Health for life

The regulators go to work....

Fed up by pharmceutical, biotech and medical device manufacturers vulgar use of "honoraria," "consulting fees" cozy "investment" relationships and other financial sweeteners to buy physician loyalty, Congress included the "Physician Payment Sunshine Act" as part of the Affordable Care Act.

The initial proposed set of regulations appeared in the Federal Register on December 19, 2011.  Comments were invited and CMS reponse i.e., the"Final Rule," has just been released.  It can be found here.  This sample of the mainsteam news media reporting indicates generally positive reviews.

Case closed? 

Not quite.  Thats why you read the Disease Management Care Blog.

As the DMCB understands it, the idea is to notify patients and the public about potential physician conflicts of interest, especially if they are recommending one treatment versus another. The financial relationship data from August through December of this year has to be reported to CMS by March 31, 2014. CMS will, in turn, post the information on the web in September of 2014.

While the DMCB agrees with the intent, it also took the time to scroll through the Final Rule and found some interesting information on page 226. 

CMS estimates the manufacturers will each need to hire a compliance officer and bookkeeping personnel.  Based on prevailing hourly salary rates (page 228) for approximately 1,150 companies, the total cost in year 1 of the Sunshine Program will be $193,037,104.  After some systems automation kicks in and start-up costs are eliminated, the cost will decrease to $144,777,828 "annually thereafter" (p. 229).  There will also be "infrastructure costs" to the tune of just over $12 million in year one and just over $1 million for each subsequent year.

The DMCB thinks thats worthy of some sticker shock, especially when were all agreeing that the health care system is already too expensive. Ultimately, it remains to be seen if patients will use the internet as advocate-consumers and blunt their physicians conflicts of interest.  Based on data like these (the impact on consumer behavior) and these (on hospitals) we dont know if patients will vote with their feet or if physicians bad behavior will lessen. 

It could work, but once again, finding out is going to cost American health care consumers hundreds of millions of dollars.

Stay tuned!

The Disease Management Care Blog spent the day navigating the halls of Congress.  The DMCB discerned a perence for black-toned suits and dresses among many of the staffers, making it think in was either in a "Men In Black" movie or that the depths of D.C.s doldrums worse than even it imagined.

As further evidence of the dysfunction, the DMCB was told that the "clean-up" bills that typically follow every major piece of legislation are unlikely to get anywhere anytime soon.  The inevitable additions, deletions and clarifications that are usually necessary to align any newly minted U.S. law with its original legislative intent are typically tackled over the following years, but not for the Affordable Care Act.  Cleaning up the ACA is being stymied by the Republicans, whose only solution to any problem in the law is to repeal it, as well as the Democrats, who are reluctant to introduce any bill that could open a Pandoras Box of crippling orms.  That no-go approach has also spilled onto other unrelated health care legislation.

And speaking of no-go, it also took the DMCB twice as long to get out of downtown DC thanks to traffic that was stuck somewhere between paralyzed and gridlock. 

Funeral garb. Legislative brainlock.  Automotive immobility. Merely a coincidence?  You be the judge.

Image from Wikipedia

While the Disease Management Care Blog has had more than its share of doubts about the Affordable Care Act, it ultimately agreed that the "individual health insurance mandate" may be a necessary - if perilously unconstitutional - requirement.  Conventional wisdom says that unless everyone buys into the system, healthy persons will forgo the expense of insurance. That means only the sick will pay for insurance that ultimately cannot cover the collective cost of their illness. That will lead to a rapidly escalating prices, otherwise known as a "death spiral."

And thats why, now that the mandate has been taken up by the Supreme Court, Obamacares supporters fear that striking the mandate could unravel everything.

Which is why the DMCB found this "dont worry, be happy" analysis by Lewin Groups John Sheils and Randall Haught very interesting. They say Obamacare can still succeed without the mandate.

Based on complicated economic modeling using a mix of inputs, methods and assumptions, they found, in contrast to the widely quoted Congressional Budget Offices mix of inputs, methods and assumptions, that

1) many persons without health insurance would take advantage of the ACAs generous premium subsidies, and

2) an open enrollment window limited to one month a year would blunt the impact of persons "gaming" health insurance by only enrolling when theyre sick. 

While insurance would not be universal, the Lewin authors estimate that between 21 and 24 million Americans who were previously uninsured would become insured.  While premiums could increase by 12.6%, the premium subsidies would help put the word "affordable" in the ACA. 

To further buttress their argument, they point out that in 1993 New York State required its health insurers to accept all applicants regardless of health status.  Despite many dire predictions, there was no spiral and no documented loss of coverage.

What can the DMCB conclude after reading this?  Its easy: no one really knows what is going to happen in 2014 with or without the mandate. 

It looks like there is only way to find out.

In George Romeros campy movie Land of the Dead, the zombies undergo a very worrisome change. While they used to just pathetically stumble around looking for brains to eat, they organize and make menacing plans. The living survivors, holed up inside the fence at the former city of Pittsburgh, have a fight on their hands.

Maybe its the Halloween season, but the recent slew of late night walking dead horror has inspired the Disease Management Care Blog.  Its entered sweeps for a cameo appearance in AMCs cool zombie series.  Its assessed the relative merits of the undead staggering vs. running, being loners vs. in packs and being wrathful vs. both hungry and wrathful.  The DMCB has also discovered one key commonality of this fearsome species: while maximum head trauma undoes the undead, more of them just keep coming and coming. That DMCB thinks that, despite the spouses advice to the contrary, is an important lesson.

The political dimensions of the Affordable Care Act are becoming more zombie-like with each passing week.  According to the Kaiser Health Foundation, public support for health orm has not only remained stubbornly underwhelming, it has just taken a recent downturn.  While its too early to tell if this is bad news or statistical variation, theres no denying President and his allies are being forced to fight one-on-one with undead employer pessimism, oppositional Republicans and the CLASS Acts failures, while more ever more issues slowly stumble closer.  And who can blame the living Dems for their post-apocalyptic anxiety? It was only yesterday that the ACA was a signature achievement and the world was a wonderful place of Congressional majorities, fawning media support and supreme self-confidence.

While supporters of health orm may take comfort in the notion that the zombies have been unorganized and are attacking the margins, the DMCB worries that the Kaiser poll slide may portend a worrisome Romero-esque development: unable to grasp the details if the Affordable Care Act, Americans support for it was always based less on the underlying policy and more on the President himself.  A slip in support, theore, has less to do with the laws merits and more with a shift in what people fundamentally think about Mr. Obama.

With just over a year until the elections, thats a scary thought for this Halloween. It seems the folks inside the White House fence have a fight on their hands.

In a hyperconnected fit of participatory democracy, the White Houses Deputy Chief of Staff Nancy-Ann DeParle hosted a Twitter health orm Q and A under the hashtag "WHChat." "Tweeps" poised questions using 140 characters or less and Nancy responded in 140 characters or less. The sanitized White house version extolling the virtues and constitutionality of the Affordable Care Act (ACA) is here, but if you look at what actually happened in Twitter, most questions ranged from rhetorical to outright obnoxious. That being said, there were some deliciously irreverent flamers like:

#WHChat Give me a motorcycle helmet! I could be hospitalized if I dont get one for free

#WHChat My Best Buy extended cell phone warranty wont cover my wifes birth control. Why does Best Buy hate women

#WHChat Can you look at this mole and let me know what you think? Oh, not those kind of questions

#WHChat whats the official twitter hash tag for his "take over" executive order?

If all this Twittering has prompted a renewed interest in the upcoming SCOTUS arguments next week on the constitutionality of the ACA, you may want to check out this article examining the merits and the "severability" of the individual mandate. If the mandate is separated from the Court, its possible that the ACA will be ruled constitutional, but the mandate itself will be struck down.

Drs. Sessions and Detsky note that the Court has historically tilted in favor of preserving as much legislation as possible. That makes it more likely that it will consider the Affordable Care Act separately from its mandate provisions.

If thats the case, the Administration will have a difficult time arguing that the ACA will collapse without it. If the mandate is struck down, insurers could still impose open enrollment windows or waiting periods (which would lessen the phenomenon of persons only buying insurance when they discover they are ill). In addition, the combinations of subsidies, employer penalties, Medicaid expansion and the exchanges make it much easier for consumers to buy insurance as intended.  When these are combined with weak penalties (signalling a belief that the law didnt really need a "mandate") and the pretzel legal logic of "partial severability," it would appear that the Supremes threshold to "severing" the mandate and declaring it unconstitutional is quite low.

The DMCB shared a delicious California red with a smart lawyer last week and heard an interesting prediction: given the laws historical importance, the Justices are going to seek a strong numerical majority one way or another.  One way to do that would be to support the ACA and duck the issue of the mandate by forcing Congress to rewrite those provisions that are legally problematic. That way out for both sides may be another reason to doubt the mandates constitutional prognosis.

Last but not least, theres always the prediction markets and public opinion. According to intrade, the individual mandates odds of not surviving are 45%.  In the meantime, 51% of Americans believe the mandate is unconstitutional, while 53% predict it will be struck down.

Enshrining a term only an actuary could love, the Affordable Care Act sets health insurance coverage on the basis of "actuarial value" (AV).  A good summary can be found in this Consumers Union Health Policy Brief.  As the Disease Management Care Blog understands it, AV is the percent of typical medical expenses that a health insurance policy will cover for a typical population.  In other words, some individuals will have no out of pocket expenses (deductibles, coinsurance and limits) while other individuals will have end up paying for most of their services.  When those expenses are rolled up over thousands of persons and compared to total health care costs, the percent left over is the "AV."

Once the Disease Management Care Blog wrapped its head around the AV, it next tackled the ACA concept of the "essential health benefit" (EHB).  This is the minimum package of covered services (outpatient, emergency room, maternity, hospitalization, medications, rehabilitation and the like) that a health insurer must include in its coverage plan.  This will ultimately be defined in yet-to-be-determined federal regulations. 

Now that we have the jargon nailed down, plans that fail to meet at least 60% of AV on the EHB will be excluded from the exchanges and ineligible for federal subsidies.  60% is "bronze" coverage, while 70%, 80% and 90% are "silver," "gold" and "platinum," respectively.  This is important because not only did most members of Congress not understand AV (consumer costs) or EHB (coverage), but because both will determine the future cost of our nations health care bill. 

Enter the Institute of Medicine (IOM), which has just released a report on how the Feds should best determine the EHB.  A handy summary can be found here.

Bottom line? 

The IOM has backed into the EHB, not basing it on notions of optimum health coverage but on affordability.  It recommends that the basic affordable EHB be based on a survey of what is typically covered by an insurance plan that is purchased by a small business employer.  With that as the baseline, the EHB be further modified (based on scientific evidence and public input) so that the premium ultimately matches 70% of the small business AV.  According to John Iglehart writing in the New England Journal of Medicine, that could work out to be about $5000 per year for individuals and about $13,500 for families.

This is significant because the key underlying assumption of the ACA was that forcing everyone in the risk pool (with the Constitutionally suspect "play or pay" provision) with insurance rich in wellness, prevention and services like rehab, mental health and pediatric oral care would, by itself, drive down health costs.

The smart folks over at the Institute of Medicine respectfully disagree.  They believe the best approach is to figure out what is affordable first and then define the insurance coverage second.

Its finally happened.  While its not explicitly stated, the Federal deficit has noisily bumped into the Affordable Care Act. The IOM has given the ACAs supporters cover over the inconvenient intrusion of costs into coverage, affordability into access and reality into fantasy.  Even if the IOM recommendations fall on deaf ears, DMCB readers can expect the the Federal budgets problems to now and forever be part and parcel of the ACA.

What to do?  When the Disease Management Care Blog is flummoxed, it likes to break into song.  One song that comes to mind is Taxman......