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.