David Williams hosts a Presidents’ Day Edition of the Health Wonk Review. Lots of great stuff in there, folks. Go check it out here.
After a long and highly contentious presidential election lasting more than a year, we now know that Donald Trump will be our next president. In the days since the election, Trump has nominated individuals for key posts in his cabinet. With the selection of Rep. Tom Price (R-GA)—an outspoken ACA critic—to head DHHS, and Seema Verma—a consultant who helped design waiver-based Medicaid expansions in conservative states—to head CMS, Trump’s intention to significantly overhaul Obamacare seems apparent. Indeed, recent commentaries from Jonathan Oberlander and Gail Wilensky make clear that Trump’s victory is not good news for Obamacare supporters and those benefiting from the law.
Repealing and replacing Obamacare entirely is unlikely, because Republicans lack the 60 Senate seats needed for cloture. Thus, the most likely path forward is through budget reconciliation, which requires only a simple majority. Unfortunately, that means the Medicaid program is a vulnerable target, which raises the question: What will the Trump Administration mean for Medicaid? There is not a simple answer to that question. Trump himself has offered conflicting views. While he campaigned on the idea of repealing Obamacare and block granting Medicaid, he also went on Dr. Oz and expressed support for ensuring that low-income individuals continue to have Medicaid coverage.
As I see it, there are four possibilities for the future of Medicaid. First, Congress and the Trump administration may repeal the Medicaid expansion. While both President-elect Trump and Speaker of the House Paul Ryan (R-WI) have advocated for repeal, doing so may prove politically unpopular. Matt Bevin mounted a successful campaign to become Governor of Kentucky, promising to end the state’s Medicaid expansion. However, once he entered office, the stark reality of taking coverage away from some 425,000 Kentuckians led Gov. Bevin to amend his position and pursue changes to the program instead.
Thus, a second possibility is that the Medicaid expansion continues, but that beneficiaries face new, more stringent eligibility requirements. For example, Speaker Ryan’s “A Better Way” proposal outlines the possibility of introducing work or education requirements, and enforceable premiums into Medicaid. His plan also precludes states from expanding Medicaid after January 1, 2016, permanently establishing the disparity in coverage between expansion and non-expansion states. Moreover, beginning in 2019, Speaker Ryan’s plan would slowly phase down the enhanced federal matching rate for the expansion population to normal levels. This reduction in federal funding may prompt states to reverse their decision to cover the expansion population.
A third possibility is that Congress and the Trump administration will limit federal Medicaid spending through a combination of per capita allotments and block grants. Under the per capita allotment approach, states would receive a fixed amount of federal funding for each Medicaid enrollee, based on the state’s federal matching rate. This means total federal funding would increase or decrease as enrollment increases or decreases, but the per capita amount would remain constant. Alternatively, states could opt to receive a Medicaid block grant—a lump sum based on enrollment and utilization projections.
In his “A Better Way” proposal, Speaker Ryan envisions this giving states “more flexibility to adapt their Medicaid programs, to better design benefit packages in a way that better meets the needs of their state populations, [and] promotes personal responsibility and healthy behaviors…” Yet, as Colleen Grogan writes, states already enjoy tremendous flexibility in the design of their Medicaid programs. While proponents of Medicaid block grants suggest that they will free states to make their Medicaid programs more efficient, Jeanne Lambrew found that previous block grant proposals failed to predict actual patterns of Medicaid costs. In some cases, that meant that the federal government would have overspent in its attempt to control costs, while in other cases, it meant that state Medicaid programs would have been severely underfunded. Moreover, evidence from both Rhode Island and Puerto Rico fails to support any link between federal funding caps and Medicaid program efficiency.
Finally, there is the possibility that nothing changes. While such a scenario is unlikely, there are two ways it could happen. First, Republican governors in Medicaid expansion states—including Jan Brewer in Arizona and Rick Snyder in Michigan—may oppose efforts to repeal the expansion or implement a block grant because they have seen the expansion work well in their states, and want to avoid the political fallout of rescinding coverage. Second, the courts might preserve the program. Sara Rosenbaum suggests that capping federal Medicaid spending may be viewed as unduly coercive in the wake of the Supreme Court’s ruling in NFIB v. Sebelius, because states agreed to participate in Medicaid with the expectation of an ongoing federal match, not a fixed sum of federal dollars. Thus, the Supreme Court might rule that forcing states to accept Medicaid block grants is unconstitutional, and—just like the Medicaid expansion—might make the block grant optional for states.
While the future of the Medicaid program under the Trump Administration is unclear, the potential implications of serious disruptions to Medicaid for tens of millions of vulnerable Americans are frightening. In a blog post from March 17, 2015, Edwin Park of the Center on Budget and Policy Priorities wrote, “House Budget Committee Chairman Tom Price’s budget plan proposes to radically restructure Medicaid by converting it to a block grant and cutting federal funding for it steeply, by $913 billion over the next decade.” The cuts would put Medicaid spending in 2025 almost 34% below where it would be expected under current law. That certainly saves money, but at what cost?
Note: This piece first appeared at Public Health Post.
I was going to write a blog post about the outcome of the election and what it means for health policy going forward. But I’m stressed enough with work, so I don’t need to add that to my to do list. But at the same time, I cannot be completely silent on the matter. So what you’re going to get is an abbreviated post and several great links. It seems no one saw our next president, Donald J. Trump, coming. No one thought he was a serious candidate. No one thought he would win the GOP nomination. And, even until late last night, few thought he had any real chance of winning the Presidency. So much for what people thought. I hope the same principle applies now, because many people think he won’t be a good president, and won’t govern effectively. For the sake of the country I love and the people that comprise it, I really hope he proves them wrong.
Of course, the rhetoric around repealing Obamacare has already begun. It certainly looks like, with control of both the House and Senate, President Trump will be able to sign such a bill repealing the ACA into law. Whether or not he will, or what popular provisions he and the Congress may try to keep truly is unknown. I say this because, even as half of the country seems to think the sky is falling, the optics of taking insurance away from more than 20 million Americans are not good. I don’t think things look good for the future of Obamacare, but I also thought Clinton was going to win last night. In fact, I’m already envisioning how Republicans will blame Obama when insurance premiums increase in 2018 following the repeal of the ACA in 2017. But, right now, it’s all conjecture. As things move forward next year, we’ll know more and I’ll do my best to weigh in then. If you want to see the immediate “hot takes” from those in the health policy world, I suggest you read this summary from Kaiser Health News, this excellent overview from Tim Jost at the Health Affairs Blog, and these pieces from Toluse Olorunnipa and Alex Wayne at Bloomberg Politics, and Susan Cornwell and Richard Cowan at Reuters.
Best of all, I highly recommend you read this heartfelt reflection from Aaron Carroll of The Incidental Economist. After I read Aaron’s piece, I thought to myself, what did I write in my first post when I created this blog back in July 2009? If you’re curious, here’s the link. This was a project born in the midst of the debate over the ACA–some 6 months into Obama’s first term. It is a project that has withered considerably as I confronted life on the tenure track, and the reality that my success would be measured by how many grants I received and how many peer-reviewed publications I had, rather than how much time I spent writing a blog for public consumption. More than once, I’ve contemplated retiring this space. After all, blogs only thrive when fed a steady stream of regular content. I’ve tried to recruit guest authors and co-bloggers to spread the workload around a bit, with limited success. But the vision remains. And, while some period of mourning is natural (even healthy), there remains increasingly important work to be done. Today, I’m thankful that I still have this space to write. My commitment to the cause of making our healthcare system better for everyone remains strong, as does my desire to make the complex topics of health policy and health services research accessible to all. For now, my writing is likely to remain sparse, but my passion is renewed. The cause is too important to abandon amidst the politics. I hope you’ll join me.
By this time next week, we’ll *hopefully* know who our next President is. And, this morning, we already know that the Chicago Cubs won Game 7 of the World Series to claim their first championship in 108 years. Last night’s game was some of the best baseball I’ve ever watched. The election, well, let’s just say it’s an exciting time people! As Matt Viser (@mviser) said on Twitter last night “This World Series is as good as our politics are bad.” “Most Americans want neither of these teams to lose. Most Americans want neither of these presidential candidates to win.” So, let’s jump right into this Game 7 of Politics Edition of the Health Wonk Review.
Let’s start with a couple of pieces closely related to the Presidential contest. With the election less than a month away, it was rather odd timing for the Obama Administration to release the news of an average 25% increase in premiums. Opponents of “Obamacare” were quick to pounce on this–including the Donald–but as Joe Paduda points out at Managed Care Matters, in a post entitled “ACA: the real story” there is something sorely missing from pundits’ and TV “experts” talking about this reported increase in premiums: It only applies to the Marketplaces, and only 6% of insureds are covered that way.
The Affordable Care Act has made it much easier for a lot of the previously uninsured population to obtain high-quality individual health insurance and – through considerable financial assistance in the form of cost-sharing subsidies and premium subsidies – affordable coverage. But Louise Norris says there are still situations when a short-term policy makes a lot of sense. In a post at Healthinsurance.org she runs down those reasons – and also provides a list of caveats for prospective buyers.
Not everything’s about the election, thankfully. Here are some great pieces from my fellow wonks that don’t mention November 8th, but are timely nonetheless:
Brad Flansbaum of The Hospital Leader writes about how healthcare providers who read the opinion pieces of bioethicists know they shouldn’t treat celebrities, pro athletes, and board members differently when they show up at the hospital, but how they all do it anyway when faced with the reality of the situation. It’s a bit like the person who votes for their candidate despite their myriad scandals, or how Cleveland Indian fans know they should have rooted for the Cubs to win, because it’s been so much longer since the Cubs won, but still pulled for The Tribe anyway.
In a post entitled “Information Technology Expertise vs. Literacy: A Lesson from the Hillary Campaign for President”, Jaan Sidorov of the Population Health Blog compares information technology “literacy” vs. “expertise” and suggests that organization leaders have an obligation to be IT literate. You know, they need to have the “best words.”
Over on the HealthBlawg, David Harlow recently spoke with Glen Tullman, CEO of Livongo (living on the go … get it?), which enables people with diabetes (and, coming soon, people with certain comorbidities) to use care management tools that free them from being tethered to home, to a phone, to concerns about test strips running out, to intrusive questions and instructions from well-meaning family members and care managers, and empower them by establishing their own parameters for alerts to caregivers. Do people want to be more engaged with their chronic conditions? Tullman says: No — and Harlow agrees. Many, if not most, people would rather be able to manage their care automagically, in the background, without having to make an effort, without having to be more engaged. Check out the interview (audio or transcript). The company’s approach has implications for the way in which we conceive of chronic disease management and of payment for such services.
Over at the Health Affairs Blog, Mildred Solomon offers up “The FDA’s Controversial Duchenne Drug Approval And The Moral Impulse To Rescue.” Her piece asks “What can we learn from the Food and Drug Administration’s controversial approval of the first drug for Duchenne Muscular Dystrophy (DMD)?” Against the recommendations of the FDA’s expert panel, Janet Woodcock, director of the FDA’s Center for Drug Evaluation and Research, approved the drug under the FDA’s accelerated approval pathway for a subset of patients, approximately 13 percent of the DMD population with a gene mutation amenable to the drug’s action. The controversial decision is defensible, but only if there is adequate follow through, writes Solomon.
David Williams writes “PCSK9 experience shows drug market isn’t completely broken” at the Health Business Blog. Williams asks (and answers) the question: “If drug makers can charge high prices at will, why have the new PCSK9 drugs for high cholesterol been such a failure?” It’s worth a read.
At the Health System Ed blog, Peggy Salvatore writes about the recent internet outages that hit the country. Widely used websites like PayPal, Netflix and Twitter were unavailable due to a distributed denial of service (DDOS) attack. Hackers got into those systems through technical holes in hundreds of thousands of personal wifi-enabled devices like baby monitors and personal devices to bring down a website host, Dyn. For people in healthcare who are concerned about security, it brought a system vulnerability into sharp relief. In “Healthcare Devices and the Internet of Things – Promise, Peril and Distributed-Denial-of-Service Attacks” Salvatore provides a review of some of the vulnerabilities they face and advice from IT experts on tightening up security.
The always upbeat Hank Stern takes a look at MediShare–a healthcare sharing ministry–over at the InsureBlog. He asks whether such plans are a viable alternative to other options under Obamacare and has a surprising answer. I was especially surprised, given what I’ve written previously on this same topic.
Ever the watchdog, Roy Poses writes “Legal Settlements to Remind Us How Our Health Care System Became Rigged: by GSK, Novartis, CVS” at the Health Care Renewal blog. Says Poses: “Yet more monetarily small legal settlements by huge health care corporations of unethical practices leading to overuse of pharmaceutical, and likely harm to patients given drugs they did not really need remind us of how the (US at least) health care system has been rigged to benefit corporate insiders, to the detriments of health care professionals, and especially patients. We hope that true health care reform would lead to responsible, accountable leadership of large health care corporations, ending their impunity. Unfortunately, we are also reminded by recent events in the US that revealing how our systems may be rigged could inspire reform, or could inspire the rise of a “man on a white horse” who promises to fix everything.”
For the first time in more than two decades, lost-time medical severity has declined in workers comp – no thanks to prescription drugs, which account for $17 of every $100 in medical spend. These and other key data and trends can be found in Julie Ferguson’s post at Workers Comp Insider: Highlights: Fall NCCI Issues Report.
Finally, at the Healthcare Economist, Jason Shafrin writes a post entitled “The Value of Adherence Information.” Information on patient adherence can lead to better prescribing decisions, but can we quantify the value of better decision-making? The Healthcare Economist does just this in his latest published research.
Well, that’s it for this edition of the Health Wonk Review. Congratulations to the Cubs, and remember to vote if you haven’t already!
The latest edition of the Health Wonk Review is up on the Managed Care Matters blog. Thanks to Joe Paduda for hosting. Go check it out!
Tonight, an anticipated audience of 100 million will all be tuned in to watch the first presidential debate between democratic nominee Hillary Clinton and republican nominee Donald Trump. A big part of the draw is the expectation of being entertained by a real estate developer turned brand curator turned reality TV star turned candidate for leader of the free world, who is undoubtedly entertaining. As has been stated repeatedly by many on both the left and the right, Donald Trump has said numerous things during his campaign that would have historically disqualified any other candidate. At the same time, there is a strong narrative that has circulated for decades that Hillary Clinton is not trustworthy–even when it can be independently verified that she is telling the truth. When it comes to politics, people are inherently irrational, but we seem to be taking that lack of thought to another level. The LA Times just reported that the “scope of Trump’s falsehoods [is] unprecedented for a modern presidential candidate.” Yet Clinton is the one with a website devoted to her called–and I am not making this up–LyingCrookedHillary.Com. And the articles emerging on Trump’s lying were all coordinated by the Clinton campaign, according to the folks behind a website appropriately titled “Hot Air.” Some have complained that the media is going too easy on Trump while the Trump campaign has called the media out for going too easy on Clinton. At the same time, both the Trump and Clinton campaigns have claimed the media is being too tough on them. But what about the facts? Although Trump has said that the media should not be engaged in fact-checking, there are many who are hoping that there will be real-time fact-checking at tonight’s debate, so that neither candidate is allowed to get away with lying to the American people. Fortunately, sources such as the Pulitzer Prize winning PolitiFact, and Bloomberg TV, will be doing just that.
Still, in advance of tonight’s debate, I feel compelled to engage in a little bit of preemptive fact-checking on a topic I care deeply about: U.S. healthcare. With only 90 minutes to debate, and with such vague topics as “America’s Direction” and “Achieving Prosperity,” it is unclear whether and to what extent healthcare will be discussed by either candidate. If the issue is raised, however, you can bet that Trump will do his best to throw Obamacare under the bus, while Clinton aims to defend it and stress the need to improve it. If you hate Obamacare, you’ll love what Trump says, and if you love Obamacare, you’ll love what Clinton says, but that’s still based on biases, emotion, and gut instinct. What about facts? Well, the facts are that only 9% of Americans are uninsured today–the lowest that number has been since it began being tracked. Obamacare has clearly succeeded in providing health insurance to approximately 20 million Americans. Still, that is just a single measure, and both opponents and proponents of Obamacare have other criticisms of the law. If only there were more facts.
Fortunately, thanks to the work of Molly Frean, Jonathan Gruber, and Benjamin Sommers, we know quite a bit about the success of Obamacare in providing insurance coverage. In last week’s New England Journal of Medicine the three co-authored a piece entitled “Disentangling the ACA’s Coverage Effects–Lessons for Policymakers” which outlines where the gains in insurance coverage occurred. They found that 63% of the gains in insurance coverage in 2014 were attributable to Medicaid, while 37% were attributable to private insurance purchased on the federally-subsidized Marketplace. Interestingly, the Medicaid expansion–in which 31 states and the District of Columbia are participating following the Supreme Court ruling that made it optional–is having an effect, but so too is the “woodwork” or “welcome mat” effect that results when policies cause previously eligible persons to enroll for the first time. Examples of these policy changes enacted by Obamacare might include the individual mandate to have insurance coverage, as well as the streamlined enrollment process through Healthcare.gov.
I reached out to Dr. Sommers, who is an Assistant Professor of Health Policy and Economics at Harvard’s T.H. Chan School of Public Health for his comments on the study, and this is what he had to say: “One of the key findings here is that despite all the recent attention on the Marketplaces in terms of premiums and several large insurers cutting back their presence, Medicaid remains the workhorse of the ACA’s coverage expansion.” Sommers is referring to the collapse of co-ops nationwide, the high-profile exit of insurers like Aetna, Humana, and UnitedHealthcare from the Marketplaces, and the proposed double-digit increases in health insurance premiums in many markets. It’s not that those issues aren’t cause for concern–they are–but it’s striking to see that Medicaid is accomplishing so much in its own right, even as just under half of states have not expanded the program.
“Another notable finding is that we found no evidence that the law was leading a loss of employer provided coverage, which had been one of the predictions offered by opponents of the law,” said Sommers. You might remember Congressional Republicans referring to the “Job-Killing Healthcare Law” during their numerous efforts to repeal Obamacare. The notion here was that larger employers who were mandated to provide insurance coverage to their employees might downsize their workforce to control their insurance costs. A related concern is what is known as “crowd out”–namely that when Uncle Sam offers subsidized insurance, many smaller employers–who were not mandated to provide coverage–would decide to stop offering insurance to their employees and let the government foot their share of the costs. Fortunately, that doesn’t appear to be happening.
Finally, according to Sommers, “We find that state policies have a big impact – not just the obvious question of Medicaid expansion, but also whether states started expanding Medicaid before 2014 (which led to bigger coverage gains) and whether they ran their own state Marketplaces (which made the premium subsidies more effective at enrolling people). It’s a federal law, but the states have a lot of discretion in how they implement it.” The fact is, Obamacare is working, but it works better in some states than others. More importantly, circling back to tonight’s debate and the presidential election, the law is imperfect. The outcome of this election will have much to say about its fate. If Trump wins, it is unlikely that the law will be repealed, but it is likely that nothing will be done to improve it and build upon this early success, and there is reason to be concerned about the long-term stability of Obamacare with adverse developments in the health insurance Marketplaces. Conversely, if Clinton wins, the law will certainly not be repealed. The extent to which it is strengthened will depend upon control of both houses of Congress, and the degree of policymaking that can occur through the executive branch and its federal rulemaking process. The fact is that 20 million uninsured Americans have gained health insurance since 2010. That’s more than the entire population of New York or Florida. What happens going forward depends on you and your vote. So, watch the debate tonight, check the facts, and vote in November.
I know, I know. I haven’t written a blog post in forever. Life’s been tied up with writing grant proposals and sending manuscripts out for peer-review. You know, the things people actually pay me to do. But every once in a while, something pretty big happens in the world of healthcare, and I feel compelled to dust off my keyboard and draft a quick post. After all, what would a few dozen of you do without my thoughts on the matter?
The event in question is Aetna’s announcement that it will no longer be participating in 11 of the 15 state insurance exchanges it currently serves come next year. And Aetna’s not the only one–just the most recent. UnitedHealth and Humana have also announced plans to pull back substantially. In fact, right now Anthem is the only one of the four largest insurers in the country that hasn’t said it will be exiting the exchanges. From the insurers’ point of view, the logic is straightforward: They’re losing a lot of money on the exchanges–hundreds of millions of dollars each–even as they continue to make billions of dollars in profits overall as this Bloomberg article reports.
Why are they losing money? The short answer is that the people who are signing up for insurance coverage are sicker than expected, while healthier individuals have opted to forego coverage or have obtained it outside of the exchanges. In response, the insurers have raised the cost of their products, and that has further served to keep the sickest individuals enrolled, while healthier individuals seek other options or drop their coverage. It is what health economists call a “death spiral.”
Whoa. A death spiral?! Sounds serious. Yeah, it is. Potentially. While a recent editorial from The New York Times expressed confidence that Obamacare will be just fine, that’s only true if somebody does something to fix this. Otherwise, the price of insurance on the exchange will continue to climb until it reaches a point that it becomes unsustainable for the people purchasing it or the government subsidizing it, and the insurance market will collapse.
So how can we fix it? Well, first, that assumes you want to fix it. If you’re the GOP, you hope that this doom and gloom culminates in Trump winning the White House, and Republicans keeping control of Congress, leading to repeal of the ACA. However, if you’re more interested to practical solutions to problems, there are a few things that can be done. One is to increase the penalties for not having insurance, making that a much less palatable choice for healthy individuals to make. Similarly, the federal government can increase the size of exchange subsidies. Together, these two steps would probably go a long way in getting healthier individuals to sign up for an exchange-based insurance plan, which would even out the risk pool and steady the market. Alternatively, the government could provide some sort of stop-loss or reinsurance to insurers offering plans on the exchanges who encounter higher-than-expected utilization among their beneficiaries. Finally, there’s the notion of reintroducing the public option. Yeah, you remember, that thing that Joe Lieberman pretty much singlehandedly removed from the ACA? Proponents suggest that a public option plan would work by creating more competition in the exchanges, which could keep costs down and encourage healthier individuals to sign up. I’m not terribly optimistic here, because as much as I love the notion of the public option and competition, there is a very real sense in which the public option would have the ability to artificially lower prices, meaning insurers would still be hemorrhaging cash and would likely exit the exchanges anyway. Besides, I’m not at all convinced that the political will exists to enact the public option. That said, if we had a public option and insurers still wanted to exit the exchanges, we’d be much closer to the possibility of a single-payer system than we are today.
Of course, this may all be a bit overblown. Sure, Aetna and others are losing money on the exchanges, but they can afford to. They’re still making billions of dollars every year. And Jonathan Cohn and Jeffrey Young did some sleuthing to discover that Aetna’s withdrawal from the exchanges may have less to do with losing a few hundred million dollars, and more to do with trying to manipulate the federal government. In a letter to the Department of Justice, the CEO of Aetna essentially said “Approve our merger with Humana, or we’ll leave the exchanges.” The DOJ didn’t approve the merger, calling Aetna’s bluff, and Aetna proved it wasn’t bluffing. If that’s the case, it tells you an awful lot about the motives of private insurers in the United States. But sure, if it makes you feel better, go ahead and blame Obamacare. Meanwhile, I just hope our policymakers have enough common sense to take action when it is so clearly warranted.