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Miscommunicating the Government’s Powers for Health Reform

By Michael D. Miller MD
February 8th, 2010

The Virginia state legislature recently passed a law making it illegal “to require individuals to purchase health insurance.” This action reminded me how commonly the extent of governmental powers are misperceived.

The Virginia legislature’s action follows those in other states, and are in line with the “tea party” groups’ opposition to the general direction of national health reform. But what exactly it means for a government’s actions to be “illegal” is also unclear. And as Tuesday’s Washington Post article on the Virginia bill states, “it would have little practical impact because it would be preempted by federal law.” Thus, the actions in Virginia and other states are more political than substantive, and seem to be more about the states’ laying down markers should they later want to take the Federal government to court over any individual mandates for buying or having insurance.

Powers of the Government
Hidden underneath this political discussion of the “illegality” of health insurance mandates is exactly what the government can and cannot do to force or entice people to do things.  And while academic and legal scholars may take some issues with my simplified description of governmental powers, there are basically four broad options for what governments can do to try and change people’s actions:

1. Attack
Making war, (or other type of overt or covert intervention), is probably the most dramatic of the Federal government’s powers, but presumably doesn’t have a role for health reform and mandates for buying insurance, etc.

2. Incarcerate
The government does a great job of putting people in jail, but I haven’t heard anyone talking about jail time as a penalty for failing to have health insurance.  However, healtcare for prisoners has been a potent political and policy issue at different times.  For example, it was a key message in Harris Wofford’s victorious 1991 special Senate election in Pennsylvania when he noted that if prisoners had a right to healthcare then so should all Americans. And at a much more granular level, there have been cases where prisoners have tried to stay incarcerated so they could get care for health problems because if they were freed they would have been uninsured.

3. Money, Money, Money
Money is the lever governments uses most frequently for non-criminal activities, such as health insurance, housing, food, etc…  At the most basic level governments can either give money, (e.g., tax credits, food stamps), or take it away, (e.g., higher tax rates, fines, penalties, or denial of tax deductions or credits, etc.). And the mechanisms for giving or taking money can be divided between taxes and cash - or cash equivalents like housing vouchers.

For example, in Massachusetts, the individual and employer health insurance “mandates” are enforced by financial penalties, i.e. not jail time.  Similarly, fiscal incentives for individuals and states to have or provide health insurance are very common, e.g. the increase in Federal Medicaid matching rates included in the 2009 stimulus law.

Of course, there are often strings attached to the receipt of money or benefits because neither governments nor private citizens are in the habit of leaving cash in a bag for someone to pick up and do with what they please. That is why government programs have participation requirements just as private contracts have provisions for what must be done before money is exchanged.

4. Talk the Talk
The last tool governments can use to influence actions is the power of the speech, persuasion, and illustrative illumination.  Elected and senior appointed officials have the advantage of having their words amplified through the press. Such officials can also identify individuals and companies who have done good things, as well as not-so-good things.  This type of individual identification can be very powerful, but may also be politically dangerous if praise is directed towards those who has skeletons in their closet, (either literal of figurative), which then become public.

The last type of tool that governments can use to change the world is to use government program operations and purchasing decisions to lead by example. This type of Walk the Walk action is a combination of money and talk, and an example is the State of Massachusetts using their state employees’ health benefits program to advance quality of care by using information about individual physicians to create incentives for employees to go to physicians who are rated the highest in quality. This initiative was controversial but it survived a court challenge in the State, unlike a similar initiative in New York State.

Leading by example is often not as simple as creating targeted economic incentives, because such actions can run into government procurement rules, international treaties, union contracts and other legal limitations on government actions - which may be why this tactic is not commonly used for driving public policy changes.

Conclusions
While the Federal Government has considerable power and resources, the history and legal system of the United States limits governments’ powers so that giving and taking money is the primary tool used to enforce “mandates” and “requirements.” The result is that people, companies and even state and local governments have a choice - comply with the Federal rules and get the money, or don’t and don’t get the money, or maybe even lose some money.  For example, as I noted in my last posting, the State of Arizona didn’t get any Federal matching funds for Medicaid for over 15 years because they chose to not have a Medicaid program.  Similarly, the mandates in Massachusetts for having health insurance are “enforced” by tax penalties for individuals and businesses - although the number of people and companies effected has been relatively small because of the exemptions for smaller companies and affordability for individuals.

Leading by example - either in how they run their internal operations or their procurement/contracting - is an option which governments have used less often to advance specific policies. In a time of fiscal constraints, leading by example might be a good way to leverage limited Federal money and resources - particularly around the contentious issue of health reform where it could help demonstrate the positive value of better healthcare benefits and care delivery for employees, organizations and society.

Posted in Access to Healthcare, Delivery of Healthcare, Economics & Financing, Politics | 1 Comment »

What “Will” Happen With Health Reform

By Michael D. Miller MD
November 29th, 2009

With the Senate scheduled to start debating (and likely amending) health reform legislation this coming week, speculation is rampant about what will happen with health reform.  Since the title of this blog is “health policy and communications,” I want to focus on the use of language in discussing health issues, studies, proposals and legislation - specifically the word “will.”

The word “will” is very strong and it implies a high degree of certainty about predicting future events, such as “The Sun will come up tomorrow morning.”   And while I have no problem with predicting the future - as my friends know, I have a great reputation for predicting the future, particularly about sporting events like fake punts and winning 8 straight games to win a World Series - but using the word “will” to describe the implications of scientific studies, or legislation and policy proposals, can be misleading.

Specifically, the word “will” is often used loosely as a stand in for the phrases, “is projected to be” or “is estimated to be.” For example, in a recent press release for a study about diabetes in the US it was reported that, “The diabetes population in the United States will almost double over the next 25 years…” Interestingly, the next part of that sentence states, “and annual medical spending on the disease is projected to hit $336 billion, up from $113 billion today…”  So apparently future costs can only be projected, but future cases of diabetes can be predicted with much greater certainty. [emphasis added]

Assumptions v. Future Reality
The reason to be concerned about the use of this type of language is because although the methodology for any study or projection may be valid and reasonable, its conclusions are only as good as its assumptions. And as ever researcher and policy person knows, many, many, many things can occur that cause reality to differ from what is projected based upon those assumptions - particularly over the course of 25 years. Think about it, how accurate do you think the predictions about 2009 were in 1984?

Media Contributes to Impression of Inevitability with Language
The media also tends to propagate some misleading impressions.  For example, the phraseology about the implications of the diabetes study was copied by multiple new sources - such as Time Magazine - and even expanded upon by the Chicago Tribune to imply that costs will also dramatically increase, “…diabetes cases will nearly double in the U.S. in the next 25 years and the cost of treating the disease will almost triple…” and CNN, “The number of Americans with diabetes will nearly double in the next 25 years, and the costs of treating them will triple…”[emphasis added]

What Will Happen With Legislation
It is also common so see the word “will” used when referring to legislation.  Many politicians and pundits use it in asserting that various bills and provisions “will do” something specific, such as expanding coverage, controlling costs, etc… when actually they are referring to projections or estimates - often from the Congressional Budget Office which is generally very careful about describing their work as projections or estimates.

The reason politicians, pundits, and others use the word “will” is because it is very effective in rallying support for (or against) specific bills or proposals, since it increases the impact on the listener (or reader), makes them feel more concerned about the issue, and increases the likelihood that they will  take some desired action.  Thus politicians and PR people use the word “will” rather than “projected” or “estimated.”  So the next time you hear a speech or news report about legislation that states the bill “will” do something in terms of changing the number of people with some benefit, or it “will” cost or save so much, substitute the phrase, “is projected to” for “will” in your mind, and see how much less impact and traction the message has - and you’ll see why the word is used.

The only drawback for politicians of making such statements, is that 5-10 years later when the actual results are different than what was projected or estimated, there can be rhetorical battles about why someone “promised” that the legislation “would” do something, yet the actual results were different.  (A great example of this was the provisions in the Balanced Budget Act of 1997 that were intended to expand options for Medicare HMO plans, but it actually reduced the options for such plans.)

Next Up: Implementing Health Reform - What Will Happen

Posted in Access to Healthcare, Information & Communications, Politics | No Comments »

Cost and Coverage c. 1989-91: Part 2 of Historical Perspectives on Health Reform

By Michael D. Miller MD
November 17th, 2009

As I mentioned in my last post, in going through old files I found many memos and articles about health reform.  Some of them from 1989-91 illustrate the long history of the challenge of controlling costs and providing care for more people - and eerie similarities to the current debate:

For example, below are some pieces of text from articles and commentaries published in the New England Journal of Medicine from January 1989 - October 1990:

  • “A Consumer-Choice Health Plan for the 1990.  America’s health care economy is a paradox of excess and deprivation.  We spend more than 11 percent of the gross national product on health care, yet roughly 35 million Americans have no financial protection from medical expenses. To an increasing degree, the present financing system is inflationary, unfair, and wasteful. In its place we need a strategy that addresses the whole system, offers financial protection from health care expenses to all, and promotes the development of economically financing and delivery arrangements. Such a strategy must be designed to be broadly acceptable in our society. To remedy this deprivation, we propose that everyone not covered by Medicare, Medicaid, or some other public program be enabled to buy affordable coverage, either through their employers of through a ‘public sponsor.’ … The U.S. health care economy is inflationary. It is still dominated by fee-for-service payment of doctors and hospitals by third party intermediaries with open-ended sources of finances. There is no total budget set in advance within which providers must manage the care of their patients. For the most part, there is no incentives to find and use medical practices that produce the same health outcome at less cost.” (1/5/89 -  Enthoven and Kronick)
  • “A National Health Program for the United States: A Physicians’ Proposal. Our health care system is failing.  Tens of millions of people are uninsured, costs are skyrocketing, and the bureaucracy is expanding. We propose a national health program that would (1) fully cover everyone under a single, comprehensive public insurance program; (2) pay hospitals and nursing homes a total (global) annual amount to cover all operating expenses; (3) fund capital costs through separate appropriations; (4) pay for physicians’ services and ambulatory services in any of three ways: through fee-for-service payments with a simplified fee schedule and mandatory acceptance of the national health program payment as the total payment for a service or procedure (assignment), through global budgets for hospitals and clinics employing salaried physicians, or on a per capita basis (capitation).” (1/12/89 - Himmelstein and Woolhandler)
  • “Sounding Board: It Is Time for Universal Access, Not Universal Insurance. … Universal health insurance is not a good idea.  To control goods and services through a single agency - especially when the driving force is economic - would fly in the face of the American way of doing things. … Rather than support such unworkable, soulless programs, I propose universal access through a pluralistic funding mechanism. … So, we ought not to be talking about a universal health insurance scheme, but rather about universal access - access to needed care, on a timely basis, with controls on quality and use that have been accepted by everyone involved.  The key principle of effective access and limited cost is the rationalization of care.  In this age of high-technology medicine and miracle drugs, we must realize that we can no longer do everything for everybody just because it is possible. Rather, we should develop a system in which decisions about what we do, when, where, and to whom are based on reasonable expectations of the benefits involved and on sound medical principles communicated clearly to patients and their families.” (7/6/89 - James Todd, MD - American Medical Association)
  • “Special Report: The Pepper Commission Report on Comprehensive Health Care. A look at the outcome of the commission’s deliberations give a good indication of what, in fact, it takes to build political consensus. The commission basically face two separate tasks - reform of the nation’s existing system for insurance medical or health care, and creation of a system for insuring assistance in the task of daily living we call long-term care. The commission voted overwhelmingly (11 to 4) in favor of a major government initiative in long-term care. … By contrast, the commission’s vote on health care reforms - universal coverage for people under the age of 65 (at a cost of $24 billion) and measures to promote the efficient delivery of health care - passed by the slim margin of eight to seven. … The difference between the commission’s votes on long-term care and health care, then reflects the many and pointed political pressures that will work against consensus on health care reform, not for it. … First, and most obvious, the vast majority of commission members face reelection campaigns this fall… … Second, and related, in the wake of the traumatic repeal of Medicare catastrophic coverage, members will remain acutely sensitive to potential voter reaction to any particular reform package. Third, in health care there are entrenched political interests. … Fourth, with a complex issue such as this, consensus on the whole requires many, many concessions on individual provisions. … Finally, outright partisan politics will undermine consensus on health care reform, as the commission found in the days preceding the vote, when the White House placed intense pressure on some members to resist any consensus before the November elections. … If we do not act promptly, I believe our health care system may well implode by the end of the century.   The need for action is starkly clear.” (10/4/90 - Senator John D. Rockefeller IV, Chairman of the Pepper Commission)

And other articles from 1991 show similar perspectives on health reform and the urgency for action:

Washington Post, February 17, 1991 “Devising a Cure for High Costs of Health Care: Support Grows for Concept of National Medical Insurance. … The idea [of government-imposed universal health care that would provide quality coverage for everyone], in various forms, is gaining the support of groups ranging on the political spectrum from the AFL-CIO and the American Association of Retired Persons to the National Association of Manufacturers and the American Medical Association.  For the first time since the mid-1970s, supporters of national health insurance believe they have a legitimate chance of winning congressional approval for a universal health care bill, if not this Congress, then the next. ‘This is the best shot we’ve had in 15 years,’ said a key congressional aide. With health care costs climbing more than 20 percent a year for major corporations and even more for many small businesses, disparate political groups are beginning to form a coalition for reform.

USA Today, March 11, 1991 - “Health care costs more, serves fewer.  No other part of the US economy seems less understood than health care.  Few realize why health care costs are so stubbornly high ($2,700 per American per year) or why health care seems to defy free-market economics. … What a growing number of people are coming to know is dissatisfaction with a health care system that absorbs ever-soaring sums of money while letting more and more people fall through the cracks. …  Of all the cold showers of reality falling on the USA as the ’90s dawn, none is as chilling as this: The healthcare system in this country is in deep, deep trouble.”  (Graphic shows that of the 37 million people in the USA without health insurance 49% are working adults.)

Bottom Line - The more things don’t change the more they sound the same.

Next Up: Part 3 - Perspectives from a 1992 Medical School Class “The Crisis in the American Health Care System”

Posted in Access to Healthcare, Delivery of Healthcare, Economics & Financing, Health System Reform | 2 Comments »

Making Sense of Health Reform

By Michael D. Miller MD
November 2nd, 2009

After spending a week in Washington DC talking to lots of people, and reading all sorts of information, I’m still not sure how to simply explain the the current state of health reform legislation - except to say that it is unfolding pretty much as expected:

  • It is taking a lot longer than planned, i.e. the August deadline never seemed realistic
  • There are pockets of agreement, but no solid majorities for a single bill
  • The Senate and House are operating in parallel, with the Senate being more conservative and focused on issues important to rural communities
  • Costs and spending are defining the framework within which all the ideas and packages are bouncing - like a 1970s video game
  • And political motivations and calculations are the firmament for many - if not most - positions and actions

Politics with Elections on 12 Month Horizon
On the last point, there has recently been ample evidence.  For example, the National Journal’s Insiders Poll recently asked, “On health care reform, what outcome would most benefit your party in the 2010 midterms?”  The results show that both Democrats and Republicans think that the best thing for their party would be “Enacting Legislation similar to the House committee bills.”  (44% of Democrats chose this option compared to 35% of Republicans, 37% of whom chose “Enact nothing”)

While there isn’t bipartisan agreement about the substance for health reform, both sides think that health reform like the House committee’s bill would be best for them politically.  As a Democratic respondent stated, “A strong health care package will be popular, especially when people see that none of the predictions from the town hall crazies came true.” And from the Republican side, “With more and more Americans distrustful of government, passing the House bill would be a gift to the GOP.”  The problem with the Democrat’s substantive - and probably correct - insight, is that most of the bills’ provisions won’t start until 2013 because it will take that long to create the rules and infrastructure for implementing substantive reforms.  To that point, another Republican noted, “Passing the most liberal version helps Republicans: The theme for  2010 and ‘12 will be, elect more Rs so we can fix this before it goes into effect.”

Other articles in the October 17th issue of National Journal also point to the highly political stakes and schisms behind health reform legislation for the Democrats:

  • “Ultimately, the verdict on the efficacy of Obama’s style will depend in significant part on whether health care legislation passes, said Larry Sabato, a professor of politics at the University of Virginia. ‘Health care could be his hammer - if he gets it, he will have proven that his style works, that you don’t have to be an in-your-face LBJ type to get significant health reform.  But if it falls apart or he gets a tiny piece of it, then there will be criticism that he is ineffective and not tough enough.’” (From “Is Obama Tough Enough?”)
  • “Although health care is becoming ground zero in the economic and values conflicts that loom within the Democratic majority, a host of other issues also have the potential to undermine party solidarity.” (From “Democratic Fault Lines Open Up.”)

To negate the Republicans’ ability to leverage people’s fear of change as they pick apart proposed rules and regulations - while also proposing legislative changes and repeals - some Democrats have called for more of the benefits to start earlier, i.e. before 2013. However, starting some benefits earlier would increase the 10 year costs of the new law, and - in contrast to expanding existing programs like Medicaid - many provisions would require new programs and rules.  Both of these factors make earlier implementation both practically and politically very challenging.

Despite these realities, and the political intricacies of the US Senate, Majority Leader Reid has taken control of melding the Finance and HELP Committees’ bills and is apparently steering it in a direction to address his reelection concerns in Nevada - at least according to the Washington Post’s Dana Milbank.

Another political complication for moving health reform legislation forward this week - as Speaker Pelosi has indicated - is Tuesday’s elections across the country. Normally moving things forward in a speedy fashion would be good, but asking Members to vote on something so potentially politically contentious right after local elections in their home areas may make them hyper-sensitive about their reelection concerns.

Coverage Beats Cost Containment Like Rock Covers Paper
Within the twin goals of having health reform legislation cost less than $1,000.000.000,000.00 over ten years and not adding to the Federal deficit, legislation has evolved to focus on expanding coverage while drifting away from significant changes to healthcare delivery that would control long-term spending.  This has occurred for two reasons: Spending money on coverage expansion is relatively easy, while changing the operations of the delivery system is much harder, and actually requires more than just financial incentives.

The extent of this shift is described in the recent analysis of HR 3200, (as passed by the Ways and Means Committee), conducted by the Actuaries Office at the Centers for Medicare and Medicaid Services. Although the Congressional Budget Office is the arbiter of the official cost estimates for legislation, they focus on federal costs, while the CMS Actuary analyzed the effects of the legislation for total healthcare spending, as well as expansion of insurance coverage.  Looking at the numbers in their report for the years 2013 and 2019 are very informative:

First, the actuaries estimate that the four provisions intended to reduce healthcare spending would have minimal impact, with only comparative effectiveness research reducing spending by a few hundred million of dollars out of total spending estimated to be over $4.6 Trillion in 2019:

Cost Reducing Provisions in Health Reform

Second, the actuaries estimate that the legislation would increase insurance coverage through Medicaid/CHIP and via the Exchange, while having no effect on Medicare and little effect on employer provided health insurance.  Overall, the legislation is estimated to reduce the number of uninsured by 33.9 million in 2019, leaving 23.0 million uninsured - including unauthorized immigrants, which others have estimated to currently total ~6-7 million:

Insurance Coverage Expansion from Health Reform Legislation

Third, the actuaries estimate that the legislation would reduce spending on Medicare, and private out-of-pocket and direct insurance purchases, while increasing spending for Medicaid/CHIP coverage, and for insurance acquired through the Exchange - both private insurance and the proposed public plan option:

Changes in National Health Spending from Health Reform

Bottom Line - Start Making Sense
It is looking more likely that a bill will be enacted before the end of the year - but that outcome is far from certain.  If passage of legislation doesn’t occur by the end of December, there are three other possible outcomes:

  1. The bill - and various amendments - could be brought to the floor to allow Members to go on record about health reform overall and various specific issues.  (This presumes that a bill isn’t brought to the floor with the expectation of passage, but fails.)
  2. Negotiations are carried over into 2010 because the Democratic leadership doesn’t have the votes to pass a bill in December.
  3. With the outlook for getting enough votes for passage looking bleaker as the 2010 elections loom closer, the Democratic leadership could decide to shelve major health reform legislation, cobble together a bill of Medicare and related changes that are needed, and pass that bill at the end of December.

The first and third outcomes would bring closure (if not cloture) to the process and create space for other issues requiring Presidential and Congressional attention.  The second route would prolong the debate and maintain the possibility of passage - but with decreasing likelihood.

In addition, as a major health reform legislation is being debated in Congress, it is very unlikely that the Administration will nominate an Administrator or Deputy Administrator for CMS. This makes sense because presenting a nominee would divert attention in the Senate, and whoever is nominated would face an armada sized barrage of questions about ever large and minute issue in the pending legislative proposals. However, it also leaves CMS without its full compliment of political leaders, which could be a problem in 2010 whether they are tasked with implementing large parts of a new health reform law, or more focused changes to Medicare and Medicaid.

So will healthcare reform start making sense to the average voter, or will the whole issue blow up for Democrats in the 2010 election - either through failure to pass anything or by overreaching and fueling the wild-eyed fires in the red and purple pockets on political strategists maps?  The answers to these and other questions about the policies and politics of health reform will come sooner or later - and certainly by November 2010.

p.s. What the Talking Heads Said in “Stop Making Sense”
There are some interesting insights and parallels about the current health reform situation from the Talking Heads’ 1984 film “Stop Making Sense.”  In particular, there seems to be some prescient message in the titles of a few of their songs included in the movie (with my annotations):

  • Psycho Killer - (Rabidly opposing health reform based on disparaging mischaracterizations?)
  • Slippery People - (No comment necessary)
  • Burning Down the House - (The goal of the Republicans? Or what the Democrats could achieve by overreaching or mishandling health reform?)
  • Making Flippy Floppy - (What is a public option and why?)
  • Swamp - (Will health reform get mired in a swamp?)
  • Once in a Lifetime - (What many health reform advocates think this is?)
  • Crosseyed and Painless - (How many people working on health reform feel right now?)

Posted in Access to Healthcare, Federal Healthcare Reform, Health System Reform, Politics | No Comments »

Off-Label Communications: Is More Less?

By Michael D. Miller MD
October 4th, 2009

Allergan corporation has filed a law suit against the Federal government challenging the FDA’s limits for companies discussing or promoting off-label uses of approved medicines.  This is not a new issue, but the news reports indicate that Allergan is going very old school and basing their legal challenge on Constitutional freedom of speech rights.

The issue is not can doctors and patients use approved medicines for conditions, (or in ways), which are not specifically approved by the FDA, but can companies discuss these off-label uses with physicians or provide them with published information about these off-label uses?

Competing Risk-Benefit Perspectives
The competing risk-benefit perspectives that surround this issue are nearly identical to the trade-offs that all stakeholders in biomedical research and development face - including the FDA, companies, patients, clinicians, and legislators:

  • Creating a landscape that protects individuals and public safety
  • Being flexible enough to provide clinicians and patients access to the best available treatment possibilities
  • Providing companies a reasonable market environment that creates incentives for developing new treatments and investigating new uses for already approved medicines, which also has marketing rules that are as clear as possible so companies can conduct business without being excessively concerned about straying into regulatory gray zones

Off-label use is common in clinical practice - particularly for disease areas like cancer - because it often represents the standard of care.  And in situations where a medicine approved to treat a common condition has an off-label use for a rare condition, the company has very little incentive to conduct the expensive and time-consuming clinical research to get the FDA to approve that rare off-label use.

There are a few key points underlying the issue of communicating information about off-label uses:

  1. The Constitutional freedom of speech rights for a company are not as expansive as for an individual
  2. The FDA’s regulatory authority focuses on the approval for sale and marketing of medicines, (and some other product areas), and not their use in clinical practice - with some very rare exceptions
  3. The FDA’s position about companies disseminating information about off-label uses has not be fixed in stone

On this last point, the 1997 FDA Modernization Act included a provision to expand the ability of companies to give physicians journal articles and similar material about off-label uses of approved medicines.  After that the Washington Legal Foundation brought a law suit seeking to expand off-label information dissemination.  And when the FDAMA provisions expired in 2006, the FDA proceeded with rule-making guidance to replace the FDAMA provisions, and this final guidance became effective in January 2009.

Not having read the details of Allergan’s legal challenge - and since the FDA doesn’t comment on current suits - it’s hard to assess the specific pros and cons of their positions.  But considering the extensive legislative and case law involving this issue, the company certainly seems to have a very steep hill to climb.  On the other hand, it would seem unusual that they would spend the time and money to bring a legal challenge unless they felt they had a chance to prevail. However, Allergan’s suit may have implications for the FDA, industry, clinicians, and patients for several or many years - even if they lose - because they may be making a pretty big splash in the policy pond with such a public challenge to change the rules for off-label promotion, and this will likely alter the landscape for any future actions.

I was involved with a somewhat analogous situation in the mid-1990s where a lot of groundwork had been done to prepare for a substantive debate about reforming a fundamental life sciences policy issue.  However, one company had an urgent and particular need for a legislative change, and they proceeded to pursue every reasonable and extraordinary avenue for getting the change they wanted.  The end result was that all our subsequent discussions were short-circuited because every policy stakeholder’s response upon raising this issue, was “Oh, I know about THAT issue,” with the implication that it was something they wanted nothing to do with because of the controversy the one company had stirred up with their expansive activities.  (I’ve purposefully not named the issue so as to not perturb anyone or any company about something that happened years ago.)

Collective Sausage Making
The moral of this story is that to make productive changes stakeholders within and across groups frequently need to work together. And if they don’t, the well can easily get polluted for everyone when policy makers avoid any action because they connect the issue to a nasty smell.  This may be another manifestation of the old adage, “the two things that shouldn’t be seen being made are laws and sausages.”

Happy Sausage Making - 2009

Posted in Delivery of Healthcare, FDA, Information & Communications, Quality of Care & Safety | No Comments »

What is Health Reform, and Why?

By Michael D. Miller MD
August 6th, 2009

As Congress enters the August district work period, (the official name for the August recess), the debate about health reform has shifted from Congressional hearings and mark-ups to local Town Hall meetings, the media, (print, talk radio, talking heads on TV, and the blogo-YouTube-osphere), and the astroturf campaign styled world of organized phone banks, shout downs, and meetup/get-together rallies/service days.

Proponents and opponents on all sides are participating in and supporting all these types of activities.  But the questions I keep getting are, “what is the proposal?” “What is in the President’s bill?”  “What is health reform?”

Simply answered, 1) There is no single proposal - three House Committees have passed bills, (which need to be melded into one bill for consideration by the full House of Representatives in the fall), and one Senate Committee has passed a bill and another is still trying to cobble together a bipartisan bill; 2) The President has 3-4 principles, but doesn’t have his own “bill”; and 3) That is still being determined - but if you listen to the escalating frenzy, (which is why I frequently wear earbuds that may or may not be connected to an MP3 player), health reform is all about a public insurance plan option.

Health Reform Centering on a Public Plan Option
So why is the debate focusing on a public plan option?  Probably because it serves as a fulcrum for many of the hot button sound-bites on both sides:

  • A  public plan option is necessary to create competition in the insurance marketplace
  • A public plan option is necessary to provide competition to private health insurance
  • A public plan will keep the private insurance companies “honest” by creating a  competing organization that won’t be concerned about profits
  • A public plan is the first step to achieving a single-payer health system
  • A public plan is a government take-over of the healthcare system
  • A public plan is socialism
  • A public plan is the first step to a college football Bowl Championship playoff system - OK nobody has said that…. yet

What is a Public Plan, and Why?
As I’ve written in the past, there has been many descriptions of what a public plan could be - ranging from  the Federal Employees’ Health Benefits Program (FEHBP) to traditional Medicare - and yes, Medicare is a government program despite some media reports of individuals telling Members of Congress to “keep the government out of Medicare.”

Obviously the structure of a public insurance plan would determine its affects on the US healthcare system. While analyses of all possible public plan options haven’t been conducted, a few have looked at how much could be saved and how many people might enroll in a public plan that looks something like Medicare - but paid higher rates to doctors and hospitals, and was run more flexibly than traditional Medicare.

John Sheils at the Lewin Group released a report analyzing this type of public plan option, and a more recent report from the Urban Institute expands on that work and makes the case that this type of public plan option is needed to increase competition in the health insurance marketplace because there has been significant consolidation in recent years. The Urban Institute’s paper makes some compelling arguments, but its analysis also combines creating a public plan option with national insurance reforms, (i.e. replacing state based insurance regulation), and national or regional health insurance exchanges.  Since each of these three initiatives, (public plan, national regulation, and an exchange), would change the competitive landscape of the health insurance market, it would be helpful to have analyses examining each of these ideas alone and in different combinations. [Note - the Urban Institute released a report in April about Health Insurance Exchanges, which discussed how exchanges can increase competition and consumer options by reorganizing the market for health insurance.]

An informative real-world initiative about what the combination of insurance regulation and a health insurance exchange can accomplish has occurred in Massachusetts.  With insurance regulation historically being the responsibility of the states, Massachusetts has had rather stringent regulations, (for example, see this chart from the Georgetown University Health Policy Institute), which is why none of the media stories about individuals being denied coverage by their insurer for apparently necessary care have come out of Massachusetts.  On top of this strong regulatory environment, in 2006, the state created the Commonwealth Connector exchange to make 3 levels of insurance packages from several insurance companies available to individuals and small companies across the state.

Has this increased competition, transparency, and the ability of individuals to compare plan options?  Yes, yes, and yes. Has it controlled the growth in health insurance costs?  Maybe a bit - but not enough because insurance costs reflect the underlying cost of care people are getting, and insurance regulation and an exchange alone aren’t going to “bend the curve” in healthcare costs. So it could be argued that the purpose of a public plan option is cost containment, and the Urban Institute’s analysis concludes that there would be system-wide savings from the public plan option.  However, these savings are based on the public plan paying lower rates to doctors and hospitals, and thus competitively driving down all prices and costs - rather than any br0ader healthcare delivery reforms resulting in improved quality and efficiency.

Answering the Question
So while health reform options have been debated and analyzed, there still seems to be many questions about what health reform will be when Congress finally comes to some semi-consensus around one bill in October, November or December. What is clear, is that whatever this is, it will be called “health reform.”

But beyond what is in that bill there is a lot more that should be considered “health reform.” Specifically, earlier this year, Congress allocated $1.1 billion for comparative effectiveness research, $10 billion more for NIH research, about $30 billion for implementing health information technology, expanded SCHIP (an existing public insurance program run by the states) to cover an additional 3 million children, empowered the FDA to regulate tobacco, and are examining ways to improve food safety and other initiatives outside of the “health reform” bill to improve the health and well-being of Americans - both through targeted legislation and changes to regulations and government operations.

So what is health reform?  It’s going on all the time in many places and ways.  Some of it is happening at the state and local levels, some of it is happening at the Federal level, some of it is happening in the private market, (with large employers working together to improve the healthcare they are buying), and some of it is happening within health delivery systems that are working with organizations like the Institute for Healthcare Improvement to improve quality and reduce costs.

While the focus has been on doing “health reform” this year, the reality is that we will have to keep “doing” health reform for many years to really make significant improvements.  This process of health reform is like making a good red wine:  It takes several years after the vines are planted before they bear fruit - and they must be regularly fertilized and tended to. It then takes several more years before the harvest is good.  And making the wine requires that the grape squeezings ferment to produce the beginning of the wine which then must age to make a really quality product.

Easy? No.
Time consuming? Yes.
Worth the time and effort? Yes.
What’s the alternative? Whining about why “health reform” hasn’t happened.

Posted in Access to Healthcare, Delivery of Healthcare, Health System Reform | 1 Comment »

Healthcare Policy and Healthcare Politics - Summer 2009

By Michael D. Miller MD
May 26th, 2009

As Congressional Committees appear to be steadily walking towards the starting line for considering health care reform legislation next week, I’ve been thinking about various healthcare policy and political events and activities that will influence the substance and process for these efforts over the coming months - and perhaps years.

Because a complete examination of all the important events and documents from the last several months and years would be too long for a single post, summarized below are some of my observations and thoughts about the meaning of 5 touchstones that people will likely reference in the coming months as part of the health reform dialogue:

  1. Massachusetts’ health coverage and reform initiative
  2. The Senate Finance Committee’s 3 Policy Option Papers
  3. Frank Luntz’s health care talking point paper for Republicans
  4. The May 11th letter from 6 national groups to President Obama
  5. The Democratic Party’s development of Organizing for America

As discussed below, each of these activities and documents has dual (or dueling) policy and political goals, (i.e. changing policy to improve the healthcare system, or designed to win political points), that may be aligned or in conflict.

1. Massachusetts Health Coverage and Reform Initiative

  • The original legislation was a political compromise that included:
    • The use of private insurance to expand coverage
    • An individual mandate
    • An employer penalty for not having all their workers insured (a.k.a. play or pay)
  • Single payer is discussed and supported in Massachusetts, but wasn’t part of the state’s health reform initiative
  • The state’s Commonwealth Connector insurance exchange doesn’t include a public plan choice/option
  • Despite not being a single payer system, nor including a public insurance plan option, the state’s initiative expanded insurance coverage to more than 97%
  • With the success of increased insurance coverage has come expanded demand for primary care services and subsequently longer waiting times for those services
  • The state is looking at various processes for controlling costs as a second outcome to be achieved
  • The state’s ability to control health care spending will likely require Federal regulatory and/or legislative cooperation from programs such as Medicare, Medicaid, and ERISA

2. Senate Finance Committee’s Policy Option Papers

  • Between April 29 and May 20th the Senate Finance Committee released 3 papers describing options for health delivery system transformation, expanding coverage, and cost savings and revenue raising.  (The Committee also held hearings on these papers.)
  • The overarching theme in these papers is transparency and accountability
  • Several issues are notable for their absence from the papers:
    • Discussion of a single payer option for overall reform
    • Cost savings estimates for a public plan option
    • Changing or repealling Medicare Part D’s “Non-Interference” provisions as a source of revenue
  • The only mention of ERISA is in the savings and revenues paper - It is not discussed in the context of health delivery transformation or expanding coverage
  • Medicare’s physician payment formula problem is discussed, and the cost of a 10 year freeze is cited as $285 billion
  • Accountable care organizations (ACOs) and care coordination are frequently mentioned goals, but the papers generally only propose demonstrations or pilot projects rather than definitive programmatic changes

3. Frank Luntz’s “The Language of Healthcare 2009″ Paper

  • This paper advises Republicans how to talk about healthcare in a purely political context.  It doesn’t substantially address policy aspects of health reform issues, and it is all about winning as many Republican and moderate hearts without considering their minds
  • The goal of Luntz’s talking points are to paint Democrats’ health reform plans as leading to government bureaucrats making health care decisions, rationing of care, and denying access to necessary care
  • The paper builds upon the premise that patient-doctor relationships are good and that government bureaucrats are bad.  It specifically states that the Democrat’s “government takeover” of the healthcare system will result in a bureaucrat putting “himself between you and your doctor, denying you what you need”
  • Luntz’s paper leverages people’s fear about loss of control and autonomy, but it doesn’t address people’s immediate and real concerns that high costs are denying people access to the insurance or care they need - in effect rationing based upon the ability to pay for the ~49 million people in the US without health insurance and the millions more who are underinsured because they can’t afford their co-payments or deductibles

4. May 11th Letter to the President from 6 National Groups

  • The 2 page letter from AdvaMed, AHA, AHIP, AMA, PhRMA, and SEIU is mostly political posturing
  • The letter uses all the right phrases:
    • “access to affordable high quality health care”
    • “transform the health care system”
    • “transparency that supports effective markets”
    • “aligning quality and efficiency incentives”
    • “encouraging coordination of care”
    • “adherence to evidence-based best practices”
  • Karen Ignagni deserves big kudos for pulling together the other 5 groups and getting agreement for the letter, but herding their collective seagull-like members into agreement for specific reform proposals - other than an individual mandate to have insurance - will be a much bigger challenge, as Paul Krugman recently discussed in his recent column
  • Getting all these groups to the same side of the same table is a success of process, but not a successful outcome.  A collective meeting of minds of similar groups was necessary for the enactment and implementation of Massachusetts’ coverage expansion law, and it is also being used in the state’s efforts to control the growth of healthcare spending

5. Organizing for America (OFA)

  • The Democratic National Committee (DNC) is working to develop OFA as a program to capture the grassroots energy and organization of the Obama campaign, with the goal of using OFA to support the Administration’s policy initiatives - the first of which is healthcare, to be followed by energy and education
  • On May 16th I attended an OFA-MA organizing meeting - along with about 500 other people from around the state. The open Q&A and my discussions with individuals made it clear that single payer has strong and wide support in this group, despite candidate and President Obama’s consistent message that if we were designing a system from scratch, single payer would be an attractive option, but given our immediate needs and problems, other significant targeted changes are needed to improve people’s lives by increasing coverage and controlling costs quickly and effectively.  (Not too mention that such targeted changes face much lower political hurdles than a single payer reform option.)
  • OFA is gearing up for Congress’ consideration of heatlhcare legislation by organizing house parties across the country on June 6th to gather individual stories and prepare the OFA grassroots rooters to engage their elected representatives, the media, and whoever else they can reach on healthcare reform

Conclusions

  1. How to pay for health reform still hasn’t been determined, and this summer Congress will also have to “fix” Medicare physician fee schedule - which will cost about $20 billion/year
  2. The most difficult aspects of health reform, (outside of paying for it), are how to do risk/severity adjustments for payments and quality analyses, how to measure the success of initiatives using a blend of process and outcome measures, and how to estimate, (or “score”), costs or savings from many of these initiatives - particularly for those that involve behavior change, disease prevention or health promotion, or are expected to act synergistically with other initiatives, such as patient-centered medical homes or other care coordination intensive models
  3. Agreement on principles is easy, but agreeing to specific proposals is difficult because one person’s waste is another person’s income
  4. ERISA is the 500 pound gorilla-issue sleeping in the corner
  5. Massachusetts is different than most other parts of the country - both in terms of policy and politics - but its experience presents valuable lessons about the process for bringing stakeholders to the same table and for creating a health insurance exchange with low-income subsidies
  6. Politics will be required to enact national health reform legislation, but the specific policies put into new laws will be important for determining their success or failure upon implementation, because a disconnect between politics and policy can result in legislation that produces outcomes different from what are intended.  For example, the Balanced Budget Act of 1997 changed the Medicare managed care program, (and renamed it Medicare+Choice), with the goal of expanding managed care options for people enrolled in Medicare.  However, following BBA ‘97 Medicare+Choice options decreased rather than increased.  In addition, success or failure of one initiative sets the environment for the next, e.g. the failure of BA’97 to expand Medicare+Choice enrollment created the context for the development of the Medicare Part D prescription drug program in 2003.  Similarly, the success of Massachusetts’ expansion coverage law has enabled the state to explore options for controlling overall health spending as a next step - something that would not have been possible if the expansion law had failed or been derailed…… as it had been twice before.

Footsteps


Posted in Access to Healthcare, Delivery of Healthcare, ERISA, Economics & Financing, Federal Healthcare Reform, Health System Reform, Medicare, Politics | No Comments »

Improving Cancer Care in Medicare

By Michael D. Miller MD
May 5th, 2009

This week’s AMA News includes an article about how cancer care for Medicare beneficiaries has improved because of a provision in last year’s Medicare Improvements for Patients and Providers Act (MIPPA).  The provision of interest clarified that Medicare Part D plans need to pay for off label uses of medicines to treat cancer when there is supportive evidence in the peer-review literature.  This changes became effective January 1st, and for at least one patient, it has improved their care. (See the Medicare Rights Center’s press release about the coverage appeal they won for a client because of the new law.)

However, as I noted in an interview with the American Medical News ReachMD Radio-XM 160, (See MP3 audio file below), because the change only applies to cancer treatments, patients with other serious and life threatening illnesses may still find their treatment options limited.  That is, under current law, for non-cancer illnesses, Medicare Part D plans can still limit coverage to only the off-label uses listed in the standard compendia.

American Medical News ReachMD Interview May 5, 2009 - Off Label Coverage by Medicare Part D Plans
American Medical News ReachMD Interview May 5, 2009:
Off Label Coverage by Medicare Part D Plans

I had recommended that the MIPAA change go beyond cancer to include serious or life-threatening conditions - terminology that is somewhat imprecise, but widely recognized, including by the FDA. However, I suspect that because of cost concerns, this broader expansion of off-label coverage was not included in MIPPA.  I find this interesting for two reasons.  First, in these times of record government spending, even MIPPA’s limited coverage expansion for off-label cancer treatments raised some concerns about cost increases - which I wrote about in January.  And second, that restricting coverage of treatments in this way seems philosophically opposite to the intended benefits of Comparative Effectiveness Research - which is all about using the best research findings to improve the quality of care.  Of course, with the size of our health care system, I’m sure this won’t be the last time the left and right hands are not perfectly in sync.

Juggling Balls

Posted in Access to Healthcare, Comparative Effectiveness, Delivery of Healthcare, Innovation, Politics, Quality of Care & Safety, Therapeutic Substitution & Interchange | No Comments »

Business Perspectives on Comparative Effectiveness Research

By Michael D. Miller MD
May 2nd, 2009

Comparative effectiveness research continues to be a hot health policy issue for many companies and stakeholders, in part, because they’re concerned that CER information will be used to deny access to innovations because of cost.

I recently talked with Jeff Sandman, CEO of Hyde Park Communications, about how healthcare companies should productively approach CER issues, and how quickly CER would lead to dramatic changes in the healthcare system.  (See part of our conversation below.)

There will certainly be more reports, seminars, meetings and Congressional hearings about CER as the $1.1 Billion in ARRA funding for CER is distributed, and the results of that research begins to roll in. I’ve written about CER in the past, (see here and here), and expect to continue writing and talking about it in the future - and I would be very interested to hear anyone else’s perspectives on this issue and how they think it will impact the transformation of healthcare.

Posted in Access to Healthcare, Comparative Effectiveness, Delivery of Healthcare | No Comments »

30% Off Health Care

By Michael D. Miller MD
April 27th, 2009

I get lots of emails.  Some are interesting.  Others are Spam – such as the one offering to double my gas mileage by showing me how to run my car on water.  (Don’t they know that cars run on air not water!!!!!)

And last week I got one promising to cut health care expenses by 30%.  Not just my health care expenses, but the entire countries spending on health care. (See their promotional coupon below.)

30% off health care coupon

As you can see, this is really a call for people to support a public plan as part of health reform.  This is a great message and marketing gimmick, but the problem is that nobody has agreed on the definition of a “public health insurance option.”  For example, Nancy-Ann Deparle, (Director of the White House Office of Health Reform), has said that a public plan could be like the Federal Employees Health Benefits Plan, which offers government employees a range of private insurance and managed care options.  But I haven’t heard anyone suggest that the FEHBP has reduced costs or premiums by 30%.

The 30% figure probably came from the Lewin Group’s analysis of how many people might go into a public plan option and how much it could save.  Their report put some numbers around the obvious conclusions that the lower the prices the government plan paid for healthcare products and services, the less it would cost and the number of people going into such a plan would be greater. They specifically found that, “If Medicare payment levels are used in the public plan, premiums would be UP TO 30 percent less than premiums for comparable private coverage. [emphasis added.]

Another factor that could influence the structure of a public plan, (if one is created in this thing we’re calling health reform), is that paying for healthcare care based upon each service, (a.k.a. fee-for-service), is being widely blamed as a prime cause for healthcare inflation.  And many payers - including the state of Massachusetts - are looking for other ways to pay for healthcare, such as making payments based upon quality or complete episodes of care….basically anything but fee-for-service (FFS).  Thus, the long term viability and cost savings of a public plan based upon Medicare-like FFS reimbursements is questionable. However, creating a public plan based on payment systems that aren’t yet widely used - such as global payments - also seems problematic.  And going the route of Massachusetts, (whose Connector is very much like FEHBP), seems too simple and probably won’t produce significant near term savings.

All this leaves me wondering what will happen, and if there are fourth, fifth, or sixth options?

Posted in Access to Healthcare, Delivery of Healthcare, Federal Healthcare Reform, Health System Reform, Politics | 4 Comments »

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