) or being hospitalized for a bucket of “ambulatory care sensitive conditions.”

Expansion of primary care has been a linchpin of health reform, leading to programs like this. While there are other studies (like this) that show there may be an association between primary care and quality, this negative report from the highly regarded DA isn't helping the Obama Administration regain any momentum in the political rearguard defense of health reform. The DMCB, based on plenty of studies, has always doubted the primary care yellowcake of the Administration's case for the ACA - not because there may or may not be an association, but because it's never been clear that the importation of primary care into areas of high utilization would do any good. The DA study makes things even worse.

Mr. Obama summed things up best at his Sept 10 news conference:

"Bending the cost curve on health care is hard to do."

No kidding. While that may either be a) a new administration insight or b) an excuse for not finding any weapons of mass cost containment, the DMCB worries that the recognition of just how hard it is was known prior to March 23. If that's the case, why wasn't that shared during its pre-passage war planning? Was it because they had already decided to pass a bill no matter what and at any price, using any means necessary? Has this become the standard approach of the political class of both parties?

Star Wars' Master Yoda Advises President Obama on Health Care Reform: Communicating, The Role of Experts & Top 100 Lists

The virtual Disease Management Care Blog has learned to navigate the duality that bridges particles and waves, channel dark matter and access the cosmic video game that governs humankind's Sim-like existence. It is in that polymension that the DMCB discovered that President Obama and Yoda have communicated.

This exchange was plucked from a bosonic mimetic string and is shared as a DMCB exclusive for your reading pleasure.....

Mr. Obama: Master, my poll numbers on health care reform are in the crapper. I've blamed the insurers and the conservatives again to try to generate better support, but it's not working. What is your advice?

Master Yoda: As wily Cato described has, using the Force is the product but the pitch not. To recognize the flaws in the Affordable Care Act and seek to correct them, you need, young knight!

Mr. Obama: But, Master, I don't have time for that. Midterm elections are a less than a parsec away. What do you think about giving some more speeches in a tour of the heartland, like the Great Communicator?

Master Yoda: The difference learn between communicating and oratory, you must. Yes, hmmm.

Mr. Obama: But President Reagan....

Master Yoda: Silence young one! Speak the name of the greatest Jedi Knight that ever lived, do not. A rare Gladwell Academy Outlier he became.... spent decades writing and giving speeches training his superb communication talent. Many thousand hours at Earth poultry dinner gatherings helped him his skills hone. Just a rookie novice you are. Yeesssssss.

Mr. Obama: Hey, let me remind you that you're just a mix of green latex and computer animation, while I'm President of the United States and Number 1 on this list of the 100 most powerful people in health care.

Master Yoda: Silly, are you. Other insider insurance execs, ivory tower policymakers, politicians and bureaucrats in a closed information loop on that list, see you, hmmm? A way to retread old news and generate web traffic, "Top 100" lists are. Little green droppings on them, I leave. Blah!

Mr. Obama: Hey, now you're sounding like the party of no that got us in this mess in the first place!

Master Yoda: Work on me, your tired rhetoric will not [whack with weenie cane here]. Advise to jettison your mistaken notions into deep space, you I do. Best find advisors who on that Top 100 list are not.

Mr. Obama: But my administration's policy making is being formulated by the brightest folks this country has to offer!

Master Yoda: Of great danger, over-reliance on experts is. Commune exclusively on Planet C-SPAN do they, pretending that Federal healthcare Jabba the Hut is not. Lack day-to-day understanding of patient care, they do! Publish in journals that are read by few. Instead, hologram message view you must from New York Times about the future of publishing, using the wisdom of crowds this is.

Mr. Obama: You are truly wise, Master Yoda. My last question is how I can get the First Lady to don Princess Leia garb.

Master Yoda: Ahhh, brazen young pilgrim. Eternally wise DMCB also frequently that asks. Thinks its spouse looks better than a new star drive when sport she twin buns of hair, says it. When the answer to that find, a true Force become, shall you!

"Repeal Obamacare" is Irresponsible. There are Better Ways to Address the Shortcomings of the Affordable Care Act

The Disease Management Care Blog has decided on two things for the 78 days between now and the midterm elections:

1. It's not going to drink bottled water. The claim of better taste is questionable and the waste of energy and plastic is atrocious. If the DMCB was worried about the safety of its public water supply (and it's not - water is safer than ever), it would petition local government to do something. It figures that if it's going to be environmentally responsible, the DMCB would be better off recycling these kinds of containers.

2. It's not going to vote for any candidate spouting silly rhetoric over the "repeal of Obamacare." The odds of prevailing against a Presidential veto are likewise questionable and the waste of political energy would also be atrocious. The only merit to a repeal debate is that every minute spent on that would be a minute less spent on crafting more ill-considered legislation - from both sides of the aisle. Our Republic deserves better.

What could responsible candidates offer as serious remedies to flaws in the Affordable Care Act that are within political reach? If they must, the politically naive DMCB sees two categories:

1. Blocking: In its role of keeper of the purse strings, Congress can withhold or alter the funding of the more questionable parts of the bill. One option is to underfund that part of the budget of the Internal Revenue Service (IRS) that will need to be expanded to support the controversial mandate. Another is to squeeze the funding of the Center for Medicare and Medicaid Innovation.

2. Tackling: During and after the health debate, the DMCB recalls hearing a lot of good ideas on how to keep the ACA but make it better. Examples include allowing for a more rational interpretation of the medical loss ratio, rethinking the not-so-obvious merits of electronic records, coming up with meaningful tort reform and preserving what's good about Medicare Advantage with smarter funding.

The DMCB looks forward to hearing more about the "blocking" and "tackling" options from the conservative candidates. Both issues have downsides. Both will test the mettle of the Republican opposition. Both will tempt the Republicans to take either a) the easy, visually appealing and scientifically bankrupt "bottled water" approach to health care reform or b) the sound common-sense approach of relying on what works.

We'll see.

More On the Risk of Growing Physician Non-Participation in Medicare

Wow. The two Disease Management Care Blog posts on the 1) non-death of small physician owned practices and 2) the risk of a physician boycott of Medicare caused a flurry web traffic, comments and emails. Thanks to all for their feedback.

The most interesting of all is a reply from the author of the HealthBeat blog, Ms. Mahar. It's in the Comment reply section of the original post. Since it makes so many interesting points, the DMCB decided to give it the visibility it deserves by reposting it here. (The DMCB answers are italicized.)

++++++++++

Thank you for linking to HealthBeat, but I didn't write the post suggesting that fears of doctors boycotting Medicare are overblowm.

The post was written by my associate, Naomi Freundlich (She came up with the idea, wrote it without any help from me.)

I doubt Naomi would characterize herself as a "liberal pundit." Formerly the Science Editor at Business Week, she's an excellent journalist and her posts tend to be fact-based. (I also wouldn't call myself a pundit--to me this suggests someone on TV who comes up with clever one-liners. But I am happy to be labeled liberal/progressive.)

(The DMCB regrets the error and not giving Ms. Freundlich her due. The good news is that the word "pundit," is from the Hindu word "pandit," meaning "learned" and "scholar." In addition, thanks for the reminder that all of us in the public square have a responsibility to minimize using single word labels to characterize complicated opposing points of view.)

Finally, I do agree with Naomi. The facts suggests that docs aren't moving away from Medicare in large numbers.

For what it's worth, I have a relative in NYC on Medicare who has no trouble specialists, and not too much trouble finding a new primary care doc--though everyone is having a hard time finding primary care docs. This is not unique to Medicare patients.

And the numbers support Naomi's argument.

Of course, it could be "different this time" but those three words usually turn out to be wrong. And docs have been threatening to stop taking Medicare patients for years.

(Use of the word "could" means that we agree that there is a likelihood that there could be a physician exodus. Since it could happen, the point of the DMCB post is that Congress has a duty to the taxpayers and to Medicare's beneficiaries to define the risk, understand its potential magnitude, minimize it and measure the progress in minimizing it. That duty transcends the size of the risk since, even if it is quite small, the implications are huge. It's simply good fiduciary business practice to carefully assess it.

The DMCB will leave it to readers to ponder the track record of similar "no problem" anecdotes combined with expert opinion when it came to our government's ability to assess other low risk situations, like say, deep water oil drilling, government-backed mortgage guarantees or invading countries in the Middle East.)

More importantly, only quite young, very successful docs would actually be able to keep a practice going without Medicare patients. (Younger patients tend to prefer younger docs).

More than 43 million Americans are on Medicare. Medicare patients account for over 22 percent of U.S. health expenditures .

And of course older people go to more specialists. The average age for a cancer diagnosis is 67, which means it would be particularly hard for oncologists, as well as cardiologist, orthopedic surgeon (who do all of those knee and hip implants) urologists or many other specialists to make it with Medicare customers.

Middle-aged people will come in for testing and check-ups, but seniors are much more likely to need the big-ticket invasive procedures that keep a practice afloat.

(The DMCB agrees that Medicare's monopsony will make physicians of all ages think twice before thumbing their nose at Uncle Sam. Yet, some replies to Ms. Freundlich's post as well as the ACP Advocate Blog suggest there are other forces at work including margin (if it's not there, economics 101 says shortages are inevitable) and a lesson from the Three Temptations: health care professionals live by more than government fees alone.)

Could docs begin turning down new Medicare patients? Sure--as long as the Medicare patients they have never die . .

Finally, it would be odd if, after all of these years, primary care docs dropped Medicare, just when they are about to get significantly better payment (up 10%) plus many opportunities for bonuses.

And by and large physicians are very enthusiastic about Berwick heading up Medicare.

All in all, a strange time for a cascade of physicians leaving Medicare.

(The DMCB agrees these are truly interesting times in health care policy which makes for great bloggery. It thinks we both agree on the need to assess the risk and to not let the risk upend the the Medicare program just when other parts of health reform beginning to kick in.

While the DMCB shares your admiration for Dr. Berwick, it's less sanguine about the cards he's been dealt: a recess appointment with the need to renew in 2011, a resurgent Republican Congress this fall and the remote possibility that anybody can tame Medicare's unwieldy bureaucracy. Will he make a tangible difference in the real world of patient care? We'll see.

As for the 10% increase, the DMCB recalls that only happened when long-made predictions of the collapse of primary care began to come true. Whether the better payment is enough to save primary care remains to be seen, which is the point. If Congress had credibly assessed the risk years ago and managed provider income expectations, it wouldn't have come up arguably a dollar late and a day short. They messed it up then and, by relying on MedPAC's shoddy methodology (focus groups? gimme a break), they run the risk of repeating the mistake with a potential for far greater problems for the beneficiaries and the President's still vulnerable agenda.)

The Contamination of Policymaking by Presidential Marketing.

It seems healthcare is no more able to resist the fizzy allure of marketing than any other business enterprise. In a showy glut of tag lines, campaigns, messaging, logos, spin, jargon and positioning, hospitals are re-labeling themselves as "systems," clinics are glomming onto the term "home" and insurers are all about prevention.

In the course of its career, the DMCB has stumbled upon the phenomenon many times. For example, one of its programs was prohibited from naming itself using the word "Center." It seems the term was reserved for special use by our marketing mavens (we joked we ran afoul of the "Center for Center Nomenclature"). Another time, an allergist telephoned and announced that he had developed a "comprehensive disease management program" for refractory seasonal rhinitis.

Not a problem says the DMCB. Branding is inevitable. Who can blame hospitals, clinics, disease management programs and allergists for wanting the best possible position in their marketplaces. A few less billboards on the road to downtown Philadelphia would be nice, but heck, it could be worse, eh?

Where the DMCB draws the line, however, is when marketing or branding masquerade as either science or public policy.

For a science example, it's beginning to look as if robotic prostate surgery may offer some distinct advantages, but that's not how its being portrayed by its hawkers. The DMCB recalls a past business meeting involving a gutsy urologist-colleague who dismissed a marketing executive's efforts to portray the robotic surgery program as a special advance in the field. That doc knew the difference between science and marketing. It's too bad others haven't taken that lead.

Unfortunately, it now appears that formulating public healthcare policy isn't immune either. Check out President Obama's apparent effort, in the face of stubborn voter skepticism, to revitalize health reform with the tag line "Patient's Bill of Rights." The term was first invented in 2001, but its namesake failed to pass muster in Congress. While the policy failed, the term has lived on, not only as a lingering symbol of evil health insurer lobbying, but how medical care should be universally guaranteed - just like access to U.S. built econobox cars, low interest, income-doesn't-matter mortgages and regular rounds of golf.

The DMCB can't recall that the insurance regulating, bureaucracy expanding and demo/pilot-laden Affordable Care Act was passed by Congress under a banner of a "Bill of Rights." As far as it can tell, the term was resurrected long after the fact by HHS Secretary Sebelius on May 27.

And the campaign doesn't stop there. Presidential Advisor and health care expert/spokesperson David Axelrod is quoted using the word "message" in this New York Times article. While the purported audience is the insurance industry, let's face it: this is a former news reporter whose "sell" motivations are as transparent as many a hospital billboard.

There are a lot of Health care issues requiring a lot of policy leadership (solving the SGR, calming restless States and clarifying the intent of the MLR restrictions). Instead, the public square is being littered with worn out canards about pre-existing conditions, lifetime benefit caps and not coming-between-you-and-your-doctor, iced with unusual and heartbreaking anecdotes.

Scroll down to the bottom of this White House blog posting and check out the pic. Keeping a politely attentive, impassive and expressionless face is fast becominjg part of the insurance executive skill set. While the President is doing all the talking, the DMCB is confident that the insurers are hearing but aren't listening. They know it's not hammering out policy details. It's all about the photo op.

There's the Health Reform Law and Then There Are the Regulations

The nonviolent Disease Management Care Blog knows that there is more to a punch than just a punch. The distinction also helps it understand that there is more to health reform laws than just the laws themselves.

The DMCB explains.

It'd be easy to think that curling up the fingers and then making forceful contact meets the definition a punch. Popular media makes it look easy, but not so. Two techniques that can make a big difference in its execution include twisting (pronating) the forearm in the course of extension (if you watch closely, you'll see it happen just prior to the board breaking at the 37 sec mark) and pulling the punch back as fast as possible after contact (for example). These and other modifications can, when there's no other choice, make the difference between angering and disabling your opponent.

It's just as easy to think that passing a law meets the full definition of health reform. Regular DMCB readers know otherwise. For example, the Genetic Information Nondiscrimination Act (GINA) sure looked like a good idea until the supporting regulations that came out. All of a sudden, it looked like insurer sponsored health risk assessments could end up violating federal law. In other words, the fine tuning of the simple 'punch' of GINA with regulatory 'technique' made a huge difference.

And so it goes now with the Affordable Care Act (ACA). According to this article in the New York Times, the law's seemingly reasonable provisions on 'grandfathering' existing health insurance plans will be clarified through additional regulatory language to mean that even minor changes to the benefit will result in its loss of protected status. Paradoxically and despite Presidential assurances to the contrary, this could accelerate a flight from employer sponsored insurance. Looks like ACA packed a bigger punch than anticipated. The DMCB expects more of the same as more ACA regulatory language issues forth from the legions of federal lawyers, bureaucrats and policymakers that are now hard a work fine tuning the other disabling features of health reform.

Don't think the parallel with martial arts is too strained either. While the DMCB prefers martial arts hyungs (here's a classic for example), every insurer, physician group, device manufacturer, trade association, consumer group, employer-purchaser coalition, State and countless other lobbying groups will close in for hand-to-hand combat in the ditches and weeds of every exclusion/inclusion, every "and" vs. "or, " every comma, and every overlawyered extension of Federal power that goes along with them.

The only important difference between the fine tuning of a marshal arts technique and creating the health reform regulations is that the former is designed to bring an end to the confrontation, while the latter will be a fight that keeps on giving for years to come.

Image from Wikipeida

Rehashed Arguments From the White House - Again

With the Disease Management Care Blog's advancing age, it's come to appreciate the ready access to convenience. If it's too far, it can take a taxi. If it's too warm, a dial thingy on the wall can make it cooler. If it's not completely sated, it can order basil flavored ice cream with its cappuccino. Problem solved.

Too bad the same isn't true for the problems facing U.S. Presidents. Stopping the Gulf oil leak remains stubbornly out of reach, while twin toxic "plumes" of red ink and voter discontent are lurking below the waves of health reform. Since expedient solutions remain out of reach, the White House solution seems to be to repeatedly tell anyone who will listen that its not too far, it's not too warm, there's enough food, they're in charge of BP and that the Affordable Care Act (ACA) will lead to savings.

Case in point is a recent Perspectives piece on the merits of health reform authored by none other than the Office of Management and Budget's Peter Orszag and Ezekiel Emanuel.

This is a litany of the usual Administration arguments of how the ACA is the legislative breakthrough that will a) reduce fraud and abuse (with a return on investment of 1:17), b) lead to administrative simplification, forcing commercial insurers to adhere to a common set of standards for claims submissions c) promote faster generic biologic drug approvals (so that they are merely very expensive, not shockingly expensive), d) reduce imaging costs by unilaterally cutting the fee schedule for radiology studies, e) reduce Medicare Advantage payments f) impose an excise tax on "Cadillac" plans and g) promote the three "I's" of information (a.k.a., electronic health records and effectiveness research), infrastructure (medical homes, accountable care organizations and post-discharge care to avoid readmissions) and incentives" (payment rates that act as both carrots and sticks to reduce avoidable complications and along with various pilots programs).

In addition to this, Drs. Orzag and Emanuel point out that an Innovation Center will develop, test and evaluate new policies and programs and that an "Independent Payment Advisory Board" will develop and propose policies for reducing health care cost inflation.

Readers may find that this article is a handy reference, suitable for building a PowerPoint slide or quoting over shared morning lattes. However, if the White House feels that publishing this in the New England Journal is going to reduce citizen-physician skepticism, they need to know a) there is nothing new here; these are the same recycled arguments and b) much of the Journal's readership is probably already predisposed to accepting the White House's nostrums. Just saying it over and over in a friendly venue isn't likely to advance the political discourse.

The DMCB is looking for better arguments that genuine health reform isn't too far away, that the cost trend can be cooled and that it can have it's ice cream and eat it too.

Why Managed Care "Gets It" When It Comes To the Value of Nurse-Led Care Management

In yesterday’s post, the Disease Management Care Blog described how risk-bearing health care provider groups will be sorely tempted to under-invest in care management.

Shocking you say? Well, in general, hospitals and physician offices have always undervalued nurse-based services. Just ask any nurse. In addition, look at how many States are considering laws mandating hospital nurse-patient ratios. Think when’s the last time you saw a registered nurse instead of a minimum wage medical assistant in your physician’s office. And we seriously think that all hospitals and physician offices will gladly hire sufficient numbers of nurses to adequately support their Accountable Care Organizations’ and Patient Centered Medical Homes’ risk contracts? Believe that whopper and the DMCB has a handheld MRI scanner it wants to sell you.

In the meantime, walk into any managed care insurer’s building and there's a good chance that at least one of the floors above you will house a cube farm filled with nurses. They're the pleasant-voiced and no-nonsense professionals that are performing utilization, disease, pharmacy and case management, helping with underwriting, determining 1st level medical necessity, precertifying, concurrently reviewing, handling appeals and grievances, coordinating benefits, pursuing fraud and occasionally (and only when they deserve it) haranguing Medical Directors. Yes, that’s a lot of nurses and, by the way, that’s one of the reasons why insurers can have high administrative costs and lower medical loss ratios.

The DMCB isn’t necessarily defending the logic carrying the salary costs of all those nurses and driving up health plans’ administrative costs. However, it is pointing out that managed care organizations have always had a lot of nurses on their payroll. They get it. They understand that that's the price of being in the risk-bearing business.

This has important implications:

1. Health insurers have a long history of believing in nurses and are less likely to skimp on them when it comes to a growing need for chronic illness population-based care management.

2. Insurers have outsourced many of those nurse-based functions when it made economic sense to do so: that’s what helped give rise to the disease management industry.

3. Assuming this is a necessary cost in the fight against chronic illness, it makes little difference if it’s 1) a health plan administrative cost, 2) assumed by disease management companies or 3) transferred/outsourced to the providers (which will increase the medical loss ratio). There are no savings to be had here. It’s all bookkeeping.

4. There is a significant risk that if the portion of the premium (otherwise known as cash) necessary to support nurse-based care management is simply handed over to providers, they will largely, based on their past behaviors, screw it up.

There is a way out of this. That will be tackled in the next post.

An Under-Recognized Ingredient in the Lingering Battle Over Health Reform, the SGR and Physician Buy-In: Professional Autonomy

Physicians have plenty of reasons to be vexed and lately this is coming up. Commercial insurers and Medicare have always been squeezing payment rates. Now the Obama Administration is failing to hold up its unofficial pledge to fix the repugnant Sustainable Growth Rate formula in exchange for organized physician support for its health reform legislation. Yet, something deeper is going on here and the DMCB couldn't quite put it's finger on it....

Until it read this and viewed this.

First, the "read" of the Archives of Internal Medicine article by Randall Stafford and colleagues, titled "Impact of the ALLHAT/JNC7 Dissemination Project on Thiazide-Type Diuretic Use." Feeling pretty good about the results from a huge international study called "ALLHAT" that showed simple cheap water pills are a best option for the treatment of high blood pressure,the investigators concocted a follow-on study. They figured they'd go out to more than 18,000 physicians' offices and academically teach, persuade, market, convince and ultimately "detail" docs to use water pills among their patients with high blood pressure.

Compared to nationwide trends, the investigators found that the physician outreach was associated with a discernible increase in the prescription of thiazide-type water pills. Unfortunately, the effect was modest, with a bump in prescribing from a baseline of 38% to 47% among persons with high blood pressure. They even tracked the intensity of the teaching as a function of how many physicians per county received the intervention. Counties with relatively low numbers of physicians saw no meaningful increase in thiazide prescribing.

While the authors generously noted that their physician "detailing" had an impact, they also recognized it was blunted. An accompanying editorial suggests that the detailing was watered down (groups of physicians were approached in lieu of one-on-one) and that the data included patients who were on stable doses of medicine, making their physicians less inclined to change things if they were doing well. The DMCB adds that the detailing used by the ALLHAT investigators was "weak" compared to the traditional pharma detailing that is typically linked to considerable financial incentives.

But the DMCB thinks something else was going on.

Which makes this video worth viewing. While authored by a surgeon, the diatribe starting at about 9:40 is does a good job of describing physicians' overall eroding sense of autonomy. It's not a small issue. Loss of professional autonomy correlates highly with overall primary care physician career satisfaction. It can get in the way of pay for performance programs and could impede the successful creation of the Administration's cherished "Accountable Care Organizations" (more on that here). The DMCB also thinks this also may have gotten in the way of the ALLHAT detailing described above.

And it is probably an ingredient among the percent of physicians opposed to Obamacare.

Years ago, the DMCB was the manager of a work force of health professionals. It quickly learned that disgruntlement over "compensation" frequently belied a deeper underlying issue. While those issues often included co-worker conflicts or pressure over job duties, it frequently boiled down to disagreements over what the employer wanted and what the employee was willing to do. That spoke to autonomy, and addressing it often helped smooth things over.

Accordingly, the DMCB worries that organized medical groups like the AMA and the Obama Administration are failing to address a far more important issue than how many shekels docs get from Medicare. That's bad news, because even if the SGR gets fixed somehow, a sizable contingent of docs - who live by more than bread alone - will remain unhappy.

Which brings up a important issue for the population-based care/disease management industry. Learn how to deliver the care interventions to the patients you serve and simultaneously preserve what's left of your physicians' sense of autonomy, and you'll win.

Very difficult? Yes. Extremely important? Very.

The Future of Digital Medicine: Smartphones Will Replace the EHR As the Workhorse Informatics Device In Clinical Care Settings

As a former New Yorker, the Disease Management Care Blog has always had an abiding respect for the Big Apple's taxi drivers. That increased considerably after it left its wallet in a Manhattan cab and it turned up in Virginia a year later - in the possession of an individual allegedly involved in organized crime. This and other evidence of the cabbies' shrewd business acumen makes the DMCB wonder why Hizzoner required that they start using hybrid cars. If they're such a gas-conserving and money saving no-brainers, the DMCB figures the cabbies would have figured out a way to get them on the streets all by themselves.

Which brings the DMCB to smartphones and healthcare. How can this be, you ask? Read on.

Thanks to the Covering Health blog and their link to this report from the California HealthCare Foundation (CHCF), the DMCB not only got to delight in the new term 'techfluentials,' it learned that these little electronic mini-slabs have remained remarkably recession proof. They're now in use by 42% of consumers. Even more impressive, however, is their uptake among supposedly tech-wary physicians. Fully two thirds of providers currently possess smartphones and that's projected to exceed 80% by 2012.

There are over 5000 iPhone health-related apps and about a third have been designed for physicians and other providers. They include medical and drug reference libraries, dosage calculators, clinical alerts, decision support tools, viewers for lab and radiology reports (including the x-rays themselves), communication portals designed for patients as well as physicians, patient status monitors (for example, in the emergency room and labor suite), continuing medical education (CME) tools and the means to access a patient's personal health record (PHR)

In the meantime, the Feds continue to promote a stubbornly expensive and unwieldy electronic health record (EHR). With their usual complex web of financial and regulatory sticks and carrots, Washington's bureaucrats remain fixated on the big boxy multifunctional and proprietary personal computer-based systems with screens and keyboards populating every clinic room and hallway.

In contrast to that orthodoxy, the DMCB agrees with it's colleague Vince Kuraitis. He predicts the EHR will evolve into a PC-centric platform of distributed cross-functional and plug-and play devices. Yet, thanks to the California Foundation report, the DMCB wonders if things may become even more complicated than that. It could be that the handheld smartphone, not the screen and keyboard, turns out to be the central hub of digital care. In other words, the iPhone won't be slaved to PC-based EHR systems, it'll be vice versa. What's more, there won't necessarily be a desktop or a hallway. In fact, the clinic's boundaries may turn out to be even more fluid than we ever anticipated.

And it's all happening without Federal intervention.

Which brings the DMCB back to the New York City cabbies. Despite the best intentions of the Mayor, there have been problems, suits and delays. The DMCB also recalls reading that the involvement of NYC government in the first place may have ironically led some cab companies, pending better understanding the law, to delay buying any hybrids.

And, despite similarly good intentions extending back through several administrations, Federal meddling in the promotion of EHRs have also caused many physicians to delay the purchase of an EHR. Unlike the NYC cabbies, however, the docs have had another smaller, nimble, cheaper and remarkably functional option. It's the smartphone, which may have been partially spurred by the continuing travails of the Fed's love affair with the EHR. It seems that while providers have been waiting for Dr. Blumenthal et al to clarify just how good the EHR can be, physicians have apparently turned to the next best thing.

In fact, based on CHCF's report, it may be turning out to be the better thing.

('’)

Medical Homes & CMS' Chief Actuary: The Mirrored Gazing Globe of Health Reform?

The Disease Management Care Blog believes a gazing ball would be a handsome addition to our yard. In its opinion, a mirrored globe would be a festive compliment to the property and introduce a distinct classiness that is absent around our neighborhood. Yet, the DMCB spouse's opaque logic has inexplicably vetoed the idea. What gives?

And the same cold water could end up being splashed on the equally good ideas behind the various pilots and demos in the recently passed Patient Protection and Affordable Care Act (APPAC). In Section 3021 (p. 271), the yet to be formed Center for Medicare and Medicad Innovation is charged with testing various models of care including medical homes. The HHS Secretary may, 'through rulemaking,' expand the models if:

"...the Chief Actuary of the Centers for Medicare & Medicaid Services certifies that such expansion would reduce program spending under applicable titles."

Egads. Getting the CMS Chief Actuary to certify there is reduced program spending may be a tough hurdle. According to this news report, this is the same equally hardnosed Chief Actuary that recently calculated that the newly passed health reform bill will lead to "increased costs associated with the expansions of health insurance coverage" and that "the longer-term viability of the Medicare ... reductions is doubtful."

The policy response from the White House and its Favored Chosen, of course, is spin. Given the Chief Actuary's uncanny similarity to the DMCB spouse, however, the DMCB isn't sure that spin will meet "reduce program spending" muster.

In the meantime, the DMCB is moving on. Inspired by the release of the movie Avatar on DVD, its latest pilot ornament idea is to festoon our shrubbery with solar powered glo-in-the dark Pandora-like butterflies. The DMCB looks forward to the DMCB spouse's analysis and the expansion of this meritorious landscaping model.

How Not To Answer The Question

Now that the spotlight has moved onto other issues of great national import like financial services reform, legalizing weed and Kate's status on Dancing With The Stars, the real work of implementing the health reform bill has begun. Based on the interchange below, one way to accomplish this is for a HHS Secretary is to respond to questions with dissembling, vague non-answers. Let the games begin.



Hat Tip: HealthHombre

The Goldilocks Approach to Insurance Design with Out Of Pocket Expenses

In a prior post, the Disease Management Care Blog touched on the complex economic trade-offs that need to be considered in insurance benefit designs. It likened the topic to the double edged sword of possible appendicitis, where maintaining too low a threshold for going to surgery means some people will have an unnecessary operation, while too high a threshold and waiting will lead to complicated rupture. Good surgeons and hospitals know the best is a middle-of-the-road "Goldilocks" approach that manages and minimizes both extremes.

And so it is with the design of health insurance and the degree of out of pocket expenses. Articles like this and this would have unsophisticated readers believe that the best approach is a "low threshold" approach to health insurance that pays for every health care need, both great and small. On the other hand, the DMCB has encounted C-Suite executives who embrace the "high threshold" style of insurance that pays for precisely defined covered services using a simplified and rigid one-size-fits-all benefit - and not a cent more. In between these two extremes is a curious mix of politics and insurer tone deafness has resulted in national health care policy tilted toward paying for every need.

Critics of the health insurance reform passed by Congress say that that level of generosity cannot continue. Supporters respond by pointing to a host of study pilots, commissions, tax policies and comparative effectiveness research (CER) that will point the way to a more enlighted approach that still manage to pay for every health need. The DMCB is not optimistic that that will be enough. Our expanding Federal bureaucracy is unlikely to execute well on the pilots, get any commission's recommendations past Congress or credibly mainstream any CER findings.

There is good news, however:

1) Disease management organizations (DMOs have a wealth of experience in not only helping patients choose among competing care options but, in many instances, also understanding how to navigate through their insurance benefit. The "Goldilocks" trick is to present the risks, benefits and alternatives to getting a mammogram or going to the emergency room and help the patient make the right decision. Why else would Congress be so interested in Shared Decision Making (SDM)?

2) Value based insurance designs (VBID) are also making good headway. While it there are significant administrative challenges, toggling out of pocket patient expenses according to the value of the medical service - as defined by market demand or government fiat - is another Goldilocks approach. Why else would the Feds be so interested in Value Based Purchasing (VBP)?

The DMCB predicts that when the current Administration's approach to the pilots and comparative effectiveness research proves unable to tame health inflation, there will be even more renewed interest in DMOs, SDM and VBIDs.