Medicare and Medicaid
A Very, Very, Very Fine House Bill
Published June 19, 2009 @ 09:38PM PT
This perhaps tells you more than anything about the roller coaster week in Congress: when the House of Representatives released their bill today, it looked more or less like we thought it would. It didn’t exceed expectations, but it clearly met them. And yet that was enough to prompt a huge sigh of relief from the ranks of health care activists.
The week started with a bang in the form of the President’s speech to the AMA. But then it descended into the chaos of the Senate Health, Education, Labor and Pensions Committee’s mishaps with the Congressional Budget Office and the stall tactics of Sen. Tom “Amendment Generating Machine” Coburn and entrenched conservative opposition reminiscent of Groucho Marx’s song, “Whatever it is, I’m against it!” The past two days have been filled with the Senate Finance Committee lopping off an arm off their health care bill rather than face a score from the CBO ($1.6 trillion over 10 years) that’s not appreciably different from the estimate of Hillary Clinton’s campaign health care plan ($1.3 trillion over ten years) for more or less the same plan. So we can perhaps be forgiven from something going well for a change!
First, there’s the simple fact that three mega-stars of the Democratic party and three of the most powerful committee chairs are stifling the kneejerk reaction to fight over territory and are working in unanimity on a single bill. But that’s exactly what Rep. Henry Waxman of Energy & Commerce, Charles Rangel of Ways & Means, and George Miller of Education & Labor are doing – and with none of the backbiting and anonymous-quote drama that the media thrives on. Second, there’s the simple fact that this is the health care bill we’ve been waiting for. It’s not appreciably different from what is in Kennedy’s bill, or what we originally thought would be in Baucus’s (these days, who the hell knows). Heck, throw in the Obama, Clinton, Edwards campaign plans and the Commonwealth Fund proposal, and you’ll scarcely notice the differences. But unlike the Kennedy bill – which left out the most contentious parts in the hopes of some future leap of bipartisan faith – or the Baucus bill, which is going through a heavy attempt to water it down revision, the House bill seems immune to the panic in the Beltway. As a result, the House version of the common provisions is quite strong.
Come on, sing along – you know the words by now:
- Expansion of Medicaid eligibility to everyone at or under 133% of the poverty line (this while Baucus is floating only covering pregnant women and children at 133% of poverty to save money)
- A national Health Exchange for individuals and families to buy comprehensive plans with a standard minimum set of benefits set by an Advisory Committee chaired by the Surgeon General (no, not Sanjay Gupta). A unique feature – over time, all employers, not just small businesses, would be allowed to purchase a plan from the Exchange rather than negotiate directly with insurers.
- No pre-existing conditions, no rescissions, no lifetime benefits, no variable rates based on gender, and premiums can only vary by age and geography to the tune of 2:1. That may seem weak – making people who are older pay twice as much as the young? – until you realize the same proposal in the Senate Finance Committee caps variance at 7.5:1.
- Subsidies based on income, up to 400% of the poverty line – they’re sticking to it even knowing how expensive that was in the HELP Committee score.
- Actual detailed plans for employee pay-or-play and the individual mandate.
- A robust public health insurance option – important, since Speaker Pelosi has gone on record as saying the package won’t have the votes in the House without it. In structure, it’s similar to Sen. Rockefeller’s proposal – the plan would start with Medicare rates just to get it up and going, but would ultimately transition to a “level playing field” where it’s negotiating rates with providers. The plan is financed only by premiums – no matter what John Boehner tells you.
- A whole raft of proposals on improving Medicare, Medicaid, quality of care throughout the country, recalibrating our system towards primary care and prevention, and developing the health care work force.
I’ll be delving more into the 852 pages worth of details this weekend. But it’s worth noting the language in the summary documents. Simply put, they’re not backing down. Ezra Klein suspects this is because the House is more responsive to populist concerns than the Senate – something our founding fathers made much of in designing the House, but of which I’m skeptical. I live in New York City – the only way Charlie Rangel’s not getting re-elected next year is if he sets half of Manhattan on fire. On purpose. But whatever the reason, it’s nice to see the people in power actually ask for what they want, and what they promised they’d deliver this year, rather than start compromising before the plan has hit the desk.
So here’s to our House. It’s a very, very, very fine house. With two cats and a yard, life used to be so hard… now everything may not be easy, but at least it’s got a fighting chance, ‘cause of you.
What if MedPAC Rules the World?
Published June 03, 2009 @ 08:19PM PT
President Obama today embraced the notion of giving the Medicare Payment Advisory Commission (MedPAC), the commission that advises Congress already on Medicare reforms, the power to make its recommendations reality. The president embraced the idea of bringing MedPAC’s recommendations each year into a single up-or-down vote in Congress that cannot be filibustered. Similar to the base closing commissions, doing this would shift the power for making decisions out of the political sphere and into the sphere of men and women intimately familiar with how our health care system works. If we're seriously thinking of giving them this power, it begs one big question: what would MedPAC do if they ruled the world?
Well, luckily MedPAC’s recommendations are all documented – the ones Congress follows and the ones Congress ignores. Based on MedPAC’s statement to the Senate Finance Committee from April, here are some of the changes they recommend right away:
- Use the payment system to create incentives for efficiency. This includes setting Medicare payments to Medicare Advantage plans to 100% of the cost of a beneficiary in regular Medicare, instead of the 114% they’re gobbling up now for not terribly different outcomes. This has become an annual recommendation from MedPAC. Although both the President and most members of Congress have spoken out against these overpayments in Medicare Advantage, no one has done anything yet.
- Increase payment for primary care providers by “improving the accuracy” of payment for specialized care. That means taking an ailment that’s not terribly severe but is currently being billed at super-high rates as though it were a difficult procedure, and decreasing the payments for it. It's one of many ways to curb the excesses of our fee for service system while simultaneously making the investments in primary care that we know are so desperately needed. This would have the added effect of discouraging doctors and hospitals who’d be tempted to only do these easy but lucrative procedures.
- Create a “quality incentive payment policy” that applies to everyone from doctors to dialysis facilities, from hospitals to Medicare Advantages plans where part of the payment is based on hitting measurable standards for quality of care.
- Require doctors using Medicare to report back on what resources they use in their treatments, compare doctors treating the same ailments, and facilitate discussions with those who use the most and those who use the least. Note: there’s no money involved in this one – it’s just creating dialogue and learning opportunities that could improve care for everyone.
- Fund more comparative effectiveness research to generate more “credible, empirically based information” so that doctors and patients could “make informed decisions about alternative services for diagnosing and treating most common clinical conditions.” This also doesn’t have any money attached to it, but would give more information to doctors and patients to make better decisions and have more productive visits. It’s also likely to bring costs down and decrease overtreatment.
And I’m only on page 4.
A refrain I hear too often is that health care is so complicated -- particularly the health care delivery system -- that we don’t know where to even start fixing it. Baloney. One thing that will strike you if you read the statement all the way through is that MedPAC has been making these same recommendations for years in multiple reports. Missing from the discussion is that the VA system uses a lot of the same techniques, which explains why their outcomes and costs are better even than Medicare.
We have the experts already. They’re making great recommendations. Some of them just involve communications and research – they don’t even involve money. But because Congress is bogged down in getting perpetually re-elected, they’re not implementing them. Medicare is a huge opportunity to start turning our health care system around – we just have to start listening.
(Photo credit: wauter de tuinkabouter on Flickr.)
Obama Wants MedPAC on Steroids (Oh, and the Public Plan, too)
Published June 03, 2009 @ 03:27PM PT
Even when he's halfway around the world, President Obama is fully capable of driving the health care debate. After months of statements of support for health care that have become increasingly general and vague, the president sent a letter to Sen. Kennedy and Sen. Baucus, the twin head honchos of the Senate on health care reform. With his embrace of the public plan and his new desire for a “MedPAC on steroids”, he’s reshaped the political debate in Washington – at least for today.
Although Mark Helperin on TIME’s The Page calls this letter “The Rosetta Stone,” it’s not particularly cryptic, nor is it, for the most part, surprising. Obama expounds on the need for cost control as always, expresses support for what Kennedy and Baucus have cooking (which is 95% the same as what he himself proposed during the campaign) and gives full support for both a National Health Exchange and a public health insurance option:
The plans you are discussing embody my core belief that Americans should have better choices for health insurance, building on the principle that if they like the coverage they have now, they can keep it, while seeing their costs lowered as our reforms take hold. But for those who don't have such options, I agree that we should create a health insurance exchange -- a more market where Americans can one-stop shop for a health care plan, compare benefits and prices, and choose the plan that's best for them, in the same way that Members of Congress and their families can. None of these plans should deny coverage on the basis of a preexisting condition, and all of these plans should include an affordable basic benefit package that includes prevention, and protection against catastrophic costs. I strongly believe that Americans should have the choice of a public health insurance option operating alongside private plans. This will give them a better range of choices, make the health care market more competitive, and keep insurance companies honest.
He could have written that months ago. It’s only noteworthy because it reverses a trend of getting less and less specific about what he wants. Now, after months of saying I thought there should be a public plan but he was open to other ideas, we get the far clearer statement, “I strongly believe.”
But really, the much bigger news is the fact that Obama’s letter also calls for MedPAC to follow in the footsteps of Manny Ramirez (allegedly) to become “MedPAC on steroids.” MedPAC has nothing to do with lobbyists or campaign funds. It stands for Medicare Payment Advisory Commission, and it was actually created once upon a time by a Newt Gingrich-dominant Congress so that experts in the field of health care – doctors, nurses, economists, health care experts, managers of hospitals and other care facilities – could make recommendations on what Medicare should be paying for, and give analysis on access to care and quality of care. It releases two reports each year, but right now the reports are completely advisory. Meaning if they advise difficult choices to dramatically control costs and improve care – as they usually do – they can be easily ignored.
Does the Patient’s Choice Act Really Solve Anything for Medicaid?
Published May 24, 2009 @ 08:31PM PT
If there’s one unifying theory to the Patient’s Choice Act, it’s that the answer to any problems with public programs is to privatize them. The rationale for modifying Medicare, VA and the Indian Affairs health services is paper-thin, but the proposal for reforming Medicaid may be appealing for many, particularly when they talk about finding a solution to removing the “stigma” associated with Medicaid. However, all that glistens is not gold, and the Patient’s Choice Act could very well be swapping one set of hardships for another, solving nothing except shoveling still more Americans into private insurance.
The widespread positive perception of the quality of care offered through Medicare is not something the authors of the PCA want to challenge. One of the questions in their Q&A document is “Why mess with a program like Medicare where satisfaction among seniors remains relatively positive?” In answer, they completely dodge the question of patient satisfaction, and just shrug “financial problems can been seen [sic] on the horizon.” Their answer to solving financial problems, of course, is a mixture of common-sense payment reform and privatization through Medicare Advantage, a costly boondoggle as mentioned many times before on this blog. The section on the VA is even less substantial, as there’s not even a suggestion that the VA isn’t cost-effective (it is) or doesn’t yields high quality care (it does). Instead, we’re just told that our veterans deserve “competition.” Something tells me veterans won’t be overly pleased with the implications of privatization.
Apparently it’s “Patient’s Choice” unless the patient wants to choose a relatively high-performing government program.
"Like Medicare?" We Love It!
Published May 19, 2009 @ 10:44PM PT
You’re hearing a lot of bashing of government-run health care these days, but notice the bashers don't call out the programs out by name. There’s a reason for that. SCHIP is hugely popular. The VA is arguably the best system of care in the country. Medicaid has less of a sterling reputation, but that's largely because no one really understands how it works or who is eligible for what state-by-state. And Medicare? Well, as a new Commonwealth Fund poll confirms, Americans are significantly more satisfied with Medicare than private insurance. It’s time to get back to basics. “Government-run” may be scary to some, but it’s lovable in practice.
Single-payer advocates often call their plan “Medicare for All.” The public health insurance option touted by Obama, Baucus and most of the Democratic leaders is usually referred to as “like Medicare.” Clearly there’s magic in the program, but how strong is it? The poll compared the responses of those over 65 with Medicare to a random assortment of those with private insurance. Now this isn’t exactly apples to apples – Medicare beneficiaries in this poll were nearly three times as likely as those with private insurance to list their condition as “fair or poor” (the lowest ranking), almost four times as likely to have multiple chronic conditions, and twice as likely to be 200% of the poverty line or below. To no one’s surprise, Medicare beneficiaries are older, sicker, more in need of care, and poorer – the exact reasons why Lyndon Johnson and JFK wanted to create the program in the first place.
But despite their higher needs for consistent and likely expensive care, the magic of Medicare is that it’s more responsive to the customer than private health insurance. 32% of beneficiaries report having a negative incident with Medicare – a number that’s clearly too high and indicative of how much Medicare needs some reforms to improve the program. But that number is 44% for private insurance. Still, we keep hearing Medicare ain’t as good as it used to be. Think of the developments over the past few years that call into question how satisfied someone might be with Medicare – turns out many of them aren’t as bad as we’d think.
First, we hear all the time that more and more doctors accept it because of declining reimbursement rates. We’re even warned that single-payer or a public health insurance plan would lost doctors like a leaky boat if the Medicare reimbursement rates were universal. But you know what? Private insurance is worse: “Ten percent of Medicare beneficiaries’ physicians did not accept their insurance, compared with 17 percent of respondents with employer-sponsored plans.” If you want a choice of doctors, you’ve got slightly better odds with Medicare.
We hear about frustration with Medicare Part D’s “doughnut hole,” where prescription drug coverage is cut off for many beneficiaries after a certain spending threshold, causing them to pay out of pocket. It definitely has an effect: “Twelve percent of elderly Medicare beneficiaries reported going without care, such as prescribed medications or recommended tests, because of cost restraints.” But that number is over double – 26% - for those with employer-based insurance. Suffice to say, it’s much, much higher for the uninsured.
Earlier today, John Goodman pooh-poohed the results, saying “One of the building blocks of economics is the proposition that people reveal their preferences through their actions and such revelations are far more reliable than polls.” Very well – then explain the consumer preference in Medicare Advantage, where, as the GAO reports, “21% of Medicare beneficiaries enrolled in [Medicare Advantage] plans decide to leave during the year, compared with 9% of those enrolled in other private Medicare plans.”
We’re not talking about Canadians, or Brits, or the Taiwanese. We’re talking about Americans – how satisfied they are in polls, and how they show their preferences through their actions. Really, one of the main barriers to reform for years has been that so few of us know people on SCHIP, on Medicaid, at the VA -- not enough to trust the managers of those programs. But all of us know people on Medicare. It has its problems – so does any health care system – but it also has strengths. Lower costs. Better satisfaction. Better health outcomes (compared to Medicare Advantage, which, by the way, markets itself aggressively to healthier beneficiaries). That doesn’t seem scary to me.
(Photo credit: Ward on Flickr.)
Health Care Is All About the Benjamins
Published May 18, 2009 @ 10:55PM PT
Say what you want about Sen. Max Baucus, but the Senate Finance Committee has been the most transparent of all the committees with jurisdiction over health care. Today, Baucus and his Republican counterpart, Chuck Grassley, released their third “options document,” laying out all the ideas they’re considering for the financing of health care. You would not normally call a document about tax exclusions and itemized deductions as “a thriller.” But there are more twists and turns in this document to get my adrenaline pumping.
Oddly enough, it’s been the most surprising document of the three. The previous two – on delivery system reform and expanding access – were thorough but not very shocking. Baucus had released a white paper on health reform, so many of the “big picture” ideas were already spelled out. The options documents then flushed out implementation points and details. But virtually none of the issues related to health care financing have been plumbed in depth anywhere but in this 40-page policy paper. Sure, a lot of focus has been on the tax-exclusion on health benefits for businesses, and the option document explores progressive ways to do that, mainly by focusing on health plans for the wealthy, or only on “Cadillac” expensive plans. And, out of deference for the president, the committee lists all of his proposals for cost savings and new revenue for health care from the federal budget (even in bulleted list format with absolutely no comment, the president’s list takes up 3.5 pages all by itself). But a lot of the material is new – and a political hot potato.
See, we know health care reform will cost some up-front dollars to implement. If we do it correctly, there will be savings down the road from prevention, rooting out some of the waste and unnecessary care, Health IT, and reform (or abolishment) of the inefficiencies in private insurance. Even when those savings manifest 4-10 years down the road, there’s uncertainty, particularly at the Congressional Budget Office, on how much credit to give them – something Baucus has been grumpy about. Realistically, we’re looking at $100-$150 billion per year to set up something like the plan Obama and Baucus have in mind. That’s a lot of tough decisions to make.
The tax exclusion would be a home run as it could bring in well over $100 billion a year, depending on how it would be implemented. But you could also do it with scratch singles, walks, and smart base-running. Here are the three ideas that jumped out at me the most:
1.) Health Savings Accounts have been a conservative staple for fixing health care reform. The idea has some merit – something I’ll get into another time – but they’re most useful right now as tax shelters. According to the GAO, the average adjusted gross income for someone making a contribution to an HSA is $139,000 – almost three times the average income of the under-65 population. Moreover, you get a deduction when you make a contribution to the HSA and when you make a withdrawal! Add to that a pretty anemic penalty of 10% if you make a withdrawal for non-medical expenses, and you have a lot that needs reforming, and a lot of lost revenue.
2.) Excise taxes on beverages were discussed here in New York City for sodas and other sugar-rich beverages – they’d raise money and discourage the rising rates of obesity that contribute to costs. That’s an option, as are alcoholic beverages, which can be similarly highly caloric and already have an excise tax on them if they’re imported.
3.) Capping inflation in Medicare. The Finance Committee is looking at forcibly capping the growth in Medicare spending based on projecting what we should be spending if the new technology and productivity efficiencies that should be widely implemented actually were. Medicare reimbursement would be capped anywhere from one quarter to the full amount that would be estimated to be saved by tech and best practices.
Notice what’s missing here: the political sense of expediency and cowardice. Ditto the bellyaching that prevention, or Health IT, or costs derived from insurance market reform aren’t being “scored” generously enough in place of real, tough financing options. Put another way, any one of the ideas is going to send some lobbyist to the Hill, screaming bloody murder. Cap the rate of inflation in Medicare, and some caregiver, hospital, clinic or nursing home will complain that whatever is determined to be the “savings” from efficiencies and tech is way too optimistic. Threaten an excise tax on domestic alcohol and expect the King of Beers to quickly hire the King of Lobbyists. Even look cross-eyed at the tax shelters for the moderately to completely wealthy that HSAs have become and several fellow members of the Senate are likely to want to rip your face off.
I’ve done bellyaching of my own that too few decision-makers were putting forward serious proposals on finding the money to actually finance health care reform, so it’s only fair that I tip my cap where it’s due. Any randomly selected option in this document is going to be a fight – but it’d be a fight worth having and winning. When it comes to health care, it’s all about finding the Benjamins to make it happen.
(Photo credit: rbbaird on Flickr.)
Should "Early Medicare" Be an Option?
Published May 06, 2009 @ 02:14PM PT
I know a number of people over the age of 55 who, if given the chance, would buy into Medicare rather than continue working just so they can stay on their employer's health plan, or even just because they're sick of private insurance. Should they be allowed to buy into Medicare early?
Merrill Goozer asked the question on his blog yesterday: “While continuing to fight for a public plan alternative, progressives might consider throwing an additional option on the table: opening up Medicare to anyone 55 and over. Why not work on making the public plan we already have available to more people and simultaneously reform Medicare to deliver more effective and cost-effective care?” As an incremental step to full coverage, it’s a tempting idea. But in terms of political reality, it seems like it would be the exact same fight we’re having now, but with far less gain at the end of it.
The answer of why someone aged 55 to 64 would want to is obvious. We already know that when it comes to the individual market, it’s a jungle out there. That’s even more true for those approaching but not yet at retirement age, who might be induced to sticking with their job not because they need the salary so much as they need the benefits. As reported by the Philadelphia Inquirer and Kaiser Health News, 17% to 29% of people age 50 to 64 applying for insurance were rejected – a rate 2 to 3 times that of people in their 30s. And lest you think those stats are exaggerated, keep in mind they come from AHIP itself. The obvious reason: exclusions based on pre-existing conditions. When you get past 55, the chances that you have a chronic condition or have already lived through a major health episode (apparently suggestive that you might again) are pretty high. A young 20-something might well only need one doctor’s visit a year, but someone entering their 60s is likely to just simply need more health care. Even worse, without community ratings, the costs of individual insurance plans are much higher the older you are. The Inquirer reports premiums of “5,090 for 60 to 64. The premiums were $1,877 for those 30 to 34.”
Combine these factors, and it’s no wonder that 4 million people in that pre-Medicare age range are uninsured.
Sen. Baucus’ white paper on health care proposes a solution: let them buy into Medicare early. Sounds good, in theory. After all, Medicare is proven coverage, they’ll be entering it soon enough anyway, let them pay a premium and get care early if they have no other option. Here’s problem number one: without subsidies, this is a prohibitively expensive solution for most people. The Congressional Budget Office scored this proposal and, to be budget-neutral (not cost Medicare anymore), the premium would have to be $7,600 for a plan with dependents. It’s hard to see that $633 out of pocket each month counts as “affordable.” If we don’t want participants to pay full premiums, we have to raise more money for the full cost of Medicare or for subsidies, and there’s nothing in Baucus’ plan to do that. Number two: how is this in any way an easier political fight? Any expansion of public coverage programs engenders the same response, whether it’s SCHIP, HR 676, Pete Stark’s Americare, or the public plan (“Plan USA”): government is “crowding out” private insurance, in that not only would early Medicare cover the uninsured, but those who just barely could afford private insurance (I think of that more as an insurance push than a government pull, but you’ve heard the arguments); you’d hear renewed bellyaching on Medicare provider rates; you’d hear all about bureaucrats disrupting the doctor-patient relationship – as always, a bogus point given that current Medicare patients don’t feel anywhere near as restricted as those in private insurance, where a corporate bureaucrat disrupts the doctor-patient relationship all the time. Finally, as we learned yesterday, Karen Ignagni and the folks from AHIP will argue that a public expansion of Medicare won’t be necessary if there’s community rating and guaranteed issue (no pre-existing conditions) combined with government subsidies. In this case, they’re could right – guaranteed issue with subsidies may well be a better deal than full-price early Medicare.
To be clear, Baucus’ plan would only allow Medicare buy-in as a stop-gap measure while setting up the infrastructure for the rest of his plan. But if we’re going to have the fight, I’d rather have the sturm and drang be to the benefit of the uninsured from 0-65, and not just 55-64.
(Photo credit: thinkpanama on Flickr.)
