Ryan Selection Heightens Medicaid Issue

NPR – The addition of Rep. Paul Ryan to the GOP ticket is certain to elevate health care as a campaign issue this fall. Most of the debate is likely to be about Medicare, and Ryan’s controversial plan to transform the popular program for the elderly and disabled.

But some of the attention is likely to focus on Medicaid, the health care program for those with low incomes, as well.

Medicaid — not Medicare — is actually the nation’s largest health insurance program, covering some 60 million Americans with very limited incomes. But you’d be excused for not knowing that, because Medicaid doesn’t get nearly as much attention as Medicare does.

That may be changing, however. The Supreme Court earlier this summer put the program in the news when it ruled that the Medicaid expansion in the 2010 health law must be optional for states.

That’s given more ammunition to Republicans, including presidential candidate Mitt Romney, who want to offer states far more responsibility for Medicaid.

“The state is the best place to determine what is the best way to help those poor,” Romney said in a health care speech at the University of Michigan in 2011. “And so I would therefore block grant to the states’ Medicaid funds, and say to the states, ‘You now use these monies as you feel appropriate to care for your own poor.’ “

Only there’s a catch, said President Obama in a speech to Associated Press editors in April. Under the Republican congressional budget Romney has endorsed, Medicaid funding would not only be turned back to the states, it would be cut substantially.

“They would have to be running these programs in the face of the largest cut to Medicaid that has ever been proposed,” he said, “a cut that, according to one nonpartisan group, would take away health care from about 19 million Americans.”

Among those, he said, would be “someone’s grandparents who, without Medicaid, won’t be able to afford nursing home care … many are poor children. Some are middle class families who have children with autism or Down syndrome. Some are kids with disabilities so severe that they require 24-hour care. These are the people who count on Medicaid.”

But Republicans on Capitol Hill counter thatMedicaid doesn’t work very well.

“Medicaid is breaking the bank,” said Rep. Tim Huelskamp, R-Kan., at a news conference last month.

Huelskamp was speaking in support of a House bill that would transform Medicaid from its current status — as an unlimited entitlement program whose costs are shared between the federal and state governments — to a limited block grant to each state.

“[Medicaid is] actually probably the worst care system that we have in the entire country,” he said.

There’s a reason Huelskamp and others make that claim. Over the years, many studies have shown that people with Medicaid coverage do worse than people with other health insurance coverage or people with no coverage at all.

But Medicaid researchers say those studies don’t portray Medicaid accurately.

Katherine Baicker, a professor at the Harvard School of Public Health and a former economic adviser to President George W. Bush, says a lot of the studies haven’t been able to control for the fact that people who get Medicaid tend to be in worse health than people who don’t.

“It’s not that Medicaid is causing the health outcomes to be bad, it’s that people with more health needs — or potentially more serious health conditions — are the ones who more likely successfully sign up for Medicaid,” she said in an interview.

But now that’s changing. Last year, Baicker was part of a unique study that took place in Oregon. That state held a lottery for low-income adults to see who would gain Medicaid coverage and who wouldn’t. That gave researchers a chance to make apples-to-apples comparisons on how Medicaid actually affects enrollees’ health.

Its findings were almost uniformly positive.

“We found that gaining access to Medicaid increased health care use – and that was preventive care, doctor’s office visits, but also hospitalizations,” she said. “It dramatically reduced financial strain, such as lowering the likelihood of having a bad debt sent to collection by 25 percent.”

People who got Medicaid were also more likely to report being in better health as a result.

Baicker is also co-author of a study out just last month in the New England Journal of Medicine. It compared three states that expanded Medicaid to low-income adults with three neighboring states that didn’t. It wasn’t as scientifically rigorous as the Oregon study, but it had a much larger study group.

“We found, in fact, that states that expanded Medicaid to that group of adults relative to states that didn’t, had substantially lower mortality,” she said, meaning people who got Medicaid coverage were less likely to die than people who didn’t.

The New England Journal of Medicine study couldn’t tell if Medicaid was the reason for the lower mortality or not. But it does refute other studies suggesting that Medicaid is bad for people’s overall health. And it’s likely to serve as still more fodder as the political debate over Medicaid heats up this fall.

Marcus Welby/Steve Jobs approach to Medicaid

Dave Chase, Contributor

Powering & studying the disruptive innovators reinventing healthcare

Pharma & Healthcare
3/11/2012 @ 9:49AM |1,643 views

The Marcus Welby/Steve Jobs Solution to the Medicaid-driven State & County Budget Crisis

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Not a week goes by without seeing some headline about deficits pushing municipalities to desperation or Bill Gates describing state budgets using accounting techniques that would make Enron blush.  The common culprit: healthcare costs with Medicaid being the biggest driver.

Fortunately, there is a solution that has bipartisan support and has shown to reduce healthcare costs by 40-80% (e.g., Seattle-based Qliance). It can be described as two parts Marcus Welby and one part Steve Jobs. The federal health reform bill included a little-noticed clause allowing for Direct Primary Care (DPC) models to be a part of the state health insurance exchanges. That little-noticed clause (Section 1301 (a)(3) of the Affordable Care Act and proposed HR3315 to expand DPC to Medicare recipients) should have the effect of massively spreading the DPC model throughout the country.

The future is already here — it’s just not very evenly distributed. – William Gibson

A common myth is DPC is the same or similar to their more expensive cousin — concierge medicine. Not so. Typically one-third of DPC practices are uninsured people. AtlasMD in Wichita, KS is run by Dr. Josh Umbehr who recently mentioned to me one of his patients. Due to tough economic times, she’s living in a storage unit. Her monthly fee ($50/mth which is inclusive of all fees) is less than she was paying in co-pays at the local public health facility. Another is MedLion. One of their recent clinics is in Salinas, CA (a farming community) and caters to farm workers . The waiting rooms are nicer than a public health facility because can put their resources towards a more pleasant experience than billing systems and personnel. AtlasMD has 2 MDs and one NP. No admin staff. Zero. Everything is low cost software, etc.  DPC organizations such as WhiteGlove Health and arriveMD have even lower overhead as their practice are run as a clinic on wheels. [Disclosure: Two of the organizations mentioned, arriveMD and MedLion are customers of my software company, Avado.]

Let’s break down how it’s possible to provide such a high level of service at such an affordable price (i.e., less than a typical cable bill). It’s simple: low overhead. It’s not unusual for a primary care practice to have 3-5 administrative staff for every doctor. This is necessary to deal with the myriad insurance billing schemes that can best be described as a Gordian Knot designed by Rube Goldberg. Smart utilization of affordable technology (often in the low hundreds of dollars per month vs. many thousands and ongoing headaches) is at the heart of it. This allows the doctor to practice medicine the way they were trained, rather than pulling their hair out dealing with insurance for the medical equivalent of a trip to Jiffy Lube. In other words, the practices run similar to the fabled Marcus Welby, MD days. Yet, they are improved upon with a dose of Steve Jobs enabling enhancements that weren’t possible in the past such as virtual house calls. In anticipation of the rapid expansion of these models, entrepreneurs such as BJ Lawson, MD of Physician Care Direct have developed software to run the business side of these practices. [See more on how practices are overcoming obstacles to switching to Direct Primary Care.]

Thus far, DPC has had success in the private market. I put the question of why not use DPC for the Medicaid population (reportedly that is in the works in West Virginia) to DPC practitioners. The response below is a summary of their perspective. It is estimated that if DPC was scaled nationally it could save 20-30% off of overall healthcare costs. That would be the difference between states defaulting and sustained balanced budgets.

The issue of using DPC for the poor is from my point of view a no brainer. Why use the most expensive inflationary system available (by which I mean the insurance system, whether public or private) to take care of those with the least money and most in need of basic services? The structure that makes sense to me is to create a thriving marketplace in direct primary care, competing on price, access and quality – and working exclusively for our patients. Then add a fixed monthly stipend for primary care for every Medicaid patient in the United States – a stipend that covers the lowest priced/highest functioning primary care available. This could be a voucher or credit card account for each Medicaid patient. The allowance could only be spent on primary care and the patients could buy up to higher priced practices if they saw value worth purchasing. That would convert the Medicaid patient from being a low paying, high utilizing patient to a valued customer who can pay cash for care at a reasonable price. This makes all kinds of sense economically:

  1. No government management system to control or manage care – it manages itself with the patient at the helm.
  2. Converting dependent impoverished citizens into patients with economic clout and respectful treatment
  3. Eliminating the cost overhead of insurance billing on both the MD and the government side
  4. No more barriers to basic care for Medicaid patients – they can use all they need
  5. Eliminating the fee-for-service incentive disaster that produces massive overutilization and huge downstream expenses
  6. Financially stabilizing the primary care world with consistent monthly fee payments to cover our fixed costs while allowing those docs with better ideas or higher prices to go for the upscale patients or those wanting better art work and longer visits.
  7. Free up primary care docs to further improve their quality, access and patient centered services – not their billing savvy
  8. If the government wanted to regulate, they could demand an annual report on each patient they support, giving the actual utilization, health care outcomes and proof of appropriate management of common illnesses, immunizations and cancer screening. The government could actually pay for results, not process. Primary care practices would have to be certified as producing an acceptable level of results and patients would have access to our success profiles both in terms of cost and quality when selecting their doc for next year. [Note: A standard is being defined by the Healthcare Delivery Innovation Alliance which is seeking outside input.]
  9. The government could track the overall costs created by each practice and make those numbers public as well. The high cost practices would eventually lose certification, particularly if the money ended up in the hands of their employer (hospitals, big multispecialty clinics).
  10. If the government wants to tackle the HotSpotters patients, they just need to up the monthly ante for the sickest patients – they will get their money back with huge interest from the reduced downstream costs and reduced transaction costs that these folks generate. With the big fees they will also be able to require more complete reporting of how their chronic illnesses are being managed.

Medicare should do the same – stop paying fee-for-service for Primary Care and start paying a fixed monthly fee (allowing patients to buy up if the government gets the price wrong, as it almost certainly would). The patient should have total control over which primary care doc gets the money – remember, we want to work for the patient, no matter who pays the bill.

So that’s the solution – a simple system where the patient is in charge, the government buys good basic care and the patients can buy up. The system itself is created within a free market structure which the government is simply choosing to ride (like food stamps and grocery stores) with patients running the show, so service and quality could go up every year while prices remain stable or decline – like any real functioning market system in the world. Direct Primary Care is the only available model that could accomplish these goals. Everyone else is still trying to figure out how to “work” the insurance system. However, if the government has wisdom, they would also make the monthly fee deal available to prior fee-for-service docs – to boost competition and to accelerate the conversion to Direct Primary Care models. The right incentives produce the right results.

Reform: A trek not a sprint

Obama’s health care law: A trek, not a sprint

By RICARDO ALONSO-ZALDIVAR, Associated Press – 2 hours ago 

WASHINGTON (AP) — It took only a year to set up Medicare. But if President Barack Obama’s health care law survives Supreme Court scrutiny, it will be nearly a decade before all its major pieces are in place.

And that means even if Obama is re-elected, he won’t be in office to oversee completion of his signature domestic policy accomplishment, assuming Republicans don’t succeed in repealing it.

The law’s carefully orchestrated phase-in is evidence of what’s at stake in the Supreme Court deliberations that start March 26.

The Affordable Care Act gradually reorganizes one-sixth of the U.S. economy to cover most of the nation’s 50 million uninsured, while simultaneously trying to restrain costs and prevent disruptions to the majority already with coverage.

Despite the political rhetoric about what “Obamacare” is doing to the nation, only a fraction of the law is in effect.

“We really haven’t seen the main game,” said Drew Altman, president of the California-based Kaiser Family Foundation, a nonprofit information clearinghouse on the health care system. “The major provisions that will affect the most people and cost the most money don’t go into effect until 2014 or later.”

What has taken effect in the two years since the law was enacted has produced both successes and clunkers, and some surprises.

Few expected a relatively minor provision tacked on late in the legislative process to be its biggest success so far. But allowing young adults to stay on their parents’ insurance until age 26 has added nearly 2.5 million people to the coverage rolls, at no cost to taxpayers.

Despite Republican pledges to repeal the overhaul, it’s arguably the Obama administration that has done more to scale it back.

Health and Human Services Secretary Kathleen Sebelius decided to pull the plug on a long-term care insurance program seen as a budget drain. She also decided that Washington would not dictate a basic health benefits package for the country, allowing each state to set its own, within limits.

Medicare recipients gained more protection from high prescription costs and better preventive coverage, but older people remain the age group most opposed to the law, concerned that cuts to the program to finance benefits for the uninsured eventually will compromise their own care.

If the Supreme Court overturns the law entirely, that would present an immediate dilemma about popular early benefits such as coverage for young adults and prescription savings for seniors.

“These provisions give immediate relief to a small percentage of people, but it’s a lot of relief,” said economist Len Nichols of George Mason University in Virginia.

Other early benefits have been a mixed bag.

Millions of people are getting preventive care that now must be provided at no additional cost to patients. Birth control for women soon will be on that list. Insurance premium increases are getting more scrutiny.

But a program of tax credits for small businesses has seen little acceptance. The administration is in the awkward position of asking congressional Republicans to help fix it.

A highly promoted program that provides a lifeline to people denied coverage because they already had medical problems has probably saved lives. But enrollment in the Pre-Existing Condition Insurance Plan has been disappointing, with only about 50,000 people nationwide.

Glenn Nishimura, a consultant from Little Rock, Ark., checked it out and found his premiums would come to about $6,300 a year.

“It’s out of my price range,” said Nishimura. It makes more financial sense to take care of his high blood pressure and high blood sugars by paying out-of-pocket and gambling that his health will hold up, he reasons. In three years he’ll be eligible for better coverage under Medicare.

If the health care law is upheld, it will bring some relief against such risks for millions of people such as Nishimura.

Starting in 2014, insurers will have to accept all applicants regardless of prior health problems. Also that year, many middle-class people will qualify for federal subsidies to lower the cost of their premiums. Consumers will have access to competitively priced private insurance through new state-based markets called exchanges.

At the same time, Medicaid would be expanded greatly to cover millions more low-income people, childless adults who do not now qualify.

Between the two approaches, more than 30 million uninsured people are expected to obtain coverage. Millions more will gain the security of knowing they can’t be turned down for health insurance if they switch jobs.

That’s critical for Natalie Hough, a college sophomore from Hillsborough, N.C. An aspiring artist, Hough has a heart condition that probably would make her uninsurable if she had to apply on her own later in life. Starting in 2014, insurers will not be able to turn away people like her.

“It’s definitely peace of mind, knowing that I can go to a hospital if I need to,” she said. “I’m an art major, and I’m not going to make billions of dollars.”

But such changes hinge on whether the law’s requirement that most people have health insurance is upheld by the Supreme Court.

This individual mandate, the main target for the law’s critics, also takes effect in 2014. Without it, many experts fear that the new exchanges, the state-based markets for private insurance, won’t work. Healthy people would be tempted to postpone signing up until they get sick, raising costs for everybody.

Administration lawyers have advised the court that if it strikes down the mandate, it also should invalidate the requirement that private health insurers accept customers with health problems.

If the court leaves the rest of the law in place, the Medicaid expansion could continue.

But even if Obama’s plan to expand coverage survives its test of constitutionality, expect the law’s cost-control measures to remain under attack.

One is an independent board that would have the power to curb excessive increases in Medicare spending by ordering cuts if Congress fails to act first. Republicans call it a “rationing board,” although the law specifically bars the yet-to-be-named panel from restricting access. The health care industry opposes the board; efforts to do away with it or diminish its role seem to be gaining ground.

“It would work like a random tax on medical innovation,” said economist Douglas Holtz-Eakin, a Republican adviser. “If you were an innovator, why would you want to bring something new to market when the biggest payer in the country is periodically lopping off spending?”

The other main cost-control measure is a tax on generous health insurance plans. Labor unions oppose it.

It won’t take effect until 2018, a year after a second Obama term would have ended.