4 Things To Understand About Youth, Mental Health & Juvenile Justice In The US

Almost 2 million youth – those under the age of 18 – are arrested each year in the US, which is more than 5,000 delinquency cases per day. Of those, approximately 95% are not accused of violent crimes (murder, rape or aggravated assault). Yet, these youth are often incarcerated in the juvenile justice system, causing more harm than good to the academic, social and personal growth of our youth, despite best efforts from experts to reduce incarceration. According to University of Chicago professor and Co-Director of the University’s Crime Lab Harold Pollack, PhD, rightly notes, “There is good reason to believe that economical, evidence-based interventions are helpful. We need to develop and deploy–at-scale–good interventions outside the criminal justice system that prevent youth violence.”

Currently, lack of capacity and resources contributes to high recidivism rates and skyrocketing taxpayer burden. As we enter a new year, with a new Congress, it is important as a country that we think about the mental, physical and financial health of our country’s most vulnerable individuals: children. Here are four things to understand about our juvenile justice system, and our children that live within the system.

1. A large majority of youth in the juvenile justice system (70%) has one or more diagnosable mental health or substance use disorders, not to mention the prevalent comorbidities such as poverty, victimization, post-traumatic stress disorders (PTSD) and poor education opportunities that contribute to untreated mental health issues. Current literature suggests that the prevalence of mental health disorders in the juvenile justice system is more than three times higher than in the general youth population.

Furthermore, more than 75% of youth in the system have experienced traumatic victimization such as physical abuse, domestic violence, and traumatic neglect, leaving them vulnerable for mental health disorders and PTSD. NIMH research indicates that half of all lifetime cases of mental illness begin before the age of 14, sometimes with decades between onset and treatment, leading to more severe, compounded, and difficult to treat co-occurring mental illnesses.

There are also significant repercussions that follow youth who have been diagnosed with a disorder, both within the system and with integration back into society. One model that has been creating collaboration between systems is the WrapAround Milwaukee program where child welfare, juvenile justice, mental health and education systems jointly tailor treatment plans to individual children in an attempt to provide holistic care. Another has been the University of Chicago Crime Lab work by Sara Heller and others who have found that improving social-emotional skills and obtaining summer jobs can reduce violent offending in youth.

2. Research indicates that the human brain develops throughout adolescence into ones mid-twenties. The particular part of the brain responsible for complex reasoning and executive function – the pre-frontal cortex – is not fully developed until then. This is one reason that age restrictions have been imposed (or are in debate) on the age of voting, drinking, driving and military activity until late teens or early twenties.

Because adolescent brains are not entirely matured, risk is inherently less frightening and peer influence is more persuasive for those under the age of 25. Yet, on any given day in the US, more than 70,000 juvenile offenders are in residential placement (juvenile detention facilities, corrections facilities, group homes or shelters) for crimes. However, not only are youth not able to assess risk like adults, competency to understand, participate in and make decisions in the judicial process are not equivalent.

Additionally, beyond developmental influences, multifaceted risk factors such as low school involvement, poverty, homelessness and cognitive deficits contribute to decision-making and risk-taking for youth. This often includes the young parents of those in the justice system. Kenneth Dodge and collaborators at Duke University have been working with young mothers to improve parenting skills, with the idea that some of the same strategies used to address cognitive errors and biases, can also be used in preventing poor parenting.

3. Both public and private prisons are ill prepared to truly help the youth in our juvenile justice system. Whether anxiety disorders, PTSD, drug abuse or sexual victimization, disorders among youth are much harder to diagnose and treat than adults, as they evolve and need ongoing assessment throughout adolescence. Additionally, facilities are particularly ill equipped to assist girls, despite a 49% increase in girls being placed in detention centers (compared to a 7% increase in boys) over a decade. National Center for Mental Health and Juvenile Justice (NCMHJJ) research indicating youths who receive a mental health screening immediately are more likely to have problems identified and treated. However, in many US jurisdictions screening only occurs after a juvenile has been assigned to a correctional facility.

According to a Youth Services International (YSI) investigation, one private prison company alone – that spans 16 states – has a traceable consistent record of abuse and neglect for more than 25 years. This neglect ranges from lack of care and services to actual mental and sexual exploitation. Shockingly, an estimated 9.5% of adjudicated youth in state juvenile facilities and state contract facilities (about 1,720 youth) reported experiencing one or more incidents of sexual victimization by staff or another offender within the last 12 months. In 2013, Polk County, Florida (and its Sheriff) were sued, alleging that children have been systematically abused and mistreated in jail, including dangerous conditions of confinement and pepper-spraying kids for failing to obey orders.

Because of issues like those, the NCMHJJ urges the use of community-based and holistic treatment interventions as more appropriate and effective responses to the needs of these youth. Further, direct collaboration between child welfare and juvenile justice centers is encouraged.

4. State variation in juvenile justice assessment, treatment and conviction is significant. Almost 40 states in the US have laws or pending legal language ensuring that those aged 17 and younger convicted of felonies are tried in a juvenile court, with Illinois and North Carolina being the most recent additions. However, even in states where youth are tried as juveniles the screening metrics and treatment options are disparate.

Since 2008 all young people in Pennsylvania detention centers are carefully screened for mental health issues, while in Virginia and Arizona a juvenile need not necessarily be assigned with a diagnosable disease, but instead are charged based on perceived competency. North Dakota and Oregon have passed laws requiring youth who have committed alcohol-related offenses to enroll in alcohol and drug educational courses.

In contrast, some states have made little progress in mental, emotional or physical health requirements for youth. However, throughout the last 20 years even states with bad reputations are being forced to revisit policies, testing and treatment of our nations most vulnerable. Louisiana, previously had the reputation of being the worst juvenile justice system in the country, and still comes under fire for the massive amounts of youth incarceration over the last few decades. However, recent steps have been taken that are getting good reviews. For example, went as far as to allow an entire judicial district to assign one of its divisions solely as a mental health court.

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Health Wonk Review Is Out Today Despite The Snow In Boston

David Williams hosts the latest edition of the Health Wonk Review in honor of the 10th Anniversary of his own Health Business Blog. Go read it, and then come back here in 2 weeks, when I’m hosting the next edition…

 

The GOP Strategy For Increasing Purchasing Power: Subsidies In Reverse

In this section of the GOP’s ACA replacement proposal, they state that they “would provide a targeted tax credit to certain individuals that could solely be used for the purpose of helping to buy health care.” This credit would be available to any employee of a small business, which the proposal defines as an entity with 100 or fewer employees. According to the latest data from the U.S. Census Bureau, that would mean that the employees of more than 98% of businesses in the U.S. would qualify. The credit would also be available to anyone else that either doesn’t work for a small business or works for a large business that doesn’t offer health insurance coverage (looks like the employer mandate is going away).

The plan offers the following additional detail: “Individuals with annual income up to 300 percent of the Federal Poverty Level (FPL) ($35,010 in 2014) would be eligible to receive an age-adjusted, advanceable, refundable tax credit to buy health coverage or health care services.” So, let me get this straight: They’re saying that if you’re income is at or below 300% of poverty, they’ll give you a refundable tax credit up front to help you pay for health insurance. Let’s take a moment to compare that to the current system of subsidized premiums through the health insurance exchange that exists because of the ACA. Both the tax credit and the subsidy happen on the front end, so there’s no difference there. Honestly, the only difference between a refundable tax credit and a subsidy is that the tax credit let’s you keep a portion of the tax money you owe in your pocket, while the subsidy collects your taxes and then gives a portion of them back to you. The math is exactly the same. It is literally six of one, half a dozen of another. But, because of how people’s minds work, they are much more likely to approve of a tax credit (they get to avoid paying some taxes) than a subsidy (they pay all their taxes and get a government handout). So, I’m not opposed to the idea of offering assistance as a tax credit rather than a subsidy. However, this portion of the proposal doesn’t stop there.

First, it should be noted that the proposal subtly dials back the level of federal support for making health insurance affordable. Under the ACA, subsidies for the purchase of health insurance don’t phase out until 400% of poverty. As just referenced above, the GOP proposal lowers this to 300% of poverty. So, if you’re a person making between $35,010 and $47,080 a year, the GOP is proposing to withdraw the financial assistance you may currently enjoy when purchasing coverage. For a family of 4, the household income range that stands to lose financial assistance is between $72,750 and $97,000.

Second, the plan does its best to appeal to those invincible people that are outraged at being forced to buy a product they think they don’t–and won’t ever–need. And they sell this under the guise of freedom: “Our proposal would give individuals the freedom to choose the health plan that best meets their individual health care needs.” Translation: If you’re young, healthy, or otherwise not expecting to utilize healthcare, you’re free to buy some really inexpensive coverage that resembles health insurance in name only. This is another one of those things that will appeal to people without much foresight, and that’s the sandbox that politicians like to play in–after all, the longest election cycle is for Senators and that’s just 6 years. Why plan for the long term?

Third, the proposal would eliminate the employer mandate (I’ll talk more about that later), while giving individuals tax credits to purchase coverage. As any health economist will tell you, that will result in what is called “crowd out.” Essentially, employers will decide that they’d rather not pay for their employees to have health insurance, especially when they realize that their employees can get tax credits to buy their own insurance. The end result is that we’ll be shifting the cost of subsidizing health insurance from corporate payrolls to the government. This would suggest that the proposal is more concerned with giving breaks to big business than about controlling government spending. Or perhaps this is just phase one of a two part austerity plan.

Finally, the proposal tries to sneak in the creation of big government bureaucracy towards the end of the section. “Our proposal envisions a health financing office at the U.S. Department of Treasury charged with ensuring that the health tax credits are administered in a manner that is secure, responsible, and safe.” Well, if all the rest of what is being proposed were to actually happen, then I completely agree that there needs to be an administrative agency in charge of, well, administering the program. But this makes my head hurt merely because it is coming from the same group of people who cooked up the false story that enforcing the tax penalty under the ACA was going to result in the hiring of 15,000 new IRS agents. Suddenly now actually stating that you intend to expand government is all a part of the plan?

 

A New Protection For Americans With Pre-Existing Conditions?

A theme you may have detected from my previous post is that much of what the GOP has proposed in its latest plan to replace the Affordable Care Act (ACA) is already contained in the ACA itself. The difference is that the GOP proposal tends to water down the substance of the ACA. It’s a bit of an attempt to have one’s cake (appear to retain popular aspects of the ACA) and eat it too (subtly alter those provisions in ways that significantly undermine the original reason for their inclusion in the ACA). Today’s topic is no exception. Senators Burr and Hatch along with Representative Upton write “Under our plan, no one can be denied coverage based on a pre-existing condition.” That sounds a lot like the ACA. But there’s a major difference, which is that under the ACA, the phrase “no one” literally means “no one,” while in the Burr-Hatch-Upton proposal it means “no one who is continuously enrolled in a health plan offering at least catastrophic coverage following a one-time open enrollment period.” Let me explain.

Individuals with a pre-existing condition are expected to use more health care. That means that, at a minimum, health insurers charge them substantially more for coverage. In some cases, they were charging them so much that it essentially priced the coverage out of the individuals’ reach. In other cases, the health insurers simply said “we refuse to issue you a policy.” Now, that could happen in a couple of different ways. First, you could be uninsured, have a medical condition, and be denied coverage, or second, you could be insured, develop a medical condition, and have your coverage renewal denied. In either case, you went without insurance because you were sick. There was also the issue that people who left or lost their job might end up unable to get new coverage. To help with that, Congress enacted the Health Insurance Portability and Accountability Act (HIPAA), which allowed people to remain covered when switching jobs, as long as they maintained continuous coverage. At the time, the provisions contained in HIPAA were a definite step forward, but they were limited to individuals with group coverage and did nothing to help people who for a variety of reasons had–or wanted to have–coverage via the individual market.

The ACA made “guaranteed issue” the law of the land, meaning that no insurance company could deny anyone coverage because of a pre-existing condition. Of course, the laws of health economics require that if insurers are obligated to “guaranteed issue”, individuals must be required to purchase a plan–even if they are healthy. Otherwise, people would wait until they got sick and “needed” insurance, knowing that they could not be denied coverage. It doesn’t take a rocket scientist to understand that that would drastically drive up the cost of insurance, as people go from buying a policy they “might” need to buying a policy they know they need and fully intend to use right away.

Because guaranteed issue is popular, but the corresponding individual mandate to purchase insurance is not (the public also loves to have it’s cake and eat it too), the GOP replace plan wants to move away from the ACA and back towards the HIPAA-style protections, which are less protective. In short, under the proposed plan, if you have insurance, you’d better make sure you keep it, because if you don’t, you may not be able to be insured again in the future. And, if you don’t have insurance, you’d better take advantage of the special “one time” open enrollment period envisioned by the proposed plan. If you don’t get covered then, the plan says that you would still be able to obtain coverage during an annual open enrollment period, but you “would not be able to avail [yourself] of the continuous coverage protections.” Translation: If you miss the boat, prepare to get soaked by the insurance industry.

 

 

 

Steve Blank And I-Corps Lean LaunchPad

Steve Blank is well known for informing entrepreneurs that, “The safest bet about your new business is that you’re wrong.” He contends, “A startup is not about executing a series of knowns. Most startups are facing a series of unknowns — unknown customer segments, unknown customer needs, unknown product feature set, etc…”

As a serial entrepreneur, academic, veteran, author and one of Forbes 2013 30 Most Influential People in Tech, Blank has carved out a well-documented career teaching others success in the startup world using his Lean LaunchPadÒ curriculum. At its core, the Lean method teaches innovators that: 1) startups are not smaller versions of large companies. This means startups need different tools than those used in existing companies, and 2) there are no facts inside of their building. Therefore, they need to get outside to test whether their hypotheses are correct.

It’s a big idea – one that in 2011 caught the eye of the federal government, a prominent backer of technical innovation and the country’s second-biggest leader in research and development funding. The theories were so highly regarded, it led to an unlikely partnership with the National Science Foundation (NSF), the $6.8 billion government agency that supports research in all nonmedical fields of science and engineering. And, while many argue that inefficiency, redundancy and regulatory burden of government agencies can hinder innovation, the Small Business Innovation Research (SBIR) offices at the National Institutes of Health (NIH) and the Department of Energy (DOE) have also partnered with Mr. Blank to incorporate his methodology into their agency practices.

Can Federal Agencies Be “Innovative”

NSF requested Mr. Blank modify the Lean LaunchPad course he developed at Stanford to a curriculum for the NSF’s Innovation Corps (I-Corps). The first fruits from this cross-pollination with the NIH came in October with the launch of the pilot I-Corps at NIH program, concluded this week with final presentations.

The National Cancer Institute is participating in I-Corps at NIH through the SBIR and Small Business Technology Transfer (STTR) Programs along with the National Heart, Lung and Blood Institute, the National Institute of Neurological Disorders and Stroke, and the National Center for Advancing Translational Sciences. The institutes have jointly sponsored 19 teams ranging from therapeutics to medical devices, hoping that the companies can change the world by bringing their research from laboratories to patients in a cost-effective and efficient manner.

“The SBIR Programs have a unique role in the federal government fostering small businesses and investing in early stage research,” said Michael Weingarten, NCI SBIR Development Center Director. “Together with I-Corps, the SBIR Programs have an opportunity to take our efforts to the next level and provide our companies with the tools to develop medical technologies faster, better and with greater success.”

The NIH SBIR/STTR Programs serve as an engine, helping small businesses develop the next generation of medical technology breakthroughs, while also filling a critical funding gap in early stage research and high risk technology development. The Center also recently led a matchmaking effort (NCI SBIR Investor Forum) to bring together investors, strategic partners, and the most promising NCI small business awardees developing targeted cancer therapies, diagnostics, and medical devices.

According to the NCI SBIR Program I-Corps coordinator, Christie Canaria, PhD, “All the teams selected are already funded companies that have received an NIH SBIR Phase 1 Grant through an extensive peer review process by industry experts. This I-Corps pilot initiative is part of a suite of targeted efforts by the NCI SBIR Development Center and other programs across NIH to go beyond funding to help accelerate the translation of research concepts into technologies that will improve patient care.”

When asked how his first cohort of students at NIH compares to his Stanford students, Mr. Blank laughs and tells me they are remarkably similar. “All the teams came in lacking a link between an idea and making an actual company,” he says. “Most often, the idea is a small part of the overall company. That’s what has been screwed up with the last 30 years of grant funding. A good idea is not going to help anyone unless it succeeds in getting to the commercialization stage.”

Blank observed, “By the end of the class the 19 NIH teams spoke to 2,120 customers, tested 695 hypotheses and pivoted 215 times. That’s an amazing amount of work. We’re proud that each and every one of the teams left the program with evidence, urgency and velocity they didn’t have coming into the class.”

The class was best summed up in a final video made by BCN Biosciences here.

The I-Corps Approach

Blank asserts that the current medical school curriculums and grant funding cycles are more focused on the science than the business sense and methods of starting a successful company. “I-Corps provides an efficient way to teach the teams working with the government the distinction between an idea and a company.”

As in the Lean LaunchPad for Life Sciences pilot course at UCSF, I-Corps teams learn how to define clinical utility, understand customers and recognize downstream commercialization. The primary difference is that most NIH participants are already well-accomplished experts in a particular field. Dr. Hobart Harris, Chief of General Surgery at UCSF, was in the first UCSF cohort, and claims his business could not have succeeded without lessons in bringing his, “idea to the marketplace,” and that is exactly the model being replicated at the NIH.

Using a nine-week course that ended with final team “Lessons Learned” presentations this week, Blank is working with business experts and NIH SBIR officials to help the teams explore potential markets for their federally supported technologies in development. The course began with a three-day “Entrepreneurial Immersion” Blank describes as, “A real eye opener. They struggled to tell what business they were in on day one. Instead, they would describe what they were making. By day three we got almost all of them able to articulate what problem they were solving and for which users.”

At completion, the companies have each engaged with 100 potential customers and he claims, “Regulation, reimbursement, clinical trials, potential partners and intellectual property (IP) are all top of mind now.” However, he also says that his greatest hope for next steps not only includes more cohorts of companies that go through NIH I-Corps and DOE’s Lab-Corps, but also with curriculum for medical schools and large research centers with life science communities.

Who Is Learning From Whom

Although Blank’s methods have proven effective for startup companies in various sectors worldwide, his theories on how to take companies to market product improvement and commercialization, is a different and untested challenge within the government. Until now.

This new I-Corps model is about making a viable business, which is a necessary step to ensuring that patients – taxpayers – will ultimately benefit from the federally supported SBIR technologies. For real victory, not only will the individuals and companies be learning about regulation, reimbursement, trials, partners, and IP in ways they never have before, but the government will also be learning about how to continue to create a bridge with the private sector that will lead to novel technologies and to prevent the challenges and burdens that stifle innovation.

There is hope. While Mr. Blank’s model is only one way for potential startup success, other agencies such as DOE have launched its own $2.3 million “Lab-Corps,” commercializing clean energy technologies using the same lessons as NIH. Moreover, Blank is in talks with NYU and Johns Hopkins in addition to UCSF, Georgia Tech and University of Michigan medical and bioengineering departments about adding the Lean LaunchPad methodology.

Perhaps, the greatest outcome of the I-Corps and Lab-Corps cohorts will be the lessons they share with the federal government about IP, scaling and regulation. That is the kind of “change the world” approach Mr. Blank and I-Corps hope to create.

Syllabus for the class can be found here.

Presentations and videos of all the teams videos and presentations can be found here.

Twitter feed for the course and events can be found here.

 

The GOP Replace Plan: Common-Sense Consumer Protections?

It is smart politics to start off a negotiation with an olive branch, because if you get everyone’s eyes focused on the carrot you’re dangling in front of them, they’re less likely to notice the stick you’re getting ready to hit them with. In that spirit, the Burr-Hatch-Upton proposal to repeal and replace the Affordable Care Act (ACA) leads off with a set of “common-sense consumer protections.” Every good story has a hero, a villain, and an innocent victim. The narrative here is something like this: Consumers are the innocent victims of villainous insurance companies that have been emboldened by the poor policies of Obamacare, and it is up to us–the GOP lawmakers–to play the hero by stepping in with simple (i.e., common-sense) policies that will fix everything and protect the consumers. What are these common-sense fixes?

Prohibit insurance companies from imposing lifetime benefit limits on consumers
This is a great idea. However, I’d like to begin by pointing out that this is already in the ACA. Nice attempt to take credit for the opposition’s successful idea. Well-played.

Allow state insurance regulators to modify community rating in such a way that it approximates experience rating.
Here’s what this means: Under experience rating, the amount you pay for your health insurance is based on things like your prior health care utilization. Thus, if you’re sicker or more likely to use care, you’ll pay a lot more for insurance than someone who is healthy. Under community rating, these costs get averaged across everyone without regard for their particular health care needs. That means that everyone pays the same amount, which makes health insurance more expensive for healthier individuals, but much more affordable for those who are sick. What the ACA did was to implement a “modified” community rating. Under this system, health insurers are basically required to use a community rating approach, but are permitted to charge higher premiums to smokers, for example. They are also allowed to charge older adults up to 3 times as much as they charge younger adults (with the understanding that people tend to use more health care services as they age). As I mentioned, this means that the young and healthy end up paying more for their health insurance than they would under an experience rating system. The GOP proposal would like to move the modified community rating closer to experience rating by allowing insurance companies to charge older adults up to 5 times as much as they charge younger adults. They say that this “will have the effect of helping to immediately lower health care costs for millions of Americans.” What they don’t say is that it will also raise the costs for millions of other Americans by a minimum of 167%.

And, on top of that, they want to allow states to be the ultimate decisionmakers on these age rating ratios. So, in theory, a state could allow insurers to charge older adults rates that are 10, 15, or 20 times higher than what they charge younger adults. In effect, they could price older adults out of the market–and if the insurance isn’t deemed affordable, the ACA exempts those individuals from having to have coverage, meaning the end result could simply be a lot more uninsured Americans as insurers opt not to cover less healthy populations. Sure, the proposal would allow states to be more restrictive with their age rating ratios if they chose to, but if they did that, we’d basically see a further deepening of disparities in coverage between states as the optional Medicaid expansion has already demonstrated.

Require health plans to offer dependent coverage up to age 26.
This is another great idea. But, just like prohibiting lifetime benefit caps, this is already in the ACA. Yet again, the replacement plan is keeping the parts of the ACA that people like. Well, maybe. They do say that–in their effort to devolve decisionmaking authority–states would be allowed to opt out of this requirement. So, young people, if you like your parents’ insurance coverage, you need to know that the GOP doesn’t necessarily want you to be able to keep it. Maybe just make sure your parents move to a state that doesn’t opt out.

Require health plans to renew policies regardless of an individual’s health status.
At first blush, this might sound a lot like the ACA’s prohibition against insurance companies denying coverage to individuals with pre-existing conditions. Let me stress that that is not what this says. On the contrary, what this says is that if you have coverage, your insurer cannot refuse to renew policy each year just because you developed a health condition or incurred lots of health care costs. Health insurers could still cancel policies in cases of “fraud or misrepresentation on behalf of a consumer or failure to pay premiums.” It is not clear whether this means that they can rescind your coverage because you failed to mention that your maternal grandfather had high cholesterol. But, again, this is only speaking about people who currently have health insurance. The protection for people with pre-existing conditions–although it inherently includes this more limited requirement of coverage–is something else entirely, which I will address in my next post.

So, what’s the bottom line on these “common-sense consumer protections”? Well, essentially all 4 provisions are outright included in the ACA already, albeit with far more protection for the consumer. The GOP’s replacement plan simply softens requirements on insurers to provide guaranteed issues of insurance, makes it optional at the state level for insurance companies to cover dependents on their parents’ plans up to age 26, and allows insurers to charge older adults significantly higher premiums than younger adults. In the guise of freedom, the plan benefits insurers (the very group being held aloft as the villain at the outset of the narrative), and places the consumer (the innocent victim of the story) at greater risk. The carrot may look juicy, but you should pay attention, because the stick has the potential to leave quite a mark.

 

The GOP Replace Plan: Summarizing the Executive Summary

This is the first post in a series that looks in detail at the GOP’s newly proposed plan to repeal and replace the Affordable Care Act (ACA). Today, I want to take a look at the paragraph in the executive summary of the plan proposal that motivates the GOP’s desire to repeal and replace the ACA. In just the second paragraph, the authors (Sen. Burr, Sen. Hatch, and Rep. Upton) make the following claims:

“The law sent premiums and out-of-pocket costs skyrocketing, forced limited networks, cancelled health plans, reduced workers’ hours, hurt jobs, and threatened the safety nets of Medicare and Medicaid that protect some of our nation’s most vulnerable. Today, just seven percent of Americans say they expect the law to reduce their health care costs. Further, a Gallup poll shows that one in three Americans report putting off medical treatment that they or their family need because of cost–the highest response rate in the 14-year history of Gallup asking consumers about this issue.”

Let’s take a moment to examine these statements. First of all: “The law sent premiums and out-of-pocket costs skyrocketing…” Well, the first issue with this is the use of the word “skyrocketing.” That’s a little thing that we call hyperbole. It’s useful when you want something to sound dramatic, and it’s especially helpful when you can’t–or don’t want to–quantify the change. Then there’s the whole issue of it being false. Prior to the enactment of the ACA, health insurance premiums increased by about 10% on average each year. After the health insurance exchanges were established, we’ve seen average premium increases in the range of 7.5%. As a number of articles make clear, this is actually a reduction in the rate of cost growth and in some cases we are actually seeing price decreases.

Next, there’s the issue of limited networks. This one, I will admit, is true. To help keep costs down (see my preceding paragraph), many insurers opted to negotiate contracts with limited networks of providers. This works by ensuring that the providers have access to a large number of patients (i.e., it makes them more attractive since they’re “in network”) and thus, the providers are willing to be paid less for each patient. This is a problem, and one that the White House is working to address. However, this alone does not require repealing the ACA. In fact, repealing the ACA would mean that many people would lose their insurance coverage. And, if you think a limited provider network is a problem for the insured, let me assure you that it is a much bigger issue when you’re forced to rely on charity care.

Then we have the cancelled health plans. There’s also truth to that. In fact, I’ve written about it before here and explained what the President was working on to address the issue here. Again, this is something that can be fixed without repealing the ACA, and which ultimately, ensures that individuals wind up with a more sufficient health insurance plan that offers them more financial protection.

The GOP proposal claims that the ACA has “reduced workers’ hours” and “hurt jobs.” I can only assume that they’re referencing a report that came out from the Congressional Budget Office in February 2014. That report was widely cited as evidence that the ACA was killing jobs, but it also has a vastly different interpretation, which I detail here.

Finally, the proposal claims that the ACA “threatened the safety nets of Medicare and Medicaid….” Nothing could be further from the truth. In fact, the ACA expanded the Medicaid program to protect more of our nation’s most vulnerable. It was only when the Supreme Court ruled that the Medicaid expansion was optional, leading roughly half of states not to participate in the expansion, that we’ve seen a restriction in the program. As for Medicare, the part of the program that funds hospital stays (Part A) was expected to run out of money in 2017. The implementation of the ACA actually extended the life of the trust fund, making the program solvent through 2029. And the most recent projection has pushed that out to 2030. I have a very hard time seeing how that’s a threat to Medicare and Medicaid. That said, I don’t think the ACA has come anywhere near fixing all of the long-term problems with the two programs. Mandatory spending is a challenge that must be dealt with, but the ACA has moved us in the right, not the wrong, direction.

I’d like to end by taking a look at the two pieces of selective evidence the proposal cites. First, that “just seven percent of Americans say they expect the law to reduce their health care costs.” I’d like to demonstrate how easily one can spin the numbers from that poll. For example, did you know that in that very same poll, a majority of Americans–59%–are opposed to repealing the ACA? Similarly, did you know that 59% of Americans expect that the ACA will not have a negative impact on the quality of the healthcare they receive? And, did you know that–despite all of the changes the law makes and the millions of people who will gain insurance coverage–many for the first time–some 43% of Americans do not expect the ACA to increase their healthcare costs? Just take a look for yourself here.

Second, the claim that “a Gallup poll shows that one in three Americans report putting off medical treatment that they or their family need because of cost–the highest response rate in the 14-year history of Gallup asking consumers about this issue.” This–as you can see here in graphical form–is true. Here’s the problem: The ACA was not signed into law until 2010. Take a look at the graph. You can see a very clear upward trend that precedes 2010. In fact, if I wanted to make an equally ill-interpreted statement of these data, I could write “Under President George W. Bush and his failed healthcare policies, the proportion of Americans who delayed medical treatment that they or their family needed because of cost skyrocketed from 19% to 30% in just 5 years.” Or alternatively “During President George W. Bush’s time in office, the proportion of Americans who delayed medical treatment because of costs soared by nearly 58%.” You see my point. Second, the last year of data in this poll–the one that the GOP proposal highlights–comes from 2014. It’s worth noting that 2014 is the first year that the major elements of the ACA were operational. Thus, unless we expect an immediate impact from the health insurance exchanges and the optional Medicaid expansion, this result is no surprise. We could make claims like “Over the last decade and a half, the largest decrease in the proportion of Americans delaying medical treatment because of cost occurred during the Obama administration.” Of course, such a claim is equally faulty from a causal standpoint, but you see where I’m going with this.

The bottom line is: There is some accurate information in the executive summary of this proposal, but there is also a great deal of hyperbole, and some flat out false propaganda. But that’s just what motivates the details of the proposal. I’m not shocked to see this sort of political rhetoric here, but I think it worthy of our scrutiny. Still, the most important things are the details of the replacement plan. I’ll be tackling each of those in the upcoming series of posts.

 

Heeeer’s Brad!

Thanks to our Dear Leader for the link to the Republican’s health reform proposal, cutely called PCARE. Professor Wright is the expert and will look through it carefully and give you the real scoop.  I’ll be the opening act.  I’ve read through it, and there are some good things in it, although you have to skip the rhetoric spouted in the first few paragraphs of every section. To wit: “Despite promises that Obamacare would lover health care costs, costs continue to skyrocket for patients, families, taxpayers, and businesses.”  Actually, the Kaiser Family Foundation says that Medicare spent $1000 less per person last year, and is projected to remain steady at 14.5% of the federal budget and 3% of GDP.  Non-partisan this treatise is not.

The good:

1. There is a proposed provision for extending health insurance policies across state lines.  This would certainly help equalize coverage quality and could promote competition.  It is worker-friendly and makes sense.  Medicare is already nationwide, although the private insurance companies that actually provide a lot of the policies are not.  So, OK.  I wonder, though, since as I point out below the plan lays an awful lot of the responsibility for all of this stuff on the states.

2. The republicans like health care savings accounts, or HSAs (personal responsibility and all that) and would like to expand this option.  Great as long as you have two coins to rub together at the end of the month.

3. They want to keep the coverage for kids under their parent’s plan ’til age 26.  I guess that one polls well.

4. Tort reform.  Amen.  Caps on non-economic damages and limitations on attorney’s fees.

5. Transparency.  “…health insurance plans would be required to disclose covered items, drugs, and services, any plan limitations or restrictions, potential cost sharing, the actual cost of services (my boldface), the claims appeal process, as well as the providers participating in the plan.”  Some of this is already required, but some real information about cost would be welcome.

The not-so-good:

1. The plan throws out the rule that insurance companies cannot charge elderly patients more than 3 times what it charges a young person.  This is considered “too restrictive” and the new proposal ups the number to 5 times. This is supposedly better because premiums would go down for millions of Americans.  That it will also go up for millions of Americans is not mentioned.

2. The proposal seems to throw the ball back into the state’s courts.  States can opt out of the coverage for kids under age 26, they can adjust the amount the elderly pay in comparison to the elderly, re-using the high-risk pool idea within states, and making the states negotiate the terms of cross-border agreements.  Perhaps most oddly, it asks the states to designate health plans that would be the default coverage for people who don’t choose a plan.  Wait, weren’t most states perfectly happy to let the federal government set up the health insurance exchanges?

3. The republicans also really like using tax credits, which I think have already been tried. Many times.

4. Here’s the part that makes me nervous.  I quote:

“Under our plan, no one can be denied coverage based on a pre-existing condition.  To help consumers with pre-existing conditions our proposal would create a new ‘continuous coverage protection’.  Under this new protection, individuals moving from one health pan to another could not be medically unwritten and denied a plan based on a pre-existing condition if they were continuously enrolled in a health plan. This new consumer protection helps incentivize responsible behaviors by encouraging consumers to keep their health coverage.”

Those italics are not mine.  People with pre-existing conditions who have been uninsured would supposedly get a grace period in the form of a one-time enrollment period in which they could not be denied for a pre-existing condition.  So people who are not “responsible” (here read “poor”) aren’t entitled to this so-called consumer protection.  I could be wrong about this, but I need a much better explanation about why the ACA’s rule that you can’t turn anyone down for a pre-existing condition at any time is so bad.

So there you go!  The real health policy expert will now take the podium…

 

The GOP’s Healthcare Reform Proposal: A New Series

Last Thursday, the Congressional Republican leadership announced their plan for health reform. Like some 40 previous efforts that have failed, this plan involves yet another attempt to repeal the Affordable Care Act (i.e., “Obamacare”), but there’s finally something kind of new here: a plan to replace Obamacare once it’s been repealed. Could this be progress? I just read their proposal last night, and I found myself agreeing with some parts, disagreeing with other parts, and challenging some of their claims more generally–let’s just say the degree to which they cite evidence to support their claims would not hold up in a college class. However, as we saw with the ACA, any effort to reform our healthcare system is a large and multifaceted endeavor. In that respect, this plan is no different. It covers a lot of topics. For that reason, I don’t feel that I can adequately discuss it in a single blog post. So, starting next week, I’m going to go through the proposal, item by item, writing a series of blog posts to address each item in turn. It may take me a few weeks to get through it all, but don’t worry: the proposal won’t be signed into law anytime soon. If you want to start reading directly from the source material, you can find the proposal here. If you want some additional context, Jeffrey Young and Jonathan Cohn offer their take here. And, to be fair and balanced, here’s what Avik Roy thinks about the plan.

 

Global Health Development Looks To BRAC And Gates Foundation For Mobile Money

Bangladesh is going digital. Not in smart watches, sensor-based clothing or electronic health records, but in money. Mobile money. Money, that according to BRAC and the Gates Foundation could improve the economic and health outcomes of the country, especially of women and children. With a healthy appreciation of the complexities in scaling digitally, faith in innovation at the grassroots level and years of planning, these organizations just might make mobile money the future of finance.

Throughout the country, like all countries in the world, there are citizens that are “unbanked,” meaning that they do not possess a bank account and cannot share funds person-to-person, even within families, without cash. For these people, a significant portion of Bangladesh’s population (estimated 70%), access to formal financial services for starting businesses, paying for children’s education and health services, and paying salaries for community health workers could translate to millions of improved and saved lives.

For Bangladesh’s large rural population, transportation and infrastructure challenges, combined with a weak banking infrastructure, financial inclusion remains a tall order. However, increases in cell phone utilization in these areas mean that mobile money – instead of cash – could make payment to individuals, schools, health care providers and businesses seamless and easily accessible.

Digital Money

It is well documented and understood that men and women accumulate and spend money differently. For example, women earn smaller, more regular streams of income than men. Further, globally, women tend to have less ownership of cellphones due to allocating their finances for shelter, nutrition and education, almost always for children first. However, those kinds of investments do not lend themselves to establishing credit, building a business or maintaining a bank account.

Innovation, often coming from those in greatest need, has taken root throughout Bangladesh – with women center stage in development. This trend has also been seen in countries such as Kenya and Tanzania, where mobile money has a successful track record, and presently accounts for more than 50% of adult transactions in those countries. In Kenya, for example, one study concluded that households that adopted M-PESA, their most popular mobile money system, saw incomes increase by 5-30%.

BRAC, a Bangladesh-based organization working in 12 countries, “is no stranger to taking radical ideas to scale,” says Maria May, senior program manager for the BRAC Social Innovation Lab. And, with growing acceptance by international organizations including the World Bank that, “digitizing payments, transfers and remittances contributes to women’s economic empowerment,” support for such efforts has been moving quickly since 2010.

In 2014, BRAC announced its first Innovation Fund for Mobile Money Challenge, in which seven winners were selected from over 100 submitted ideas. From those, initiatives such as Mobile Micro-Insurance to secure low premiums on insurance and Honorarium Disbursements to Community Health Workers through the health, nutrition and population programme were approved to lead the way. Additionally, mobile insurance for credit shielding has been established at 20 branches, while exploring opportunities to offer additional types of insurance in 2015.

The Bill and Melinda Gates Foundation also committed its 10th Grand Challenge to “Putting Women and Girls at the Center of Development,” with a strong focus on financial services. Because significant correlation exists between empowering women and improved outcomes in health, agriculture and finance, the goal of the Challenge is to “accelerate discovery of how to most effectively and intentionally identify and address gender inequalities and how this relates to sectoral outcomes; scale-up approaches known to work.” And to date, mobile money is working.

Mobile Technology Makes Access Possible

Although there is great promise in mobile financial services, there are significant up-front and maintenance costs. However, Bangladesh presents a unique environment in South Asian in which to test the potential programs. Not only does Bangladesh boast a strong microfinance market, but it also has access to more mobile devices and accounts than other South Asian countries. In 2014, cell phone ownership in Bangladesh on GrameenPhone alone is over 50 million strong in a country with 160 million people.

Between 2011 and 2014 there have been two networks that emerged as strong frontrunners in the mobile money market: bKash and Dutch Bangla Mobile, of the Dutch Bangla Bank. While these entities have a combined 75 million customers, bKash has cornered a significant portion of the market. Like many other markets around the world though, Bangladesh is still waiting on international remittances and cashing out from mobile phones.

Nevertheless, it is widely accepted that mobile money will develop organically with person-to-person transfers followed by scaling to formal providers, and that countries around the world are hungry for the opportunity. As the trend continues, the ability to access mobile money can empower women one at a time to fund their own work, pay for their family’s educational and health needs, and for community workers to receive payment for their services. Whether small or large scale, the ability to bank the unbanked and transfer funds, could change education, health and wellness around the world in ways other digital health products cannot.

As an early step, BRAC University’s Institute of Educational Development, also part of BRAC’s Innovation Fund for Mobile Money, is transitioning to mobile-based payments for its secondary schools. Its director, Erum Mariam, has big plans for going digital. “I think this is an excellent pilot since it ensures transparency. I have asked my group to explore the possibility of the mobile transaction for providing teachers’ salaries as well.”

Additional, personal stories from bKash recipients can be found on the website.